Thursday, November 20, 2014

2014 Hispanic Holiday Shopping Survey: Feliz Navidad For Retailers



This holiday season Hispanic shoppers will make the difference between a ‘Feliz’ (happy) and ‘Feria’ (fair) ‘Navidad’ for retailers, according to 2,417 Hispanic consumers who participated in the Brand Keys 20th annual Holiday Shopping Survey.

The projected individual spend among Hispanic households is estimated to be $985.00, about 7% higher than last year, and nearly 15% higher than the projected 2014 spend for the general population. But retailers will need to work culturally smarter if they want to get their share.

In this year’s Brand Keys Holiday Shopping survey, 54% of the general population indicated they were going to start Holiday shopping in November, a trend we’ve commented upon for a number of years now. But this is not the case for Hispanic shoppers. Nearly half of Hispanic consumers surveyed (49%) indicated they were going to wait until Black Friday November 28. Many Hispanics (38%) indicated they were going to wait well into the traditional holiday shopping season to buy gifts, which has less to do with discounts and more the time taken to search for the perfect gift. The rest started shopping last month.

Virtually all consumers interviewed indicated they’ll buy holiday gifts online this year (98%), and is equally true for Hispanic shoppers. And, even in light of the mobile sales movement, brick-and-mortar retailers rank high on Hispanic consumers’ list of places to shop, with some meaningful differences from the general population:

Store Type                                    2014               % change from General Population

Traditional Department Stores       88%                                        +10

Specialty & Apparel Stores             63%                                        +23
Discount Department Stores          90%                                        – 6
Catalogues                                     15%                                        -10

Gift cards have become as universal as greetings cards, and Hispanic shoppers indicated they’d buy at least one this year, at slightly higher levels (98%, +3) than the general population. Hispanic consumers indicated that the following categories are where money will be spent. The differences from the general population is worth noting by retailers:

Gift Categories                               2014             % change from General Population

Clothing and Accessories                 83%                                        +5

Electronics/Phones/Computer          58%                                        +7
Jewelry                                              25%                                        +5
Food and Wine                                  21%                                        +1
Toys                                                   15%                                        +7
Home Décor                                      10%                                        +3
Personal Care Products/Spa             10%                                       -23

Hispanic consumer expectations are up again this year regarding outreach and convenience, but particularly as regards the brick-and-mortar retail shopping experience. Brand trumps dollar-value perceptions among this cohort and retailers that can integrate some sense of Hispanic culture and store experience with all forms of outreach will likely find it to be a winning combination for this shopper segment. Y una muy feliz navidad este año!


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

Sunday, November 09, 2014

The Few. The Proud. The Marines.




Tuesday is Veterans Day, a celebration to honor America's veterans for their patriotism, love of country, and willingness to serve and sacrifice for the common good. We salute them all. But today belongs to the United States Marines, marking the 239th birthday of the Corps.

Marine Corps birthday celebrations come with a traditional cake-cutting ceremony that would put your usual event marketing to shame. For this, a commanding officer cuts the cake with a Mameluke sword (a kind of scimitar), the first piece going to the oldest Marine present, which is then passed along to the youngest. During the annual birthday celebration, Order No. 47 is read, which says in part, “it is fitting that we who are Marines should commemorate the birthday of our corps by calling to mind the glories of its long and illustrious history.” Marines are proud of that history.

This birthday presentation started November 1, 1921 by order of the 13th Commandant, Gen. John A. LeJeune, as a reminder of the service of the Corps and its inception. It’s been celebrated this way for 93 years. So a real tradition and part of its “long and illustrious history” and a truly emotional event where loyalty and continuity continues to reinforce the Marine Corps brand.
History and tradition are a big part of the Marine Corps brand, and many expressions that have become part of the American lexicon are related to the Marines.

For example, the phrase “Leathernecks,” hearkens back to 1776 when the Naval Committee of the Second Continental Congress stipulated new Marine uniforms and along with green coats, buff breeches, and black gaiters, the committee mandated a leather collar to protect the neck against cutlasses. Oh, and to help maintain proper military bearing. Marine “packaging” has changed over the past 239 years – they have the best dress uniforms of any of the services – but the name stuck!

The appellation “Devil Dogs” comes from the Battle of Belleau Wood in 1918. The Germans called the Marines fighting through woods that were thought to impenetrable, and who finally captured ground thought to be an absolute German safe haven, “Teufel Hunden,” referring to the legendary Hounds from Hell.

