The Good Brand Spokesperson

L'Oreal announced a new addition to their roster of celebrity spokespeople this week, signing actress, Julianna Margulies, as a new ambassador and celebrity face for the brand. Ms. Margulies currently stars in the critically acclaimed series "The Good Wife,” for which she won a Golden Globe and SAG award for her portrayal of a loyal yet betrayed wife of a politician.

Does it surprise you that L’Oreal (and most other beauty brands, both luxury and mass merchandiser) went the expected route and found a high-profile beauty to front for their brand? We weren’t. But just because it’s predictable doesn’t mean it isn’t practicable, and there are two basic ways a celebrity can positively affect a brand.

The first is by creating what might be called “borrowed equity,” when the celebrity causes more attention to the brand than otherwise might be the case, an approach usually used when a brand is seeking high levels of awareness. The second is when the spokesperson association actually increases the brand’s equity—that is, when the values inherent in the spokesperson significantly reinforce brand values. If successful, the brand is then seen to better meet, and can even exceed, expectations consumers dream about for the ideal in the category.

That measure – the brand versus the real, unconstrained-by-the-marketplace Ideal – is the very best measure of brand engagement and loyalty because it takes into account real emotional values, something that imagery and good-looking celebrities can’t bring about on their own.

Ms. Margulies won’t appear in advertising for L'Oreal Paris until 2011, but until then, we turned to our 2010 Loyalty Leaders List to see which cosmetic brands were currently engaging loyal customers. Here’s the top-10 ranking:

1. Mary Kay
2. Maybelline
3. Estee Lauder
4. Clinique
5. Avon
6. Lancome
7. L’Oreal
8. Covergirl
9. Chanel
10. Max Factor

Coco Chanel is said to have offered this bon mot: Women have two weapons – cosmetics and tears. Happily, these days beauty brands can arm themselves with something more than outdated clichés: the loyalty driven by real emotional connection.

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Absolutely the Most Loyal Customers in America

Here are a couple of brand absolutes:

1. Loyalty is absolutely driven by emotion and
2. This year consumers are absolutely looking for emotional connections – more than ever before.

This year the list of top-50 Brand Keys Loyalty Leaders is made up of 8 categories. Cosmetics and moisturizers account for 30% of the brands; technology brands – primarily smart and cell phone brands – account for 26% of that list; and these two categories together account for nearly 60% of the brands with the most loyal customers.

Surprised? You shouldn’t be. Not when you consider that the ‘emotional engagement’ that women share with beauty brands is very powerful, and that there are few things consumers take more personally than the technology that keeps them connected.

Sixteen percent (16%) of the top-50 Loyalty Leaders represented retailers (bricks, clicks, and catalog), and 12% of the brands were alcoholic beverages, principally vodka, with only one beer brand in the top-50 ranking. On the other side of the bar, Dunkin Donuts and McDonald’s coffees were the only other beverage brands to make the top-50 loyalty rankings.

Of the 501 brands in 70 categories on this year’s list, here are the 10 brands with the most loyal customers:

1. Apple iPhone
2. Samsung cell phones
3. Wal-Mart
4. Grey Goose
5. Apple Computers,
6. Hyundai
7. Amazon
8. J. Crew
9. Blackberry
10. Avis.

Who had the greatest gains in loyalty this year? Progressive Insurance (+78), Avon (+53), and Domino’s Pizza (+38).

Who showed the greatest losses in loyalty: Palm (-407), Tylenol Allergy (-199), and BP (-326).

For the complete ranking of the 501 brands, click here.

Some brands have, of course, suffered loyalty losses because of the economy. But brands that understand how real emotional connections serve as a surrogate for added-value will create stronger loyalty bonds no matter what the economy is like.

The good news: Unlike economic use models, which rely heavily on historical data and profitability conjecture, the Brand Keys Loyalty Model and rankings are 100% consumer-driven; are predictive leading-indicators of corporate profitability; and are eminently understandable.

The better news: Real customer loyalty can be quantified and predicted. And in these economic times, knowing what’s making loyalty happen gives a brand an extraordinarily powerful advantage.

Absolutely!

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Follow Their Dreams

The concept of a card to be used for purchases was first described in 1887 by Edward Bellamy in his novel Looking Backward. It portrayed Bellamy’s dream of how an Ideal 21st century would operate.

It turns out Bellamy’s was ahead of his time. It was only 1984 that Brand Keys proved that consumers don’t just shop, but dream too. When it comes to brands, they dream about an Ideal.

