The Keyhole: Peeking at 21st Century Brands

Brand Assurance and Engagement

2009-11-10T07:00:00.001-05:00

"Now finance or lease any new Hyundai, and if you lose your income in the next year, you can return it with no impact on your credit."

With that audacious statement on Super Bowl 2009, Hyundai began a full-out assault on the economy, consumer anxieties, and a mediocre car brand image. The campaign was the beginning of a drive from a price-value brand, to a mainstream, value-for-dollar brand.

The rest, as they say, is history: Consideration for new Hyundai vehicles jumped to nearly 60%. Hyundai's market share jumped to 4.3% and while the industry suffered a 22% sales drop, Hyundai increased by 27%. So it wasn’t too much of a surprise that this week an Advertising Age Reader Poll named Hyundai the “Marketer of the Year.” Hyundai, was also Brandweek’s “Grand Marketer of the Year” back in September.

But if you want predictive metrics and not rear-view mirror ones, you need to look at measures of brand loyalty and engagement. Hyundai moved up on the Brand Keys Loyalty Leaders List of 440 brands to 24th. That’s up from 295th last year, which only proves that if you can differentiate your brand emotionally consumers will engage with you in the best of all possible ways: sales!

Consumers could always find cheap cars, but real emotional engagement has been pretty sparse in the automotive category of late. “Anyone could have done it,” you say? Well, maybe, but as we’ve pointed out before, saying it, doing it, and doing it believably are three different things. Without real engagement, it’s just words, sounds, and wasted marketing dollars.

Thoreau advised, “live your beliefs and you can turn the world around." Sometimes whole industries, too.

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Keeping Your Brand From Going to the Dogs

2009-11-05T09:11:00.002-05:00

Voltaire suggested that animals have three advantages over man; no theologians instruct them, their funerals cost nothing, and they don’t start lawsuits—the latter of which a certain pet supply company now wishes was true.

Burberry, taking a cue from other fashion brands, is cracking down on companies who copy their logo. All about protecting its checkered pattern, the famous “Burberry Plaid" —an emblem for the fashion house for almost 100 years— Burberry is suing a pet supply store in England, called “Pets at Home.” Turns out that the company is selling dog coats, baskets and carriers in a plaid design very close to Burberry’s signature plaid. So much so, in fact, Burberry alleges that the retail store was actually violating copyright laws.

Although the items have been taken off the shelves, the lawsuit is ongoing, as likely recommended by its solicitors. According to the Brand Keys Fashion Brands Index, Burberry is among the top-10 fashion brands most resonant with 21-34 year olds and is in the top-15 among the 35-44 and 45-60 year age groups.

Those are nice loyalty rankings for a brand because with the consumers’ shift away from the traditional ‘price-value equation’ to one of ‘value-for-dollar,’ the brand itself – in all its manifestations – can act as a surrogate for real value. And given the economy, weak retail reports, and even weaker predictions for the upcoming holiday season, that makes it any leverageable brand differentiation especially worth protecting.

Brand loyalty assessments are leading-indicators of consumer behavior toward a brand and they correlate very highly with profitability. So it’s worth noting that last month Burberry announced that their six month revenues were up 14%, with its signature check continuing to be leveraged throughout its wide range of merchandise.

When it comes to design and fashion, “Pets at Home” might well benefit from the advice of another Frenchman, Honoré Balzac, “You may imitate, but never counterfeit.”

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El Propósito del Negocio es Crear y Guardar a un Cliente

2009-11-03T07:00:00.006-05:00

That’s Spanish for management guru Peter Drucker’s advice to marketers: “The purpose of business is to create and keep a customer.”

If you follow that precept, it translates to keeping customers loyal to you and Brand Keys relies upon a loyalty framework because loyalty is a leading-indicator of consumer behavior and, if you do it right, profitability.

We translated Mr. Drucker’s admonition because today we are proud to announce the results of the 1st Brand Keys Customer Loyalty Engagement Index in Spain at the Club Financiero Genova in Madrid.

The survey was done in conjunction with Asociación de Marcas Renombradas Españolas (The Brand Association of Spain), Accenture Marketing Science, and Positioning Systems, Brand Keys’ marketing partner in Spain. For this year’s survey, ¬¬¬3,500 Spanish consumers, 18 to 65 years of age, self-selected the categories in which they are consumers, and rated the brands for which they are customers.

We looked at the loyalty and engagement marketplace in Spain, examining 50 of the top brands and their category drivers including Zara in Retail Apparel Stores, the Real Madrid soccer team, Iberia Airlines, Carrefour (Hypermarkets/Department Stores), BBVA in the banking category, and BP gas stations.

The category drivers – and the category and customer attributes, benefits, and values they consist of – are critically important to understanding brand loyalty and getting it right when dealing with today’s consumers. Properly configured, category loyalty drivers will tell you far more than who a consumer is – the typical demographic and attitudinal point-of-view. They tell you what you really need to know as a brand: how consumers will actually behave in the real marketplace, which matters if you’re keeping score by counting your sales and profits and not merely brand awareness or recommendation levels.

The Brand Keys Customer Loyalty Index of Spain may be new, but the lessons that can be learned from loyalty and engagement aren’t. Another management consultant – W. Edwards Deming – wisely noted, “Ganancias vienen de los clientes leales quienes compran otra vez, clients que jactan de su producto o servicio, y esto atrae amigos” (“Profit in business comes from repeat customers, customers that boast about your product or service, and that bring friends with them.”).

And loyalty always translates into profitability – no matter what language you speak.

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Search Consolidation Puts on the Brakes

2009-10-29T08:13:00.003-05:00

Barry Diller, the chief executive of InterActiveCorp, is giving serious thought to getting out of the search business. Apparently he is open to selling Ask.com—which currently grasps a weak 2% share of the US search market.

