Thursday, September 18, 2014

2014 Sports Fan Loyalty Index Names NFL Fan Favorites And Finds Ray Rice Domestic Violence Hurts League More Than Team

Anyone up on the news can’t have missed the fact that the start of the National Football League’s season was overshadowed by the release of a video of Baltimore Ravens running back, Ray Rice, punching his fiancée in the face. Wow. Talk about unsportsmanlike conduct!

NFL commissioner Roger Goodell disciplined Rice with a two game suspension, but that penalty was criticized as being far from ideal. And not representing standards the fans expect. A review of the video led to the termination of Rice’s contract and his suspension from the NFL. Now former FBI director, Robert S. Mueller III, is conducting an independent investigation into the NFL's pursuit and handling of the evidence.

While the Brand Keys Sports Fan Loyalty Index doesn’t normally conduct diagnostic measures of individual players, we do measure overall League loyalty. In January 2014, self-classified football fans representing the NFL’s 32 teams rated the National Football League 1st in terms of league loyalty. But based on current Rice-related circumstances, their own fans now rate the NFL #3, just behind Major League Baseball and the National Basketball Association, and just ahead of the National Hockey League. The good news is that loyalty for the Baltimore Ravens team (#7 this year) has so far been unaffected by all this.

The fans’ “Ideal” is the foundation upon which the Brand Keys Sports Fan Loyalty Index, the 22nd annual fan survey, is based. The Sports Fan Loyalty Index was designed to help teams identify precise fan loyalty rankings in their home and national markets with insights that enable the league and teams to identify areas – particularly emotional values – that need strategic brand coaching. As we’ve said before, it really isn’t just about winning games. Not entirely, at least. In the case of fan loyalty, a team ends up being much more than a group of players and a good win: loss record, and the actions of individual players can have dramatic fan loyalty effects.

So here’s the 2014 NFL teams that scored well in re fan loyalty, and those that didn’t. For comparative purposes, #’s in parentheses give the team’s rankings for last season:


1. New England Patriots               (#1)
2. San Francisco 49ers                 (#4)
3. Green Bay Packers                   (#2)
4. Denver Broncos                         (#7)
5. Indianapolis Colts                      (#5)


32. Oakland Raiders                      (#32)
31. Jacksonville Jaguars                (#31)
30. Cleveland Browns                    (#30)
29. Tampa Bay Buccaneers           (#24)
28. Dallas Cowboys                       (#26)

The Brand Keys Sports Fan Loyalty Index provides an apples-to-apples comparison of the intensity with which fans within the team’s home market area support their team versus corresponding values for fans of other teams (or leagues) in that market. And yes, everybody loves a winner, but, again, win/loss ratios do not entirely govern fan loyalty. Neither does simply counting attendance. There are other powerful and emotionally-based factors that need be taken into account. The percentages next to each driver of loyalty indicates the contribution they currently make to fan loyalty and engagement:

History and Tradition (33%)
Is the game and the team part of fans’ and community rituals, institutions and beliefs? These include both moral and legal codes of behavior and principals.

Fan Bonding (29%)
Are players particularly respected and admired? An issue like domestic violence will not only have its effects primarily on this driver, but on an overall basis as well. And, to be frank, it depends on the transgression. No matter how rational a response fans seem have regarding offenses like domestic or alcohol or drug abuse, adultery, illegal possession of firearms, or adultery, a great record for touchdowns, field goals, pass completions or rushing, has a tremendous emotional modifying effect.

Pure Entertainment (21%)
How well a team does, wins, losses sure. But even more importantly than a win-loss ratio, how or entertaining is their play? And yes, on-the-field aggressive play is part of the acceptable DNA of this loyalty driver. Off the field, not so much (see Fan Bonding).

Authenticity (17%)
How well they play as a team. What’s the offense and defense like? New managers, as they’re seen to be responsible for the genuineness and credibility of the team, can also help lift this driver. How the team – and in this particular instance, the league – behaves in a situation like Rice’s. Do they ultimately meet the fans’ expectations?

