What Do You Get When You Cross a Tablet With a Smartphone and a Notepad?

No. Not a joke. And not a set-up for a joke.

Two years ago, in examining the leading-indicator values and expectations of the then-nascent “tablet” category, we commented that consumer values dealing with tablets and telecommunications seemed to be criss-crossing, the result being tablet attribute, benefit, and values fusing with something that let you make a call. That’s the nice thing about real loyalty metrics. They’re leading-indicators, meaning signs of what’s going to happen in the next 12 to 18 months.

Anyway, as the tablet category was pretty much only the iPad back then, we called the combination of technologies a “MID,” a mobile internet device, or more casually a “tweener,” something between technologies. There weren’t many of them though. In early 2010 Dell introduced the Streak, but a year later only had a 3% share of the market (versus iPad’s 84%), and last year pulled their tablet- phone from its online stores.

But what a difference a year makes. Those values we talked about two years ago have – according to the 2012 Customer Loyalty Engagement Index – created heightened tweener blips on our loyalty-engagement radar screen. This serendipity is in time with Samsung’s Galaxy Note 10, a combination mobile phone, tablet, and digital notepad, which includes Samsung’s S Pen stylus for drawing, note-taking, and highlighting. Cool combo, huh!?

But consumers have high expectations regarding the size of their devices. Will it comfortably fit into my pants pocket? Or even a jacket pocket? Or a reasonably-sized pocketbook? Or am I walking around holding it all the time? What does it feel like to hold? Or when I make a call? The new Samsung device is big. It’s 5.3-inches diagonal, halfway between the Kindle Fire and an iPhone, and is currently being referred to as a “phablet” – half-Android phone and half-Android tablet.

So here we are, back where we were two years ago. The “phablet” category is too new and too small for us to track, but the way things are going with customer expectations and brand technology, perhaps next year. In the meantime, here’s how customers rank their tablets:

1. Apple
2. Amazon
3. Samsung
4. Barnes & Noble
5. Asus
6. Sony
7. Dell
8. Lenova
9. Toshiba
10. Blackberry
11. Kobo

Questions abound. Which values will supersede others? Smartphones, tablets, or notepads? Does size really matter? Will “phablets” become a real category at all? Will consumers flock to this new configuration?

Three sure things come though: First, consumer expectations will continue to grow, especially when it comes to fusing technologies that have previously delighted them. Second, predictive loyalty and engagement assessments can help to answer those questions, and quite specifically at the early stage. And, third, you want those answers, because it prevents brands from confusing the art of possibility with the art of profitability.

Because when it comes to your brand, one thing you never want it to be is a punch line.

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A Foot in the Door No More

You have to be of a certain age to remember the actual door-to-door salesmen of joke and fable, because times have changed. That happens more quickly in the marketing universe than others.

The concept of the door-to-door salesman traded on the idea that anyone could make money with a good product, hard work, and a comfortable pair of shoes. Oh, and a society that still had stay-at-home mothers who spent a lot of their time “keeping up” with the neighbors, being judged by how high the gleam of the linoleum on their kitchen floors was, and who had no Internet access. You wanted convenience? You waited for the door-to-door salesmen to ring your bell. No, really that’s what it was like. Door-to-door salesmen visited homes weekly. From a marketing perspective they were the thin edge of the sales sword for brands like Encyclopedia Britannica, Avon, and Fuller Brushes.

The Fuller Brush man made regular rounds in our Lower East Side neighborhood in New York City. Those were, of course, simpler times. No malls. Only 7 TV broadcast stations, 5 newspapers that came out 4 times a day, and AM radio; so if you wanted the latest and greatest from the world of brushes and cleaning products, he was the go-to guy, or more accurately he was the come-to-you guy. Convenience, primacy of product, and value made it a successful proposition. In the 1950’s.

Alfred C. Fuller started the company in 1906, designing brushes and selling them door-to-door. Over the years, customers across the country became familiar with the iconic greeting, “I’m your Fuller Brush Man.” Dick Clark, Joe DiMaggio, and Dennis Quaid were all one-time Fuller Brush salesmen, and this model created one of America’s most formidable, and then-iconic brands. And profitable brands too. By the 1950’s and 60’s they had annual sales of $100 million, which was real money back then.

