The Setting Sun

Napoleon noted, "Four hostile newspapers are more to be feared than a thousand bayonets." And it seems as if New York City is soon to be short one weapon.

The struggling New York Sun, expressed fading hopes that a white knight would materialize to bail out the 6 1/2 year-old paper. The paper, known for its conservative, pro-Israel slant and it’s distinguished arts, music, and culture coverage, had been partially backed by the now imprisoned Canadian press baron, Conrad Black. But it was reported to be losing about $1 million a month. An economic and advertising slowdown – on top of rising production costs – apparently caused those losses to accelerate.

John Callaway, a TV journalist and commentator, recently advised, “Read two newspapers a day. And not just online. Hold them in your hands. Get ink on your fingers.”

In New York City it just got a lot harder to follow that advice.

Introducing the Second-Most Reliable Indicator of a Company’s Ability to Grow and Be Profitable.

The single-most reliable indicator of a company’s ability to grow and be profitable is real customer loyalty and engagement metrics. No question about it.

Our metrics have proven out time and again. In B2B and B2C categories all over the world. These assessments have very, very high correlations with consumer behavior in the marketplace. Egregious corporate mismanagement notwithstanding, they correlate highly with profitability. Why not? Loyalty = $. But let’s not kid each other. If they were simple to calculate, everyone would be doing it.

In the absence of real engagement and loyalty metrics, we have created a metric called a Brand Upward Yield Score®. We call it a BUY Score®. We’ll be introducing it at an Executive Leadership Presentation at the Motivation Show in Chicago today. While not providing leading-indicator metrics, it can provide you with a positive-indicator of brand success (or failure) that can be used to identify relative ROI.

The BUY Score is an aggregate assessment of four, key brand measures including:

1. Brand image,
2. Likelihood to purchase,
3. An indication of how much they like the brand, and
4. Likelihood to recommend to a friend or colleague.

For those of you familiar with the Net Promoter® score, which attempts to measure the talk-value generated by a brand, the BUY Score includes that aspect but also incorporates three other critical measures — giving the marketer a score four times as powerful as the Net Promoter.

In the interests of fair disclosure and an unwillingness to disappoint, we remind you that this is merely a positive-indicator ROI assessment. Unlike real loyalty and engagement-based measures, a BUY Score is an indicator. It is not predictive and it does not simply “translate” into “Initiative B will produce 31% return on the effort.” Very few metrics do. Nor does it offer the granularity a brand needs to develop nuanced strategy and communications efforts. Would that it were that easy.

But the BUY Score can be built into your marketing models and it can provide a comparative option for assessing market, media, and communication effects. We invite you to visit our website to learn how to calculate your score and for additional BUY Score details.

Banking on Trust

The Federal Reserve, in an attempt to prevent the Wall Street crisis from eroding the foundations of two, premier financial institutions – Goldman Sachs and Morgan Stanley – have agreed to allow the investment companies to convert to traditional bank holding companies.

The move places the companies under the supervision of national bank regulators and subjects them to new capital requirements. But over and above government oversight, it creates a new consumer loyalty paradigm under which the new “banks” will have to operate.

Based on assessments from our Customer Loyalty Engagement Index, banks are generally seen to be undifferentiated. For the bank brands we track, products and services, customer service, even fees, are generally ubiquitous. There are, of course, minor differences between them, and we can rank them on an overall basis. But if you’ve paid any attention to bank advertising over the past two or three years you will have noted that it has generally dealt with how many ATMs they have or how they’ve been able to cut 3.8 seconds from the average transaction, not, we think you will agree, massively leverage product differences or extraordinary added-value.

Because of the structure of our assessments, we can not only identify the overall drivers of loyalty and engagement for a category, but can “drill down” into those drivers to examine the individual attributes, benefits, and values, that form the components of each driver. Given the current climate in the financial category, we thought it would be interesting to see how the banks we track rank on consumer “trust.” The results – different from their overall rankings – were as follows:

1. Bank of America
2. JPMorgan Chase
3. Bank of New York
4. Wells Fargo
5. PNC Bank
6. Wachovia
7. Citi
8. Washington Mutual

Shakespeare didn’t cover the financial markets, but he did write some excellent advice, “Love all, trust a few. Do wrong to none.” We’ll see.

