Focusing On More Than Memories

That time of year when memories get captured for posterity is upon us. Graduations, Mother’s and Father’s Days, Weddings, vacations and Summer camp. All opportunities to use our various multi-functional devices’ photo applications. We used to say “take a photograph,” but that language is so very mid-20th century!

It’s been said that language shapes the way we think and determines what we can think about. But with changes in consumer expectations and technology happening at the speed of knowledge and consumer endorsement, changes in language also determines what we can say about – or how we can position – certain products and services. And while technology may have exceeded our humanity, it still has not exceeded expectations. Consumer expectations are about the only things that are actually able to keep ahead of technological advances. And language has kept up as well.

For example, changes in technology, language and expectations have caused consumers to view digital imaging brands differently than they did in earlier times when cameras used film that needed to be developed. What was once a “photograph,” became a “digital image,” and is now a “jpeg.” Or a “file.”

And expectations demand that those files be available on demand. Or sooner. Forget Polaroids or actual film. Who among us doesn’t have a camera – or in the current vernacular, a 3-to-5 megapixel autofocus photo or video application – on their phone? And the results? As expectations for greater connectivity increase, an image we once expected to see developed in a week turned into a day with 24-hour availabilities. Now, of course the results of your ‘photo applications’ can appear in an email halfway across the world or on somebody’s Facebook page with a mere push of a button or caress of a touch screen.

So when it comes to digital imaging we turned to our Customer Loyalty Engagement Index to see which brands lead in the hearts and loyalties of consumers:

1. Kodak/Canon
2. Nikon
3. Fuji
4. Panasonic
5. Casio
6. Sony
7. Olympus
8. Pentax

And whether you call it, a “photograph” or a “file,” the reason for stopping time remains unchanged: the capturing of memories, even if the way we share them is drastically different. If properly positioned, the increasing ease and sharing of images can develop a new image for brands—for those that focus on the right thing, that is.

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Let’s Make A Deal

Though the economy has not been a boon to car rentals, Hertz announced that it was making a deal to acquire the Dollar Thrifty Automotive Group for $1.2 billion.

The acquisition would take another player out of the rental car market, which has gone from nine holding companies to three in just the past three years, and would give Hertz 9,800 locations, four brands, and a 23% market share. Enterprise now has 53% share and Avis a 21% share of the car rental category, so you’d figure that’s the way it would shake out with consumer preference and loyalty.

But that’s not always the way with acquisitions. Peter F. Drucker, the legendary management consultant, noted that one of the rules for a successful deal was that the acquisition must be based on business strategy. But today, successful acquisitions are not just about the deal, it’s about the brands as well.

Consumers don’t make decisions just on the basis of market share or distribution they look at the brands and what they stand for. Or – more importantly – what they believe they stand for. In this year’s Customer Loyalty Engagement Index car rental brands ranked as follows:

1. Avis
2. Hertz
3. Enterprise
4. National
5. Budget
6. Dollar
7. Alamo

Analysts have noted that car rental consolidation hasn’t had much effect on profit margins. Apparently customers have become more adept at getting better deals too.

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Happy Earth Day

Forty years after the first Earth Day, greater pressure is being applied to brands to address environmental problems along with the problems of dirty clothes, financial services, technology, and convenient, quick-serve meals.

Yes, more consumers hear the phrases “fuel-efficient,” “organic,” “energy-efficient,” “natural,” “green,” and “sustainable” more these days, consumers are on to all that. They want brands to walk-the-talk, and “green” has become the cost-of-entry in many categories, making larger and larger contributions to brand engagement and loyalty.

A review of category loyalty drivers in our Customer Loyalty Engagement Index shows that how consumers define “green” varies significantly from category-to-category. And as more people become more aware of the dangers of ignoring the environment, and as brands have actually sought to establish standards, the definitions and expectations applied to brands have evolved. Any/all these questions can be applied to virtually any category: What is it made from? How is it made? How is it packaged? How is it consumed? How do I dispose of it? Those are the questions consumers are asking brands to answer.