But time, the marketplace, familial structure, and consumer expectations have changed and the cleaning-products maker has filed for bankruptcy less than two months after saying the company had “completely rebooted itself.” Last month Fuller Brush indicated that 2012 would be a “landmark year” with a new marketing campaign, among other changes.

Fuller has tried to clean up its own act recently, brushing up its image with a new website and a line of kitchen and bathroom cleaners and an expanded retailer relationship. But as Arthur Miller wrote of salesmen, “He’s a man way out there in the blue, riding on a smile and a shoeshine. And when they start not smiling back – that’s an earthquake.”

And for all of Fuller’s sprucing up the brand it was not enough to offset the seismic changes in the category or the consumer marketplace. Consumers haven’t smiled back and the company was forced to file for Chapter 11 bankruptcy protection this past Tuesday.

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And the Academy Award for Engagement Goes To...

The Academy Awards are considered to be one of the biggest entertainment draws of the year, sometimes called the “Super Bowl for Women.” True, female ratings have been down. Overall ratings too. Last year’s viewership was down about 10% from the year prior. And they haven’t been doing all that well with those yearned-for younger viewers either.

As to that last point, last year the Academy went with the youngest co-hosts in its history – Anne Hathaway and James Franco – who got really bad reviews and didn’t bring in the younger, hipper viewers, who, one can only suppose, were supposed to have identified with them. The Academy was going with Eddie Murphy this year, but he bailed and Billy Crystal stepped in. Well, what can you say about that choice? Mr. Crystal, a 9-time host, can entertain with the best of them. But he’s 63 so not precisely a poster child for that coveted 18 – 34 year engagement Madison Avenue’s always looking for.

Which brings us to our annual Academy Awards Engagement study. The way we approach the business, “entertainment” and “engagement” are two, very different things. Just like movies and advertising are two different things. One is there just to entertain. The other is there to convince viewers to behave positively toward the brand in the ad. You know, buy something. At the very least think better of the brand. Not to just sit there and laugh or be amazed at blue-screen special effects. In these days of fragmented media and titanium-strength consumer gate-keeping, this has become something of a tough assignment.

Attaining real brand engagement is more than just identifying an audience and blasting funny/exciting/sexy commercials at them. You don’t want to know they were just amused, you want to know they were engaged. And much as some marketers would like to believe it, the Academy Awards has not yet reached the lofty Super Bowl heights where people tune in to see what the advertisers are doing as much as for the show itself. No, people tune in to the Academy Awards for the 5-W’s: who’s wearing what and who wins! So it really is more important to know if your $1.7 million for that 30-second spot was a good investment.

We do that by using a validated process to fuse emotional and rational aspects of category and brand, and then quantify how exposure to the advertising caused the viewer to “see” the brand as better meeting the expectations they hold for their category Ideal. You know, see if they were engaged or not, and not just that they saw the commercial. This can be done predictively for virtually anything you can show or tell a respondent, but in this case we were looking at whether the combination of the media environment i.e., the Academy Awards, and the advertised brand created an engaged consumer by measuring if the combination of brand and media platform increased (or decreased) a brand’s equity.

And yes, before the critics start carping, entertainment and engagement are not necessarily mutually-exclusive. But if you’re a marketer and are given your choice between one or the other, you should always vote for “engagement.” Attaining both means not only was your creative top-notch, but your strategy was, as well. And just because a venue seems exciting and has the potential to generate an audience doesn’t mean it’s right for every brand. In fact, last-year-advertisers like Amazon, Best Buy, and Living Social – all brands that ended up on our 2011 “Entertainer” list – are not back for 2012. Coincidence? We don’t think so.

This year’s study was conducted among 1,200 men and women, 18-59 years of age, screened for advertiser category involvement, and who indicated a top-box intent to watch the 84^th Academy Awards this Sunday, February 26^th. Results for the 14 specific brands reported to be advertising this year were (alphabetically) as follows:

Engagement Winners:

American Express

AT&T

Diet Coke

Disney Pictures

Hyundai

Paramount Pictures

Samsung

Stella-Artois

Entertainers

Kraft

JCPenney

McDonald’s

Met Life

Sprint

Travelocity

Anyway, last year – also based upon our predictive engagement assessments – we offered up some odds on who would win the Academy Awards in the “big” categories, and did pretty well. Please note we provide these for entertainment value only. If you’re looking to engage in real bets on the outcomes, you’re on your own. Just like advertisers without engagement metrics.