Marines have sometimes been called “Jarheads,” and that term originates from the "high and tight" haircut that many Marines have, which makes their head look like a jar. (OK, nobody’s perfect, but Marines come as close as you can get to perfect!)

The Marine Corps motto – “Semper Fidelis” (“Ever faithful” and the John Philip Sousa official march of the Marines) – was adopted in 1883. It replaced three traditional but unofficial slogans, which isn’t a bad record for a brand that’s 239 years old (Take a look and see how many times Coca Cola has changed their tag line. And that brand is only 128years old!)  The first was “Fortitudine” (Latin for “with courage”), the second, “Per Mare, Per Terram” (“By sea and by land”). The third, “To the shores of Tripoli,” was revised in 1848 to “From the halls of Montezuma to the shores of Tripoli.”

That was incorporated into the "Marines' Hymn," the official hymn of the Corps as well as the oldest official military theme song in the United States armed forces. See what we mean about history? Marines stand at attention when it’s played or sung, a real tribute to the Mad Men of the ‘50’s who counseled you could identify a hit brand, theme song, or campaign by “running it up the flagpole, to see if anyone saluted it.” Marines continue to do so.

But the six words the Marines, and the Marine brand, are perhaps best known for are, “The Few. The Proud. The Marines.”

A lot of credit goes to ad man J. Walter Thompson for that. Mr. Thompson enlisted in the Marine Corps in 1864 so you might say there was some history there too, because l about 100 years later his company helped develop the Marine Corps into the elite brand it stands for today. It is, perhaps, the most-cited slogan of any of the U.S military forces and even appears on Madison Avenue’s Advertising Walk of Fame.

But, like all things Marine, it also has its roots in history. On March 20, 1779, Captain William Jones of the Continental Marines placed a recruiting advertisement in The Providence Gazette (digital banner ads being unavailable at the time), which read in part "The Continental ship Providence, now lying at Boston, is bound on a short cruise, immediately; a few good men are wanted to make up her complement." If you want a celebrity endorsement regarding that practice, it was George Washington who later commented, “It is infinitely better to have a few good men than many indifferent ones.”

So to the complement of those few good men, past and present, we say “Happy Birthday.”

And (as is traditional) “Semper Fi, brothers.”


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

Thursday, November 06, 2014

For Retailers “Black Friday” Has Become A Season Unto Itself. Oh, And It Started November 1st.



Super-charged by increased mobile outreach, intensified consumer planning, and raised numbers of retailer mobile apps, traditional retailers will be going to work earlier, and working harder to engage consumers this season if they want their share of a projected individual $855.00 holiday spend, about 4% higher than last year. Sixteen-thousand (16,000) consumers from the 9 U.S. Census regions identified these real facts-of-retail-life in Brand Keys’ 20th annual national holiday shopping survey.

And many consumers missed Black Friday. That’s because it started last Saturday.  Surprised? Well, it shouldn’t have been a total surprise. Store checks conducted by Brand Keys found retailer displays of holiday greeting cards, giftwrap and Christmas-themed gifts already on display in October. Consumers shopping for Halloween candy, actually had to sort through themed packaging, because retailers had Christmas candy leitmotifs right next to the bat wing and witches-on-broomsticks packaged candy, for the same candy!

More than half of the sample indicated that they were going to start holiday shopping in November. In last year’s Holiday Shopping survey, 54% of consumers indicated they were going to start Holiday shopping in November, a trend we’ve commented upon for a number of years. Only 25% of consumers – 10% fewer than 2013 – indicated they were going to wait until Black Friday November 28th.

Amazon and Walmart kicked off their Christmas discounts on Saturday, November 1st – 27 days before the traditional Black Friday, which had long been regarded as the start of the holiday shopping season.  Amazon started its “Black Friday” Saturday with two daily deals on holiday merchandise that will run through December 22nd. Walmart’s chief merchandising officer, Duncan MacNaughton, said, “As soon as they put away their Halloween costumes, our customers start prepping for Thanksgiving buying Christmas trees and shopping for gifts.”

Ninety-eight percent of those interviewed indicated they’d buy holiday gifts online again this year, but no surprise there. And, even in light of the mobile movement, bricks-and-mortar retailers still rank high on consumers’ list of places they intend to shop:

Store Type                                         2014            % change from 2013

Discount Department Stores                96%                             +2
Traditional Department Stores             78%                             +2
Specialty and Apparel Stores               40%                             - 5

Catalogues (25%), are down again from last year by 50%. And apparently if a consumer can pull it up on a site on a mobile device, hard-copy has become superfluous.