According to our 2009 Customer Loyalty Engagement Index, Ask ranks 6th, which may explain a lot about its levels of engagement and usage. Overall rankings look like this:

1. Google
2. Yahoo/Bing
3. AOL
4. MSN
5. Netscape
6. Ask
7. AltaVista

Consolidation in the online search category is already underway, and that could end up being Ask’s fate. After all, Yahoo! has already agreed to farm out its search business to Microsoft (an easy way for Microsoft to pick up more market share), but search engine business consolidation is intertwined and complex, is likely not going to rev up in the near future, especially given customer loyalty levels.

But the search highway looks like this: Ask uses its own search engine for results, but relies on Google to supply ads. Microsoft and Yahoo are unlikely to want to add a third partner so soon after their partial merger, and Google has no real use for Ask.com's capabilities.

So Ask searches for options. But ultimately it seems just another case of engine failure.

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Go Yankees! Or Phillies!

2009-10-27T07:00:00.006-05:00

Player/Coach Tommy Lasorda once opined “There are three types of baseball players: those who make it happen, those who watch it happen, and those who wonder what happens.” But player or fan, everyone knows what happened Sunday night. After a six-year wait the Yankees conquered the LA Angels and are back in the World Series business.

It’s the 40th pennant for the Yankees, so you’d figure their odds of winning a World Series would be pretty good. But that’s just sports. Winning fan loyalty, on the other hand, is a little different. Oh, don’t misunderstand us. Winning matters, but only to the degree that it reinforces one of the critical four sports fan loyalty drivers. In this case that’s the “Pure Entertainment” driver.

Sure, winning is important. And it’s never just a game when you’re winning, but a team’s win-loss ratio is only one component of the “Pure Entertainment” driver, that win-loss ratio making a 25% contribution to real loyalty when it comes to entertaining the crowd. How a team plays (whether they win or lose) is an important component too. “Pure Entertainment” gets a lot of media attention but is only one of four loyalty drivers that define how – and to what extent – a sports fan becomes a loyal sports fan. And there’s a difference.

Fans watch the games. Or don’t watch the games. Loyal fans always watch the games – or least to the extent of six times more than just someone who “follows baseball.” Real fans are also 6 times more likely to buy licensed team merchandise, which is still a big business, even in this economy.

The other drivers are “Authenticity” (Do they play like a team, or as Hal Steinbrenner said of the Yankees, “ . . . they really care about each other. They are a family. . . they support each other.” And what’s the Manager like counts too), “Fan Bonding” (are there players like Derek Jeter with whom a real emotional bond is established?), and finally “History and Tradition,” the ultimate loyalty driver. If you watch baseball (or any other major league sport) sitting with 3 generations of Yankee or Phillies fans, watching the game wearing team shirts and hats, you’ll have an understanding of precisely how that driver resonates.

So how do the Yankees and Phillies stack up in terms of fan loyalty? For that answer we looked to our 2009 Brand Keys Sports Fan Loyalty Index, a scorecard of all the teams in the MLB, NFL, NBA, and NHL. Well, on an overall basis the Phillies were #2. That has a lot to do with what the season was like last year. The Yankees were #3. Rankings for the top and bottom-5 in all the leagues can be found on our website at http://www.brandkeys.com/awards/sports.cfm

Assessments are indexed against a benchmark of 100, so higher is better, just like sports scores. These assessments correlate very highly with TV viewership, merchandise purchase, and heart rates!

Phillies

Pure Entertainment: 131
Authenticity: 116
Fan Bonding: 111
History & Tradition: 119

Yankees

Pure Entertainment: 110
Authenticity: 110
Fan Bonding: 116
History & Tradition: 130

So will “History and Tradition” win out over “Pure Entertainment?” Will "Authenticity" score big against “Fan Bonding?” Tomorrow’s game will give some indication of the sports record’s outcome, but that’s mostly all down to the managers and players.

But in sports marketing and TV and licensing deals it all comes down to loyalty and when it comes to loyalty it all comes down to the fans, and you’ve got to manage those fans carefully. Because you know what the great Yogi Berra said about fans? “If the fans don’t come out to the ball park, you can’t stop them!”

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Listening to a Billion Consumers

2009-10-22T08:57:00.001-05:00

Windows 7, the latest version of Microsoft Windows, a series of operating systems for use on personal computers, was released today less than three years after the release of its much-denigrated predecessor, Windows Vista.

With the official launch currently underway around the globe, Microsoft has released four new advertisements to market Windows 7. This round of advertisements is very direct and dubbed 7-Second Demos, with the theme “I’m a PC and Windows 7 was my idea,” an extension of the “I’m a PC” campaign, having consumers take credit for “developing” various aspects of the new operating system.

We cannot comment upon whether Windows 7 will live up to promises and expectations, but we think that the concept of a billion consumers co-creating the product, is a wonderful example of meaningfully leveraging the real voice-of-the-consumer, an often overused advertising expression.

Lots of companies – especially big companies like Microsoft – do all kinds of research. Most of that research ends up providing excellent answers to meaningless questions, and virtually none reflect the real voice or expectations of the consumer. Check out the new GM campaign if you doubt us. And while a product positioning approach of “we not only hear you but we’ve listened to you” isn’t new, it’s usually the small niche brands that do it well.

And it shouldn’t be surprising that it’s Microsoft who’s doing it now. After all it was Bill Gates who pointed out this strategy back in 2000, in his book “Business @The Speed of Thought.” “Your most unhappy customers are your greatest source of learning.”

And perhaps a meaningful voice for the brand.

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The 2009 Brand Keys Loyalty Leaders List: 63 Categories, 440 Brands. Guess Who’s Last?

2009-10-20T07:00:00.001-05:00

First, the good news for us brand investors: iPhone, Samsung, and Blackberry accounted for a third of 2009’s top-10 Loyalty Leaders, with the next third represented by cosmetic brands like Mary Kay, Maybelline, Estee Lauder, Clinique, and Lancôme. When it came to the most powerful brands overall in terms of loyalty, the award goes to Google, Wal-Mart, Grey Goose, Mary Kay, Avis, Apple, and Amazon.com.