Best Picture

The Artist 5:1

The Help 7:1

Hugo 8:1

Midnight in Paris 10:1

Moneyball 10:1

The Descendents 11:1

Tree of Life 12:1

War Horse 15:1

Extremely Loud… 20:1

Best Actor

George Clooney 2:1

Jean Dujardin 3:1

Brad Pitt 6:1

Gary Oldman 10:1

Demian Bichir 11:1

Best Actress

Viola Davis 2:1

Meryl Streep 3:1

Michelle Williams 5:1

Glen Close 10:1

Rooney Mara 20:1

Best Supporting Actor

Christopher Plummer 2:1

Max Von Sydow 4:1

Kenneth Branagh 7:1

Jonah Hill 20:1

Nick Nolte 25:1

Best Supporting Actress

Octavia Spencer 2:1

Melissa McCarthy 4:1

Berenice Bejo 5:1

Jessca Chastain 10:1

Janet McTeer 11:1

Best Director

Michel Hazanavicius 3:1

Martin Scorsese 4:1

Woody Allen Gerber 5:1

Terrence Malick 7:1

Alexander Payne 10:1

Brand Keys wishes good luck to all the nominees and the advertisers, too. Clint Eastwood once noted, “There’s a lot of great movies that have won the Academy Award, and a lot of great movies that haven’t. You just do the best you can.”

With real engagement assessments, advertisers can do better than that.

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The Most Valuable Company in the World

Apple’s stock broke above the $500 point for the first time this week – right after the company reported absolutely staggering sales and profits for the recent holiday quarter. That gives them a current capitalization of $465 billion. Exxon’s, formerly the world’s most valuable company, is $400 billion. You do the math.

We’ve done the math too, in our Customer Loyalty Engagement Index. True, it’s a different kind of math, but our numbers correlate very highly with positive consumer behavior toward brands. So it’s axiomatic: more consumers behave well toward a brand, a brand sells more, a brand makes more money, its stock goes up.

This year we looked at our findings two ways. First to identify the top-20 brands best at creating customer delight, and second, to see how brands rank in the categories in which they directly compete.

Apple was #1 (Tablets) and #2 (Smartphones) when it came to delighting their customers. That’s what a combination of a brand loaded with values and meaning and products that continually deliver meaningful experiences gets you.

When we look at individual categories, Apple was #1 in Laptop Computers too. And, logically, Tablets and Smartphones. They used to be #1 in the MP3 Players, but we had to stop measuring that category. Virtually nobody mentioned a brand competitive to the iPod, and even when they had a competitive brand, consumers insisted upon calling it an “iPod,” so we unofficially ceded that category to them too.

The bottom line to our analysis of Apple: a thoroughly delightful brand that consistently beats out competitors in meeting customer expectations. There is, however, a tiny downside. Wall Street analysts have pointed out the gap between Apple’s share price and earnings and if you calculate the usual Price/Earnings ratio, Apple’s stock should be worth much more. Which would make it even more valuable than Exxon.

OK, it’s true Exxon can’t really complain about a $400 billion capitalization. But it’s also worth remembering that Exxon sells products people need.

Apple sells products that people want. Really want. And that’s a difference that delights both customers and shareholders.

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No More Kodak Moments

Kodak is going to stop doing what they were once the first to ever do. No, not produce Kodachrome. They stopped that 10 years ago. They’re stopping the manufacture of digital cameras.

“Did Kodak manufacture digital cameras?” I hear you ask. They invented digital. Back in 1975. But because they had a 90% share of the US film market they relied on film and developing fluids to make a living. Digital remained an afterthought. Well, it’s not an afterthought any more. It’s more like the actual marketplace now.

Yes, the competition got the better of them, to the tune of Chapter 11 bankruptcy. So Kodak made it official: digital cameras, pocket video cameras, and digital picture frames will all be phased out. All done in an effort to “focus on profitable lines of business,” and if you’re wondering what “profitable lines of business” they’re talking about, so are we!

