Raising a Glass to America

Next week is Independence Day and Americans will celebrate with the traditional backyard barbeques, family gatherings, and the customary holiday/summer beverages: iced tea, lemonade, and beer.  Lots and lots of beer. The Independence Day holiday is the #1 occasion for sales and servings of beer – ahead of Memorial Day, Labor Day, and yes, sports fans, even Super Bowl Sunday.

This year the Belgian brewing conglomerate, Anheuser-Busch InBev, could end up controlling more than half the U.S. market if the rumored acquisition of the remaining 50% they don’t already own of Mexico’s Grupo Modelo SAB (Corona), goes through. There are, of course, potential antitrust concerns, although AB In Bev could divest some of their smaller brands like Natural Light, Busch, and Michelob to ease some of those concerns.

In the meantime, as concerns loyalty to beer brands, here are this year’s rankings according to our Customer Loyalty Engagement Index:

Regular Beer

1. Sam Adams/Coors
2. Stella Artois
3. Corona
4. Heineken
5. Guinness
6. Michelob
7. Miller
8. Budweiser

Light Beer

1. Sam Adams Light
2. Coors Light
3. Michelob Light
4. Bud Light
5. Natural Light
6. Miller Lite
7. Amstel Light

There’s been a flow of beer deals since InBev’s takeover of Anheuser_ Busch. SABMiller acquired Foster’s and Heineken NV bought Femsa (Modelo’s rival in Mexico), but whichever brand you prefer, raise your glass and toast America. After our own 4th of July holiday we’ll be back on the 10th.

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Planning a Vacation? Here’s How Hotels Ranked For Value.

For those you who may have missed it, Summer officially started last week, and that means vacations for most people. Vacations, which used to be regarded as a luxury, have become a necessity in today’s world. Nearly 95% of folks we polled in our Customer Loyalty Engagement Index indicated they had no intentions of cutting back on their vacations.

This year, the top-5 U.S. destinations turned out to be the usual suspects:

1. Las Vegas
2. Orlando
3. Hawaii
4. New York City
5. Washington, DC/ Los Angeles

For those hankering for foreign climes, the top-5 cities ranked like this:

1. London
2. Rome
3. Paris
4. Barcelona
5. Dublin/Prague

That consumers are not giving up travel does not mean that they’ve stopped looking for good deals. So when it came to “value” here’s the top-5 rankings of the four categories of hotels we track:

Luxury

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

Upscale

1. Hilton
2. Marriott
3. Hyatt
4. Doubletree/ Embassy Suites

Midscale

1. Best Western
2. Hampton Inn
3. Ramada
4. Holiday Inn

Economy

1. Days Inn
2. Quality Inn
3. Econo-Lodge
4. Travelodge
5. Motel 6

George Bernard Shaw wrote, “The great advantage of a hotel is that it’s a good refuge from home life.” But the need to relax, recreate, and re-charge is taking precedence no matter what the economy or the cost of gasoline and airline baggage fees.

So for most Americans, another thought is true: a vacation is what you take when you can’t take what you’ve been taking anymore!

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The e-reader story

It was just reported that Barnes & Noble fell short of market expectations, reporting a fourth-quarter loss of $57.7 million this week, despite getting a boost from some popular titles like "Hunger Games" and "Fifty Shades of Grey," as well as the Borders liquidation.  Importantly, results for their closely watched Nook e-reader division were mixed. In April, Microsoft announced that it would invest hundreds of millions of dollars in Barnes & Noble’s Nook division, valuing the unit at $1.7 billion and giving Barnes & Noble a much-needed lift for its growing but expensive digital business. But, while a nice infusion of cash never hurts, it will only go so far, unless it's directed toward creating consumer engagement with the brand.

It turns out that Barnes & Noble fell short of consumer expectations, as well, which is what creates these market realities. As nascent as this category still is, consumers have a very clear idea at this point in time what they want from their device. Our research from the beginning of this year demonstrated the writing on the e-wall, as the brands that best met customer expectations in the category ranked as follows:

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

And while Barnes & Noble currently has more than 25 percent of the e-book market, it faces a formidable competitor in Amazon, which dominates e-book sales. Understanding the "why" behind the "what" of the e-reader category is far more than a numbers game--especially in these developing categories. When it comes to what e-reader brands have on their nightstand, this category story is one book they don't want to be a mystery.

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Brand Lessons on your Tablet

The Sunday New York Times reported one more brick removed from traditional media’s wall, as the Huff Post introduced an online weekly, available for the tablet via the Apple Store. As the article’s writer, David Carr, points out, a few years ago this wouldn’t have even been called a magazine. Ah, but how that has changed, with Arianna Huffington a powerful general leading the charge into the digital future.   