Oh, and spoiler alert: everybody is getting a gift card this year. Gift cards have become as universal as greetings cards, with 95% indicating they’ll buy at least one for someone.  All other categories remain relatively unchanged from 2013. Apps and downloads have replaced CDs, DVDs, and printed books.  Consumers indicated the following categories where money was going to be spent:

Clothing and Accessories                     78%                                        
Electronics/Phones/Computer              51%                                        
Personal Care Products/Spa                33%                                        
Jewelry                                                 20%                                        
Food and Wine                                     20%                                        
Home Décor                                           7%                                        

Value is still paramount for all platforms and consumer expectations regarding outreach and convenience, particularly for mobile, and the shopping experience for bricks-and-mortar retail, are all up again. Retailers that can integrate the store experience with their mobile outreach will likely find it to be a winning combination. They’re just going to have to do it much earlier this year.

But given the intense competition for consumer dollars, Department stores and specialty shops will have to become more aggressive on deals, promotions, and operating hours.


Because this year they won’t be able to avoid it.


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

Wednesday, October 29, 2014

Being Better In Tune With Consumer And Brand Engagement



Brand Keys celebrated its 30th anniversary last month. And as much as we’ve done in that time, we are reminded of an old synergy axiom, "No one can whistle a symphony. It takes an orchestra to play it.” That turns out to be truer in today’s complex marketing arena, filled with more complex consumers watching and sharing every brand’s every move – 24/7 on both big and small screens.

Orchestrating a successful and strategically engaging symphonic program for a brand (whatever the occasion, sponsorship, or holiday) has become more complex too. Thus, we are extraordinarily excited to announce a new and synergistic partnership between Brand Keys and Cult Collective to help brands more harmoniously (and profitably) accomplish just that.

If you have read our blog, “The Keyhole,” or our Forbes columns before, odds are you know what Brand Keys does. For those new readers who don’t, we specialize in predictive brand loyalty and consumer emotional engagement metrics that can identify the direction and velocity of customer values and categories, and, as it turns out, sales and profits too. Cult, a leading marketing consultancy helping global brands engage consumers in ways that lead to higher customer loyalty and profitability, is an enterprise composed of a consortium of companies across North America specializing in identifying the right marketing, strategy, social media, creative, and tactical market maneuvers for brands.

With this new alliance, the two firms can amplify brands’ abilities to deepen brand-to-consumer emotional engagement and customer loyalty by fusing Brand Keys’ validated research-based methodology with Cult Collective’s marketing implementation expertise. Ideologically, the two companies are aligned in their belief that customer engagement is what truly drives sales and long-term, sustainable growth, and not just more advertising.

This partnership is exciting not only because of what it means for both Cult and Brand Keys, both of which have a reputation for being thought-leaders and histories of smart, insightful, cutting-edge work for Fortune 500 companies, business leaders, and small brands alike. This new affiliation with Cult is an exciting opportunity for businesses to effectively optimize their marketing and media budgets and implement more engaging path-to-purchase strategies and go­to-market tactics. To paraphrase Cult Collective CEO Chris Kneeland, Brand Keys' statistical and predictive brand science, stacked up with Cult Collective's creative, will to yield even more potent brand solutions.

Brand Keys is excited to work with Cult to design solutions that will create better emotional engagement for more brands than ever before. When you are able to do that you end up achieving more than you ever expected for your brands, more efficiently with higher profit margins, which is music to any company’s CFO and shareholders.

And whether your brand program ends up sounding like a classical symphony or classic rock, independent validation studies have proven that optimizing your brand engagement efforts will have everyone whistling your brand’s tune.

All the way to the bank!



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

Monday, October 20, 2014

An Ounce of Loyalty Is Worth A Pound of Most Everything Else


Bottom line: mobile, digital, and social brands continue to exhibit loyalty supremacy. New brands and categories make up more than a third of this year’s Top-100 leaders list.

Apple, Amazon, What’s App, Google, YouTube, and Kindle head of our 2014 Brand Keys Loyalty Leaders List. This is the 18th year aggregating brand loyalty leaders, and the seismic shifts in loyalty leadership in terms of new categories and brands making appearances in the Top-100 continues.