Kodak says that it plans to license out their name to other manufacturers. But if you’re stumped about who would choose the Kodak name over their own digitally-centered brand, so are we. According to the 2012 Customer Loyalty Engagement Index, digital Point-and-Shoot camera brands rank as follows:

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

10. Kodak

If you’re surprised that Kodak is last on the list you shouldn’t be. By all rights, the 131-year old company isn’t really much of a brand anymore, much less a 21^st century digital brand. Not if you expect a “brand” to stand for something meaningful and differentiating in the mind of consumers.

What happened? Well, by the time the film business went into decline years back, Kodak tried to play catch-up with brands that had capitalized upon – and were believably identified with – digital. And imaging – not photographs. What Kodak stood for, was not the taking of pictures, not point-and-shoot cameras, but the capturing of a moment in time via processing – film to negatives, negatives to pictures, and pictures to mantelpieces and memories. They were good at that.

But along came digital cameras and phones with cameras and jpegs. Analogue photography became a piece of nostalgia. And nostalgia turned into something old-fashioned. Old-fashioned became unfashionable. Digital became more (and more) state-of-the-art, and by then Kodak couldn’t get consumers to believe that they could successfully play in that arena, whether they had been there first or not.

BTW, none of this is 20:20 brand hindsight. The Customer Loyalty Engagement Index is conducted in January of each year, providing 12-18 month leading- indicators about category and consumer values. All one need do was take a look at those accurately-measured consumer expectations and they would have had a finger on the pulse on what was driving the imaging category.

And then all would have come into sharp, megapixel focus.

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Beautiful Brand Loyalty Assessments

Somerset Maugham wrote, “The essence of the beautiful is unity in variety.” As researchers we like that thought.

There should be unity in your approach to measuring consumers, brands, and the marketplace. And when a design and the results of that design all come together, i.e., highly correlate to consumer behavior and brand profitability, a design like that can be a really beautiful thing.

But keeping the “variety” notion in mind, we added 5 new categories to the 2012 Customer Loyalty Engagement Index, bringing the assessments up to 83 categories and 598 brands. The new categories appearing in this year’s survey are:

1. Tablets, including brands like Apple, Samsung, Asus, Kobo, and Amazon,
2. Video Streaming Websites, which includes the brands: Hulu, Vudu, YouTube, Netflix, and Amazon,
3. Packaged coffee, including Dunkin’, Starbucks, Peets, Caribou, and Green Mountain brands,
4. Packaged Ice Cream like Haagen Dazs, Ben & Jerry’s, Edy’s, and Breyers, and
5. Major League (Multi-Player Online) Gaming, which includes the brands Batman Arkham City, Halo, Call of Duty, Madden Football and Crysis.

And while a variety of categories and a raft of brands were assessed, we do recognize that consumers don’t view all categories the same way (you don’t, after all, buy a computer the way you buy a car or a cola). So there’s unity in the way we measure loyalty and engagement, and brands’ abilities (or lack thereof) to delight the consumer.

This year we talked to 49,000 consumers, 18 to 65 years of age, drawn from the nine US Census Regions, who self-selected the categories in which they were consumers. Then they assessed brands for which they are “customers,” usually the top-20% segment. Seventy-five percent (75%) were interviewed by phone, 20% via face-to-face interviews (to account for today’s ever-growing population of cell phone-only consumers). The remaining consumers assessed categories and brands online.

The technique is a combination of psychological inquiry and higher-order statistical analyses, has a test/re-test reliability of 0.93, and has been used in B2B and B2C categories in 35 countries around the world. The assessments are based on an independently-validated technique that fuses rational and emotional aspects of the categories to identify category drivers for the Ideal. Then it determines how well the brand meets – sometimes even exceeds – expectations consumers hold for that Ideal. If you can do that, you end up delighting the consumer, building your brand, and earn ROI bragging-rights at the annual shareholder meeting. All of which is a beautiful thing.

If you are of a mind that “variety is the spice of life” (and sometimes research findings too), we invite you to click here to see how the brands in the 5 new categories (and 78 old categories) did this year. We think you’ll find there’s something in there for everyone.

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Customer Loyalty Engagement Index 2012 Commandment: Delight Thy Customer

Last year, the Brand Keys Customer Loyalty Engagement Index (CLEI) found customers were looking for “delight” from their brands. This year evidence mounts that it’s still delight that will continue to define the consumer landscape, and what brands can do to cement customer loyalty and profitability.