Customer values intrinsic to technology brands were seen to best meet, and even exceed, customer expectations for their categories, and the ‘emotional engagement’ that women share with their favorite beauty brands is still very powerful. And loyalty – a leading-indicator of consumer behavior and profitability and a proxy for real emotional bonding – has become more and more important, especially at a time when many brands are turning into commoditized category placeholders.

Wal-Mart and J. Crew (taking two places, one for apparel retail the other for clothing catalogues) posted strong numbers among the retailers, but car brands ran out of gas. Only two auto brands showed in the top-25: Toyota, a perennial loyalty leader, and Hyundai, which moved up from #295 on the last year’s list to #24 this year—an increase in loyalty largely due to massively improved product quality, and it’s emotionally resonating ‘Assurance’ campaign: a one-year promise to buy back Hyundais from any customer who became unemployed.

McDonald’s perked up loyalty and profits with an enormous increase in the Coffee category, moving from #156 last year to #16, and mostly to Starbucks detriment. Ranked #191 on the 2008 Loyalty Leaders List, the once-invincible Starbucks now ranks #428, in the bottom dozen brands—a move that tracks exactly with decreases in same-store sales and profitability.

Some segments have, of course, suffered because of the economy, but brands that understand that the old ‘price-value’ equation has been transformed to a ‘value-for-dollar’ assessment, will have also realized that the brand can have meaning and can act as a surrogate for value. For a list of complete 2009 rankings – who got it right and who still can’t figure it out – we invite you to visit http://www.brandkeys.com/awards/leaders.cfm

Much to the dismay of the bailer-out’ers of our great nation, General Motors clearly didn’t get that memo and ranked last.

GM might want to start with doing more than investing in a big string section in their advertising, and doing some meaningful branding. Because when it comes to engendering loyalty, meaning is what sets us apart from other life forms – or at least the ones with driver’s licenses.

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Running Against Global Warming

2009-10-15T07:00:00.001-05:00

Blog Action Day is an annual event that unites the world's bloggers in posting about the same issue on the same day on their own blogs. The aim is to get discussions started around an issue of global importance. One day. One issue. This year the topic is “climate change.”

Brand Keys is able to identify how issues like climate change impact the way consumers view categories. We see changes in what drives engagement and loyalty usually 12 to 18 months before they show up on traditional research radar screens or are actually articulated in focus group discussions. One of the earliest shifts dealing with the environment showed up in the Athletic Shoe category five years ago. One of the category’s drivers – previously labeled “Manufacturing and Materials” – morphed into (no pun intended) “Carbon Footprint.”

We note that this was shortly after Nike joined Climate Savers in 2001 and set a target of reducing greenhouse gas emissions by 13% from Nike-owned operations and business travel. Nike achieved those reductions via energy efficiency projects and the purchase of green power, including the installation of 6 wind turbines. Nike also completed its goal of measuring the greenhouse gas emissions from its contracted manufacturing and shipping operations. Nike offset business travel carbon dioxide emissions through partnerships with air carriers and car rental companies.

OK, there’s always room for more action, but one needs to start someplace. For the athletic shoe category Carbon Footprint driver, here’s how consumers rank other athletic shoe brands:

1. Nike
2. Air Jordan
3. Adidas
4. New Balance/Reebok
5. Fila
6. Sketchers

You’ll have to check with you own brand to see whether these rankings are perception or reality. But the potential for global climate change is frighteningly real and has never been more present. The most dangerous changes may still be avoided if both consumer and corporations alter our hydrocarbon based energy systems and initiate balanced and adequately financed programs to forestall the coming disaster.

So consumers and corporations both would be wise to follow Nike’s own admonition: Just do it!

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Meaning + Style = Fashion Choice

2009-10-13T07:00:00.001-05:00

We were interviewed by a French fashion magazine about the influence the TV show "Mad Men" has had on how men dress: slimmer cuts and thin-lapeled suits, skinny ties, subdued colors, but generally a more adult and masculine style.

It’s attracted attention from consumers and fashion designers, clothing retailers, and even hotels. Banana Republic launched a line of Mad Men-inspired clothing. Theory re-branded its space at Bloomingdale's with "Mad Men" paraphernalia. Hilton introduced a "Live Like a Mad Man Sweepstakes" that includes two round trip tickets to NYC, 4 days at The Waldorf Astoria, one Mad Men wardrobe item, (like Don Draper’s fedora), a Mad Men Guide to New York, an autographed script, a DVD collection, and gift cards for Mad Men inspired locations so they can be wined and dined like a real Sterling Cooper client. They’ll also look the part after being styled by a show stylist.

But it isn’t just the clothing’s style that’s creating the appeal. Narrow lapels, thin ties, and fedoras have been available in the marketplace for a while for those willing to take the time to look.

No, it’s something that is often missing from fashion – and that’s some sense of “meaning.” The show literally provides a context for the clothing and, thus, imbues the clothing with something more than the style itself. It doesn’t happen all the time, but over decades, TV shows and movies have played a primary role in providing a context and adding meaning to style, directly affecting people's fashion choices. So Mad Men isn’t the first entertainment vehicle to instill meaning to style.

In the 1977 Woody Allen film, "Annie Hall," Diane Keaton wore baggy pants, dress shirts, a vest and tie, which led women to adopt a masculine preppy look still with us.

"Who Wants to Be a Millionaire," featured host Regis Philbin wearing a monochromatic shirt-and-tie set, which launched a popular line of shirts and ties from Van Heusen.

John Travolta's white polyester suit in "Saturday Night Fever" rejuvenated the disco craze in the late ‘70’s that gave permission for men to wear crotch-hugging pants, chest-baring shirts, and large medallion jewelry.