As overall league and team rankings correlate very highly with game viewership and purchase of licensed merchandise, and since rankings can be influenced by how loyalty drivers are managed, it’s critical that team marketers manage them strategically to better meet fan expectations. But you have to know what the fans really expect – beyond a winning season.

The Sports Fan Loyalty Index measures all teams in the four Major Leagues each year, and as loyalty is a leading-indicator of behavior and profitability it tells us what people are going to do. And, because of their high correlation with sales of licensed merchandise, we weren’t surprised when retailers like Dick’s Sporting Goods and Modell’s pulled Ray Rice jerseys from the shelves. Or when the Ravens themselves tweeted that they “will offer an exchange for Ray Rice jerseys at stadium stores. Details to come.” Indeed.

And sure, aggression and ferocity are a thread that runs though the “Pure Entertainment” loyalty driver for Major League Sports (some leagues more than others, of course), and are undeniably characteristics that help teams win. But this kind of widespread negative publicity, fan outcry, the appearance of a player letting his fans down, and of league indecision and/or whitewash, unfortunately raises issues regarding not only player behavior but league standards as well. When that happens, bonds of loyalty are weakened for all teams.

And when that happens, nobody wins.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, September 10, 2014

Unhappy Meal Options: Consumers Losing Taste For Fast Food

A new study conducted by New York-based brand and customer loyalty and engagement consultancy, Brand Keys ( has shown that demographics and associated core values of generational cohorts explain critical factors initiating failure of fast food brands to increase same-store sales and profits and driving the success (and concomitant increase in visitation – and profits) of fast-casual brands.
The 3,000-consumer study examined attitudes and behaviors of 1,000 consumers in each of three generational cohorts – Baby Boomers, Gen X, and Millennials – as regards fast food and fast-casual restaurants. The sample was drawn and balanced from the 9 U.S. Census regions and examined major National brands.

If you have any doubts as regards the difficulties fast food brands have been having over the recent couple of years, you only have to look at recently reported same-store sales of the big guys, McDonald’s, Burger King, and Taco Bell to see the shift that’s taking place. The declines reported by the big-3 correlate very highly with the downward loyalty shifts we saw in our January 2014 Customer Loyalty Engagement Index, with fast food brands losing loyalty. And as loyalty is a leading-indicator of profitability, it isn’t surprising that fast food visitation and associated profitability is down too. QED.

The survey conducted in the 3rd Quarter of 2014 identified the following insights as regards visits to the traditional fast food chains and fast-casual restaurants. (BTW, the nomenclature “chains” for fast food and “restaurants” for fast-casuals came out of the study. “Storytelling” may be the flavor of the month, but nothing beats seeing what language a consumer uses to describe a brand. We mean, would you rather eat at a “chain” or a “restaurant”? Yeah, exactly!)

Baby Boomers Want Better Service and Believe They Deserve It. Oh, And They Can Pay For It!

Baby Boomers reported an 18% decrease in fast food restaurant visitation. Not surprisingly, this group placed extraordinarily high values on health, but also living well. They can afford, what nearly a third of the sample (32%) called, “quality food,” something that they attribute more to the fast-casual restaurants like Panera and Chipolte than they do to the traditional fast food brands.

The survey showed that Baby Boomers also expect better service, something the traditional fast food chains have fallen down on in recent years, not being as fast as they used to be. Expectations in, well, everything, just get higher and higher each year, and expectations as regards speed of service is up too. This group reported a 20% increase in visitation to fast-casual restaurants, with 65% indicating high expectations of “excellent service” and 58% indicating that their expectations were met by the fast-casual brands. Baby Boomers (along with Millennials) indicated that interior design was a critical difference between fast food and fast-casual too.

Among the National brands examined, Baby Boomers’ top-3 carte du jour were located at Panera, Au Bon Pain, and Applebee’s.

Gen X Looking for Value-For Dollar

Gen Xers reported an 11% decrease in visitation to fast food restaurants – the lowest decline in the three groups examined – but with an equal increase reported in visitation to fast-casuals, so pretty much a wash.

