Branding Kelly Smith Branding Kelly Smith

Brand Building Fundamentals: Desired Consumer Experience

Branding only from the inside out opens the door to confirmation biases. It's just too easy to convince yourself that your brand is smart, innovative and darned good looking. But your brilliant product without an audience isn’t worth much in the market.

Brands often talk about what they bring to the market. The smart ones also think about how they want their audiences to respond. In brand building, this is the Desired Consumer Experience (DCE).

Branding only from the inside out opens the door to confirmation biases. It's just too easy to convince yourself that your brand is smart, innovative and darned good looking. But your brilliant product without an audience isn’t worth much in the market.

I like to consider three vectors for DCE:

  1. What do you want your audience to THINK about the brand as a result of an interaction?

  2. How do you want them to FEEL about the brand?

  3. What do you want them to DO?

A few DCE examples:

  • (The brand) helps me feel like I can own my future

  • (The brand) is always working on my behalf

  • (The brand) helps me take care of what's important

  • (The brand) makes me feel like a rock star!

I tend to lean towards emotion in the DCE partly because emotional connections are longer lasting than simply having consumers think "I always get a good deal."

Ultimately it's your call. Just be purposeful in your choice.

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Brand Building Fundamentals: Points of Difference

Key here is that points of difference should be elements of the brand that competitors can't copy easily (think under six months). Unless the brand is willing to fight for trademarks, you can expect your assets to be copied.

Every successful brand must have attributes or benefits that make them stand out in the hearts and minds of consumers and stand apart from their competition. These are the points of difference in the brand foundation and are fundamental to helping your brand win in  the marketplace. They are what give your audiences a reason to turn your way versus the competition.

These can be rational, as in distinct product quality features or maybe even the fact that it's tied to a particularly strong parent brand/organization, or emotional, as in the way the brand makes its audiences feel.

Key here is that points of difference should be elements of the brand that competitors can't copy easily (think under six months). Unless the brand is willing to fight for trademarks, you can expect your assets to be copied.

One of my favorite examples of the nuances between points of parity and difference comes from the classic Miller Lite campaign. In this campaign they touted "Great Taste," a point of parity in the category plus "Less Filling," a point of difference at a time when consumers wanted fewer calories without sacrificing taste. Brilliant.

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Branding Kelly Smith Branding Kelly Smith

Brand Building Fundamentals: Points of Parity

What your brand does that qualifies you to be in the market will not differentiate you from your competition. They're called points of parity in brand building—so you can move on to what matters.

What your brand does that qualifies you to be in the market will not differentiate you from your competition. They're called points of parity in brand building—so you can move on to what matters.

The name is fairly transparent: these are elements the brand offers that enable them to be seen as a player in any particular category. I often state it like this: If I were a billionaire and wanted to get into your category, what would I need to offer in order for people to take me seriously?

The list often starts with things like: wide range of products, good quality, a variety of experts on staff, size of company, efficacy, good value, etc.

In workshops with some larger, established brands rethinking their way, the list can fill several pages—which is perfect for the group to work through. Because many established brands fall victim to believing their Points of Parity are what separate them from their competition. They don't! They simply keep you in the game.

The next step in the equity building process is to identify Points of Difference. These are usually much harder to nail down—some brands may only have one or two true differentiators.

I'll discuss those in my Points of Difference post.

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Branding Kelly Smith Branding Kelly Smith

Brand Building Fundamentals: Brand Personality

Brands can be fun, free willed, playful, studious, a work horse, etc. But those attributes don't drive much energy into the brand. Worse, your interpretation of "fun" may be decidedly different than mine. So we could work on the same brand using "fun" as the brand personality and end up in vastly different areas.

Every brand has a brand personality. Not every brand chooses to manage that personality. That's a mistake.

Brand personality has been defined as the human characteristics that embody the brand or brand experience. Helpful? Didn't think so. Let's rethink this.

Brands can be fun, free willed, playful, studious, a work horse, etc. But those attributes don't drive much energy into the brand. Worse, your interpretation of "fun" may be decidedly different than mine. So we could work on the same brand using "fun" as the brand personality and end up in vastly different areas. I think that's an issue.

I recommend people start with analogies (cars, famous people, bands, etc.) and then unpack what makes them work for the brand.

You might start with mountain climber Reinhold Messner. But everyone might not recognize that name. Unpacking that might get you to: Courageous, personable mountain guide: skilled, knowledgeable, engaging, with an intense desire to help others succeed.

It can be short or long. Just help people get on the same page and visualize the potential so internal and external audiences connect with the same powerful personality.

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Business Strategy, Branding Kelly Smith Business Strategy, Branding Kelly Smith

Tankers and Speedboats: Is your innovation program solving the right problems?

