OCTOBER (Your Brand Goes Here)

Originally the months of the year were named in honor of the divinities. They changed slightly depending upon whether you were talking Greek or Roman months, but the basic concept was still the same.

Adapting to 20th – and now 21st – century marketing trends, we often find some sort of supernumerary marketing descriptor appended to the month to call attention to a category or a cause. Take this month for example. It’s proper marketing nomenclature is “September, Life Insurance Awareness Month.”

In this economy families have less to financially fall back on, yet ownership of life insurance has hit a 50-year low with only 44% of US households having individual life insurance. And the number of households that have none is growing.

Even in an ad-saturated, Internet-driven marketplace about one in four households admit they don't know how life insurance can help them, so one of the biggest barriers is apparently lack of information. We can’t speak to the packet you might receive from one of these providers, but here’s how insurance companies that provide home and life coverage currently rank on our Customer Loyalty Engagement Index:

1. New York Life
2. MetLife
3. The Hartford
4. AXA
5. Travelers
6. ING
7. Prudential
8. Aetna

So in addition to all the insurance advertising out there the other 11 months of the year, September is the month when the insurance industry reminds Americans of the need to include life insurance in their financ

We’d also like to remind you that next month Amy Shea, EVP Global Brand Development will be presenting the findings from a study looking at car insurance advertising that dramatically extends the body-of-knowledge on how humor can build brand equity.

On October 11, 2011, at 12:00 PM (EST) a free webinar, hosted by the Advertising Research Foundation will be presented. While there is some existing research on the use of humor in advertising, there is little linking predictive brand metrics to examples of different comedic approaches and we invite you to share in our insights.

Follow the instructions below to attend at no cost:



1. Go to http://my.thearf.org
2. On the left side of the screen, click on “Sign up for this upcoming Event, Forum or Webcast
3. Register for webcast “10/11/2011 – What’s So Funny? How Humor in Advertising Can Build a Brand”
4. Enter code “Loyalty” in the discount code box on the bottom of the screen and click continue
Combining today’s blog topic and next month’s webinar, we are reminded of humorist Stephen Leacock’s observation, “I detest life-insurance agents: they always argue that I shall some day die, which is not so.”

Would that were the case for us all.

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Memory Shtick

When brands find they are losing sales, share, and profits, there are three well-used approaches that usually get served up first. The first is hearken back to better times, remind consumers of who you used to be, and go into the film vaults and pull out classic advertising and edit it for current demands. The second is to reformulate the product. The third is to change the packaging. Wendy’s has opted to do all three.

In what’s being positioned as an “homage,” they’ve dipped into the Classic Slogans department of the Advertising Hall of Fame, and are bringing back a newly designed cheeseburger as an answer to the classic advertising tagline, “Where’s the beef?"

Wendy’s has had cheeseburgers since they opened in 1969. But in the face of falling sales and consumers’ desires for more healthy and natural quick-serve foods, Wendy’s has given their cheeseburgers an overhaul. They’re calling them “Dave's Hot 'N Juicy Cheeseburger” in honor of Dave Thomas, the company’s founder, with the burger being introduced by Dave’s daughter, Wendy, of the firm’s nomenclature. Basically, Wendy’s is going natural. Much like Burger King did recently and McDonald’s had done quite a while ago.

In a category that used to be driven by Price-Value, consumers – considering their Ideal Quick-Serve Restaurant – are now looking for “Healthy Choice and Quality.” Before “Variety” and even before “Service.” But to do that so it impacts your bottom line, you have to have a believable offering and not just a reconfigured meat patty. All the research in the world doesn’t add up to a pile of fries unless consumers are of a mind to think the brand can actually deliver what they promise.

According to the current Customer Loyalty Engagement Index, when it comes to “Healthy Choice and Quality,” among the brands we track that might offer up a cheeseburger, here’s how brands rank on that particular culinary dimension:

1. McDonald’s
2. Burger King
3. Hardee’s
4. Wendy’s
5. Jack in the Box/Carl’s Jr.

These consumer loyalty ratings correspond very highly with behavior and sales and market share. These days when it comes to burgers, McDonald’s has 49% of the market, Burger King serves up 17%, and Wendy’s trails at 12%. Wendy’s dipped a fry into a natural ingredients program last year when they kicked off a campaign heralding a new recipe for French fries. That too was positioned as the “biggest overhaul” of its fries in 41 years, which was also 1969, the time the company was founded. Consumer loyalty drivers apparently take time to make themselves felt within the Wendy’s organization. At that time, unfortunately, they didn’t have a classic slogan to wrap the campaign in, so they used sea salt.