As such the value of such environmental initiatives, extend beyond the aspects of social responsibility, and even further beyond simple advertising tag lines, and present a competitive opportunity for both top and bottom line growth, brand differentiation and – given consumer expectations – increased profitability.

As noted, the categories vary in their “green” aspects and expectations, but here (alphabetically) are the Top-25 Green Brands from this year’s Brand Keys Loyalty Engagement Index:

1. American Express
2. Apple
3. Avon
4. BP
5. Coke
6. Coors
7. Dell
8. Ford
9. Honda
10. HP
11. Johnson & Johnson
12. Kellogg’s
13. Kohl’s
14. Marriott
15. McDonalds
16. Microsoft
17. Nike
18. Pepsi
19. Samsung
20. Seventh Generation
21. Staples
22. Starbucks
23. Tom’s of Maine
24. UPS
25. Wells Fargo

Forty years ago it must have seemed a quixotic idea to set aside a single day to focus on the fragility of our planet. But in the 21st century, after years of raising awareness about environmental issues, many Americans try to celebrate Earth Day every day of the year and seek out brands to help them.

But that said, today might be a good one to pass along this advice: Don’t blow it – loyal customers and good planets are both hard to find!

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I Know That You Believe You Understand What You Think I Said, but I’m Not Sure You Realize That What You Heard Is Not What I Meant

Brand Keys’ ‘secret sauce’ to being able to predict consumer behavior in the marketplace is an acknowledgment of the reality that direct Q&A may measure what people say they think, but it’s an extraordinarily imperfect approach to understanding what people really think. To get to that reality, you need to measure the emotional part of the engagement and loyalty equation. Five-point scales, imagery questions, and ranking lists are extraordinarily unsuited for that task.

Oh, sure, easy answers to questions like, “are you optimistic about the economy?” are probably going to provide an accurate measure of how people feel. Nobody feels terribly exposed answering a question like that. But ask a middle-aged man “why he bought the new sports car,” and you’re likely to hear all kinds of phrases that rationalize the purchase – “fuel efficient” and “empty-nest” – while the phrases “mid-life crisis” or “want chicks to find me cool” just do not appear on any list of open-ended responses.

Those thoughts sprang to mind upon reading some of the results of a survey from Affluence Collaborative that reported people with incomes of more than $75,000 – and most with incomes of $500,000 – said they felt “extremely optimistic” about their financial situation. The $500,000-plus group – when asked – reported that they were “happier than they were two years ago.” If your reaction to reading that finding was “well, duh,” then join the club. Didn’t really need a study to confirm that supposition.

But then the questions took a nasty turn into the kingdom of What-We-Think-We-Ought-To-Say, a very dangerous place for researchers and brands to wander. They gave respondents a list of 22 activities that might contribute to their current state of happiness and shopping for luxuries ranked 20th, just ahead of smoking.

Now if you’re thinking to yourselves, “Wow, extremely rich people not getting a happiness jolt from shopping for luxury goods, can that be right?” you’re not alone. We share those very thoughts with you. Even in a weakened economy, that kind of response rings hollow, more particularly in light of the recent increase in same-store sales at luxury retailers and blockbuster earnings by luxury-goods brands.

It is not luxury consumption that has fallen out of favor, despite this economy; it’s conspicuous luxury consumption. The reality is that those who can afford those goods are not going to be out of fashion, whether it’s sartorial or economic. And they will certainly not bare their economic souls to obvious above-the-radar research queries. Or, more importantly, it’s not what they’re going to do. And no brand has the luxury of making that mistake.

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Denim’s 4F’s

Continuing this week’s clothing theme, we’re looking at classic, denim blue jeans today.

Yves St. Laurent wished he “had invented blue jeans. They have expression, modesty, sex appeal, and simplicity. All the things I hope for in my clothes.” Consumers seem to feel the same way except that a couple of years ago they were buying expensive, high-end premium denim more often. Now they're buying a couple of “perfect” brands and complement their wardrobes with less expensive pairs, which means that the competitive set for any denim is a lot broader than it used to be. And if it’s broader, who’s in the primary consideration set?