… too many speedboats and you can new idea your company out of existence. Too many tankers and the world will pass you by. With innovation, it's often best to let your speedboats race out to the front.

What's the balance between your tankers (people who excel at keeping the train on the track and dialing up efficiencies), and your speedboats (people looking to move fast and find what's next)?

Most companies need both. Too many speedboats and you can new idea your company out of existence. Too many tankers and the world will pass you by. With innovation, it's often best to let your speedboats race out to the front.

I'll use the Peloton bike as an example. (https://lnkd.in/e3DJd-W) In your typical company, the challenge goes out to build a better spinner bike, so the tankers get on it. They hyper-analyze materials, components and electronics, adding and honing to build the ultimate self-contained unit, like bikes have always worked.

But the Peloton team are speedboats. They combined a love of cycling, problems with scheduling rides and the isolation of working out alone, and came up with a better experience in general. Now you can be a part of a group experience—at home. Log in, ride, sweat and win alone and yet still with others. Brilliant.

Tankers can now fine tune the machine while the speedboats run ahead.

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Business Strategy, Branding Kelly Smith Business Strategy, Branding Kelly Smith

Tankers and Speedboats: Checking the box versus solving the issue.

Every company has check-the-box employees. These are people who keep their heads down and move through a steady list of to-do items.

Every company has check-the-box employees. These are people who keep their heads down and move through a steady list of to-do items.

Sometimes these are the tankers who were hired to keep the machine going. I have also found this in tankers disguising themselves as speedboats. These people like to check LOTS of boxes every day to show how busy they are.

But we need people who lift their heads up to identify and solve issues.

Take, for example, the lowly highway stripe. Before 1911, roads had no dividing lines to help people know when they'd strayed too far over. Maybe this wasn't a big problem on straight roads, but there were countless wrecks around curves as people drifted around the turn.

Check the box people don't see or solve this problem. But a guy named Edward Hines, who was a Michigan county road commissioner, saw the problem for what it was—solvable. He had his crews add lines to the center of the roads, and thereby changed the way we navigate highways around the world.

It wasn't a crazy invention or expensive idea.

But it wasn't anyone's job to solve this issue, either.

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Business Strategy, Branding Kelly Smith Business Strategy, Branding Kelly Smith

Tankers and Speedboats: Are you trapped by success, or failure?

Success can trap even the speedboats of a company into believing their one brilliant win is enough. It isn't. Companies must continue to innovate and learn, try and fail, learn more and stretch to find what's new.

Success can trap even the speedboats of a company into believing their one brilliant win is enough. It isn't. Companies must continue to innovate and learn, try and fail, learn more and stretch to find what's new. Because in every category, someone is out there willing to fight to make an impact. And those without the roadblock of success can do amazing things before they're told those things can't be done.

On the other end of the spectrum is failure, which leads to risk aversion. They say if a cat sits on a hot stove and gets burned he'll never sit on a hot stove again. The problem is that he won't sit on a cold one, either.

I worked with a company once that had tried a number of innovation approaches years before. During one intense period they'd tried consultants, students, PhDs and more only to come up short. So they stopped innovating and just focused on legacy products.

The tankers of the company convinced everyone that innovation was a bad thing and pointed to the old data as proof.

After a scare from a competitor, new management turned the innovation spigot back on and the company lived to fight another day.

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Business Strategy, Branding Kelly Smith Business Strategy, Branding Kelly Smith

Tankers and Speedboats: Are you over-engineering the solution?

The average tv remote control has 40+ buttons. Most people use about six on a regular basis and stretch to 10 in a crunch. So why do remote controls have the extra 30+ buttons? Because they can. But should they?

The average tv remote control has 40+ buttons. Most people use about six on a regular basis and stretch to 10 in a crunch. So why do remote controls have the extra 30+ buttons? Because they can. But should they?

This is a classic tanker paradox. Instead of stopping with clean and simple, tankers are driven to add and build until all that extra space is filled.

I found this in an innovation program with a client a number of years ago. Market and consumer insights said consumers really wanted a product that did ONE particular job very well and came in reasonably priced. The tankers in the organization skewed the data to show that what people really wanted was a product that did a VARIETY of things.

We sketched ideas on a continuum and went back to consumers to double check things before heading further in product development. Sure enough, the simple ideas came out on top.

At this point the client took over the rest of the product development. What hit the market was a convoluted mess. The tankers won. And the product failed.

I've found healthy teams balance their tankers with speedboats who have the power to say no to over-engineering.

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Business Strategy, Branding Kelly Smith Business Strategy, Branding Kelly Smith

Is the ad agency model dead?

A year after launching a start-up agency built on filling the gap between in-house creative groups and traditional agencies, I get asked almost weekly if I think the traditional agency model is dying. The answer? Maybe. But the reasons are far simpler than people think.