The Gen X group turns out to be more pragmatic about their decisions about eating out, so they seem to still be more vulnerable to value positioning. But they’re also skeptical about brands too, and are looking not for price-value, but value-for-dollar. They feel the fast-casuals offer that to them too, equal to and more often better than the fast food brands. Nearly 50% of this cohort reported that time was important to them so “fast” has it’s advantages for them. But years of experience and process-engineering pretty much guarantees you don’t have wait long at a Panera either.

Gen X’s top-3 selections included Subway, Chipolte, and Au Bon Pain.

Millennials Not Interested In “Dollar Food”

Millennials reported a 20% decrease in visits to fast food chains, with 13% indicting that they felt fast food was, indeed, “edible” but not much more than that. Forty-two percent (42%) reported increased visits to fast-casual restaurants in the past year. Millennials are, perhaps, our most sophisticated segment right now. They also mentioned interior design as an important element of choice, with nearly a quarter of the sample (23%) postulating that how the restaurant looked gave them a sense that the brand “knew what they were doing.”

True, they’re the toughest to reach via traditional marketing à la McDonald’s et. al., and they are the toughest group with whom to build loyalty. But when asked to characterize traditional fast food brands, more than half of this group (53%) called it “dollar food,” the result of a habituated reliance of traditional fast food brands on the ‘Dollar Menu’ to boost sales. The thing is, you can’t build brand meaning or loyalty on the basis of price. That only works for commodities.

Virtually all this group (89%) reported looking for fast, casual food that they deemed tastier, healthier (22% indicated the ingredients in fast–casual offerings were “of higher quality” and ingredients were more “trustworthy”), and more customized than fast food. “There’s an issue with this group regarding how they value what they eat too. For them, fast-casual restaurants offer better, more customizable options. Nearly half the sample (48%) indicated that fast-casual was “worth more” – and they were willing to pay more for it. And, according to the reported sales figures, apparently are. And while it’s true that digital and mobile behavior has changed – particularly for Millennials – more mobile apps and outreach aren’t going to change how they see the brands.

Millennials top-3 menus were located at Chipolte, Five Guys Burgers, and Panera.

Sure, consumers in all the cohorts have definite expectations about eating out, and some of them even overlap, but a new McWrap isn’t going to do it for them. Not in and of itself. The traditional fast food brands have tried to be all things to all customers for years now and the results should have informed them long ago how that was going to turn out. Longer menus have just resulted in longer waits, but more significantly, a real dilution of what the brand means.

Your brand may be all over, but you can’t be all things. You really do have to stand for something in the mind of the consumer. And it really ought to be something other than “dollar food.” Otherwise loyalty for fast food brands is only going to move in one direction. Down.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, August 20, 2014

Are Bedtime Shoppers A Bad Bet for Target Brand?

There’s a saying that goes, “old poker players never die, they just shuffle away.” Today the same might be said for some retailers too.

Why? Well, in recent years many retailers have eschewed a differentiating brand strategy for gambling. OK, not gambling in the very strictest sense of the word, but certainly the part of, say, a poker game where players keep raising the stakes hoping their competitors will back down. If competitors don’t, of course, players have to raise the stakes again. For some retailers, again and again and again.

The best example was the bet retailers made on Thanksgiving. You have to go back a few years to see when those kinds of bets started being made, but if you want to understand today, you have to search yesterday even in marketing, and these days, especially in retail marketing. For the purposes of this example, we’re defining “yesterday” as approximately seven years ago, not so long a stretch in modern marketing time.

Back then most stores weren’t open on Thanksgiving. It was, after all, a holiday. A national holiday, in fact, and the signal that Black Friday – the kickoff of the holiday shopping season – was just a day away. It started with some marketer thinking, “Hey, how about we advertise some really great things at really great prices and open a little earlier the day after Thanksgiving, get a jump on Black Friday and, you know, get shoppers into our stores earlier – before they go and buy the same stuff at one our competitors.” And they did just that. They advertised they’d be open at 6AM (three hours earlier than they had in the past) and a gabillion people showed up for the $99 37-inch plasma TV, and thus the “Door-Buster” marketing concept was born.

