Martha Stewart Posts ‘For Sale’ Sign

No matter how tastefully they tried to do it, Martha Stewart Living Omnimedia hired the Blackstone Group last week to try and sell the company. Oh, and “explore other opportunities.” That’s a good thing, because even talk of a sale doubled the current share price. That brought it up to $10, or a valuation at around $550 million. Which is less than a third of the $1.9 billion at which the company was valued before Martha ended up serving 5 months in prison, 6 months of house arrest, and the stock plummeted 88%. So not such a good thing.

Back then, when Martha the Human Brand was found guilty on all counts, the brand lost a good deal of trust among her then-loyal customer base. At that time, according to our Brand Loyalty Index, the brand rated lower than Enron, although to be fair, it’s easier to “hate” a Human Brand than just some faceless corporation, no matter how dreadfully it behaved. It took nearly half a decade for the brand just to edge back to break-even loyalty levels, and it’s hovered at there ever since. The brand has not managed to return to the early-21st century levels, when the brand was rated the highest of every brand we tracked. Definitely not a good thing.

Martha’s company and brand has since failed to migrate the brand to a new generation of consumers. The namesake magazines only generated $2.7 million in operating income. NBC dropped all her shows, relegating them to the void that is the Hallmark Channel, and broadcast lost $1.6 million. Not a good thing.

“Martha Stewart” has turned into a default brand – well-known and a lot easier for retailers to add to their product mix than trying to create a new brand on their own, but not much more. So successful merchandising efforts – even in the face of the Kmart non-renewal – with the likes of Macy’s and Home Depot, selling paint, pillows, and plates have provided $25 million in profit. And that’s a very good thing.

Stewart turns 70 this year, gets to rejoin to her Board after her five-year banishment, and has hired Lisa Gersh to fill the long-vacant CEO spot. Martha owns all of the Class B shares and controls 90% of the total voting rights and it’s been reported that while an offer for the entire company has not been proffered, Stewart does not regard an outright sale as such good thing.

Attracting more consumers and being more profitable requires more than just being known or even well known. It requires being seen as better meeting – even exceeding – expectations consumer hold for the category in which the brand competes. If you can do that you end up with more highly engaged customers, more sales, and a better bottom line. Oh, and far more attractive to prospective acquisition or investment partners.

And those are very good things.

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BTW. Bttry is LO! PLZ DNT 4get 2 chg 2day! :- ) THNX

That’s the message some Toyota owners will be getting.

From their cars!

Toyota has teamed with salesforce.com and Microsoft to create a social network – called “Toyota Friend” – where Toyota’s electric cars and plug-in hybrids can become “friends” with their owners. By connecting the owners’ smartphones via a dedicated app, the car will send a message to the vehicle’s owner alerting him or her that the battery is low. Or that the car needs a tune-up. Or an inspection. Or that it’s lonely. OK, not that last one, but the program is certainly more differentiating and engaging than a check-engine light, or a postcard from your dealer.

The new social network will be integrated into the dashboard of new models and will feature full Facebook and Twitter integration. There will even be a private website customers can use to view news feeds about their cars. Or share stories about their cars. And if it turns out that your car is more technologically advanced than your mobile phone, messages will be sent via SMS.

Toyota, which has been hit with recalls, shortages, more recalls, and factory shutdowns, needs something to lift its sales and dented image. Toyota president, Akio Toyoda, announcing the $5 million venture, said, “Social networking services are transforming human interaction and modes of communication. The automobile must evolve in step with that transformation.”

In a parallel lane, Ford had announced last year that it was adding a new feature to transform its in-car communication systems – a “Do Not Disturb” button – a proactive safety measure to block incoming calls and texts. Earlier this year, at the Geneva Motor Show, BMW introduced its “Connected Drive,” a system that brings together more than 50 communication functions, including satellite navigation and self-drive technology.

Anything that can make drivers’ lives more comfortable and safe is bound to offer new opportunities for brand differentiation and engagement.

And if they drive buying decisions too, all we can say is XLNT!

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Now On Sale at Barnes & Noble: Barnes & Noble

Remember how music downloading caused the disappearance of actual record stores? Well, the memory of that combined with actual increased levels of online e-book downloads has caused Barnes & Noble, the largest bookstore chain in the United States with more than 700 stores, to consider putting itself up for sale.