A year after launching a start-up agency built on filling the gap between in-house creative groups and traditional agencies, I get asked almost weekly if I think the traditional agency model is dying. The answer? Maybe. But the reasons are far simpler than people think.

1. Too expensive: This always has been an issue. Agencies that can't prove their value will die.

2. Too slow: I think this goes to responsiveness. Not everything can be done quickly. But much of it can. Time still equals money.

3. Too many people: Agencies still bring five people to meetings when two will do. And clients recognize that only two are actually doing the talking. Yet all five are billing $200 an hour. That's a logic problem.

4. Too full of themselves: The condescending, insular personalities who can't be bothered by the business challenge are just not relevant in a world that needs to find ways to solve problems faster and build better relationships.

5. Too much jargon: Can we give "proprietary processes" a rest? Many companies would be happy to forego the bloated process for faster, smarter work. Those processes are rarely proprietary, anyway.

In the end I think it's about solving problems efficiently and humbly.

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Business Strategy, Branding Kelly Smith Business Strategy, Branding Kelly Smith

Does anyone really care about core values?

If your culture is dysfunctional, it doesn't matter how many core values you list or how you word them. If the leadership doesn't demonstrate the kinds of behaviors you want, TELLING your employees how to act will fall on deaf ears.

I work with clients every year on vision, mission, core values and culture challenges. When we get to articulating core values, executives often defer to a standard list of behaviors like Integrity, Accountability, Responsiveness, Empowerment, etc. But this random list doesn't do anything for anybody.

Enron's core values were Communication, Respect, Integrity and Excellence. Most would agree that these values were anything but core to the company.

The culture was corrupt. And that's where I find executives get confused. Your core values emerge from the culture. They don't drive it.

If your culture is dysfunctional, it doesn't matter how many core values you list or how you word them. If the leadership doesn't demonstrate the kinds of behaviors you want, TELLING your employees how to act will fall on deaf ears.

Ralph Waldo Emerson put it this way: “What you do speaks so loudly I cannot hear what you are saying”

So, no, core values don't matter. Core behaviors do.

If you want to change a company, or help guide an organization to a positive new future, focus on the behaviors. Start at the top and cascade down. Once the leaders get it right you can consider making posters and t-shirts. Until then, no. You're just asking for trouble.

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Branding Kelly Smith Branding Kelly Smith

Branding Should Be Logical

Logical branding doesn't mean overly simple. It means people can easily understand the path from one end of the communication spectrum to the other, whether that's in the portfolio strategy, equity, architecture, Web site or customer service rep responses.

Over the last 15 years+ I've dug into and created branding programs for start ups to global conglomerates in almost every category and channel imaginable. What has become abundantly clear is that the strongest brands, and companies with zealous employees and brand  fans, are crazy simple and logical.

Logical. Sounds almost too easy, right?

In the market I think it's a combination of vision and purpose—very few companies set out to confuse their audiences and make it difficult for them to find the products and services they want.

Logical branding doesn't mean overly simple. It means people can easily understand the path from one end of the communication spectrum to the other, whether that's in the portfolio strategy, equity, architecture, Web site or customer service rep responses.

Behind the scenes it involves the kind of brand building tools people inside those companies will use to bring the brand to life. It's been my experience that too many agencies promote complicated tools and "proprietary methodologies" that are hard to explain and harder still to use, and therefore end up in a drawer. The brand spends money on the agency but doesn't improve the experience or the brand.

I think logical is better.

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Branding Kelly Smith Branding Kelly Smith

10 Steps to Creating a Personalized In-Store Experience

The in-store experience is critical to the success of any retailer. It is especially important to small retailers and mom-and-pop operations. It is your chance to prove to your customers that you have their best interests in mind and that you are truly focused on helping them succeed.

The in-store experience is critical to the success of any retailer. It is especially important to small retailers and mom-and-pop operations. It is your chance to prove to your customers that you have their best interests in mind and that you are truly focused on helping them succeed.

That means first impressions count. It means how you address them and their interests matters. It means they are your number one focus for the entire time they are in the store, and you will give them every reason to return—as well as give them reasons to tell their friends how amazing your store is. 

1) Engage the customer within the first 30 seconds of their entry into the store. Thirty seconds isn’t much time, but it feels like an eternity to someone visiting who sees you not connecting with them.

Avoid the gauntlet! There is plenty of research that shows a rise in heart rate and stress as consumers enter some retail shops—because they know they are going to be assaulted by commissioned sales people. When this happens, consumers naturally put up their defenses and say no to ANY help offered.

So, when you engage with your customer, it MUST be in an approachable manner and CANNOT be confused as an attack by a money-hungry salesperson.