The TV series "Miami Vice’s" lightweight fabrics and pastel colors proved a hit on television and in the stores. Don Johnson's signature look of the tee-shirt, suit jacket, linen pants and shoes worn without socks has become an established look.

The film "Flashdance" made activewear – like a ripped sweatshirt worn off one shoulder, tight leggings and leg warmers – a sexy (and acceptable) look for women.

And finally, the mother of all fashion trendsetters, "Sex and the City": the HBO series, which ran for 6 years and spawned a 2008 movie (with another to come), literally created the stilettos and denim look, and became a fashion that millions of viewers would follow, along with brands like Manolo Blahnik and Jimmy Choo.

Gilda Radner once joked that she based most of her fashion sense on what didn’t itch, but the truth is that style is just a word until someone or something comes along and give it meaning.

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Is a Mona Lisa Extra Value Meal In France’s Future?

2009-10-08T08:07:00.003-05:00

Celebrating its 30th anniversary in France, a new McDonald's will be installed in December in the Carrousel du Louvre food court, an underground mall that adjoins the museum. Some think it’s going to be a great coupling; the world's most visited museum and McDonald's top market outside the United States.

In fact, according to our Customer Loyalty Engagement Index, McDonald’s ranks #1 in the Quick-Serve Restaurant category that according to our most recent update looks like this:

1. McDonald’s
2. Subway
3. Quiznos
4. Burger King
5. KFC
6. Wendy’s
7. Hardee’s
8. Jack in the Box/Taco Bell

But in France and other countries and cultures, McDonald's is symbolic of US ethos, globalization, and a homogenization of cultures, so not everybody is happy.

No comment was offered by the Louvre about the arrival of its new neighbor (the mall adjoins the museum but is privately owned) but the mixing of French fries and French art are raising some hackles in France, with some calling the incursion the “Disneylandization” of French culture and cuisine.

Of course, it has been pointed out that one of the glories of visiting foreign lands is the local ethnic cuisine. It’s fair to say that in today’s world when it comes to food, only McDonald's is the great equalizer.

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10:10 Brand and Marketing Trends for 2010

2009-10-06T08:02:00.001-05:00

Niels Bohr once noted that “prediction is very difficult, especially about the future,” but then he didn’t have access to predictive loyalty metrics. Happily, Brand Keys does. And as they measure the direction and velocity of consumer values 12 to 18 months in advance of the marketplace and consumer articulations of category needs and expectations, they identify future trends with uncanny accuracy.

Having examined these measures, we offer up ten trends for marketers in 2010 that will have direct consequences to the success – or failure – of next year’s branding and marketing efforts.

1) Value is the new black

Excessive spending, even on sale items, will continue to be replaced by a reason-to-buy at all. This is trouble for brands with no authentic meaning, whether high-end or low.

2) Brands increasingly a surrogate for “value”

What makes goods and services valuable will increasingly be what’s wrapped up in the brand and what it stands for. Why J Crew instead of The Gap? J Crew stands for a new era in careful chic—being smart and stylish. And the first family’s support of the brand doesn’t hurt either.

3) Brand differentiation is Brand Value

The unique meaning of a brand will increase in importance as generic features continue to plague the brand landscape. Awareness as a meaningful market force has long been obsolete, and differentiation will be critical for success—meaning sales and profitability.

4) “Because I Said So” is so over

Brand values can be established as a brand identity, but they must believably exist in the mind of the consumer. A brand can’t just say it stands for something and make it so. The consumer will decide, making it more important than ever for a brand to have measures of authenticity that will aid in brand differentiation and consumer engagement.

5) Consumer expectations are growing

Brands are barely keeping up with consumer expectations now. Every day consumers adopt and devour the latest technologies and innovations, and only hunger for more. Smarter marketers will identify and capitalize on unmet expectations. Those brands that understand where the strongest expectations exist will be the brands that survive – and prosper.

6) Old tricks don’t work/won’t work

In case your brand didn’t get the memo here it is: consumers are on to brands trying to play their emotions for profit. In the wake of the financial debacle of this past year, people are more aware then ever of the hollowness of bank ads that claim “we’re all in this together” when those same banks have rescinded their credit and turned their retirement plan into case studies. The same is true for insincere celebrity pairings: think Seinfeld & Microsoft or Tiger Woods & Buick. Celebrity values and brand values need to be in concert, like Tiger Woods & Accenture. That’s authenticity.

7) They won’t need to know you to love you.

As the buying space becomes even more online-driven and International (and uncontrolled by brands and corporations), front-end awareness will become less important. A brand with the right street cred can go viral in days, with awareness following, not leading, the conversation. After all, everybody knows GM, but nobody’s buying the cars.

8) It’s not just buzz.

Conversation and community is all: ebay thrives based on consumer feedback. If consumers trust the community, they will extend trust to the brand. Not just word of mouth, but the right word of mouth within the community. This means the coming of a new era of customer care.

9) They’re talking to each other before talking to the brand
Social Networking and exchange of information outside of the brand space will increase. Look for more websites using Facebook Connect to share information with the friends from those sites. More companies will become members of Linkedin. Twitter users will spend more money on the Internet than those who don’t tweet.

10) Engagement is not a fad; It’s the way today’s consumers do business

Marketers will come to accept that there are four engagement methods including Platform (TV; online), Context (Program; webpage), Message (Ad or Communication), and Experience (Store/Event). But there is only one objective for the future: Brand Engagement. Marketers will continue realize that attaining real brand engagement is impossible using out-dated attitudinal models.

Accommodating these trends will require a paradigm change on the parts of some companies. But whether a brand does something about it or not, the future is where it’s going to spend the rest of its life. How long that life is up to the brand, determined by how it responds to today’s reality.