We have also been writing and speaking quite a bit about digital, from the viewpoint of how consumers engage with it, and specifically how that digital engagement intersects with how they engage with brands. Tablets and digital share more than a critical symbiotic relationship, it turns out. They both represent a warning shot for brands. Those brands that fail to look beyond their category to the lessons in the tablet category are often those who have relegated digital to the playground of the brand—that space where the brand is trying things, with little or no strategic intent, even as digital applications multiply like a science fiction organism.

In our work in the tablet category, we find a stunning example of the sharp left that those who are highly engaged with digital technology—the Higitals—make when it comes to decision making. How they make that decision that is striking in its hierarchy. While the general population seeks a brand name first to inspire confidence in their choice of a tablet, the Higitals squint their discerning eyes and examine things like design and advanced features first. They’re looking for a not-so-little something called innovation from the brand. Only after completing that technological coal walk can the brand make the short list of possible choices. And, unlike the masses who are looking to paid digital messages from the brand, it’s all about the earned media with HIgitals. Who’s writing and posting about you? It’s blogs, online articles and social media connecting up with brand in that space.

Why should a shampoo or cereal or diaper brand care? Because even though those categories don’t work the same at all, Higitals are buyers there, as well. And looking at how those folks see your world is to see the future. Understanding how they are using digital technology specifically in your category, enables you to be one of the brands that does more than experiment in the digital space, but instead links strategy to the technology consumers have adopted at blow-back speeds.

When it comes to tablets, here’s how the world at large sees the top five brands that are doing it best when it comes to meeting their expectations:

1. Apple
2. Amazon
3. Samsung
4. Barnes and Noble
5. Asus

Steve Jobs once said, “The broader one's understanding of the human experience, the better design we will have. “ And, we would argue, the better brand.

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For Verizon Talk May Be Cheap But Data Isn’t

Reacting to the rise of data use over traditional voice, Verizon is introducing a new version of their pricing plan. The new plan – called “Share Everything” – will allow customers to link up to 10 devices to a single contract under the same data plan, and goes into effect on June 28th. Accompanying this change there’s good-and-bad news, bad news, and good news, depending upon what wireless features you use.

The good-and-bad news is that this is a really big paradigm shift for customers, one that forces them to consolidate service providers, not something that has come naturally. Just think about how long it took cable companies to get customers to bundle services.

The bad news is that the plan does away with unlimited data plans and replaces them with, for example, the cheapest version – $50 a month for one gigabyte. Then you pay $10 for the next additional gigabyte, and $10 for the next two additional gigabytes, which is OK if you use a lot of data, but not so much if you don’t.

The good news is that customers will pay $40 a month for unlimited voice and texting and can connect other devices  -- $10 for a tablet and $20 for a laptop – which are cheaper rates than currently on offer.

But when it comes to the brand world, saying it, doing it, and doing it believably so customers are truly engaged are three entirely different things. You need to be both believed and meet customer expectations for the category if you expect to succeed.

According to our 2012 Customer Loyalty Engagement Index rankings, when it comes to voice and data plans, this is how the major brands in the category rate as compared to the Ideal provider (100%):

AT&T Wireless      95%
Verizon Wireless    92%
Sprint PCS             91%
T-Mobile                90%

The low, fixed-fee approach for all customers confirms a trend we commented upon nearly a year ago: providers no longer expect to make the big bucks from calls and texts, but intend to make up for it with the data plans and the connection of additional devices.

Just one of the other services provided by Brand Keys: Some advance notice so you can acclimate to the newest version of the digital world coming at you.

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The future of Research In Motion (RIM) and Blackberry. Or what happens when you don't use predictive metrics?

Remember Palm? They started the handheld revolution with PDAs and ended up with phones. For a while they were top of the heap when it came to “smartphones,” but that’s when the category was just being created. The problem was that other companies entered the marketplace and were able to better meet those pesky (and constantly increasing) customer expectations. So Palm tried to leverage its own smartphone operating system, but failed to connect with consumers at any significant level of engagement. By the time Hewlett-Packard came up with the highest bid for the floundering company, Palm stock had dropped 50% from the prior year. Yikes!

OK, it may be true that history repeats itself. Or that history is wonderful because it allows you to recognize a mistake when you make it again. But we specialize in – and, thus, recommend to brands – predictive engagement metrics that inform as to what consumers want and where the marketplace is heading, we think that it’s a really good thing to have in your marketing toolbox. In the absence of that, RIM may just have to read their future by looking at their own palms or examine the history of the Palm brand – and find a really different strategy for themselves. RIM had, for a very long time, rejected the idea of selling their company. But last week they announced the company was “considering strategic business model alternatives,” which is desperation-speak for “make me an offer, any offer!”