2) Introduce yourself by name and thank them for coming in to the store. Then ask if there is a specific question they came in the store to answer. This may include shopping for a distinct event, room, person or item. You offering your name makes this a personal experience, not just a trip into someone else’s club.

Technology exists today that allows consumers to scan QR and other codes in-store and receive real-time information on the range of options available. Consumers can even link to an online shopping cart while in the store and do their shopping virtually while browsing the real thing. This kind of technology enables the floor personnel to stay connected to customers without chasing them throughout the store.

What I love about this approach is it enables the customer to stay in control of as much of the information gathering and sharing as SHE wants, and removes an uncomfortable barrier between pushy salespeople who ask too many questions at the wrong times.

3) If they say NO: give them room while providing information on the layout of the store. For example, point out how the store is arranged, where to find particularly popular items, showcase what’s new or different.

Tell them you will check back with them in a few minutes—and let them shop on their own. But make sure you check back with them.

Keep your promises, even little ones made in the moment. These may seem small to you, but your customer uses them to judge your credibility.

4) If they say YES: obviously you want to address that need. This is where customer segmentation comes into play. The more you know about the type of customer you are dealing with, the better prepared you are to provide the right kind of information they want and how they like to receive the information.

For example, if you’re in a specialty business like a guitar or bike shop, you need to be able to determine whether you are talking with someone who considers him or herself an expert, or whether you have a newbie on your hands. The expert may be able to cut to the chase and sort through all the technical details of the product. The newbie will likely be lost by the jargon and turned off by their perception of you acting like a know-it-all.

5) Offer ideas: People like to buy; they just hate to be sold. So offer ideas and reasonable suggestions. Start small and work your way up.

Keep in mind that your online retail competitors have all of this built into their software. So instead of personal assistance and suggestions your customers get pop-ups and banner ads. You being there in person should be a better option to online, if you want your customer to return.

6) NEVER PATRONIZE YOUR CUSTOMERS! If they don’t know what questions to ask, it is your job as the expert to help them get to a great solution while allowing them to save face. Most people do not like to admit that they don’t know the answer to a question. You proving they don’t know what they’re talking about may make you feel better but it will almost always guarantee a lost sale plus a social media wildfire.

Retail is hard. Dealing with living, breathing customers in person every day can be crushing to the spirit—on the bad days. But that never gives you the right to belittle your customers. The customer is NOT always right. By the same token, they are not always wrong, or stupid, or lazy or ... you get the idea. Use the Golden Rule here.

7) Be the expert: Most of your customers want you to know what you’re doing, and expect you to know more about your category and channel than they do. So feel free to offer tips and share anecdotes based on your personal experience. Chances are good that you have more experience in your category (especially if you’re in a specialized category) than a fair number of your walk-in customers. Your excitement for your store, variety, options, potential and more will rub off on them—and improve your chances for a sale.

8) Think long-term: You are building a relationship one visit at a time. Some of your customers will walk into the store having done their homework and knowing exactly what they want. For them, you will likely serve as the resident expert who shows them what they want to see and verifies the details.

Many more customers will want to browse and ask questions, especially for larger ticket items. Be patient with them. Give them a reason to come back, which starts with liking the in-store experience and the person helping them—that’s you.

9) Get them into the system and into events: Every in-store visit is a chance to connect long-term. So get their name and contact details while pointing them to your Web site, Facebook page, app and more. Let them know the kind of information you post online (tips, videos, styles, upcoming shows, etc.) so they have a reason to check in. Ask if they would like to receive follow up reminders and updates.

10) Give them a reason to return: Remind them of your name and show them that you remember something about their interests, which proves you were listening to them. Offer to help personally on their next visit.

For consumers to continue to frequent brick and mortar retailers, the experience in-store simply must offer options beyond making product available and available locally. Those arguments are wasted when consumers can have virtually any items shipped directly to them overnight in most cases and free of charge.

In-store experiences offer an excellent opportunity to build lasting relationships between real people and provide the emotional connection many say is increasingly missing from the equation. If you can’t win on price, and many boutique stores cannot begin to win a price war, then emotion and personal interaction must overcome the difference. You can do it.

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Six Critical Factors in Winning Against Private Label

When private-label brands can match, or claim to match, national-brand quality standards, it’s time to recognize their power and plan accordingly.

In the not-too-distant past, private-label products were discussed in the same hushed tones reserved for topics not suitable for public consumption. Consumers didn’t really want to tell anyone they bought private label, the generics of the retail world, and let on that they were willing to compromise. National-brand managers relegated private-label products to the bottom of the category shelf set, allowing a tiny portion of share to be taken by this awkward cousin—but never really took them seriously.