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Good Marketing that Really Sucks

2009-10-01T07:00:00.005-05:00

Everywhere you look the overbite is back in fashion — this time coming with more than just incisors in an extra-long and a strong distaste for garlic. Today’s vampire culture has evolved into a buff crowd of populars, seemingly as interested in cool couture as they are in blood donations. True Blood, the smash-hit series for HBO revolving around this new brand-conscious vampire will have some competition this fall when the CW Network debuts The Vampire Diaries — a series that promises to deliver the same fashion bite that modern viewers have found irresistible.

It’s interesting to ponder the changes to the vampire “category” over time. Clearly today’s vampire brands are responding to something shifting in the consumer landscape, as the musty bad-guy played by Bela Lugosi has given way to the chic morally-ambiguous nocturnal, mmmmmm of True Blood fame. This new version of blood-sucker embodies many positive associations with the night, such as a taste for glamour and parties, and their accompanying youth. As society agrees less and less on right and wrong, the vampire keeps pace—choosing to drink artificial blood rather than initiate the innocent.

The shift in the way brands reach out to viewers — who are also consumers — has led to some unusual offerings in the marketplace, not the least of which is a drink meant to be sucked down, possibly with your favorite spirit. “Tru:Blood,” a blood-orange drink now available, is an exact replica of that used on the show, and comes in A, B, O-Positive and other flavors—bringing a new level of meaning to product placement as it migrates from TV to reality instead of the other way around.

As marketers scramble to maximize profits off the un-dead, it remains to be seen just how much of a stake consumers will want in the products that rise out of them. But then, stranger things have happened. As we’ve learned watching the vampire myth survive death more than once, we have a thirst for both the sexy and the macabre—a combination perfect for today’s vampires with taste.

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Pizza is a Lot Like Sex

2009-09-29T07:00:00.002-05:00

Someone (probably a college student) once noted that “Pizza is a lot like sex. When it's good, it's really good. When it's bad, it's still pretty good.”

This notion came to us when someone at the Motivation Show here in Chicago, talking about the greatest invention of all time nominated pizza, but specifically Chicago pizza. As “source material” they mentioned The Chicago Pizza Club, a group of committed pizza gastronomes whose objective is to become the foremost pizza authority in Chicago, assessing only the quality of the food.

According to their website, they “have used a basic scale of 1-10, which works fine. The only problem has been that we have not used a guide for what different numbers mean. As a result, we noticed that many of our numerical rankings did not accurately reflect our feelings about the rankings,” and that, as any researcher or brand planner knows, can be problematic. The problem has since been rectified with a more descriptive scale but as readers of this blog can attest, the truth is rarely pure and never simple.

Because there are emotional aspects to virtually every consumer decision, scales often don’t reflect the nuances so important in understanding how consumers decide upon one offering versus another. So we turned to our Customer Loyalty Engagement Index whose assessments fuse the rational and emotional to see how US Consumers assess pizza brands. Keep in mind that ours are ratings of National brands and don’t take into account local favorites, which, according to Chicagoans, are better than anything you have in your hometown! The results were as follows:

1. Domino's
2. Pizza Hut
3. Papa John's
4. Godfather's/Little Caesars/Round Table
5. Chuck E. Cheese

So is pizza the greatest food invention of all time? Not according to humorist, Dave Barry who feels, “Without question, the greatest invention in the history of mankind is beer. Oh, I grant you that the wheel was also a fine invention, but the wheel does not go nearly as well with pizza.”

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Engineering Engagement

2009-09-24T07:00:00.008-05:00

That’s the title of the 3rd Annual Motivation Show being held next week in Chicago. This year’s focus is connecting engagement, loyalty, and profitability. And if anybody knows about loyalty and engagement, it’s Brand Keys.

Engagement has been a tough metric for marketers to define, but your ultimate goal shouldn’t be that difficult to articulate. Engagement with the brand is – or should be – your ultimate objective. Nothing substitutes for it. Nothing else will guarantee brand survival and profitability.

To get there you must, of course, employ outreach — conversations, experiences, advertising, promotions and the like — and that outreach also requires engagement. But that’s not brand engagement. It is an engagement with the method the brand is using to get the consumer to engage with the brand.

We’ve identified four engagement methods and one fundamental objective that addresses the complex consumer living in the 21st Century mediascape:

The methods:
1. Platform (TV; online; print; sponsorship)
2. Context (Program; webpage; magazine; game)
3. Message (Ad or Communication)
4. Experience (Store/Event)

The objective:
1. Brand Engagement.

Based on numerous in-market validity studies we can confidently define “brand engagement” as the consequence of any marketing or communication effort that results in an increased level of brand equity for the product/service — and therefore loyalty, a leading-indicator of sales. Loyalty is always generated when the brand meets or exceeds customer expectations, and real engagement metrics can help optimize your efforts.

At this year’s Motivation Show, Amy Shea, Brand Keys EVP, Global Brand Development, will be teaching attendees how to “Leverage Emotions to Leverage Loyalty.” And because loyalty metrics are leading-indicators of consumer behavior and profitability, Brand Keys founder and president, Robert Passikoff will give attendees an advance look at “Ten Loyalty and Engagement Trends for 2010.”

We hope to see you in Chicago. As always, if you are unable to attend, drop us a note (amys@brandkeys.com or robertp@brandkeys.com) and we’ll be glad to send you a copy of either (or both).

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Che Marche Sono Fino a la Roma

2009-09-22T07:00:00.003-05:00

We take a moment out from our presentations in Rome, to look through “The Keyhole” at some of our Italian branding compatriots. Today’s focus is the famous Lamborghini brand.

The Lamborghini company founded by Ferruccio Lamborghini, began manufacturing cars, tractors, golf carts, and engineering equipment in 1946. Their masterpiece was, of course, the Miura sports car of the 60’s and the 70’s. In 1981, Ferruccio's son, Tonino, a designer himself, took over the family business and expanded into branded clothing and jewelry.