The precise quote from the board was that they were “considering strategic alternatives, including the possible sale of the company.” In light of its declining shares and the inability of the Nook to counter the digital book download phenomenon, “sale of the company” is likely the operative phrase.

To be fair, when it comes to e-readers, Barnes & Noble doesn’t do too badly, generating about 27% of e-book sales, second to Amazon which accounts for 58% of the category sales. According to this year’s Customer Loyalty Engagement Index, those brands rank as follows:

1. Kindle
2. Nook
3. Sony
4. Kobo
5. iPad

Investors are challenging Leonard Riggio, B&N Founder and director. Billionaire, Ronald Burkle has increased his ownership stake and last week Liberty Media offered $17 a share – or just over a $1 billion – for the company. As the stock has risen in recent days, a shareholder fight looms.

The particular story may have a surprise ending, but the plot twist in the category of bricks and mortar bookstores has already been written—and it’s a non-fiction story when it comes to the increasing dominance of e-readers. Either way, Barnes and Noble has found itself in the self-help section, trying to avoid the clearance bin.

Economy Sluggish, Sales Sluggish, Staples Sluggish

In the wake of what some have called an “economy stuck in neutral,” Staples stock tumbled by 15% yesterday. That was their biggest one-day drop in over a decade, as investors reacted to the office supply retailer’s earnings report, which fell short of Wall Street expectations.

Staples’ net income rose 5% from a year ago, and same-store sales have only slipped by 1%, and the company expects 2011 earnings of $1.35 to $1.45 per share, although that’s down from a projected $1.50 to $1.60 per share.

Analysts of the Office Supply Retail Category thought the brand was going to significantly beat the competition, and, indeed, according the Brand Keys Customer Loyalty Engagement Index rankings appear as follows:

1. Staples
2. Office Max
3. Office Depot

And while engagement and loyalty metrics are leading-indicators of consumer behavior, they are just one ingredient in market modeling, and, of course, and unfortunately, office supplies tend to lag during economic recoveries because they are so closely tied to employment and, thus, product usage.

But – and we agree – according to one analyst, Staples is positioned to maintain a dominant market position over the long haul.

It’s just that sometimes it’s not easy for a brand.

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Gesundheit!

And welcome to allergy season.

The pollen count is so bad this year that sufferers are willing to pay virtually anything for some relief, creating a category paradigm you might call “robbing Peter to pay for pollen!”

No, that wasn’t a set-up for a joke. According to the Asthma and Allergy Foundation of America (AAFA), this really is the worst allergy season in a number of years. They’re predicting that 40 million Americans will suffer from some form of sneezing, coughing, runny eyes, breathing difficulties, cramps, hives, rashes, even vomiting. Some reactions can be life threatening.

According to the AAFA, the six worst cities for allergies this season are:

1. Knoxville, TN
2. Louisville, KY
3. Charlotte, NC
4. Jackson, MS
5. Chattanooga, TN
6. Birmingham, AL

According to the Customer Loyalty Engagement Index, the six OTC allergy brands we track rank as follows:

1. Claritin
2. Zyrtec
3. Benadryl
4. Chlor-Trimeton
5. Sudafed
6. Tylenol

For an increasing number of allergy sufferers the road to relief will, of course, differ depending upon where you live, the particular season, and how much you’re willing to spend. But these days, the difference between a sniffle and an allergy can end up being about $50, turning allergy season into holiday season for allergy brands that also know the science of engagement.

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Nothing But the Web

Yesterday Google unveiled Chromebook, a new kind of computer that uses the Chrome operating system and stores everything online.

Doing that, they suggest eliminates the need for backups and updates and will act as a replacement PC running Microsoft Windows software. Google suggests that this approach doesn’t put the burden of managing the computer on the user, and will encourage people to use web-based applications.

It’s supposed to be a sleeker browsing experience and suggest that the devices – due to first come from Samsung and Acer – will boot up within 8 seconds! Acer’s model will run on Intel’s dual-core Atom processor and will have an almost-12 inch HD display and 6 hours of battery life. Samsung is a quarter pound heavier (3 1/4lbs) and has a skoosh-larger 12.1-inch screen, uses the same processor and the same USB and SD slots as Acer. Its battery life is estimated to be 8.5 hours.

