You Win Some, You Lose Some, and You Wreck Some

Sunday's NASCAR Food City 500 race drew a 4.1/9 overnight rating on FOX. That’s down 18% from a 5.0/11 for last year's race, and the lowest overnight rating for a NASCAR race this season. The 18% decline continues an ominous trend for NASCAR, which has seen overnight ratings for all five of its races drop double-digits this season.

Sponsors of NASCAR are also slamming on the brakes. General Motors, Chrysler, Sears, and Chevron have indicated that they will cut or drop sponsorships. And it’s not just the NASCAR organization that’s suffering.

Two weeks ago David Gilliland’s Chevy Impala, showed up in Bristol, TN with a large white rectangle on its hood, advertising their lack of an advertiser. Dario Franchitti, the 2007 Indianapolis 500 winner, was forced out of the stock car series by a lack of sponsors as well. NASCAR teams like the legendary Richard Petty’s have merged with others because sponsorships have dried up. Honda ended its Formula One sponsorship, and this year’s Detroit Grand Prix was canceled.

The economy has a lot to answer for in terms of sponsorship cut-backs, but the viewership falloff has to do with how consumers bond with – and remain loyal to – their sports-venue viewership and attendance. If you don’t keep track of what really drives loyalty in your category, your strategy is likely to be a wreck and you – and your brand – end up losing.

And in sports and sports marketing, it’s fair to say that while winning may not be everything, losing has very little to recommend it.

Change or Die (or come to the ARF Conference)

It’s no secret that these days brands and consumers are nervous, money’s tight, and most research is at least half a decade behind consumers. All current signposts are pointing marketers away from data dumps, demographics, stated importance, and cross-tabs and toward predictive engagement metrics and expanded customer listening methodologies. Change is necessary, but just calling an old approach by a new name really won’t help.

If you are interested in being ahead of your consumers, perhaps we can help you to facilitate real change in the way you listen and measure your consumers’ real expectations, emotions, and behaviors. Predictively.

Interested?

Then we invite you to hear Liz Claiborne VP of Consumer Insight & Marketing Intelligence, Karen Tillson, and Brand Keys founder and president, Robert Passikoff, present Run What Where? Engaging Multi-Generational Shoppers Across a Multi-Platform World, at Re:think 2009: The ARF Annual Convention. We’ll be speaking at the Marriott Marquis in New York City on Wednesday, April 1 at the Key Issues Forum “Innovative – Moving Beyond New and Different,” 11:15 AM -12:45 PM.

We’ll be presenting the results of a predictive engagement study that tracks the multi-media consumption of Baby Boomers, Gen Xers, and Gen Y/Millennials, correlating consumption with in-market sales for two of the most respected retail brands around, Lucky and Kate Spade.

If you can’t make it to the presentation, contact Leigh Benatar, Brand Keys EVP by email leighb@brandkeys.com or phone 212.532.6028 X15, and he’ll be happy to arrange a time to take you through it. We believe that it will change the way you look at cross-media consumption and integrated marketing. It will also change how consumers behave toward your brand.

Of course, it isn’t strictly necessary to change. As Darwin noted, survival is preferable but not mandatory.

The World’s Cheapest Car

Here’s a car brand that didn’t show up on our Customer Loyalty Engagement Index, the Nano, from India’s Tata Motors. After some re-engineering, the Nano is scheduled to go on sale next month for $2,500.00. No, that’s not a typo. It will be selling for twenty-five hundred dollars!

The Nano has a tiny, 0.6-liter engine and only 33 horsepower. The front and rear bumpers are made of plastic and most of the construction is glued instead of welded. It has only one side mirror and windshield wiper, hand-cranked windows, and a manual transmission. There are no airbags. A radio is an optional extra, so we’re talking a real basic car. But the Nano is supposed to get 50 miles to the gallon and will have a catalytic converter. That’s supposed to capture 80% of exhaust-pipe pollutants, but not carbon dioxide, so the environmentalists are worried that while the car may be the most economical, it clearly isn’t the most eco-friendly.

Automotive brand success – ALL brand success – is based upon how well a brand meets or exceeds customer expectations for their Ideal. This will vary by category and demography and geography, to be sure, but it also depends upon which particular engagement and loyalty driver you are looking at. There’s a difference between “Safety” and “Style” and “Drivability” and “Eco-Friendliness,” the drivers that currently define the American automotive category. But with car sales tanking around the world, the international automobile industry sees cars like the Nano as one of the few growth areas on the highway horizon.

That said, when it comes to meeting or exceeding expectations regarding “Eco-Friendliness,” Americans rate their brands like this:

1. Toyota
2. BMW/Mercedes/Subaru/Hyundai
3. Honda/Jeep/Nissan
4. Saab/Volkswagen
5. Kia
6. Chevrolet/Volvo
7. Chrysler/Ford
8. General Motors

You can argue all you want about “official” emissions standards and tests and advertising and marketing and the promises coming out of Detroit, but like most consumer decisions, emotion rules and brand perception is – for better or worse – reality. There is great truth to the statement that there are things known and things unknown, and in between are the doors of perception. But most of the time those are the doors consumers walk through with wallets in hand.