One quickly learns that smart American companies aren’t the only ones who have loyalty-based research to inform them of what will truly engage the consumer marketplace. And from a market perspective, in the face of the ever-enlarging cyber boom, the Italian luxury brand has diversified into the luxury accessories segment, offering a Lamborghini-branded line of multi-media accessories.

With a worldwide explosion of new computers, laptops, i-phones and i-pods, and smarter (and smarter) phones, Lamborghini will now offer signature branded computer backpacks, i-phone, Blackberry, notebook, and digital camera cases at their mega lifestyle retail stores.

The brand is apparently targeting college students and young executives, who make short-haul trips in Europe with their laptops and other digital accouterments. And although one might question a brand extension like this in a world just recovering from the economic turmoil for the last two years, Mr. Lamborghini may just be following the Italian philosophy, “Il lusso non è un requisito di vita. Tutto che dobbiamo renderli realmente felici è qualcosa essere entusiastico circa” (Luxury is not a requirement of life. All we need to make us really happy is something to be enthusiastic about.)

The Lamborghini brand may just be able to do that.

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And the Brand Award Goes To…

2009-09-17T07:00:00.004-05:00

By now, Kanye West’s latest trip to the social trash bin has been commented on by both blogs and media alike. Proving just how inappropriate a celebrity can be is a game that will always have its audience—especially when that audience has been invited to watch, as it was the night of the MTV Video Music Awards.

West’s taking the stage from Taylor Swift as she was accepting her first VMA in order to present his personal vote for Beyonce was painful to watch, as Ms. Swift’s devastation was inescapable to anyone with feelings. That same night at the VMA’s, post Kanye’s “episode,” Beyonce did indeed win an award in another category, and used the opportunity to recall her own first win and call Taylor Swift back on stage to finish her acceptance speech and “have her moment.” But there is pain, and triumph, beyond that of Taylor Swift’s that ripples out from such an event.

Both West and Beyonce are human brands—brands that are impacted by the persona they craft in the public eye. West, as is clear from the blog posts swelling the internet highway, has some damage control to do, and may want to consult Beyonce for some lessons.

As a brand, Beyonce has not been without challenges, coming by way of the very adult dressing of young girls for her House of Dereon clothing catalogue last year. But clearly Beyonce has not only found her way as a brand, but also as a human being—adding grace and class to her product line, along with clothing and jewelry, and a soon to be announced fragrance. These are values that matter to fans, who are also, it turns out, consumers. Kanye would do well to take note and remember that, when it comes to brand stars, clever songwriting may make fans but it takes values to make music with consumers.

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Can America Get its Money Back, Please?

2009-09-15T08:08:00.003-05:00

Last Sunday GM launched a campaign called “May the Best Car Win.” It was, apparently, designed to address a lingering image of GM as a financially struggling company with substandard products. The campaign offers customers a refund within 60 days on any GM vehicle if not completely satisfied. Edward Whitacre, GM’s new Chairman recruited by the US Government and former AT&T chief, is the face of the new campaign. Shades of Dieter Zetsche!

This begs the question, of course, if the belief that GM has sub-standard products is really GM’s problem.

This has now escalated from a mere marketing question batted around a conference room table to real news, seeing as the American taxpayers coughed up $50 billion dollars to bail GM out, with the US government holding a 60% ownership stake in the company.

Clearly the guarantee element was included as an “insurance policy” of sorts. A creative way of expressing a “quality” proof-point in the ads. After all, would GM make the offer if they actually thought the cars were of poor quality?

But the truth is that real brand loyalty research has shown it’s been a good long while since consumers thought about GM in that way. The GM cars are, generally speaking, thought of as being as good as any comparably priced competitors. Really. So why even raise the issue?

Part of the answer likely has to do with the way in which GM has been evaluating the brand and its cars. Nothing so crude as “So, do you think GM still makes inferior cars?” where a “yes” or “no” reinforces a second-rate image any way someone answer—but you can bet some question or scale akin to that is being used.

No, the core of the problem resides in the fact that GM stands for “generic car company.” In the past we’ve called them the “ACME Car Company of the 21st Century.” GM was never very good at branding, and is still failing to present their cars in any context that is meaningful to consumers. When you’re just a “car” you never end up being rated better than a brand that is seen to be somewhat more than just a car.

But this is not a recent condition. A number of years ago The New York Times covered a new Buick campaign in their Ad column. It had some sort of tag like “Technology” or “Creative Motoring” or “To Infinity and Beyond.” When asked about why a positioning (such as it was) was selected, the Agency VP said something like, “Well, we had to give buyers something to tell their neighbors as to why they bought the car!” We don’t know about you, but none of us can ever remember using a tagline in any conversation that was not either work related or a hotly-contested game of trivial pursuit.

Back in 2005, after reporting a $1.1 billion loss (it was only stockholders money back then), the remedy that GM management suggested was to put the GM Mark of Excellence logo on all models in an effort to link the corporation to its divisions. This was deemed a good idea, presumably, because, as the company pointed out with its usual mid-20th century bravado, “everyone was familiar with the GM brand!”

It was, to say the least, an interesting marketing proposition: Link automobiles that stand for little in the consumer’s minds with a manufacturer that stands even less. Consumers knew, of course, GM made cars and trucks, but on the rare occasions they thought about GM, they didn’t think much about them at all (including anything having to do with substandard vehicles), and therein lies the real problem. GM brands never stood for anything in the minds of car buyers, and they still don’t.

It can’t have gone unnoticed – even in insular Detroit – that about a decade ago the consumer decision-process became far more emotionally-based than rationally-based. A lot of that has to do with the fact that with process-reengineering, Total Quality, advancements in robotics and the fact that consumers didn’t really didn’t like the door handles falling of their cars as they drove them off the lots, car manufacturers – all car manufacturers including GM – pretty much got the nuts n’ bolts fabrication formula down pretty well. Cars – price points notwithstanding – were pretty much the same. But the cars that did better in the marketplace were the ones that did better in the minds of the consumers. They “meant” something. They stood for something important to consumers. They thought, and they bought. At the very least they ended up in the consideration set. Of the four remaining GM brands, three stand for nothing.