The Ideal is a consumer-centric view of a category. It absolutely informs how consumers view, compare, and choose among category options. If you identify the Ideal, you not only possess a measure of consumer expectations, but also know what truly matters to them. Brands that best meet – even exceed – expectations for the Ideal always possesses the highest brand equity, engender high levels of loyalty, and, as this is business we’re talking about, posts profits. Very regularly and usually exceeding estimates.

When it comes to 21st century credit cards ubiquitous acceptance, competitive rates, and air miles don’t cut it any more. Those have become category ‘table stakes.’ What influences brand loyalty most is the reputation the brand has for service. According to our most recent loyalty assessments, here’s how the major card brands rank when it comes to what consumers dream about customer service:

1. Discover
2. American Express
3. Visa
4. Capital One
5. MasterCard

Discover recently aired a new campaign focusing on (ideal) customer service. Oh, and having the category’s most-loyal cardholders and this year’s Brand Keys Loyalty Award, a circumstance that most CFOs and CMOs also dream about.

All dreams may be answers to questions consumers haven’t figured out how to ask yet. But for marketers those dreams can be codified in a very practical, very predictive category Ideal.

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Bless You!

A wet Spring and a dry Summer have conspired to produce record-breaking ragweed (and other) pollen counts. And no matter how dry you think it was, tree pollen counts are nearly a 1,000 times above average.

Now those microscopic pollen particles are swirling through the air, triggering itchy eyes, runny noses, headaches, coughs and sneezes from autumnal allergy sufferers. And while the pollen from these weeds may be microscopic, the consequences for allergy sufferers aren’t.

Avoiding the pollen itself is the best way to avoid symptoms. But next to moving to Antarctica, over-the-counter medicines, usually non-drowsy antihistamines, can help reduce the severity of allergy symptoms. And seeking some word-of-mouth as it relates to your nose, we turned to the Brand Keys Customer Loyalty Engagement Index to see how OTC Allergy Medicines were rated by suffering consumers. Here’s how the brands we track currently rate:

1. Claritin
2. Benadryl
3. Sudafed
4. Zyrtec
5. Tylenol
6. Chlortrimeton

There are home remedies that range from vacuuming your pets to washing your hair every time you go outside to lemon and honey draughts. But for real brand relief, understanding what makes afflicted consumers choose one tablet over another is the surest way to end their suffering, no matter what season!

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Grandeur Without Points

There’s an old hotelier saying that went, “elegance needs no adornment.” That used to be true for luxury hotels, where one could count on reputation and service and amenities to differentiate them from the ones where you got stuck when you had to spend a night at the airport. That sense of elegance and top-flight service for the elite carried those brands. You know, the kind of place where Room Service had an unlisted number and they didn’t consider offering guests anything so common as loyalty points – because they didn’t have to.

We track hotels in our Customer Loyalty Engagement Index and here’s how those bastions of luxury and refinement rank when it comes to their reputation for providing high-end extravagance:

1. Inter-Continental
2. W Hotels
3. Fairmont Hotels
4. Ritz Carlton

Customer expectations have continued to rise in virtually all categories. And as you might suspect, customer expectations as they relate to luxury generally, and luxury hotels specifically, have increased more than more proletariat categories like breakfast cereal or take-out pizza.

While smaller and more exclusive than other categories, you still don’t want to find your luxury brand at the bottom of the list. That means that the brand – or more precisely the brand’s equity – isn’t doing the best job meeting or exceeding the guests’ expectations for the category. And when that happens brands – who find it cost=prohibitive to add a sauna or lap lane to every room – often find it easier to turn to price promotions or loyalty programs to help bolster the brand.

And while such programs have become apparent necessities of late, there’s a point where brand and promotion meet and it doesn’t quite fit, although based on the numbers, we expect to see more luxury brands borrowing whatever equity they can whichever way they can – especially in the current economy.

Dorothy Parker noted that, if one took care of the luxuries the necessities would take care of themselves. In many categories – exceeding expectations – does precisely that!

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Throwing in the Towel

It turns out that Robert McDonald, CEO and President of Procter & Gamble, is a former military man with two missions: win back ground his company has lost as thrifty shoppers opt for cheaper products, and to invade foreign markets currently dominated by CPG rivals Colgate and Unilever.

Supported by massive ad budgets and ubiquitous distribution, P&G has in the past managed to persuade consumers to pay more for household basics. But a combination of the recession, consumers’ ability to engage with brands in the absence of traditional advertising, and increased brand commoditization has severely undermined that strategy.