But in the economic crash of 2007–2009, the world of private label changed dramatically. Retailers like Tesco, Sainsbury’s and Morrisons led the way by developing private-label brands instead of individual products. By some reports, as much as 54% of Sainsbury’s sales, and 41% of Tesco’s sales, come from these owned brands.

These retailers also recognized that (in many cases) using a national brand equivalency (NBE) strategy, where one simply knocks off the aesthetics of the best-selling national brands in each category and places their product to the immediate right of said brand with a price 40% lower, wasn’t gaining any loyalty.

The private-label trend caught on globally, from Loblaws of Canada to Walmart, Target, Kroger, Aldi, Wegmans, H-E-B, The Home Depot, Lowe’s … the list goes and grows on. A 2013 Nielsen Homescan study showed private-label brands in the US make up an average of 23% of total dollar share in supermarkets, 20% in club, and 18% in dollar. And now, Amazon is actively building its own private-label group, with plans to offer a considerable amount of owned, branded products across hard and soft goods.

A 2013 Nielsen Homescan study showed private-label brands in the US make up an average of 23% of total dollar share in supermarkets, 20% in club, and 18% in dollar.

So what can national brands do to compete in a world where they don’t control the retail space, shelf set or pricing structures? It’s a tough question to answer, but there are a few opportunities out there for brands willing to take on the challenge.

1. RECOGNIZE THE QUALITY OF PRIVATE LABEL

Sometimes we run into brand managers who scoff at the idea that private label might be a real competitor. Or, perhaps even worse, relegate private label to the lowest tier of the category set and figure that only consumers looking for a cheap product at a cheap price will choose it.

This line of thinking is horribly flawed. Private-label products and brands have made huge strides in quality over the last 10 years, with many of the manufacturers who support private label proudly touting the superiority of their products versus national brands. First Quality Enterprises of Great Neck, New York regularly conducts independent tests to certify that their diapers and incontinence products perform as well as or better than any national brand. Aldi recently ran an ad calling out Pampers in a head-to-head comparison with their Mamia brand.

When private-label brands can match, or claim to match, national-brand quality standards, it’s time to recognize their power and plan accordingly.

2. GET TO KNOW YOUR BUYERS AND CONSUMERS

Most retailers build their private-label brands through in-store conversion. They spend few resources educating consumers on the values of their brands or trying to build relationships with consumers before they enter the store. This is where national brands hold the first advantage.

National brands must know the people who shop for and consume their brands and products very, very well! I’ve worked with brand managers that noted their consumer audience as “builders” or “homeowners” or “moms.” That kind of vague reference won’t get you anywhere. You must dig to understand not just the demographics of the people buying and using your products, but also the psychographics behind why they make their choices. To do this, I recommend getting out and talking with people face to face, in homes, in stores, wherever they gather or shop for or use your products. Sending out an online survey will never get you into the hearts and minds of your consumers. You must engage them personally.

3. CREATE STRONG BRAND EQUITIES

Make it easy for your brand zealots to discover, locate, purchase and recommend your brand and products to other like-minded fans.

I’ve been playing acoustic guitar for more than 35 years. Around 20 years ago, I came across the Taylor guitar brand out of El Cajon, California. I was drawn to the quality of the guitars they made, and the distinctive headstock made it easy to spot others playing the brand from a distance. The brand published a newsletter that looks and reads like a high-end magazine, and shipped it free to everyone who owned a Taylor guitar. These newsletters shared stories about how the brand sourced woods, built different guitars, incorporated technology in the building process and more.

They also built their brand community by using popular artists to play at local guitar shops where fans could get their hands on the very guitars being played exceptionally well by these artists. This collection of information and identifiable equity elements has helped Taylor become the number-one acoustic-guitar brand in the US.

4. BUILD EMOTIONAL CONNECTIONS

Studies continually show that consumers trust national brands at a level that far outweighs their private-label counterparts. The power of Coke’s long history of brand storytelling, from unique shape language to the color red, polar bears, Santa Claus and teaching the world to sing, makes it virtually impossible for store brands to compete on anything but the lowest performance measures.

When national brands focus on product function only, they open the door for private label to take away market share. Most consumers want an emotional connection to the brand. Give it to them.

5. INNOVATE AND LEAN FORWARD

Private-label manufacturers by their very nature race to catch up to national brands, which is why national brands must work twice as hard to change the game. This means national brands must stay in touch with consumers and market trends to see what people want now, and how their preferences are changing, so they can anticipate change and get ahead of it whenever possible.

Steve Jobs recognized that anyone could make a phone, but only Apple could make an iPhone. He looked at a category replete with lookalikes and created a new platform that shook up the entire mobile phone universe so much that a once-dominant player like Nokia, which had gotten lazy in its innovation cycle, saw market share fall from a high above 50% in 2007 to just 3.5% by the third quarter of 2012.

