Happy Brand New Year!

For us at Brand Keys, the New Year doesn’t really begin until this coming Monday. That’s when Brand Week publishes our annual Customer Loyalty Engagement Index—a measure of what brands, according solely to consumers, rank at the top of their categories.

For this year’s survey, 33,500 consumers, 18 to 65 years of age drawn from the 9 US Census Regions, self-selected the categories in which they are consumers, and the brands for which they are customers. They were interviewed by phone and face-to-face (to account for today’s 20% of the population who are cell phone-only consumers). This ended up including 518 brands in the 71 categories tracked in the Brand Keys twelfth annual Customer Loyalty Engagement Index—and also includes some surprises, as the world continues to shift beneath consumers’ feet.

Of course, there is far more to these 71 categories than the ranking of the brands that play in the space. Our research makes available to clients the most critical view of all: the category as seen by the consumer, without subjective researcher interpretation, from the strategic to the most granular level of insights, and how their brand and competitors measure up.

For more on that, don’t hesitate to contact us. And, in the meantime, an especially Happy New Year to the winners!



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Betting on the Super Bowl

No, we’re not handicapping the upcoming game. But we are willing to bet that not all programs are right for all brands, even if it happens to be the Super Bowl.

Our 8th annual Super Bowl Engagement Survey found that when it comes to monetary returns advertisers will get on their ad investments in the Super Bowl, upsets are not limited to the playing field. This year’s survey, conducted among a national sample of 1,350 men and women, 18 – 65 years of age who indicated that they were going to watch Super Bowl XLIV, was created to predictively measure viewers’ true reactions to brands within the context of the medium. Results correlate highly with consumer behavior, and are reliable predictors of brand engagement and future purchase.

The Super Bowl Engagement Survey, like our Brand Keys Customer Loyalty Engagement Index, predictively measures respondents’ true reactions to brands, here within the context of the Super Bowl medium. If it helps, think of it as identifying how the media reinforces, or in some cases degrades, brand values. What you want to see is a minimum of seven points added to your brand to ensure you’re getting a real return on a very expensive investment.

Return-On-Investment assessments for this year’s Super Bowl advertisers are calculated to be as follows:


Advertiser “Super Bowl” R.O.I

Anhauser-Busch (Budweiser) +8
Audi +6
Boost Mobile -0-
Bridgestone Firestone (Halftime Sponsor) +5
CareerBuilder +6
Cars.com -3
Coke +2
Coors +11
Denny’s +9
Diamond Foods (Pop-Secret) +10
Dockers -2
Doritos +9
Dr. Pepper Cherry -4
E*Trade -2
Electronic Arts +7
Go Daddy.com +3
HomeAway -3
Hyundai +10
Kia -5
Mars +5
Monster +7
Motorola +7
NFL +9
Telaflora -0-
TRUTV -2
US Census Bureau -0-
Unilever’s Dove Men&Care +7
Universal Pictures (The Wolfman) +7
Viacom’s Paramount Pictures (Shutter Island) -0-
Viacom’s Paramount Pictures (Iron Man 2) +11
Viacom’s Paramount Pictures (Last Airbender) +4
Walt Disney (Alice In Wonderland) -0-
Walt Disney (Toy Story 3) +6

Engagement assessments are separate from how many of which demographic eyeballs were watching and are a reality check that lets advertisers know how super their media buys actually are. Happily, it can be done before signing a check.

It has nothing to do with ‘being watched’ or of consumers ‘being aware,’ or even ‘liking the ad,’ and has everything to do with being emotionally engaged with the brand. All that’s vastly different from just being entertained, and even setting aside the question of quality creative, the survey brings into harsh relief the question being more loudly articulated this year – does the ad-buy actually lift the brand? More and more, clients want to know more than just that their ad was seen or the commercial liked or the audience amused, and with 30-second spots selling for $2.5 million - $2.8 million, this is a whole new ballgame.

Because today, a laugh alone isn’t really an acceptable return on a super-sized investment like this.



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What’s the Difference Between a Cell Phone and a Pint of Vodka?

None, actually, if you’re driving a car.

University of Utah researchers found talking on a phone has the same effect on your driving as drinking. Some states have a ban on using cell phones while driving, but the best solution, of course, is self-discipline. Wait until you’re out of the car to make that call or text that text.

Wired to your cell 24:7? Not enough willpower? If you’ve got a smartphone, there are software apps that’ll limit your use of the phone when you’re on the road. You don’t even have to manually launch these programs. Just install them, and they’ll know you’re in motion, thanks to your smartphones’ GPS.