Cheeky Advertising

Ah, yes, spring is here. Goatees of green grass sprout out of lawns; winter coats work their way to the dark of the closet; and advertising slide shows spread across the internet—some award winning, some just there for shock or their trompe l'oeil effects.

Before reading on, take a look at the latest batch that came across our desk. Most of them are real ads, though a few are likely not. Warning: contains nudity and violence, just like TV. If you’re okay with that and over 18, click here and gaze on. . .

Fun, huh? Creative minds are hard at work these days, trying to cut through the cacophony of clutter with breakthrough images. And advertisers, more desperate than ever and sensitive to the tight-fisted and skittish consumer, foot the bill, often asking little more of research than “was the ad remembered?”

Now here’s a little quiz. Take out a scrap of paper (trust us, you will need just a scrap), and write down the names of every brand you remember advertising in the show you just watched. Go ahead, we’ll wait.

If you are like most people, your list will have few brand names. And that’s with being focused on just the ads. That’s the trick with entertaining and provocative advertising. It’s often just that—entertainment that forgets what it’s there to do: move the customer to behave differently, usually to purchase the product (except when it comes to public service advertising which, in the case of anti-smoking campaigns, for instance, has the opposite goal).

These days advertisers need to ask more than ever of their creative partners, as do the creatives of their work. Does it work strategically to move the consumer to see the brand as better meeting their Ideals? If not, then it doesn’t work. Period. And if your researchers can’t tell you that, our lines are open.

Sex and shock may sell an agency, but if it doesn’t sell the product it’s nothing more than a spring fling—short-lived and soon forgotten.

What’s A Girl to Do?

You turn 50 and you lose ground to your rivals. Suddenly the wealth of houses, dream cars and your ability to get as many Ken dolls as you want mean nothing: they’re out there lusting after younger dolls.

The icon who put the “plastic” in plastic surgery, Barbie remains a well-known and polarizing cultural and social phenomenon. Introduced in the pre-dawn of the feminist movement, generations of women have grown up with her wardrobes, careers, friends, boy friends, pets, playhouses, and flashy pink sports cars. But a lot has changed in 50 years and Mattel, who introduced Barbie five decades and a billion units ago, is rolling out a commemorative doll and promoting “All Things Barbie” to perk up sagging sales.

Barbie’s history, however, has reflected the evolving role of women. For example:

When Barbie debuted women made up 38% of the workforce. Now they make up 60%.

Mattel introduced an Astronaut Barbie in 1965, but it wasn’t until 1983 that Sally Ride became the first US woman in space.

In 1973, Nurse Barbie went to med school. The percentage of female doctors back then? 10%. Now it’s 35%.

In 1989 Barbie served in four military branches, wearing uniforms approved by the Pentagon. The number of female veterans today numbers 1.8 million at an average age of 47.

In 1992 Teen Talk Barbie whined, “Math class is tough,” prompting anger from parents and an apology from Mattel. Still, the number of math doctorates granted to women at that time was 23%. Today it’s only slightly higher, at 29%.

In 2004 Barbie and long-time boy-toy, Ken, broke up after 43 years and then reunited in 2006, which is a real storybook ending since today only 6% of divorced couples get back together.

However, unlike real women, Barbie hasn’t changed physically (the picture above is a simulation of what she would have looked like had she aged in real life) and it’s been noted that her measurements -- at 36-18-38 -- if rendered in the flesh, would make it impossible for her to stand. She’s lost market share over the past decade, with domestic sales falling as much as 12% in recent years. And no matter what memories she evokes for moms, her target audience has grown younger, more sophisticated, and increasingly disinterested in the fantasy Barbie has to offer. What’s worse, interactive dolls, toys, and video games have moved into the dream-house neighborhood.

All the categories we study change over time, and this is no exception. Once considered edgy now seems relatively tame, especially when compared to real-life Barbies like Jessica Simpson, Lindsay Lohan and Britney Spears. More recently she’s been replaced by Bratz dolls with pouty lips and by Hannah Montana fashion-dolls.

Still and all, it’s a real cultural and marketing event. Barbie, the iconic fashion doll with the top-heavy figure and high-heel arches is 50. And some fairytales do continue for girls even when women are long past the point of believing in them.

Open a New (Wireless) Window

News from the GSMA Mobile World Congress in Spain, the largest wireless industry event so far this year:

Microsoft made quite a push to make its Windows mobile software as ubiquitous as its PC operating system. LG announced that they were going to significantly increase the number of handsets that will carry the new Microsoft operating system this year. Sony Ericsson announced a Walkman phone integrating telecommunications and entertainment features. And nobody announced they’d be featuring Google’s Android operating system, although that may just be a sign of the times.