Branding Goes to the Dogs

Here’s the scoop. After the terrorist scarf fashion faux pas, celebrity chef, Rachael Ray, is debuting a line of dog food. She always talks about her dogs on her show and she actually had a Food Network special on making your own dog food (which may come in handy in today’s economy). The proceeds will be going to fund her charity “Rachael’s Rescue”.

The recipes for the Nutrish for Pets line are taken from those Rachael has created for her pit bull, Isaboo. Other pet food and treat recipes have been featured in her magazine.

A line of cat food is coming.

Arrivederci Roma. And All Points North

Free pretzels and in-flight magazines have flown away and staples such as pillows, blankets, and meals have been left at the gate, so what’s next for the beleaguered airline industry? Analysts suggest the next thing to disappear is the brands themselves.

First on the list? Alitalia. The troubled airline is not only having problems buying fuel, but is on the verge of losing its operating license if it fails to seal a deal with unions to avoid total collapse. The Italian bankruptcy commissioner assigned to the brand threatened to start liquidating the airline this week if unions did not agree to an investor takeover.

How do things look on this side of the Atlantic? It would seem that fuel and operating costs notwithstanding, the brands that have not done away with every frill and amenity seem to rate higher in customer loyalty than those who have jettisoned snacks, pillows, and free beverage service. The current ranking looks like this:

1. JetBlue/Southwest
2. Continental
3. United
4. American
5. Delta
6. Northwest
7. US Air

Herb Kelleher, the co-founder of Southwest Airlines, noted, “If the Wright brother were alive today Wilbur would have to fire Orville to reduce costs.” He made that statement nearly 15 years ago, so to quote Rousseau, “Le plus ca change le plus ca le meme chose.”

We Remember

God’s Way of Telling You That You Have Way Too Much Money in the Marketing Budget!

So, imagine you are stranded on a desert island. No, wait, how about this: imagine you found a magic lamp. Oh, no, no, we’ve got it — imagine you had 300 million dollars to spend on an advertising campaign for a brand that has been made the butt of one brilliant ad after another at the hands of your competitor. With that much money, hey, what would you do first?

Apparently, you can take 300 million dollars and use at least a chunk of it to hire Jerry Seinfeld to re-run his shtick, this time with Bill Gates in tow — a man so uncomfortable on screen he ignites dreams in Al Gore of starring in a reality show. And, apparently you can also, as an agency, forget completely what advertising is supposed to do. Oh, right, yeah, sell something. That is so, ugh, traditional.

For those who have had the good fortune of not seeing the maiden voyage of the new Microsoft advertising campaign from the too-cool-for-research guys at Crispen Porter + Bogusky, let us explain the premise. This guy walks into a mall. Wait, it’s Jerry Seinfeld. Wait again, there’s Bill Gates, buying shoes on the cheap — pleather to be exact. After some discussion about Bill’s shoe size, loyalty points, and mall food, they leave. The punch line? Bill Gates adjusts his shorts.

We couldn’t make this up. We’re funnier than that.

This Microsoft ad is not funny. But, even if it were, the standard it is being held to is that of Apple’s amazing advertising about the PC and Vista — ads so funny they bear up under repeated viewing — and how those ads sell the Mac with not only a brand position but the proof points to back it up, something increasingly out of vogue in these days of ad-as-slapstick. One is left wondering what exactly the Microsoft ad was intended to do. If not built for the heavy lifting of actually creating an in-market result, was it at least supposed to muscle us into a new way of feeling about Microsoft? If so, what new information were we supposed to take away from this ad? That in the PC-Apple wars, Microsoft is the nerd who, no matter how many zabillion dollars it has, still can’t figure out how to dress itself?

The PC as un-cool. Got it. But we already knew that. You know who told us? Apple.

That makes this advertising worse than a waste of money. It makes it a redundant waste of money. And that’s about as un-cool as you can get.