Right now, according to our Customer Loyalty Engagement Index, the non-web-based netbook brands rank as follows:

1. Samsung/Acer

2. HP

3. Toshiba

4. Dell

5. Lenovo

6. Gateway

At the introduction ChromeBooks won’t have the number of applications Windows netbooks have, and prices are estimated to range from $350 to $500, which is as much as, maybe more, than a Windows netbook, which somehow feels like paying more for less.

The bottom line? Web-based computers are coming. Is the world ready for one right now? Well, like every 1.0 version, it’s not going to be perfect, but check back with us when they have the 4.0 and we’ll let you know.

Investing Your Money. Just to be Sociable

LinkedIn the professional social-networking site, may not best meet consumer expectations when it comes to the Ideal for social networking. But it certainly seems to be exceeding investor expectations.

Given the import and influence of social networking sites in marketing and consumer outreach, we added the category to this year’s Customer Loyalty Engagement Index. While there are a lot of nascent social networking sites out there, only five brands were mentioned enough times to be included in the survey. They ranked as follows:

1. Facebook
2. MySpace
3. LinkedIn
4. Flickr
5. Twitter

Foursquare, Quora, YouTube and Yelp didn’t make the list. Neither did Friendster, which is in the middle of massive reorganization mode.

But being 3rd hasn’t hurt LinkedIn, which has increased its planned IPO, valuing the site at more than $3 billion. It plans to sell more than $315 million of shares to expand their business, with 7.84 million Class A shares valued in the range of $32 to $35 each.

Is it worth it and is that where you want to invest your money? Well, how do others fare? Facebook is valued at $89.2 billion. So that’s good. But MySpace is only valued in the range of $500 million to 1.2 billion, and that’s not so good for a company that Rupert Murdoch paid $580 million for, so you’ll have to be the judge.

One word of really good investment advice: the only safe – and proven – way to double your money is to fold it over once and put it back in your pocket!

Slow and Steady Wins the Race

That is, of course, the punch line to the Aesop fable about the slow, compact tortoise and the sleek, swifter hare. Interestingly, the allegory seems to be playing itself out in the real world of automotive sales.

Rising gas prices, improved designs, and pent-up demand has fueled sales of smaller cars. So much so, the higher demand for compact and subcompact cars pushed April vehicle sales up 18%. Sales for the year are running at an annual rate above 13 million vehicles—for the third consecutive month.

Improved design and gas efficiency can go a long way to engaging customers these days, but ultimately it’s how well the brands meet – or even exceed – expectations that consumers hold for their Ideal car. And if you want to help drive sales, loyalty and engagement metrics provide predictive measures of what customers really want. Oh, and what they are willing to believe about a brand. Here’s how the most recent rankings match up with most recent reported change in sales:

Hyundai +40.3%

Ford +16.3

Kia +56.7

GM +26.6

BMW +19.6

Chrysler +22.5

Nissan +12.2

Volkswagen +18.7

Honda + 9.8

Toyota + 1.3

For those of you without a statistical app on your GPS, those engagement assessments and sales increases correspond to one another with a whopping 0.72 correlation, which is marketing mileage any CMO would like to drive.

And the moral of this story: If you know what customers really expect and you are able to manage your brand to better meet those expectations you’ll always end up winning. If you don’t, the nap you took may well be a very long one.

Happy [High-Tech] Mother’s Day

Electronics are the gift of choice for Mom this year. More than nine of 10 consumers plan to celebrate Mother’s Day and they’re going to be doing it a little bit harder and a little bit more high-tech this year than last.

According to our annual Mother’s Day survey, total spending is estimated to be $15.7 billion, an average spend of $148.00, up nearly 5% from last year. Twenty percent of consumers – twice as many as last year – have turned their focus to electronics this year with shoppers indicating that they’re going to buy:

Electronic readers (25%)

Tablets (19%)

Smartphones (15%)

Computers (9%), and

Cameras (6%)

All other traditional gifting areas showed little or no change from last year. Except books. That’s the only category that had a decrease. But based on buying intentions, it appears that electronic readers are replacing traditional books. Other Mother’s Day gift categories look like this:

Cards 97%

Flowers 70%

Brunch/Lunch/Dinner 58%

Gift Cards 58%

Clothing 36%

Jewelry 25%

Spa Services 17%

Books 15%

Candy 5%

Given this year’s high-tech/electronics gift trend it’s fair to say that more than ever, the most modern device in the household just might be Mom!