More than two-thirds of consumers say they switched to a cheaper brand for at least one basic household product this year alone. And while consumers’ day-to-day spending more-and-more reflects persistent penny-pinching and a search for added-value that only a truly resonant brand can deliver, P&G’s response was to slash prices. Among the premium brands P&G has discounted were Tide, Charmin TP, and Bounty paper towels.

Is this surprising? Well, maybe. But the problem is more than just the recession. Or the habituation of frugality. Certainly the current economy gives people a reason to look for savings where they see no discernible differences, but the development of brand meaning, engagement, and loyalty to a brand shouldn’t be discounted either. Yes, yes, there are always those who will buy purely on price, but a loyal customer is six times more likely to rebuff competitive offers, especially price-based offers.

We track two of the price-promoted categories in our Customer Loyalty Engagement Index and here’s how brands currently rank when it comes to the value of the brand itself:

Paper Towels:

1. 7th Generation / Bounty
2. Viva
3. Basic / Brawny
4. Scott
5. Mardi Gras

For Laundry Detergent, there’s a bit more differentiation:

1. Cheer
2. Tide
3. Wisk
4. Gain
5. All
6. Purex
7. Era / Bold
8. Arm & Hammer

So is a price war the way to go? Getting consumers used to paying less for more makes it very difficult to compete and make a solid profit, unless you can really provide differentiation and value. But ultimately investing in what drives loyalty is where a brand can clean up.

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Eat, Drink, and Be Merry. For Later You May Have to Make a Call. Or Drive.

As the drivers in the Smart Phone Category have revealed (no pun intended), accessibility to Apps makes an enormous contribution to engagement and loyalty. The list of free and purchased apps increases every day for every smart phone format. And now there’s one that might help keep streets safer from drunk drivers.

The New York City Transportation Department is offering a free app aimed at keeping those who have had one too many from getting behind the wheel. The app is part of the department’s "You the Man!" campaign – aimed at men 21 to 39 who, it turns out, account for 63% of the city’s alcohol-related accidents.

The app/campaign mixes humor and hard facts to determine if you’re a DWI-in-waiting. There’s a list of questions offering alternatives to drinking and driving. For example, as to why mass transit is a good choice: “The worst thing that can happen is you fall asleep and wake up in Coney Island.” Or why take a cab? “A $30 cab ride is cheaper than a $500 DWI summons.”

There's also a spin-the-bottle game to select a designated driver, and a calculator to estimate blood-alcohol content. .08 is legally drunk, and if you are the app provides locations of the nearest subway and car service phone numbers. This very smart (and funny) app is free and available through iTunes.

Drinking and driving: there are stupider things, but it's a very short list.

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Reflections on Brand Beauty

According to a recent article in the Wall Street Journal, retail giants are tired of losing cosmetics sales to the likes of Sephora while simultaneously losing inventory to consumers insistent on the “try-before-buy” experience, biting their way through consumer-resistant packaging. And then there are the returns. When that vibrating mascara wand wasn’t all consumers dreamed once they got home and thought better of putting an independently-moving object anywhere near their corneas. To help solve these pesky consumer-generated problems, EZface Inc., makers of virtual mirrors, has arrived at the pilot stage with forty kiosks in ten of Wal-mart’s stores in the US.

Designed to be easy to use, the consumer stands in front of a screen, and an internal camera takes a picture. Shoppers scan the bar codes of the cosmetics of interest and each automatically appears where it goes on the face—all the while keeping a neat tally of the products in a side bar. This being 2010, said subject can print, email or—depending on their level of bravery or innocence—Facebook-post the final image.

When it comes to how major discount retailers mirror consumer expectations when it comes to technology, here’s how the brands rate right now:

1. Target
2. Wal-Mart
3. Marshall’s
4. J.C. Penny/Sears
5. Kmart

This virtual world being created is all designed to get consumers to do something they do all the time when it comes to cosmetics: reach for the ideal. In this case, it’s the ideal face. But there is also an ideal for brands—something we’ve devoted ourselves to studying, and observing as it changes over time. And these days that ideal, when it comes to retail brands, hinges on shopping experience even more than low prices.

It remains to be seen if the makeover in Wal-Mart’s cosmetic department offers the elevated experience shoppers are looking for when it comes to their grab at personal perfection. Or if the Sephora party will continue on in its reign as a destination store where consumers are encouraged to play with the products as long as they like.

Categories, like skincare, change over time. Like Starbuck’s immersion years ago revolutionizing how the U.S. viewed coffee, the ideal image of the cosmetic-buying category currently reflected back may have a decidedly new perspective.

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