But, retailers reasoned, if you could get people to stand in a freezing cold parking lot at 6AM, why not ‘raise the stakes,’ as it were, and open at 4AM? Well, the competition saw right through that bluff and said, “I’ll see your 4AM and raise you to 2AM.” Then bam! A raise to a 12:01 AM opening. After all, it was still technically Friday! Eventually it got to the point where some retailers were willing to raise the stakes enough to ignore the fact the it was Thanksgiving, and open on Thanksgiving Day. That too became a retailing-raise-the-ante game. First one opened at 11PM, then one opened at 10PM, then 9PM, then 6PM. Kmart finally won that pot last year by opening at 6AM – turkey dinner, stuffing, mashed potatoes and football games be damned! – and didn’t close for another 41 hours.

So did retailers win by raising the opening hour stakes? Not really. It was pretty much a bust. Last year sales were down 11% or 15% or 17% depending upon who was counting the chips, but what is clear is that sales weren’t up. Yes, yes, the Internet has a lot more to answer for than 24/7, readily available pornography and online poker. But in the absence of a real retail brand strategy where the brand acts as a surrogate for added value, tactics like early openings and low-lower-lowest pricing have become just, well, table-stakes.

Why the history lesson? It was announced that Target, who reported a drop in same-store sales and, via John Mulligan, their CFO, indicated it would be "very difficult" to increase store traffic in 2014, even if same-store sales rose by 1%, are – wait for it – going to be keeping their doors open later than the competition, because early openings worked so well for them! Oh, and we can only suppose, just to make sure that consumers who haven’t yet discovered the Internet, or insomniacs, or folks who aren’t daywalkers, can shop really late at night.

Typically Target stores are open 8AM till 10PM (9PM on Sundays), but the new hours will keep the stores open until 11PM or midnight (11PM on Sundays). The extended hours will vary by store, will start this month, and will be in effect through the holidays. Or, if retail marketing history repeats itself, until another retailer changes their hours to 7AM till 1 the next morning, and midnight on Sundays.

Is this an insane gamble? It’s been said that the definition of “insanity” is doing the same thing over and over, expecting a different result. They also say that most of the money you’ll win at poker comes not from the brilliance of your own play, but the ineptitude of your competitor’s off target strategy.

Anyone care to make a bet on the outcome of this particular game? 

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Monday, August 11, 2014

An Educated Consumer May Have Been Sy Syms' Best Customer, But Today They’re More Difficult To Engage!

The 2014 Brand Keys Back-to-School report card is in: households with school-aged children (pre-school through 12th grade) plan on spending more – an increase of 9%, and an average spend of $655.00. That’s according to 8,300 families with interviews collected by telephone and central location intercept, to account for the surging number of cell-phone only households.

Preferred retail categories indicates an increase in anticipated use of all retail platforms this year except catalogs, although, to be fair, some of those consumer purchases have shifted from hardcopy to digital. Online has, of course, been growing and increased use of mobile outreach is responsible for this year’s significant growth for that specific platform. Consumers have come to expect discounts for, well, everything, so virtually everyone mentions “Discount Stores,” although that was up a bit too.

Discount Stores                  99% (+2%)
Online                                 93% (+30%)
Department Stores             35% (+25%)
Office Supply                      30% (+20%)
Specialty Retailers              34% (+13%)
Catalogs                              30% (-5%)

This year, the top-10 list most popular retail and e-tail brands consumers mentioned as places they intended to shop included:

Retail                                     E-tail

1.         Wal-Mart                      
2.         Target                           
3.         Macy’s                          
4.         CVS                              
5.         Best Buy                       
6.         TJ Maxx                        
7.         Staples                         
8.         Footlocker                    
9.         Payless                         
10.      Apple stores                  

Some of this reflects the consumers’ perceptions of a slightly improved economy, but it also reflects a definite need to re-stock. For clothing and shoes there’s no way to get around children’s growth spurts. But the figures also represent a shift in consumer buying habits.