While the wireless industry has proven to be recession-resistant, it is not recession-immune and there are, after all, just so many customers out there, most not hungering for a new device launch. Which is why loyalty is so very, very important, generally, and specifically so in less-than-optimum economic times. According to the most recent Brand Keys Customer Loyalty Engagement Index, Wireless Handset brands rank as follows:

1. IPhone/Samsung
2. Blackberry
3. LG
4. Sanyo
5. Sony Ericsson
6. Nokia/Treo
7. Motorola
8. Panasonic
9. Sanyo

It’s been suggested that the new economy is all about the Internet, and connectivity, and wireless handsets and PDAs – but its profitability you’re talking about, just like in land-line times, ultimately it's all about customers.

Will NFL Discount Players?

As the NFL heads into free agency tomorrow, players may be feeling the pressure of the economic arena. While the NFL’s revenue is listed as $7.5 billion, the league and the teams have cited the recession as the reason for salary freezes and layoffs. Are we about to see the discounting of players?

These circumstances came at an apt time, with the release of the 2009 Brand Keys Sports Loyalty Engagement Index, which helps professional sports teams increase broadcast, merchandise, and ticket revenues by providing the precise loyalty rankings of fans in the home (and national) market.

Loyalty and engagement is driven in four ways; how well a team does (Pure Entertainment), how well they play as a team (Authenticity), are players respected and admired (Fan Bonding), and is the game and the team part of a fan’s History and Tradition. Overall team rankings correlate very highly with TV viewership and sales of licensed merchandise.

The top-5 and bottom-5 teams in the NFL in terms of loyalty and engagement for 2009 were:

Top-5

1. New England Patriots
2. Indianapolis Colts
3. Pittsburgh Steelers
4. New York Giants
5. Tennessee Titans

Bottom-5

1. St. Louis Rams
2. Houston Texans
3. Detroit Lions
4. Oakland Raiders
5. Cincinnati Bengals

While win/loss ratios and excitement on the field is a critical part of the entertainment and loyalty process, a large portion of the loyalty and engagement that a team engenders is based upon Fan Bonding. That is, are there players on the team with whom fans create a real emotional attachment? Maintain that emotional bond and fans are more likely to be loyal to the team. Break it somehow and you see the results in the marketplace.

The Giant’s own Plaxico Burress, suspended after drunkenly shooting himself in the leg with an unlicensed .40-caliber handgun saw his No. 17 jersey fall from being one of the best sellers in licensed apparel to virtually no sales at all. Even when chains like Sports Authority and Modell’s marked the jersey down from $80 to as low as $19.49.

In terms of Fan Bonding, the top-5 ranked NFL teams are:

1. New England Patriots
2. Indianapolis Colts
3. Pittsburgh Steelers
4. Philadelphia Eagles
5. New York Jets

At the bottom were:

1. Cincinnati Bengals
2. Oakland Raiders
3. Carolina Panthers
4. Detroit Lions
5. Miami Dolphins

Fans may not be able to decide whether an athlete’s contract gets renewed or how much he gets paid, but they sure can show their disapproval at the cash register.

Fan Bonding is critical. Even in a recession.

Some Brands Win When Price ≠ Value

For all 444 brands in 63 categories in the 2009 Brand Keys Customer Loyalty Engagement Index (CLEI), aspects concerning “value perception” and the contribution they make to engagement, loyalty, and brand profitability have increased. Very significantly. These findings indicate that shopper-consciousness has shifted from one of personal responsibility to ferret out value, to a brand’s responsibility to provide it. Plainly, publicly and proactively.

One only has to look back a few months to see the convergence of the US economic crisis with the holiday season evident in store windows across the nation. Gone were signs offering 10 - 15% off, replaced by 70%, 80% and even 90%. That was the event. As we all know, events have consequences and ripple effects in the marketplace in ways that always seem obvious when looking back. This year’s leading-indicator CLEI data predicts a consumer shift away from price and toward value, in the form of real brand differentiation.
A few of the 69 brands that received the highest loyalty and engagement assessments from this year’s 26,000 loyalty constituents were: Avis, JetBlue, Bank of America, Zyrtec, Sam Adams, Cheerios, Allstate, J. Crew, Olive Garden, Dunkin’ Donuts, Mary Kay, Kohl’s, Discover, Kodak, W Hotels, Scottrade, Iams, McDonald’s, Grey Goose, ABC TV, Nike, Apple, Samsung, Wal-Mart, the NFL and Tom’s of Maine. The complete listing of the 62 category rankings can be found at www.brandkeys.com/awards

The brands that won are the beneficiaries of consumers’ new expectations regarding brand value. The most significant shift is a neutralizing of the impact of price. And, believe it or not, this can actually turn out to be good news for brands. While economic news hasn’t been good, these shifts provide opportunities for brands that pay attention to what the consumer really expects and offer meaningful differentiation, will tip the value scales in their direction, because value matters more than ever. More than just price.

The bottom line: for brands that have something real to offer, this may just be the year you’ve been waiting for.