As we’ve always said – and the marketplace has proven – brand loyalty has always been driven by emotional engagement, and the rankings on this year’s list make it abundantly clear that connection, meaning, and differentiation is still everything to consumers. With 721 brands in 65 categories for consumers to rate, there’s a lot of competition for the top-100 spots. This year certain categories rose to the top because of their high levels of consumer emotional engagement. Oh, and their abilities to deliver against consumers’ increased expectations – in virtually any category you care to name.

Thirty-six of the top-100 Loyalty Leaders are new brands or categories. Most new arrivals facilitate communication and social outreach: tablets, smartphones, and social networks, with What’s App (instant messaging), Netflix, and Amazon (video streaming), Instagram, and PayPal (online payments) now representing that trend.

Other, new, non-digital/social categories include Fast-Casual Restaurants (Chipotle, Panera, Chick-fil-A), Insurance (USAA), Credit Cards (Discover, American Express), and Beer (Sam Adams). Dunkin’ Donuts was the only non-digital/social brand in the top-10, up 7 spots since last year, but not surprising when you realize their customers have rated them #1 in the out-of-home coffee category for years.

This year, the top-10 on the Brand Keys Loyalty Leaders rank as follows:
  1. Amazon: tablets
  2. Apple: tablets
  3. Apple: smartphone
  4. YouTube: social networking
  5. What’s App: instant messaging
  6. Amazon: online retail
  7. Google; search engines
  8. Kindle: e-readers
  9. Samsung: smartphones
  10. Dunkin’ Donuts: coffee (out-of-home)


Forty-five percent (45%) of the top-100 brands account for consumer outreach and engagement via cellular and social networks, and the phones, smartphones, computers, and tablets needed to meet ever-increasing expectations related to outreach and personal connectivity the consumer uses as a yardstick to measure brands.

Last year beauty and personal care brands accounted for nearly a fifth of the top-100 but this year represent only 13%. The emotional engagement that women share with their beauty brands can be very powerful, but again, consumers are looking harder for a reason to believe and a reason to engage with – and buy – one brand versus myriad ‘me-too’ products. Check out who were among the brands to show the greatest positive loyalty increases.

Traditional retail brands were down 50%. The inability for many retailers to provide meaningful differentiation – beyond low-lower-lowest pricing strategies – has seriously eroded loyalty levels in the retail category. That, and a shift to buying online and via mobile devices. Retail brands that remain among this year’s Loyalty Leaders include J. Crew (#50), The Gap (#80), Macy’s (#88), Victoria’s Secret (#75) and T.J. Maxx (#92).

Six (6) automotive brands made the top-100, including: Hyundai (#23), Ford (#26), Toyota (#48), Jeep (#70), Nissan (#94), and KIA (#99). Ford and Toyota moved up the list +12 spots each, Jeep +11, and Nissan appears on the list for the first time

Biggest Winners

The brands that showed the greatest loyalty gains this year were:

Netflix (+79)
Estee Lauder (+31)
MAC Cosmetics (+28)
HTC smartphones (+26)
Cover Girl (+25)

The Biggest Losers

With minor exceptions, it turns out that the biggest Loyalty Leader losers were primarily categories. Certain categories just disappeared.

These included Breakfast Cereal, which shouldn’t surprise anyone. The category has seen dramatic shifts over the past few years in how and what is consumed for breakfast. And anyway, and how much loyalty can you expect when “differentiation” is defined as which flavor marshmallow is in this particular box?

Major brands – perennial Loyalty Leaders – but absent from this year’s list, included:

Pepsi and Coke. Sure, the category has shifted there too, but they’re both cold, refreshing, come in a bottle or a can, have ubiquitous brand awareness and distribution, and are each on sale alternate weeks. What is there to be loyal about? 

ABC News, CBS News, NBC News, and the Today Show didn’t report this year list, some accounted for by the ascendancy of mobile. Today a tablet screen and a TV screen are regarded as two entirely different platforms engendering different loyalty and engagement levels for different programming. Certainly broadcast news is watched, but not considered an important first-source to be loyal to.

And you can search all you want, but you won’t find Bing or Yahoo on this year’s list either. When it comes to search, Google (#7) is the only one in that category that that appears.

Not surprisingly General Motors didn’t make the list this year. Where loyalty exists, consumers are six times more likely to give a brand the benefit of the doubt in uncertain circumstances. But that well of forgiveness isn’t bottomless, especially in the face of seventy-five GM recalls (more than 30 million vehicles) this year alone. Loyalty is about the strongest bond you can create between customer and brand, but even loyalty has its limits!