As part of the annual Brand Keys Customer Loyalty Engagement Index, a segment of 7,500 consumers respond to questions about the value they place on fashion brands and the particular brands they find important to them. When it comes to the four drivers of engagement and loyalty in the denim category, it turns out that consumers think (and judge and buy) in terms of the 4F’s:

1. Fit: How does it look and how does it feel? Does it flatter and/or flaunt?

2. Fashion: Is it cutting-edge in design, does it have a signature people recognize, and do my favorite celebrities wear them?

3. Fabric: Is it truly “premium” denim? Has the wash and finishing made it soft? Does it stretch and sculpt? Does it look different?

4. Finish: What differentiating characteristics and character have been washed, whiskered, or sanded into the final product?

And how do brands measure up? When it comes to blue jeans here’s how the top-20 brands ranked:

1. Levi’s
2. True Religion
3. Lee
4. Lucky
5. Gloria Vanderbuilt
6. Wrangler
7. 7 for All Mankind
8. Ralph Lauren
9. Citizens of Humanity
10. Liz Claiborne
11. Rock and Republic
12. Cheap Monday
13. Diesel
14. Joe’s Jeans
15. Calvin Klein
16. Rockawear
17. Hudson
18. Juicy
19. Gap
20. Tommy Hilfiger

According to Diana Vreeland, tastemaker and Vogue’s long-time editor-in-chief, “blue jeans are the most beautiful thing since the gondola.” With nearly $15 billion in denim sales, consumers obviously agree.

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Is “Brand” the New Black?

As you read this posting, the findings of the 10th annual Brand Keys Fashion Brand Index are being presented at the Retail Marketing Society luncheon at The Williams Club in New York City.

Last year’s findings predicted that value, not price, was the watchword in consumer behavior. And tradition dictates that you can’t have a real value conversation without a brand conversation as well. But is that the case in today’s economy? Happily, these metrics are a leading-indicator of retail sales and always play out in the marketplace.

Half a decade ago fewer than 3% of US fashion buyers thought fashion brands and logos were more important to them in deciding which clothing to buy. According to the 2010 Brand Keys Fashion Index, the brand-to-fashion consumer mindset has changed dramatically and fashion brands were seen to be much more important – increasing that sentiment by +14%, bringing the Total Audience figure to a record high of 28% of consumer saying that brands are more important to them when it comes to deciding which brand they are going to buy, the critical word in that sentence being ‘buy’. Brands have reached their highest level of consequence since the 1960’s.

For the Total Audience of 7,500 men and women, 21 to 65 years of age, the top-10 fashion brands on the list collected on an unaided basis were:

1. Favorite Sports Team
2. Ralph Lauren
3. Armani
4. Nike
5. Polo
6. Brooks Brothers
7. Levi’s
8. Banana Republic
9. Tommy Hilfiger / J. Crew
10. Burberry / Chanel / Versace

On the basis of this year’s results we believe it’s fair to say that retailers are going to find that fashion does not just consist of putting on a new dress or coat, but putting on the right brand as well.

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Heritage Helps Distinguish Between Leaders and Followers

Brands have become more important in recent years. Consumers looking for value-for-dollar have come to rely upon brand as a surrogate for value.

Today a brand name, a real brand name, a name that stands for something – as opposed to a well-known name that means nothing to the consumer – can be an important asset.

Back in 2004 Cingular (remember Cingular?) bought AT&T for $41 billion. At the time – corporate egos notwithstanding – it was felt that “AT&T” conjured up images of rotary dials (for those of you born after 1962, the year the touch tone phone was introduced by AT&T, that was yesteryear’s version of touch screens or voice dial command) and switchboard operators, so the name got dropped in favor of “Cingular,” which stood for, well, Cingular.

Two years after that they ditched the Cingular name for something with more heritage and picked – you guessed it – AT&T! They re-introduced it with the $1billion campaign, “Your world. Delivered,” which was an art director’s dream but a confusing consumer nightmare. Now, four years later AT&T is beginning a new campaign that they hope will leverage the brand beyond calling plans and borrowed equity of smart phone partners like Apple’s iPhone.