Doubt me? OK here’s a little brand word-association test to determine whether any product or service is a brand. Ask the consumer to tell you the first thing that comes to mind when you name a particular product. In the car category it would go something like this (answers come from our most recent Brand Keys Customer Loyalty Engagement Index):

You: Mercedes
Customer: Luxury
You: Toyota
Customer: Hybrids
You: General Motors
Customer: Cars
(Category Placeholder)
You: GMC
Customer: Trucks
(OK, a little bit more explicit)
You: Buick
Customer: Uhhh

That “uhhh” is the sound of a brand dying. If you have no values or meaning to leverage all you can do is resort to tactics like offering a money back guarantee.

In their last campaign we heard a lot about “reinvention” from GM. But what they really ought to remember is that if they want to do something new, they have to stop doing things they way they did 50 years ago and start some sort of meaningful branding.

Because when it comes to successful auto sales, meaning is what sets us apart from other life forms – or at least the ones with driver’s licenses.

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The Rich Aren’t All That Different

2009-09-10T08:14:00.002-05:00

A number of years ago we identified a trend among wealthy consumers. We observed that these households were suddenly patronizing Discount Retailers, even though they didn’t really need to the way households with far lower incomes needed to. It turned out that they wanted to be seen a “wise shoppers.”

Most of this trend had to do with the commoditization of products and services, and the fact that “brands” (the quotes are intentional) had actually become “category placeholders.” Stuff people knew, but didn’t really stand for anything different than their primacy of product or service. You know, GM had become the ACME Car Company of the late-20th Century. Like that.

Anyway, we’re not sure if the recent economic upheaval reinforced or destabilized that trend, but the rich would have been wise to have listened to the advice offered up by Ben Franklin, “If you would be wealthy, think of saving as well as getting,” because bankruptcy filings have skyrocketed 73% in recent months among people who own homes worth more than $1 million, who can't afford them anymore and can't sell them, either.

Instead of liquidating and walking away, the rich are spending extra legal fees to file Chapter 11 reorganizations, actions reminiscent of another quote: “Bankruptcy is a legal proceeding in which you put your money in your pants pocket and give your coat to your creditors.”

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Happy To Be Going Back To Work

2009-09-08T08:08:00.001-05:00

Labor Day is a strange holiday. Think about it. There are no gifts, no decorations, no cards or flowers, no fireworks or costumes. There are the usual B-B-Qs, but then, a worker’s got to eat!

But whether you are celebrating or not, playing or reclining, consumer confidence has been working overtime. A leading-indicator of consumer spending, which makes up two-thirds of the nation's economic activity, consumer confidence jumped much more than was predicted last month. The job market outlook and business expectations have improved and the measure moved up nearly 15% from August’s numbers – especially regarding expectations for the economy six months from now.

This may not traditionally be a holiday that rings the registers, but this year there is something for America’s retailers to celebrate!

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Sometimes The Most Urgent Thing You Can Possibly Do Is Take A Vacation

2009-08-20T07:00:00.002-05:00

There’s a proverb that goes, “No matter what happens, a vacation gives you a story to tell.”

With that maxim in mind, we shall return to this blog after Labor Day with more stories to share with our readers.

See you back here September 8th.

We hope you have a good vacation too

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A Shock to the System

2009-08-18T07:00:00.003-05:00

A week ago GM announced its plans to plug into the alternative-vehicle market with the Chevrolet “Volt,” an electric car Chevy claims will get 230 mpg in city driving. This would make it the first car to break the triple-digit barrier for mileage, and deliver over four times the mpg of the most popular car in the category, Toyota’s Prius. The price tag? Also a lesson in multiplication for car buyers: $40,000, or nearly twice the cost of the entry level Prius II.

While clearly GM needs to restructure the brand in serious ways, there remain some unanswered questions about how the buying public—already jaded with GM products—will respond to an electric car that comes with sticker shock, not to mention the challenge of plugging in, especially for city dwellers whose outlets may be out of range of any power cord. The “build it, they will come” philosophy was never a very good one, and is less so today when our research in the category continues to demonstrate that consumers expect their cars to be increasingly green, while more green stays in their wallets.

And while “green” and “fuel economy” are certainly high-percentage loyalty contributors, the current overall rankings in, for example, the smaller sedan and crossover vehicle segment demonstrates the marketplace reality of the data and match up pretty well to the top sellers in the recent “Cash for Clunkers” program:

1. Toyota
2. Ford
3. Honda
4. Jeep
5. Hyundai/Nissan

Faith, they say, is like electricity. You can’t see it, but can see the light. For consumers recently too often that light has not been a new car, it’s been a train. As Americans, and thus part-owners of General Motors, we would like nothing more than to see it move up in the world. But it will be consumers’ belief, and not faith, that will turn on the GM brand. And that belief will come when the brand delivers against the expectations consumers hold in the category, not before.

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Back-To-School Basics (Part 2)

2009-08-13T07:59:00.001-05:00

That anticipated back-to-school sales are down should not be a surprise to retailers. But consumers are spending close to last year’s spend – parent can’t do anything about growth spurts or the need for larger shoes – so which retailers will get A’s in brand management and sales this season? See the categories below (numbers in parentheses indicate changes from last year’s Back-to-School consumer choices):

Discount Retailers

Wal-Mart 70% (+10)
Target 50% (-0-)
Kmart 40% (-5%
Best Buy 30% (-5%)

Department Stores

Kohl’s 40% (+15%)
Macy’s 35% (-5%)
Dillard’s 35% (-0-)
JCPenney 30% (+5%)
Sears 15% (-5%)

Office Supply

Staples 50% (+5%)
Office Max 35% (-0-)
Office Depot 35% (-0-)

On-Line

Amazon.com 80% (+5%)
Zappos.com 55% (+10%)
Staples.com 40% (+5%)
Apple 40% (+10%)
Dell.com 35% (+5%)
Overstock.com 20% (+3%)

While there will be some clear winners, despite massive discounting other retailers continue to struggle. Our Customer Engagement metrics have been predicting what has manifested in the marketplace over the last several years: What brands get what piece of the academic pie depends upon how much the retail brand has truly learned that brand meaning has become a surrogate for value in today’s marketplace.