Offering new versions, flavors or varieties of the same old products never has and never will be considered innovation. Consumers get confused by too many line extensions and default to the products they know and love anyway, so do yourself a favor and reach beyond the extension into true innovation.

6. USE THE ENTIRE MARKETING MIX TO YOUR FAVOR

Because consumers have an emotional connection to and therefore predisposition to purchase national brands, it is the responsibility of the national brands to do everything in their power to embrace those passionate consumers. This will never happen in one clean, concise manner. It involves strategies in pricing, placement, product assortment and promotion. Finishing this experiential journey with excellent customer service, trade relations and sales support increases the likelihood that your brand will be able to compete against the strongest private-label challenges.

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Build Private Label Brands That Last

Consumers have been trained to perceive three tiers in most retail environments: cheap stuff, expensive stuff and everything else. However, owned brands can fall prey to presenting too many layers. Some retailers have difficulty killing off weak products or collections that no longer match the brand and instead create sub-tiers and super-tiers. When consumers can’t distinguish the nuances, they apply the three-tier rule for simplicity.

Private Label has come a long way since the 1970s!

In the US, private-label products have long carried a stigma of being the generics—the items people bought when they needed to compromise. Some point to the energy crisis of the 1970s as a boom-and-bust period for private-label products. Consumers were forced to trade down from their beloved brands to cheaper options because they simply couldn’t afford the items they really wanted. They bought a lot of private-label products, and—by most accounts—the experiences didn’t go all that well.

Two hard lessons were learned during this period:

1) Private label more often than not meant significantly lower quality and;

2) Consumers couldn’t wait to trade back up to brands and products they really wanted when their budgets allowed the switch.

Private-label advocates knew they had to find ways to build brand loyalty and gain credit for more than just being the lowest-cost option.

The good news is that private-label brands have made huge strides in the hearts and minds of American consumers. During the Great Recession of 2007–2009, as in the 1970s, large numbers of households were driven to private label. But one significant difference is that as the economy has shown signs of strengthening, consumers haven’t bailed from private label. A recent Nielsen report indicated that 71% of consumers say private-label quality has improved over time.

Can private-label brands hold on to their good fortune? We’ve identified five key principles that need to be in place for private label to hang on to and advance their share.

BUILD BRANDS INSTEAD OF COMPROMISES

Consumers always claim to want the lowest price, which is why so many private-label efforts follow a national-brand-equivalent (NBE) strategy. But when this happens, consumers are reminded that private label is the trade down from their desired choice. So private label gets no credit for brand or product innovation, nor loyalty based on its own equities. Consumers will trade up and out when possible.

Target’s Up & Up brand abandoned NBE lookalike branding, opting instead for clean, bright packaging and clear system architecture to communicate minimalism without sacrificing style. By building up its own brand, Up & Up created a recognizable, “cheap-chic” offering in line with Target’s master-brand positioning.

LIMIT YOUR LAYERS

Consumers have been trained to perceive three tiers in most retail environments: cheap stuff, expensive stuff and everything else. However, owned brands can fall prey to presenting too many layers. Some retailers have difficulty killing off weak products or collections that no longer match the brand and instead create sub-tiers and super-tiers. When consumers can’t distinguish the nuances, they apply the three-tier rule for simplicity.

Sainsbury’s evolution to private-label leadership began with a clear good/better/best strategy that provided separation within the tiers—“Basics,” “by Sainsbury’s” and “Taste the Difference.” Giving each brand a discrete (and complementary) job to do ensures products are organized in a smart, accessible way so consumers can quickly assess and know what they’re getting.

MATCH THE BRAND SCALE TO THE SITUATION

In today’s superstores, shopper mindsets shift from aisle to aisle. Know where private-label initiatives can succeed as large-scale systems crossing the entire store (such as Costco’s Kirkland Signature brand) or where they are more effective as smaller systems that leverage the unique emotional cues of specific categories (think Walgreens’ private-label-turned-national-brand Boots for high-end beauty). It’s important to match the needs of the brand, category and consumers.

MAKE EACH BRAND STAND FOR SOMETHING DISTINCT

People don’t buy what you make, they buy why you make it. Owned brands can become watered down over time by lack of clarity in the brand purpose or position in the marketplace. Building a purpose-driven brand empowers owned brands to use discretion when it comes to product assortment. And innovation against category white space can be a driving differentiator when tied to an established position.

Wegmans’ Simply from Nature pet line does this well. Driven by the insight that pets are family too, the line cuts out artificial colors, flavors and preservatives. Here, staking a claim to a considered brand experience—while still driving value—elevates product benefits to differentiators and positions for preference.