Three Points-of-View

Marshall McLuhan wisely noted that, “A point-of-view can be a dangerous luxury when substituted for insight and understanding.” Happily, Brand Keys points-of-view are always backed with a thorough understanding, validated research, and predictive insights. And we are pleased to invite you to attend any of the three conferences we will be presenting at next week.

The first is “RFID and the Consumer Experience” and Amy Shea, Brand Keys EVP and Director of Brand Development, will present a look at RFID technology seen through a consumer lens at the RFID World Conference in Las Vegas, NV, September 9th.

Overview: RFID technology uniquely addresses two problems facing brands today: keeping consumer data private and secure, and brand commoditization. This is critical, as fewer and fewer attributes are able to differentiate a brand in the minds of consumers. RFID technology offers a path to one of the most compelling drivers of brand loyalty: customization. As consumers customize everything from their sneakers to their cars to credit cards, the satisfaction of the consumer who gets text messages to Indian food can earn a lot of loyalty chips for a cell phone brand struggling to differentiate itself.

The second is “Integrated Marketing: Blending Digital & Broadcast" and Leigh Benatar, Brand Keys EVP will present how to measure blended platforms and what happens to sales at the Digital Leadership eXchange, in Deer Valley, UT September 7^th through the 9^th.

Overview: Industry thought leaders, academics, and authors unite to discuss the most pressing issues facing the digital marketing industry today. Agencies, brand, and media companies will exchange their ideas and expectations for future success of digital, as well as the challenges. Top brands in the industry such as Colgate, McDonald’s, P&G, J&J, Coke, ESPN, and ABC-TV, will be presenting their points-of-view regarding problems and solutions for the digital community. The outcome will be a preview of the ever-changing face of digital marketing.

And the final conference is “Is There A Point to Loyalty Programs?” Robert Passikoff, Brand Keys Founder and President, will give the Keynote address and an engagement-based view of how real loyalty is created at the Infopresse Loyalty Conference in Montreal, Canada, at the Centre Mont-Royal, September 10^th.

Overview: Today “loyalty” or “point” programs are ubiquitous. Eighty-six percent of American shoppers participate in some form of point programs. The average family participates in more than a dozen such “loyalty” schemes. Seventy-six percent of Canadian consumers belong to at least two such programs. But these days, shoppers approach loyalty cards more and more with a mixture of weariness and indifference, amusement and expectation. Will point programs keep consumers loyal or can a real brand that can engage customers stand on its own?

Will Rogers thought “A conference is just an admission that you want somebody to join you in your problems.” As always, we look forward to also providing real, leading-indicator solutions.

“Can You Connect Me Now?” I Said, “Can You. . . Are You Still There?”

Since the debut of the iPhone 3G in July, buyers have been loudly complaining about poor network connections and dropped calls. These days, consumers don’t expect that to happen. The loyalty driver “Clear and Uninterrupted Calls and Connections” accounts for nearly a third of the engagement and loyalty bond in the Wireless Carrier category. And with nearly 90% of the population already owning a cell phone, there’s little room to grow, so loyalty is more important than ever. Well, it’s not as if we haven’t pointed that out before!

AT&T offers the iPhone exclusively, so they’ve been taking the brunt of the complaints regarding problems with their cellular network. AT&T’s competitors have been having a field day exploiting the situation with full-page ads with headlines reading, “A phone is only as good as the network it’s on.”

Unfortunately for AT&T, that’s a statement consumers are willing to believe, because while fingers have been pointed at both the phone and the network, iPhone owners have been generally forgiving of Apple. This is not an entirely unexpected reaction. Loyalty ratings and consumers’ emotional bonds are very, very high for Apple, and where loyalty is high you can categorically apply one of loyalty’s six “Rules of Six.”

In this case, the rule that applies in these circumstances is “consumers are six times more likely to give your company or brand the benefit of the doubt in tough circumstances.” When it comes to what consumers expect from their high-speed networks and cell phones, it doesn’t get much tougher than poor connections and dropped calls.

And, unfortunately for wireless carriers, when the going gets tough, the tough move their accounts to other networks.