Retailers started running official Back-to-School ads in June but they’ve been discounting and couponing continuously for the since the beginning of the year for, well, everything. “Back to School” is yet another way to position promotions in the low-lower-lowest pricing retail marketplace.

Nearly 35% of these marketing-educated consumers indicated they’ve already bought and stockpiled supplies getting ready for the first day of school. Another 25% indicated they would wait for the ‘Summer Sales.’ The remaining 40% are waiting till the last minute. Retailers have spent more than a decade teaching consumers they can get something cheaper or of better value if they just wait longer or look a little harder, and consumers have graduated with honors. And a mobile device in their hands!

Speaking of mobile devices, it’s also worth remembering that bigger ticket items like tablets and smartphones and computers, which in years past had been traditionally been purchased at the start of the school year, are now purchased throughout the year, so parents don’t feel the need to upgrade just because classes are starting.

It was Sy Syms, the off-price clothing entrepreneur, who observed, "an educated consumer is our best customer." But as most consumers now have their Doctorates in Marketing, compliments of the sustained efforts of retailers, they expect a lot more. Particularly when it comes to value. More particularly when it comes to value that will engage them and get them to behave more positively toward one retailer or e-tailer than others. Value, of course, isn’t just pricing, it’s brand, brand differentiation, shopping experience, customer service, brand engagement and a raft of other things consumer have come to expect as a rite of retail passage. Retailers that can engage consumers and are seen as surrogates for added-value will always benefit. Consumers not only believe that, they act that way in the marketplace.

And that’s a fundamental lesson all retailers need to learn.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, August 06, 2014

Want To Be A P&G Brand? (Placeholders Need Not Apply!)

Procter & Gamble announced it’s cleaning house. It plans to dump, er, divest 70 to 80 brands so, according CEO A.G. Lafley, P&G can “create a faster growing, more profitable company that is simpler to operate.” Well, fewer brands should certainly help make it simpler. As to more profitable, Mr. Lafley said P&G will focus on core business and popular consumer brands like Tide, Charmin, Pampers, Gillette, Crest, and Bounty. We don’t think you’d be surprised to learn that it’s those brands that account for the lion’s share of P&G’s sales and profits.

Those brands also tend to be engagement leaders in the categories we measure in our annual Customer Loyalty Engagement Index, meaning that they do a better job meeting customers’ category expectations than competitors. So good for Mr. Lafley, although this really was a long time coming. It turns out that many P&G products in many of the categories they’re looking to dump, er, divest, have remained not so much brands, as much as having turned into category “placeholders.”

“Placeholders” is the nomenclature we came up for categories that have more products in them than consumers really care about, and describes something people have heard of, provides perfectly acceptable degrees of primacy of product, usually have ubiquitous distribution, similar pricing models, and are, well, to be candid, exactly the same as one another. Yes, yes, different names and packaging, but in no other meaningfully way different. Most importantly, including the degree to which one product is seen to meet customer expectations they hold for the Ideal in the category, versus another similar product. So basically commodities with names attached. But not quite a “brand.” A “placeholder.”

Every January we measure between 65 and 90 categories and 500 to 1,000 brands in the Customer Loyalty Engagement Index we referred to above. Every year (and more-and-more often) we find we have to dump certain categories too. Oh, our metrics, which fuse emotional and rational consumer decision-making and engagement values, are as sensitive as ever. And for real brands, à la independent validations of the resultant brand rankings and loyalty measures, they continue to correlate very highly with positive consumer behavior toward a brand which, axiomatically (gross mismarketing notwithstanding), usually results in higher sales and profits. Sometimes categories just go away. Like “Movie Rentals,” “Answering Machines,” and “35mm Film.” But for placeholders, we just don’t see any significant differences in the assessments for one offering versus another, and, apparently, neither do the consumers. They are seen to be interchangeable.