And desperation it is indeed. According to our Customer Loyalty Engagement Index – rankings that have been independently validated to correlate very, very highly with consumer engagement and corporate profitability in the corollary range of 0.75 upwards of 0.90 depending upon the category – the current lines of smartphones rank as follows:

1. Apple
2. Samsung
3. HTC
4. LG
5. Motorola
6. Nokia
7. RIM (Blackberry)

RIM/Blackberry, which once was at the top of our rankings (remember Palm?), has been nattering about an imminent “turnaround” based on new phone models equipped with RIM’s vaunted email, a new touch screen, and an operating system that was supposed to have rivaled the iPad. But as our list correlates with consumer behavior, customers, in fact, migrated in droves to iPhone and Android devices instead. Defections, lack of meaningful brand engagement, all accompanied by rolling blackouts resulted in RIM’s sales being down 20%, with its market value down nearly 76% from a year ago. Oh, and more losses forecast for the future.

Today, when both markets and technology move at the speed of the consumer, we recommend a healthy infusion of engagement metrics, especially if one is interested in having a better fix on your brand’s future. Because when it comes to the future, there are 3 kinds of companies: 1) those that let it happen, 2) those that make it happen, and 3) those that wonder what happened.

For companies looking to predict a bright future for their brands, we strongly recommend option #2.

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You’re On Facebook. OK, Now What?

William James once said, “A man has as many social selves as there are individuals who recognize him.” But with brand ubiquity on the largest social network to ever exist, recognition is the very least of a brand’s concerns today. Having built a brand guesthouse on Facebook real estate, brands are asking what they should actually be doing now that they’ve invested in the neighborhood.

Being there, of course, is only the first step. Being there meaningfully – with consumers defining what “meaning” is to them – is how brands can graduate from just posting pictures and collecting friends. But how does a brand successfully do that? Especially in a responsive way that’s more and more vital as web listening takes its rightful place at the brand strategy table.

The answer to that question will change, of course, dependant upon the category in which you compete. But whatever the category, knowing the answer remains critical to every brand. And not just when it comes to the social space, but on all the digital platforms that a brand can access to communicate and engage with consumers.

For insights to these issues we hope you can join us for “We’re on Facebook. What now?” on Tuesday, June 12th, at the Marriott Marquis in New York City, as we present at the ARF’s annual conference, Audience Measurement 7.0.

Amy Shea, EVP Global Director of Brand Development, will reveal findings from our 2012 Digital Platform Engagement Index. This national study of 83 categories and 14 digital platforms assessed by 49,000 consumers was designed to identify the intersection of digital platforms and brand strategy – offering insights into how brands can now connect today’s technological possibilities to their most leveragable and engaging strategies, and navigate successfully in the digital space.

If you can’t make your way to the presentation, we can still help you navigate more successfully in the digital space. So please feel free to reach out to us at keys@brandkeys.com to learn more about what to do, now that you’re there!

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Big Gulp Meets Big Brother

Last week New York Mayor Michael Bloomberg – indicating his concern for the health of New York’s citizens – proposed a ban on the sale of large-sized, sugared drinks, i.e., 16-oz. or more, in restaurants, sports stadia, movie theatres, and from street carts. For those of you addicted to 40-oz. drinks, the proposed ban did not include grocery or convenience stores.

If you ask New Yorkers, about 55% are in favor of the ban, 30% are against it, and the remainder said “You talkin’ to me!” and stalked off.  OK, perception is reality. On the rational side of things, nobody is going to declare regular sodas a health drink. Refreshing? Sure. Thirst-quenching? Obviously. But healthy? Not so much.

But decisions aren’t all rational. Most of a consumer’s decision is emotional, and luckily enough, Brand Keys is able to measure both. When we look at the emotional aspects of the Regular Soda category – the one that does deal with “health” and “being good for me,” here’s how the brands rank specifically for that according to our 2012 Customer Loyalty Engagement Index:

1. Sprite
2. Canada Dry Ginger Ale
3. Pepsi
4. Coke
5. Dr. Pepper
6. Fanta
7. Mountain Dew

Concern for health is one thing, but there are some flaws in the overall plan. If the ban is on 16-oz. drinks, what’s to stop brands from producing 15-oz. bottles? A 20-oz. bottle of Coke has 65 grams of sugar, but because dairy drinks aren’t included in the proposal, you could go out and have a 21-oz chocolate malt from McDonald’s and consume 111 grams of sugar.

Right now, for those of you who live, work, and eat in New York, the decision is still yours. But it’s a slippery slope facing off health regulations and free will. And you know what they say: “When soda is criminalized, only the criminals will have soda!”

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