McDonald’s, which up till this year had appeared since the List’s 1996 inception, dropped off the top-100 list too. In another study conducted earlier this year by Brand Keys, Millennials, a critical audience for fast food chains, reported a 20% decrease in visits to them, with 42% reporting increased visits to fast-casual restaurants, a category whose brands have shown up for the first time on this year’s list. When asked to characterize traditional fast food brands, including McDonalds, 53% of this group called it “dollar food,” the result of a habituated fast food brand reliance on the ‘Dollar Menu’ to boost sales. The thing is, you can’t build loyalty on the basis of price. In the absence of brand meaning, stuff for a dollar, a new wrap, or new app, and all the social networks in the digital universe isn’t going to change things for them.

Other brands not appearing on the Loyalty Leaders List this year included Ben & Jerry’s, Canon (point-and-shoot cameras), H&M, Haagen-Daz, Skechers, Skype, Southwest Airlines, Walgreens, and Walmart.

Which brands had the greatest loyalty and engagement erosion?

Max Factor (-20)
Clinique (-16)
Grey Goose (-13)
Revlon (-13)
Apple Computers (-11)
Costco (-11)
Sam’s Club (-11)

OK, it’s true that some of the shifts are certainly due to the creation and adoption of new categories and brands that better meet – even exceed – customer expectations. But brands that understand that real emotional connections can serve as a surrogate for added-value, and the brands that have made loyalty and emotional engagement one of their real strategic priorities and KPIs will always show up at the top of a consumer’s list.

For the complete top-100 2014 Brand Keys Loyalty Leaders List, please visit: http://info.brandkeys.com/acton/formfd/943/0011:d-0004

Or, for more information regarding this year’s Loyalty Leaders List, your brand’s position on the list, or general information about integrating predictive loyalty and engagement metrics into your marketing efforts, feel free to contact: Leigh Benatar at leighb@brandkeys.com or 212-532-6028.



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

Tuesday, October 14, 2014

Q: What do you do when your brand gets stale? A: Find a fresh recipe that offers more than just product.


McDonald’s is desperately looking to change the image of their food – from unhealthy (and, apparently, unnatural) to something closer to how people see fast-casual restaurants, that have apparently been eating McDonald’s proverbial lunch!

To that end, they’ve hired Grant Imahara, former host of Mythbusters, as part of their new social media campaign. Mr. Imahara is, ostensibly, far less frightening than their previous Facebook and Twitter Happy Meal mascot that ended up drawing massive mockery and scorn from audiences. And, four straight months of declining U.S. same-store sales. To be clear, we don’t believe that the mascot contributed much to that decline. McDonald’s has been suffering from more than just a bad case of social media malaise, although it is worth pointing out that social media is not a universal antidote for what ails them!

In a study conducted 3rd Quarter this year by Brand Keys, Millennials reported a 20% decrease in visits to fast food chains, 13% indicted fast food was “cheap” and “edible” but not much more than that. Fifty-three percent (53%) characterized it as “dollar food,” the result of a habituated reliance of fast food brands like McDonald’s (credited as the originator of the ‘Dollar Menu’) to boost sales. But apparently not working as well as in years past. Baby Boomers indicated an 18% drop in fast food restaurant visitation, citing that they were looking for “quality food,” and didn’t expect to get it at places like McDonalds. Gen Xers reported an 11% decrease in visitation. They wanted their food fast, but even that’s something McDonald’s has been reported struggling with.

To dispel all these beliefs – and hopefully shift consumer behavior – McDonald’s is turning to social media to take real questions from consumers and deliver real answers. Answers to questions like, “What is mechanically-separated meat, and how do you turn it into a nugget?” or “What’s with that pink slime?” or “Why are there 17 ingredients in your French fries?” “Is there horsemeat in your hamburgers?” and the very, very, best of all: “Does McDonald’s even sell real food?”  Don’t believe us? Check it out here: www.youtube.com/watch?v=UaJUq1ncCRo

The company – apparently unaware of Albert Einstein’s definition of “insanity,” i.e., doing the same thing again and again expecting different results, has been rolling out new menu items and price promotions, including a $5 20-pack McNuggets, $2 jalapeño burgers, and National free coffee events. Ben Stringfellow, a spokesman for McDonald's USA, said, "People are looking for faster, more straightforward responses to their questions about our food." Actually they’re not, Ben. That’s what late-20th century research techniques and the ad agency told you.