Last month 49,000 consumers self-selected among 598 brands in 83 diverse categories in which they are customers, and assessed brands based on an independently-validated technique that fuses rational and emotional aspects of the categories, using a combination of psychological inquiry and higher-order statistical analyses. It’s been used in B2B and B2C categories in 35 countries around the world and is proven to identify the real category drivers for the consumers’ Ideal. Along the way it allows us to determine how well brands meet – sometimes even exceed – expectations consumers hold for the Ideal in their category.

Across the brands and categories surveyed, attributes relating to “experience” and “brand values” were found to exert the strongest impact on customer decision-making, category-expectations, and engagement with brands. And while expectation levels for delight vary by category – consumers do not, after all, buy computers the way they buy colas – the top-20 brands, best at creating customer delight were found to be:

1. Apple (tablets)
2. Apple (smartphones)
3. Amazon (e-retailer)
4. Kindle (e-reader)
5. Facebook (social networks)
6. Hyundai (automotive)
7. Samsung (cellphones)
8. Discover (credit cards)
9. YouTube (video streaming)
10. Google (search engine)
11. Call of Duty (gaming)
12. Mary Kay (cosmetics)
13. McDonald’s (quick-serve food)
14. Haagen Dazs (packaged ice cream)
15. Patron (tequila)
16. Grey Goose (vodka)
17. Crest Whitestrips (tooth whiteners)
18. Walgreen’s (drug stores)
19. Clairol (hair color)
20. AT&T (wireless phone service)

Many industry pundits have looked at the pressures on price and drawn the erroneous conclusion that brands have lost their value. Quite the opposite is true. Real brands are more valuable than ever.

Brands, on the other hand, that lack meaning and differentiation, are punished. Such products and services have turned into ‘category placeholders;’ known, but not know for anything in particular. Relegated to a space closer to commodities than brands. And of one thing you can be sure, consumers do not look to commodities in their search for delight.

The complete listing of the 83 category rankings can be found here.

There’s an old, Russian proverb that goes, “differentiation and delight grow on one stalk.” And that’s another thing of which you can be sure: brands that understand and act on that axiom are the ones that always reap tremendous returns to their bottom line.

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How Do You Solve A Problem Like Your Website?

As the saying goes, nothing is as certain as change. Particularly in the digital world.

There have been a lot of changes in the digital world recently, which is a perfectly accurate observation but fails to present the full scale of the transformation. Kind of like describing the Empire State Building as being bigger than a duck. And, it turns out that the digital world isn’t as old as it feels. Yes, it seems as if it’s been with us always, but it hasn’t even been 20 years, which may seem like a lot of time if you’re worrying about getting that report out by Friday, but not when you consider that the ballpoint pen has been around since 1935 and the safety pin since 1826. Kind of puts things into perspective.

Anyway, for brands, all the fuss when it comes to digital can be distilled to two big problems. The first is that marketers are desperately trying to link digital usage, digital platforms and brand in a meaningful way so that they have something more than just another targeting tool, but also something that helps with brand strategy in the digital world. We’re working on that, so more about that later this month.

The second big behavioral shift is that consumers are talking to each other before they are talking to brands. And it turns out that brand websites increasingly are not the first stop on the decision-making voyage, unless (there’s an ‘unless’ in there) brands really understand what consumers want and what they expect from the website experience and try and address those wants and meet those expectations. It’s not a simple exercise, but brands need to do it or risk having their website end up at the bottom of the digital list of places consumers and customers visit.

Oh, and just so you know, we do take our own advice!

Like those clever landscape architects who place bricks based on worn footpaths through the grass, we have examined how visitors have traveled through our website and made some new roads, as well as sprucing up the view a bit.

We continue to be grateful for the attention, through following our blog; examining the findings from the annual Customer Loyalty Engagement Index and our other syndicated work; perusing our publications; and checking out our evolving product offerings — always designed to offer real answers to the hard questions our clients need resolved.

If you’ve not visited our website before, welcome! And to everyone, please don’t hesitate to give us your reactions to the changes.

And remember, the site is open 24/7/365, even if we researchers still need our sleep.

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