1. Don’t be afraid to kill weaker brands.
Capitalism rests on simple, predatory logic – weak brands must die and strong brands must kill them. Only then will the consumer be served and the market improve or progress.
Unfortunately, many marketers find this sharp end of capitalism unpalatable. We’re happy with the idea of deriving success from “delighting” customers but shy away from the side of that equation in which we “destroy” the competition.
In Walter Isaacson’s biography of Steve Jobs, the founder of Apple exemplifies the killer spirit when he proclaims he will spend “every penny of Apple’s $40bn in the bank” to destroy Android. Be aggressive.
Personalization is the quest of the moment for so many marketers, with 70% of executives interviewed by Forrester saying it is now of strategic importance to their business. (What may surprise you, as it did me, is how generalized so much of marketing still is.)
According to the Forbes article, most personalization efforts are currently underpinned by customer preferences and purchase history. Looking ahead, marketers see social sentiment, contextual behaviors, time of day/week and location information as emerging factors in their bid to make experiences feel more specific.
Few retailers do personalization better than Amazon. Their ability to suggest offers that are relevant based on what they know about consumers from previous behaviors is insightful and addictive. But that doesn’t make personalization a panacea, and it certainly doesn’t mean it can apply universally. As Paul Boag points out, “Too often personalization is requested with no clear idea of what that means or what benefits it would provide.”
Boag identifies five other types of personalization beyond Amazon’s custom personalization approach:
When I was named director of brand management and marketing at Hallmark, most of the company’s leadership team viewed the company as a greeting card manufacturing company.
With the advent of the Internet, it was easy to foresee the demise of “ink on paper” greeting cards. I felt it was my duty to get the company’s leadership team to think about our business more broadly and eliminate the risk of being defined as a product category. Ideally, brands stand for customer values and benefits, not specific products.
It was clear through research that Hallmark helped people maintain their relationships and express their feelings. Based on this, we determined that Hallmark should stand for “caring shared.”
At the time, Hallmark was mostly manufacturing “ink on paper” products – greeting cards, giftwrap, paper plates and napkins and related products. It also produced calendars and day planners. It outsourced collectable Christmas ornaments and other small gifts. Most of these were produced in Asia.
Opportunities Found, Opportunities Lost
If you’re a marketer, commodity status is a bad thing for your brands. It indicates that your product or service is undifferentiated, that it rises and falls with the market and that it carries no inherent value beyond that. That’s fine when things are going well, and supply cannot keep pace with demand – it’s not so good when the dynamics are reversed. Here I explain how and why perceived brand value degrades to commodity status.
The reason why companies build brands of course is that they’re looking to rise above the market’s natural asking price. They want what they sell to have a value beyond what the market would otherwise set for the materials used. They want their value equation to be about more than just cost plus margin. The price of a smartphone for example bears little resemblance to, and is seemingly unaffected by, changes in the costs of the parts. Price sensitivities for brands are between competitors and are much more likely to be based on emotive drivers such as desirability, popularity and recency.
Every brand strives to win, but what happens when you compete in a market where you are, and can never be more than, number two? If you’re Pepsi, for example, or Bing, how do you find the energy to continue to build out a business that will stay where it is, behind a massive incumbent? How do you do that without becoming uninspired, distracted or stuck?
The temptation that so many succumb to is simply to pursue the brand they see as the market leader, and their greatest rival, at all costs. To go all in. The burger wars, the cola wars, the airline wars, the smartphone wars…many a campaign has been generated through the wish of one brand to dominate and overpower another. For the most part, such struggles, while all consuming for those involved, do little or nothing to sway the sentiment of consumers. And while market positions may shuffle, once the dust settles, things are usually not that different (at least as far as buyers are concerned).
So what should you do? The best strategy if you’re the number 2 brand, I believe, is a combination of inclusion and distinction. That’s because being one of the top three ranked brands in a sector places your brand among the ‘establishment’. You are one of the brands that defines the sector and therefore you need to use enough of the predominant industry structures and technologies to leverage that mass while at the same time finding ways to separate what you believe in, offer and mean from the offering and ethos of the market dominator.