And for those of you are worried about going cold-turkey for the 15 minute drive to the mall, never fear. You’re not locked completely out of the phone. Each of the currently available apps allows for exceptions. For instance, programs always let you dial 911 and you can “whitelist’’ special phone numbers so that calls from family members or significant significant others can always get through to you.

The apps cost anyplace from $2.99 to $4.95 a month and they offer a variety of family plans for multiple phones at yearly rates. Of course, the best solution of all is absolutely free. Just put the phone in your pocket or handbag phone and drive.



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Racking Up Retail Sales

It’s been reported that retailers did a bit better this past holiday season (+3%) than a year ago, but things have not returned to pre-recessionary levels. Customer expectations in the category are still on the rise and retailers are being forced to look into tactics other than deep discounting and the offering up of loyalty points.

Nordstrom, the upscale department store with the reputation for meeting and sometimes even exceeding customers’ expectations regarding service, has expanded their geographic catchment area and the word on the street, is that they are planning to open one of its off-price Rack stores on New York City’s Midtown Fifth Avenue.

With customer expectations up and the demand for expensive clothes, shoes, and handbags down, Nordstrom announced they will add 16 new Rack stores by the end of next year, bringing the total number up to 75. One Rack discount outlet will be opened in New York City on Union Square this spring, and may also lease 521 Fifth Avenue. That’s the space formerly occupied by the now-defunct Circuit City, so the circle of retail life – or at least discounting – goes on.

Nordstrom’s plans to put a second Rack store in Manhattan may signal the fact that discount outlets may be central to luxury retailers’ growth strategies, and that may just be the thing customers are looking for. Retailers have had a difficult time differentiating themselves via Pricing and Merchandise Range management, so the expansion of locations, making it more convenient for the customer, may be the most viable customer-care tactic in the current economy.

Expect more of this kind of growth. It’s something that retailers will have to consider because, as the maxim goes, if they don’t take care of their customers, someone else will!



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It Is A Capital Mistake To Theorize Before One Has Data

That’s a quote from one of the most famous investigators in the world, Sherlock Holmes. But we don’t think that he’d mind – given the state of the economy and brands, not to mention promotion for his recent film – if we updated it to read that it’s a capital mistake to theorize before one has predictive engagement metrics. This amendment to the quote to help battle creeping commoditization and consumer brand ennui came up at discussions today at our relatively new London office, where it became increasingly clear that many brands out there have the same mystery to solve.

We say “relatively new” London office not because we’ve moved to new quarters (we’ve had London offices for quite some time), but it’s not been until recently that the consequences of lack of brand differentiation and a more (and more) empowered consumer base have forced companies on this side of the Atlantic to understand (as did their celebrated Sherlock Holmes) that “detection is, or ought to be, an exact science.”

Consumers may have changed since 1895, but Holmes was always ahead of his time in understanding the importance of detection. To that end, we are proud to announce that we have expanded our offices and outreach in this market, and invite you to visit our new Brand Keys UK website: http://brandkeys.co.uk

And no matter in which marketplace your brand competes, making the move to predictive loyalty and engagement metrics is truly elementary.



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Bragging Rights

Robert A, Heinlein, who wrote about the future, once observed, “Being right too soon is socially unacceptable.” But when it comes to marketing and brand profitability, a brand can’t be right too soon or too often. And the same is true about the research brands base their planning upon.

We call this certainty to your attention because we’ve been advocating predictive loyalty and engagement metrics for a while now and, while we don’t want to totally discount social convention, we’d like to point out at the end of last October, as part of our year-end trend forecasts – which are entirely based on consumer engagement and loyalty metrics – we predicted an industry increase in Holiday Spending of 3%.

Were we right? Well, last week the nation’s retailers confirmed that they indeed had a merry Christmas in 2009, a year after weathering the worst holiday shopping season in decades (which we also predicted, in 2007). Overall the industry turned in a 2.9% increase in December versus the same period a year ago, which makes us right again. (The National Retail Federation predicted a 1% decline, only further proving the significant difference between measuring what consumers say, and measuring how they’ll really behave.)

Could consumers go into hiding again now that the holidays (and dramatic discounts) are over? Perhaps. Consumers are increasingly wily shoppers. Brands that don’t have an accurate fix on consumer behavior will constantly be walking a dangerous line about how to strategically and profitably manage the brand.

Two years ago, retailers felt first-hand the down-side of deep discounting. However, for retailers and brands, it’s discounting loyalty measures that is the most dangerous discount of all.



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New Dimensions in Television

Three-dimensional images are expected leap from movie theaters into living rooms this year as many electronics manufacturers get ready to unveil 3-D TV sets.