Anyway, according to Wendy’s there’s a new buttered and toasted bun and thicker, never-frozen beef patties. They’re still square, but not as precisely cut as previously so, they are supposed to appear more natural. They’ve shifted to red onion, something called “hand leafed” iceberg lettuce, and thicker tomato slices. And they reengineered, crinkle-cut pickles, added two slices of American cheese, and promise “precise” amounts of ketchup and mayonnaise. Oh, and a new half-box that was developed to protect the burger.

So you want to beef up your brand? The best thing you can order from the Loyalty menu is a real understanding of what the category Ideal looks like – how consumers view the category, how they’ll compare offerings, what they’ll believe, and ultimately, what they’ll buy. Prepared correctly it comes with three sides: an understanding of consumer expectations, increased brand engagement, and consumers’ willingness to really believe.

That’s a deal no marketer should pass up!

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The Heresy of Netflix

Convention has it that the one thing you must not discuss with the father of the girl you’re dating is politics; with the mother, religion, but even convention has its moments.

We dance around religion and politics because you will not find more passionate, easily ignitable people on earth than those who hold a belief deeply. Netflix co-founder and chief executive Reed Hastings is finding this out, to his grief and financial loss, as his actions cause brand believers to lose the faith.

After springing some spectacular pricing “options” on customers, this past Sunday Hastings made the widely panned decision to split Netflix in two, leaving Netflix proper to handle the Internet-streaming service and assigning the new company, Qwikster, the DVD-by-mail business.

Sure, it’s a questionable business decision to begin with, but the true heresy lies not in dividing the company, but in breaking down the lines of communication between the Netflix brand and the brand’s many faithful disciples.

According to the Wall Street Journal, 17,000 former Netflix believers fired back in the Netflix blog’s comments section, faith obviously shaken to the foundation at this unexpected and largely unexplained change. Netflix users are feeling unheard and uncared for, their thoughts and opinions bounding back on them like so many unanswered prayers. This has also showed up in Brand Keys Loyalty numbers. At the beginning of the year, Netflix had a comparable brand strength – an ability to delight – of 99%. Not bad, huh? After the change in pricing policies that moved down to 93%. As of today? 87%.

Any beloved brand has a differentiating feature, a hook that gives brand fanatics something to hang their hats on, and Netflix’s was customer care and responsiveness. This breach of faith is potentially damning to Netflix. Because the world is full of things for consumers to believe in, and in the battle for consumer devotion, no brand is sacred.

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Commodity Couture

If there were any sleep-plaguing doubts that designers matter, the recent crash of Target’s website as it debuted its collaboration with Missoni should help you rest easy. Yes, the real-world votes are tallied, and designers seized the day and took the web platform with them.

The bigger question is why, of course. It’s easy to look out over the retail landscape and report that everything the couture sun touches is in its kingdom. But Missoni is no Ralph Lauren or Calvin Klein. This is an Italian brand founded in 1953, and while highly respected among those that lunch as a living, it is hardly a household name. So what was it that drove a niche luxury brand to crash a sturdy mass retailer’s website?

To sum it up in a word: meaning.

A brand is a product, service, concept, or even a person, that is publicly distinguished from other products, services, concepts, or people by meaning. And sometimes two meanings can be put together and not be simple addition, but have a multiplication effect. Not always, and not often even, but sometimes.

Such as when Target, differentiated from other mass retailers by its central mission of “design for all,” connected to Missoni, a luxury brand known for, well, its design. The very recognizable zig-zag pattern of Missoni is both retro and modern at once and, importantly, that design is at the very core of the brand. Ask someone about Missoni and they talk about the design.

With this hook up, luxury truly did become design for all, with a real happy ending: A very nice retailer married a very beautiful brand and had little babies born on ebay within hours, at three-times their size (aka cost) at birth. So proud.

Meaning is what matters when it comes to brands. And successful brands know that the meaning has to matter to consumers if it’s going to make offspring like that.

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You’ve Got Mail. Well, For Now, Anyway!

The United States Postal Service (USPS) is asking Congress to close almost 4,000 branches and lay off 120,00 employees. Business, you see, is down. The Postmaster General has pointed to technology as a prime reason, to wit, email has replaced the mailing of letters and bills. Also they’ve gotten into egregiously bad labor contracts with the Postal Worker’s Union. And they are legally barred from just raising postal charges. So what’s an organization to do?

When it comes to parcel delivery, the USPS doesn’t fare any better in our Customer Loyalty Engagement Index. As of the most recent wave, rankings for the three major carriers looked like this:

1. UPS
2. FedEx
3. USPS

The USPS has been at the bottom of the list for as long as we’ve been conducting these studies, and that’s nearly 2 decades! Part of the problem has been the USPS hasn’t been able to meet customer expectations for the category. Perhaps its just because they don’t recognize what drives loyalty and profitability in their category. Finding yourself in that position is a big problem in any category, but particularly so when you’ve got competitors who are paying attention to what customers really want and are trying to delight them.

UPS, for example, just launched a new delivery service that gives customers more control as Internet shopping has boosted associated home deliveries.