So just to be clear placeholders are the same. Undifferentiated equivalents, mutual, and/or fungible. To paraphrase one of the funniest Monty Python bits ever, Dead Parrot, the brand has ceased to be. It’s expired and gone to that great supermarket in the sky. It’s bereft of meaning and differentiation, has kicked the category bucket, shuffled off this mortal coil. Which is pretty funny as a TV sketch but calamitous for something that used to be a brand. The placeholder is, indeed there, but “there” is pretty much just occupying place on the shelf, usually selling on some low-lower-lowest price strategy, neither of which helps a company’s bottom line. Which is why P&G is dumping all those products.

It was reported that for the full fiscal year, P&G’s income rose 3% to $11.6 billion. Mr. Lafley said although P&G delivered on its financial commitments, it "should have and could have done better.”

When you’ve got a real brand to work with, you usually do.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, July 30, 2014

2014's Most Innovative Tech Brands

A long time ago in a galaxy far, far away. . . OK, 35 years ago, which in tech-time is a long time ago, Sony introduced the Walkman.

If you weren’t around then or aren't a student of portable, private music devices, it was a 14-ounce, brick shaped portable cassette player with big square buttons, and biggish headphones, that came wrapped in a leather case. It ran on two AA batteries, had no external speakers and was the height of technological sophistication when it came to on-the-go music. It fundamentally changed the paradigm of how consumers experienced music and, thus, sold a cumulative 200 million units. By 1986 the word “Walkman” was included in the Oxford English Dictionary and became part of the lexicon.

Sony kept at it, innovating formats to accommodate CDs, but corporate hubris being what it is, when it came to MP3s, Sony insisted on sticking to a proprietary digital music format (the music version of their Betamax video players), which left the brand way, way behind Apple and its iPod. It also left Sony way, way behind other brands when it came to consumer perceptions regarding brand innovation.

In a recent Brand Keys survey of consumer perceptions of innovative tech brands, 4,500 consumers (500 men and women, 16-65, from each of the 9 U.S. Census Regions) were asked to rate companies and brands on a 1-to-10 scale when it came to innovation for on and off-line technological innovation leadership. The top-20 rankings ended up looking like this:
  1.  Apple (98%)
  2. Samsung (97%)
  3. Google (96%)
  4. Amazon (95%)
  5. Microsoft (91%)
  6. Netflix (89%)
  7. HP/Panasonic (87%)
  8. YouTube (85%)
  9. Facebook (82%)
  10. Twitter (80%)
  11. Hulu (79%)
  12. IBM (78%)
  13. LinkedIn (77%)
  14. Canon/Dell (75%)
  15. Uber (74%)
  16. Airbnb (71%)
  17. Roku (70%)
  18. Sony (68%)
  19. Intel (67%)
  20. Pinterest/Yahoo (65%)

While Sony ended up toward the bottom of our list, and, by the way, lost nearly $1.4 billion in their fiscal year that ended in March, they apparently don’t intend upon staying there – either perception or profit-wise.

The solution? They’re introducing a new, $700 Walkman aimed at upscale consumers looking to trade up in the audio-to-go category. The XZ1 is Sony’s 21st century version of the Walkman; hefty and heavy, hand-carved from a block of aluminum, housing 128 gigabytes for radically high-quality files that combines data storage, download speed, and sound quality.

Brand Keys tracks consumer expectations in nearly 100 B2C and B2B categories, and generally speaking, expectations have only increased – especially when it comes to personal technology. This new Sonly entry is an example of a product built to address some of those consumer expectations likely created from consumer exposure to high-quality HD-TV and newly-popular premium headphones. And whether the new Walkman will be a niche product or a consumer phenomenon remains to be seen.

As Apple (#1 on our list) discovered, truly great innovative products can change everything for consumers – from how they listen to music to what they expect about how they’ll listen to music. And when brands do that, they elevate themselves from well-known brands to innovation icons.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.