KNOW HOW GOOD IS GOOD ENOUGH

Consumers tend to shop retail categories in one of two ways as they move across the store: top-down quality assessments and bottom-up compromise. For top-down assessments, they’re concerned about failure, perception and replacement costs. Think about buying fresh meat, where the family meal is on the line. The typical household only buys a few types of fresh meat that they already know how to cook. This drives butchers crazy but it makes sense when you think about it. Because if mom screws up a London Broil she’s trying for the first time she ruins dinner and suddenly the family is doomed to cereal or pizza for the night. The family now has to pay twice for dinner ... and mom feels like she’s failed the family. That’s a lot of pressure riding on one cut of meat. Better just to stick with things she knows how to fix and look like a star at the dinner table. The same logic holds true for other categories as well, such as prestige cosmetics, where emotion and appearance count.

For bottom-up compromise, consumers look for products that deliver their desired level of performance, but at the lowest price possible. Think about buying commodity and high-use items like toilet paper, laundry care, dish care and paper goods. Sure, there are always consumers who want the best. National brands love and court that audience hourly. But not everyone wants to pay for a quicker picker upper. These consumers tend to start at the lower end of the selection set and find what works okay for their needs. For them, a paper towel that works okay is just fine. They’ll save money on paper towels and go buy more ground chuck.

 

While the faltering economy that drove the expansion of private label has improved, in its wake is a new class of value-minded consumers willing to keep purchasing private-label brands as long as they perceive continued quality and innovation. Brands that leverage these principles will be poised for both elevation and endurance.

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Branding Kelly Smith Branding Kelly Smith

It’s Spring. Time to Weed Your Brand.

I find many brand portfolios resemble my yard in the spring: odd collections with a few purposeful placements, a few hangers-on, and a handful of items that randomly showed up over time. Why not use spring as the time to do some brand management?

Spring at my house means crazy combinations of things growing in my yard and flowerbeds. Some are flowers that somehow survived the winter, even though they are technically annuals and should have lived only one glorious year. Some are perennials that we expected to return. And others are a mélange of weeds and various sprouts.

These plants are not coordinated in any way and grow randomly and somewhat frustratingly wherever they like.

I find many brand portfolios resemble my yard in the spring: odd collections with a few purposeful placements, a few hangers-on, and a handful of items that randomly showed up over time. Why not use spring as the time to do some brand management?

Just because it grows doesn’t mean it fits

I’ve worked with a large number of brand managers who looked at their roles as two- to four-year engagements where they intended to make their mark and move up in the company. That meant launching new products and brands. It did NOT mean affecting anything that came before them. The typical result is a dysfunctional brand portfolio that makes things tough for consumers.

There are plenty of case studies on bad brand extensions like Coors Water, Colgate’s Kitchen Entrees, and Frito Lay Lemonade because it’s easy to spot the major offenders. But people forget that micro-extensions are just as dangerous: the shampoo in 30 varieties though only six sell with enough volume to justify the calories spent to get them to market. These are annuals that were beautiful for one season and should have died, but they showed up the next season and no one had the heart to get rid of them. If they’re no longer a match for the brand, or simply add color but no value, they need to go.

Build the plan but enjoy the surprise visitors

Admit it. Most of us really, really like the little things that blow in from nowhere and bloom into something pretty. Recently, Kohl’s found itself the unexpected beneficiaries of Candace Payne’s wildly popular Chewbacca Mask video. The brand took advantage of the positive vibes being given off by the video (some 152 Million views worldwide and counting) and rewarded Mrs. Payne with gift cards and gifts. Count that as a major win for the retailer and an excellent job of capitalizing on a sudden new flower. Now it’s back to the plan.

This is not to say that Kohl’s can’t continue the conversation involving “Chewbacca Mom” but it would be a mistake to change the whole program to reflect a mega-viral video.

Sometimes you just have to kill the weeds

Some companies make it hard to kill products that don’t work, or get rid of the ones that came in with an acquisition but no longer fit the brand. These are the weeds in the brand portfolio—and they have to go in order to let the good stuff shine through. Just like vines growing in the flowerbed, it can be easy to mistake weeds for healthy products, but they get in the way and choke the life out of the brand.

When Steve Jobs returned to Apple and began to turn the company around, among other things he killed off the weeds: laser printers, the Newton PDA and accessories. He simplified the portfolio so it could be amazing.

I hear plenty of people say they want their brand to be like Apple, but very few want to take the bold step of killing off products in the portfolio that seem to make money but actually drain the company of needed calories that could be better spent building something spectacular.

Be purposeful and enjoy the beautiful results

Every brand manager and company executive has a choice in what grows in the portfolio. But since there never seems to be a perfect time to reflect on what’s working and what isn’t, let this spring be the time you look things over. Have a plan. Weed accordingly. And be willing to trim some products that take on the appearance of good health but in reality suck the life out of the brand. In the end, you’ll have a stronger brand, build better brand tribes, and have the resources to continue your passion.