According to UPS, they are trying to make that yellow, missed-delivery notice “a fossil of the past,” and have introduced UPS Choice. That lets customers register for free alert via email, text, or phone a day before a first delivery attempt. Oh, and you can sign for a package electronically. For $5 more you can re-route or re-schedule a package or set a 2-hour confirmed delivery window for yourself. It turns out that people are willing to pay for delight, but the government doesn’t seem to realize that.

Lee Iacocca once noted, “The government can’t run anything. The only things they run are the post office and the railroads, and both of them are bankrupt.” Or soon will be.

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Top-100 Loyalty Leaders for 2011

Bottom Line: Beauty Trumps Technology, Retail Shines, and Amazon Pares Down Apple as Consumers Seek Emotional & Social Connections with Brands.

Our 2011 Brand Keys Loyalty Leaders List is out. For many brands it’s been a meteoric rise and for others it’s been a slow and steady decline, or in some cases a freefall. It all comes down to delighting the customer and creating an emotional bond. Brands that can do that not only go to the top of the Loyalty List, but become top earners too.

Some brands have suffered loyalty losses as consumers shifted to less expensive brands that had considerable meaning. But this year’s rankings also prove that brands that understand how real emotional connections and delight can serve as a surrogate for added-value will always create stronger loyalty bonds – no matter what the economy is like.

Beauty brands, like Mary Kay, Estee Lauder, Crest Whitestrips, and Maybelline accounted for one-third (32%) of this year’s Top-100 Loyalty Leaders. Of the 528 brands in 79 categories we examined, the top-10 brands were:

1. Amazon

2. Apple (smartphone)

3. Facebook

4. Samsung (cellphone)

5. Apple (computer)

6. Zappos

7. Hyundai

8. Kindle

9. Patron (tequila)

10. Mary Kay (cosmetics)

Emotions Drive Brand Loyalty

Brand loyalty has always been driven by emotion and this year’s rankings indicate that more than ever consumers are looking to emotionally connect with brands that stand for something and delight them. And connect with each other too.

Social Networks Leap Into Prominence

Social network sites, a new category for 2011, had three of the six brands consumers named, not only in the top-100 but in the top-25 brands.

Loyalty Leaders Top-50

The top-50 ranked Loyalty Leaders ended up being composed of eight product/service categories. Beauty brands account for 32% of the list. But the ‘emotional engagement’ women share with their favorite beauty brands, while very powerful, also extends to technology, as consumers seek to customize their life experiences as well as their looks.

Tech ­– 20% of Top-50

Technology brands account for 20% of the top-50. Nothing is better at fueling a consumer connection than technology, although as tech brands have lost real meaning (turning from “brands” into “category placeholders”) there are fewer tech brands in the top-50 than last year. Technology Loyalty Leaders include Apple, Samsung, Kindle, Google, LG, Bing, Sanyo, and Sony Ericcson.

Retailers Ring Up High Loyalty Ratings

Mirroring 2010 rankings, 16% of the top-50 Loyalty Leaders are retail brands. Amazon moved to the #1 spot, displacing the Apple iPhone (#2). Other retailers generally ranked lower than last year, an indicator of the challenges wrought by the economy, and retailers’ struggles to differentiate on something more than price. Brands included Zappos (#6 and new to the list), Wal-Mart (#13, -3), J. Crew (#21, -8). Other retailers included Target (#33, -7), Sam’s Club (#38, -9), Kohl’s (#44, unchanged), and BJ’s (#50, -7).

Strong Alcoholic Beverages Showing

Of the top 50 brands, 12% were alcoholic beverages, in the two categories surveyed: vodka and tequila. Vodka leaders included: Grey Goose, Ketel One, 3-Olives, and Stolichnaya. In tequila, it’s Patron and Don Julio. No beer brand made it to the top-50 ranking this year. Sam Adams ranked #58.

Starbucks Soars – from 432 to 100

On the other side of the bar, Dunkin Donuts coffee (#12 up from #14) and McDonald’s coffee (#26, down from 18th) were the only other beverage brands to make the top-50. Starbucks, a brand synonymous with coffee, has been in the process of reinvention, and demonstrated the largest increase in the rankings, ending up in 100th place, up from #432 last year.

Auto Brands Run Out of Gas

Automotive loyalty rankings were generally unchanged. Hyundai parked in the #7 spot. Toyota, a perennial loyalty leader, #37 last year is now #59, feeling the effects of recalls, the tsunami, and the economy. It might have been worse for Toyota, but with loyalty comes ‘The Rule of Six,’ i.e, loyal consumers are six times more likely to give a brand the benefit of the doubt in uncertain circumstances.