And that’s a fundamental lesson for all marketers.

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Back-To-School Basics (Part 1)

2009-08-11T07:00:00.002-05:00

According to the U.S. Census Bureau, New York public schools invest $15,981 per pupil to teach the 3 R’s. Tennessee spent $7,113. On average the states paid $9,666 per student. That’s up nearly 6% overall.

The average parent, on the other hand, anticipates spending $531 this year for back-to-school clothes and supplies. Despite retailers’ deep discounting and promotional activities, consumers are showing steadfast frugality, with a figure that’s 10% below 2008. That’s because the 3 R’s for consumers are now ‘Retailer,’ ‘Rates,’ and ‘Requirements,’ or which retailer is going to offer the best prices for the things the kids require most?

The survey includes assessments from 10,000 households with school-aged children (pre-school through 12th grade), drawn from the 9 US Census regions, and found that the average-spends for the major back-to-school categories is expected to be as follows:

Clothing $275.00 (Unchanged from last year)

Computers, software, printers $189.00 (-11%)

Shoes (athletic & dress) $105.00 (-10%)

Supplies $ 95.00 (-5%)

Books and study aids $ 20.00 (-25%)

Unlike other major purchase events like Mother’s and Father’s Days there’s a more lopsided distribution in terms of which retailers will be the beneficiaries of consumers back-to-school shopping:

Discount Stores 95% (+ 12%) over last year

Department Stores 55% (-0-)

Office Supply 55% (+ 10%)

Online 50% (+ 25%)

Specialty Outlets 30% (- 6%)

Catalogs 30% (+ 20%)

That the average share of back-to-school wallet is going to be down 10% from last year may be of little solace to retailers. Still, most kids will be going back to school pretty well kitted out in the classroom, and anyway, even in this economy, it’s still true that any investment in knowledge always pays the best interest.

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CAR ALLOWANCE REBATE SYSTEM

2009-08-06T07:55:00.002-05:00

If the car you own has a combined 18-mpg rating or below, you may qualify for the U.S. Government's trade-in rebate program, aka "Cash for Clunkers." If you qualify your old vehicle may be worth up to $4,500 towards the purchase or lease of a new, more efficient car.

The “Cash for Clunkers” program has been such a big hit with consumers that the government announced it was actually in danger of running out of funding for the program. Some dealers are running low on inventory due to the program's popularity.

But don’t worry; the Senate has cleared the way for a vote to extend the program through Labor Day. Transportation Secretary Ray LaHood said, "In about eight or ten days, the government has proved we can get money out the door and sell almost 160,000 cars, and push about $600 million out the door in order to do it," he added. "This is a huge boost for the economy."

What are “Cash for Clunkers” participants buying when they trade in their clunkers? A new report released by federal transportation officials indicates that 4 out of 5 drivers are putting the rebates toward foreign-made automobiles. That doesn’t surprise us though. According to the Brand Keys Customer Loyalty Engagement Index, when it comes to being “Fuel Efficient and Environmentally Friendly,” here’s how the top-10 auto brands rank on those loyalty-drivers:

1. Toyota
2. BMW
3. Mercedes
4. Hyundai
5. Subaru
6. Honda
7. Nissan
8. Saab
9. Volkswagen
10. Jeep

Of course, those are just the rankings for fuel efficiency and being green – reflecting the program’s raison d’être – but still, even with other emotional and rational aspects making up the automotive category, 9 out of 10 of the cars are foreign-brands. If nothing else, these numbers reveal a lot about how consumers perceive the brands vis á vis good gas mileage, and because they’re linked to loyalty, they are leading-indicators of how they’re going to behave in the marketplace.

So if more mileage is what you’re looking for, you can check out the brands listed above. Or you might follow another route once suggested by George Carlin: Kilometers are shorter than miles. Save gas and just take your next trip in kilometers!

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Passengers May Not Stand For Big Airlines Savings

2009-08-04T07:00:00.002-05:00

Ryanair, the low-cost Irish airline, headquartered at Dublin Airport that operates 190+ Boeing 737-800 aircraft on some 830 routes across Europe and North Africa, wants more people on their flights.

Well, why not? The beleaguered airline industry, beset by the recession, diminished business and pleasure travel, and increased fuel costs has already resorted to abolishing amenities and charging for checked luggage. But here’s a new tactic: Ryanair has asked Boeing to design a plane where passengers would stand for the entire trip.

The idea is that standing passengers would fly with a belt around their waists, buckling them to a metal pole and have them kind of huddle next to ledges that have been described as something like “bar stools.”

Well, we can’t say whether US travelers would stand for this kind of treatment, but as we’re going into high Summer vacation mode, we can tell you – as found in our Customer Loyalty Engagement Annual Research – how US airlines rank when it comes to “In-Flight Comfort.” Their standings look like this:

1. JetBlue
2. Delta
3. Southwest
4. Continental
5. USAir
6. American
7. United
8. Northwest

Ryanair head, Michael O’Leary apparently got the idea from the Chinese airline Spring, which put forward similar plans — estimating they could pack in up to 50% more passengers and slash costs by 20%.

An airline would have to withhold a lot of dry roasted peanuts to up make those kinds of savings, but we suppose things could be worse. O’Leary also unveiled plans for planes with just one toilet instead of three, which would add six extra seats to the plane.

None of these cost-savings affect travel time, although, we suppose that just like on the ground, how long a minute is depends on what side of the bathroom door you're on!

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