Some marketers opined that 3-D is not ready for prime-time viewing, questioning whether consumers are ready to switch from recently acquired plasma and LCD TVs, and if having to relearn everything they already thought they knew about TV would seem a barrier to purchase.

But that said, it may help to think about the switch like the ones you had to make from vinyl records to cassette tapes (and then again to CDs) or the switch from black-and-white TV to color (and then from standard transmission to high-def). This similar and soon-to-come viewing shift is good example of what happens when technology meets consumer expectations. 3-D used to be just a gimmick, but the success of movies like Avatar show that consumers would likely welcome the next, well, dimension in home entertainment IF it meets – or exceeds – their expectations for the TV set category.

Who’ll be the beneficiary of these innovative technological changes? Well, history (and profit statements) suggests that brands to which consumers are currently loyal have a six times greater chance of being anointed the new format brand of choice. According to the Brand Keys Customer Loyalty Engagement Index, the top-5 brands in the HDTV LCD and Plasma category were found to be:

LCD:

1. Samsung
2. SONY
3. LG
4. Sharp
5. JVC
6. Panasonic
7. Hitachi/Toshiba
8. RCA

Plasma

1. Samsung/Panasonic
2. LG/Toshiba
3. SONY
4. Pioneer
5. Phillips/Hitachi

Samsung currently sells 3-D rear projection TVs in the US, but there are currently no 3-D TV broadcasts in this country, although ESPN has said it will air at least 85 live events on a 3-D channel beginning in June. Last year Hyundai introduced a 3-D TV in Japan and Japanese cable stations now broadcast 3-D four times a day. Sony and Panasonic will release home 3-D television systems this year and Mitsubishi and JVC are reported to be working on 3-D products too.

Although specifics haven’t been released, the price of 3-D TV, which requires (along with a new television set) broadcasting content and 3-D glasses isn’t expected to be substantially higher than some HD TVs. And in the short-term consumers and marketers will have to deal with the lack of 3-D production equipment and competing transmission standards.

We believe that the director and TV host Alfred Hitchcock would have been a supporter of 3-D TV. He once suggested that the opportunity to see a murder on television could help work off one's antagonisms, so one can only imagine that he would have felt that 3-D would add an additional dimension of help. Of course Mr. Hitchcock also thought that if didn’t have any antagonisms to begin with the commercials would give you some!



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Cheers to a New Year & Another Chance to Get it Right

Welcome to the new decade. Were you one of the millions of people who made a New Year’s resolution last week? Most people do, although it’s been said that New Year’s resolutions go in one year and out the other.

It turns out that people who make resolutions are ten times more likely to change than those who have the same goals, but don’t actively make a resolution. Nearly 40% of people who make resolutions are still successful after six months. It’s a sign that people can successfully change their behavior, a lesson for us all. So courtesy of the 2010 Brand Keys Customer Loyalty Engagement Index, here’s a list of the top-5 most frequent resolutions for the New Year:

1. Spend More Time with Family & Friends: More than 50% of Americans vow to appreciate loved ones and spend more time with family and friends this year.

2. Lose Weight (and Exercise More): Over 66 percent of adult Americans are considered overweight or obese by recent studies, so it is not surprising to find that weight loss and regular exercise routines continue to make it to the hit parade of the most popular New Year's resolutions.

3. Quit Smoking: More over-the-counter therapies than ever provide easy access to proven quit-smoking aids. On average, smokers try about four times before they quit for good.

4. Get Finances in Order and Get Out of Debt: This resolution used to be lower on people’s lists, but not surprisingly, money was a big source of anxiety last year. Millions of Americans have resolved to spend this year getting a handle on their credit cards and their finances, a behavior change that can repay itself many times over.

5. Getting Organized: Whether it’s your closet or your desk, nearly everyone can benefit from reorganizing their stuff. You know what Einstein said, “Out of clutter, find Simplicity. From discord, find Harmony. In the middle of difficulty lies organization and opportunity.”

Other popular resolutions include Learning a New Skill, Drinking Less, Volunteering More and Enjoying Life.

New Year's has always been a time for planning for positive change. So as you contemplate how to enhance your brand’s performance for the coming year, we’d like to suggest one more resolution: Divest yourself of mid-20th Century legacy measures and incorporate real loyalty and engagement metrics into your 2010 marketing toolbox. They’re predictive of the preferences, expectations, and behaviors of 21st Century consumers, and virtually ensure brand profitability.

Of course, the year’s close is neither an end nor a beginning but a going on, with all the wisdom that experience can instill in us. We look forward to joining you!
All best wishes for 2010.



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