Loyalty Leaders Top-100: Gains and Losses

Brands that showed the greatest gains in loyalty, vaulting them into the top-100 included:

Starbucks (+352);

Skechers (+290);

Ford (+237); and

Overstock.com (+150)

Skechers invented a new athletic/exercise shoe category. Ford and Starbucks reinvented their brands. Overstock has been slowly moving up the list building loyalty over the years.

Among the brands in the top-100 that saw the greatest losses were:

Nokia (-63),

Blackberry (-51),

Chanel cosmetics (-23),

Eucerin moisturizer (-23),

True Value (-21), and

3-Olives Vodka (-18)

The Loyalty Losers

Out the 528 brands included in the 2011 survey, the bottom 10 included:

519. Bank of America

520. Dr. Pepper

521. Budweiser

522. Friendster

523. BP

524. Tylenol (OTC Allergy)

525. NHL

526. Taco Bell

527. American Apparel

528. Borders

Unlike economic use models, which rely heavily on historical data and profitability conjecture, the Brand Keys Loyalty Model and rankings are 100% consumer-driven, and are independently validated, predictive, leading-indicators of brand and corporate profitability.

The good news is that brand loyalty is understandable. The better news is, it can be quantified and predicted, useful for creating actionable strategies and sequencing tactics for real ROI. And especially in these economic times, knowing what’s coming down the road gives a brand an extraordinarily powerful advantage.

For a the complete list of the 2011 Brand Keys Top-100 Loyalty Leaders rankings (versus their standings last year) we invite you to visit http://www.brandkeys.com/awards/leaders.cfm

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Nightmare on FNO Street

Today is supposed to be a big day for fashion. Fashion Night Out, or FNO for short, is in its third year. This may be its make-or-break year in terms of reputation, especially as shoppers are looking for a little more than free champagne to get those hard-won Prada wallets to open.

Marsha Wright Lee’s blog on “Mashable,” a site known for covering digital culture, social media, and technology, quotes Wendy Bendoni, professor of fashion marketing at Woodbury University, on the event. “Most consumers still are wondering why there aren’t any promotion sales and don’t see the need to go out in the crowd. They have not been properly educated of what this night means to the fashion industry as a whole,” said Ms. Bendoni.

Well, we would have to agree with Ms. Bendoni. Consumers have not only not been educated about what this night means to the fashion industry as a whole, but they don’t care. Nor should they. Consumers are not actually responsible for keeping any industry alive and thriving, despite our government’s penchant to put us in that position. Industry thrives because it does what it is supposed to do: offer something someone wants for a price worth the value offered in exchange. Consumers—aka people—have their own lives to worry about. And, yes, they do have the temerity to ask for something in return for their engagement and loyalty, not to mention the effort of balancing on stilettos and walking from store-to-store for hours on end. And that amounts to more than having a close-up of some celebrity.

FNO was started to inject value back into fashion, as the economy drove retailers to price cutting and fire sale tactics. It was meant to encourage people to get out and shop—you know, for fun, not for gain or anything as crass as that. But many people got there, had some free goat-cheese puffs, and went home empty handed. Clearly there has been a miscommunication here, or someone has been watching too many “Sex and the City” re-runs. Today’s consumers want, and are insisting on, brand value—and that equates to meaning, not just price.

Price cutting has never been the answer. But shopping experiences, and emotional reward, actually do matter—to consumers, if not the industry. Let’s hope the retailers figure out how to turn this high-profile party into profit-center, or this will be one more nightmare for retailers with already little to celebrate.

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A Vacation’s Over When You Begin to Yearn for Work!

Summer’s officially over, Labor Day celebrated, so welcome back to work. We hope you had the chance to take some time off and invigorate yourselves.

If you’re like most people, you probably immortalized your vacation or travels in photographs. Of course, when we say “photographs” these days most people think of images with pixels and not old-technology, chemical processing. Most everyone has gone digital, with digital SLRs or point-and-shoots. Virtually nobody uses old-technology “film” anymore. You might say the act of dropping off of rolls of film has dropped off precipitously.

No, most consumers have gone digital, and according to our Customer Loyalty Engagement Index, expectations regarding digital cameras and imaging have increased dramatically. With the ability to instantly review and re-capture images and then to immediately manipulate, display, print, transmit, and/or archive, what else would consumer expectations do? What once delighted and exceeded expectations have become the expected.

So how do consumers rate the current range of digital camera brands? From a loyalty perspective here’s what the categories look like:

Digital SLR Cameras

1. Nikon
2. Canon
3. Panasonic
4. Sony
5. Olympus/Pentax
6. Fuji

Digital Point & Shoot Camera

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

The photographer Ernst Hass, best known for his innovations in color photography and experiments in film with abstract light and form, once noted, “there is only you and your camera.”

But with the increase in picture quality and the ubiquity of we-do-everything smartphones taking the place of stand-alone digital cameras, we expect we may soon have to amend that to “there’s only you and your phone.”

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