What they’re looking for is quality food (quality, which by the way, it turns out they’re willing to pay for at fast-casual restaurants), served in a reasonable timeframe. That’s not exactly the secret of the decade. But with consumer decision-making more emotional than rational, Q&A, no matter how many social media platforms are used, isn’t the answer to this problem. A new wrap, a “natural” frappe, or a social media app won’t fix what needs fixing. It’s the brand. And it needs reinvention.

That and what the brand stands for à la emotional engagement. Where emotional engagement with a brand is high (and BTW, you can’t buy that for a dollar), consumers are six times more likely to trust you. When they do, they don’t ask questions like “Are your ingredients pure?” or “Is it actually meat?” They walk into your restaurants already believing all that! And more. Which is precisely why Chipotle Mexican Grill reported same-store sales growth of 17.3%.

It seems as if the research McDonald’s is relying on is the kind of stale Q&A that stopped providing attitudinal and behavioral insights around 1995. Maybe earlier than that. There may not be such a thing as a free lunch, but here’s a free tip: It’s the brand, not the food. You’d think a company as big as McDonald’s, with all their marketing and insight resources, would have figured out that recipe by now!

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

Thursday, October 09, 2014

Breaking Up Is Hard To Do.



Three years ago Meg Whitman, CEO of Hewlett Packard, instituted a new turn-around attempt in the form of a new line of printers. More precisely, multi-functional printers (MFP’s). At the time of that announcement, H-P ranked 5th of 5 major brands we tracked in the MFP category and HP stock was at a ten-year low. In the spirit of fairness we did mention at the time that H-P was the largest printer maker in the world, but only if you counted number of “units.” It had only a miniscule share of the then-burgeoning MFP market.

At the time Ms. Whitman noted, "We haven't had a new product lineup in seven years" and her plan to fix the brand so it was seen as innovative. Well, that and cost-controls and cutting nearly 30,000 jobs. Oh, and an announcement that they were going to come out with a smartphone. No, seriously, a smartphone. They had spent $1.2 billion dollars to acquire Palm, and debacle or not, consumers had apparently been crying for an H-P smartphone for a while [Editor: insert emoticon for sarcasm here], so why not? Currently the word on the street is that their “Slate” 6 & 7 will be introduced in India first this year.

In the meantime on this continent Meg “Together-we-are-stronger” (her quote in 10/11) Whitman, is suggesting a different strategy three years later, to wit: “Being nimble is the path to winning.” Well, being nimble is good, especially in a world where consumer expectations move at the speed of, well, the consumer, so having a company and brand that is deft and agile is an advantage.

So, to that end, H-P announced that the company is going to split into two smaller pieces. H-P will continue as the printing and computer part of the business, serving the consumer, and Hewlett-Packard Enterprises will sell services like data-storage and consulting and products like servers to large businesses. Now you may not agree with Ms. Whitman, but you have to admire her grit, because they really have to do something! Both revenue and earnings are down again, and how long will the U.S. market wait for a new tablet-like smartphone!?

According to the current Customer Loyalty Engagement Index (whose rankings, by the way, correlate very, very highly with positive consumer behavior toward brands and, axiomatically, with sales and profits, and whose 2014 Loyalty Leaders List will be released next week) H-P is now rated 3rd of 10 brands in the MFP printer category – where they’re up against leaders like Konica Minolta and Canon. It’s worth noting that they were tied for 1st place this past January. H-P is ranked 7th (of 12) in the computer category, against juggernauts like Apple and Samsung and price killers like Lenovo. We don’t currently measure hardware platforms and converged systems, but you have to expect that Cisco will have something to say about a new competitor. And as to smartphones. . .  

So you’d think that having smaller, more agile operating units would help to meet shifting consumer needs and expectations. It worked OK for eBay and PayPal. But to be frank, those brands were really seen as separate categories and brands by consumers to begin with. They were also rated #1 in their respective categories in the Customer Loyalty Engagement Index, so if splitting H-P doesn’t seem as graceful and seamless as that kind of brand disengagement you’re not alone in that.

One question raised by industry analysts about this decision is, “will a slimmed down H-P become a stronger, more profitable company?” But in what’s become a no-one-size-fits-all-world, the real question should be, “will consumers – B2C and B2B – decide to remain engaged with the brand in its new incarnation?” It’s worth remembering that for sure if they don’t, H-P’s engagement number won’t be the only thing that will continue to go down.

Time will tell, but it’s also worth remembering the old marketing maxim, “Bad decisions made with good intensions are still bad decisions.”


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