Alexander Graham Bell invented the telephone and founded AT&T. The company was the first telephone exchange in the United States, ran the first long distance and transcontinental lines, invented dial phones, coaxial cable, and cellular telephony. That was all before 1948.

AT&T already rates pretty well on our Customer Loyalty Engagement Index on Corporate Reputation and Innovation. But if you are a brand looking for heritage-of-innovation proof-points, we’d suggest that you can’t find much more than that!

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Return of the Wayward Brand

Last December Tiger Woods dropped out of professional golf after a Thanksgiving weekend car wreck turned his personal life into a car wreck too. Since then Mr. Woods issued a public apology for his extramarital affairs, has undergone treatment for unspecified "issues," and put his professional career on hold.

Of course, it wasn’t just Woods’ personal life that was threatened but his status as a Human Brand too. He lost a handful of sponsors, Accenture being the first major company to drop Woods, but as they were best known among the general public for their Tiger Woods ads and not much else, you could kind of understand the distancing. AT&T’s logo disappeared from Mr. Woods’ bag and, we can only suppose, that he wasn’t drinking much Gatorade after Gatorade dropped him.

The abandonment was not universal, however. Nike continues to back Woods, and days after announcing it would drop Woods from its U.S. campaigns, Tag Heuer prominently featured him on its web site next to the large text, "TAG HEUER stands with TIGER WOODS." Clearly these are brands that understand American consumers have a long history of forgiving the transgressions of talented athletes of all sports persuasions.

But more importantly, a good deal of what has been reported regarding Woods’ brand situation is a good example of “what people say” versus “what people think.” If you ask people whether the extramarital affairs were a “good thing,” the large majority of respondents are going to say, “no.” Morality, like art, requires that you draw a line someplace, after all.

But in the interests of good research, we suggest that they add behavioral aspects to their inquiries. Something like, “the next time you need to buy a driver, would you consider the model Tiger Woods uses?” or “Will you be buying EA SPORTS’ Tiger Woods PGA TOUR Online?” the introduction of which coincides with Woods’ announcement that he was coming back to play in the Masters April 5-11 (which he has won four times). But the real question isn’t whether he’ll win the tournament, but whether he’ll win back the fans. We’ve already gone on record suggesting that at the first 400-yard drive, a good deal of his past transgressions will evaporate like mist on a sunny fairway.

There’s the golf joke that goes, there’s no game like golf: You go out with three friends, play 18 holes and return with three enemies. As this is no joke for Mr. Woods, we can only suppose that with this round of golf he’s hoping to return with millions of fans.

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It Happens Every Spring

Sports Columnist, Thomas Boswell wrote that “time begins on Opening Day when we know that something fine, almost wonderful is about to happen.”

It’s also that time of year when we release our Sports Fan Loyalty Index, a wonderful survey that helps professional sports teams hit marketing home runs by increasing broadcast, ticket and merchandise revenues. It can help hit a marketing home run by providing loyalty rankings and fan diagnostics that identify areas that need strategic brand reinforcement.

For 2010, the top-5 ranked baseball teams – including 3 home run leaders – were:

1. Boston Red Sox
2. New York Yankees
3. Philadelphia Phillies
4. Anaheim Angels/Los Angeles Dodgers
5. Minnesota Twins/Milwaukee Brewers

Yes, everybody loves a winner, but it’s important to note that win/loss ratios do not entirely dictate fan loyalty. Fan loyalty is driven in four ways. If it makes it any easier, think of them as the four bases you’ve got to touch to score a home run.

• Pure Entertainment: How well a team does (yes, wins and losses), but more importantly, how exciting is their play?

• Authenticity: How well they play as a team. A new stadium can help on this driver, but failing that, so can a new Manager.

• Fan Bonding: Are players respected and admired?

• History and Tradition: Is the game and the team part of a fan’s and a community’s rituals, institutions and beliefs?

So, if you’re looking to cover all your marketing bases, you’d be making a real error to bench fan loyalty, which can always identify your brand’s sweet spot. When you’re pitching to fans and want to pickoff the competition you’d be well to remember the old baseball maxim, careers end with a ground ball to shortstop, never with a home run!



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