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Branding Kelly Smith Branding Kelly Smith

Could Your Brand Benefit From Personalization?

I work with a wide range of companies each year, from small mom and pops to Fortune 50s. A common thread, whether working on organizational health or brand strategy, is authenticity and humanity. Everybody wants it. Everybody talks about it. So why then do so few companies truly deliver in this area?

I work with a wide range of companies each year, from small mom and pops to Fortune 50s. A common thread, whether working on organizational health or brand strategy, is authenticity and humanity. Everybody wants it. Everybody talks about it. So why then do so few companies truly deliver in this area?

In many ways we can blame the convenience of email, which has done much to make communications simple, fast and easy, but has also added to the distance between people. Let’s face it, it’s often more convenient to send a quick email than to pick up the phone or even walk down the hall and have a conversation. I think we’ve lost more than we know by opting for convenience.

Before it’s B2B or B2C, it’s people to people

There are plenty of stories of famous people who wrote notes to those who touched them in some way, from Abraham Lincoln and Ronald Reagan, to John Lennon and William Faulkner. The common theme that makes the notes memorable is that the person writing the note was under no obligation to write it, and usually the person who received the note was pleasantly surprised or genuinely shocked to receive it.

I get surprised responses on the notes I write by hand. Why? Because so few people take the time any more.

 A friend asked me not long ago whether she should write a thank you note following a job interview, or simply send an email. My response was simple: write the note. I get many hundred email in any given week. I may get one handwritten note in a month, if that often. Which do you think I remember?

Personalization makes good business sense

I worked with a local triathlon shop for a few years to help them turn around their store after a particularly bad breakup between partners. The store’s reputation had taken a hit and they had virtually no money for traditional advertising and marketing. So we focused on the small things: we worked hard to rebuild positive comments on social media, we trained employees to improve the personal in-store experience and we added handwritten Thank You notes as a regular part of the process.

Notice that nothing in this list is particularly unique or difficult to execute. But the combination is rare enough these days.

In the triathlon world, new people enter the sport every week. From a retailer standpoint, that means people show up with the same questions and the same bewildered looks day after day. This can be frustrating for staff who are often seasoned athletes with years of competitive training and performance behind them. So we trained everyone in the store to think like a newbie—someone who isn’t in stellar shape, who doesn’t have all the right gear and who is probably intimidated by the thought of wearing compression gear in public.

This meant connecting on a human level and getting excited with the customer and for the customer. Most of us could use a few more people in our lives who share our interest and excitement in anything.

It also meant not focusing on the sale and, instead, focusing on the person in the store that day. We helped the staff see that by being genuine, accessible and willing to provide the right information for the right level of interest and energy, they could build relationships that far outweighed any one sale.

Finally, we implemented a simple policy of sending handwritten Thank You notes to everyone who bought a bike at the shop. Nothing complicated. Nothing convoluted. Just a note that said something like “thank you for choosing us to be your triathlon shop. We’re working on your bike to make it perfect for you. If you have any questions please don’t hesitate to call or stop by.”

Competitive triathlon bikes run from around $1,500 to beyond $10,000. And each bike is tweaked to uniquely fit each rider, which may add a week or two between the time of purchase to the time of delivery. When you’re the buyer, every day without your bike seems like an eternity. By sending handwritten notes after purchase, the store reminded each customer that the customer was important and the shop was working diligently on their expensive baby.

Personalized and growing

It’s always difficult to track the impact of soft skills like training in personal service and handwritten notes, but in the case of the triathlon shop, they saw a dramatic turnaround in positive feedback on social media, they grew their customer base in the ever-important newbie and avid athlete segments (who tend to purchase the most gear and ask the most questions), and saw a steady 20% annual growth for three straight years in an industry declining 10% annually over the same time period.

Anecdotally, the shop regularly heard back from customers who said they had never gotten a handwritten note from any store before—regardless of the size of the purchase. Those same customers said they had told several friends about their experience.

Think about that for a moment. In this day and age of antisocial media, consumers tend to tell two to five times as many people about negative experiences as compared to positive experiences. And yet this local shop had fans spreading the good news. Why? Because it was personal. It was human.

It really is the little thing that matters

I coach executives to keep things simple, especially in communications inside their organizations. Because most of us think the worst before we think anything positive. So a simple nod of thanks, looking someone in the eyes, using their name and talking about what matters to them not only breaks through the negative fog many companies are in, it helps employees and customers alike see the authenticity they so desperately crave.

Try it for yourself. Take a few minutes this week and hand write a note of thanks to someone around you. There are plenty of people worthy of your time, trust me on this. Chances are good that you’ll both be better off for the time you spend.

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