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kombucha marketing kombucha wonder drink brand

How to compete in the booming Kombucha Market

Interview with Steven Lee of Kombucha Wonder Drink.

Steven Lee Kombucha wonder brand insight blogIn the tea business Stephen Lee is a household name. A pioneer. You could also say he’s the father of Oregon’s booming Kombucha market.

Lee first tried the popular elixir of fermented tea on a business trip to Russia, back when the U.S. and the USSR were coldly pitted against one another.

“When I first experienced Kombucha in Russia − I thought it was one of the most amazing things I’d ever experienced,” Lee said. “There was no question in my mind. I knew it was going to be a phenomenon.”

So Lee brought a SCOBY back with him and started brewing his own kombucha in his kitchen. But it would be many years, and several start-ups later, before he would jump into commercial kombucha production.

Over the years Lee built and sold five different tea companies. He literally wrote the book on Kombucha and today he is continuing to help lead Kombucha Wonder Drink, which he recently sold to Harris Freeman, America’s largest private label tea packer.

I sat down with Steve to talk brand building, marketing, business creativity and his long list of successful entrepreneurial ventures. It all started with Universal Tea Company in the early 1970s with $2500 and a basement full of herbs, spices, teas and dreams…

SL: When we started Universal Tea Company back in 1972 there was there wasn’t much competition… Lipton, Celestial, Bigelow and Twinnings. We were selling bulk to natural foods stores, but we really hit on peppermint… We were bringing peppermint in from Eastern Oregon — It’s the finest peppermint in the world — and selling it in bulk. We actually bought a wheat combine for $800, reversed the airflow, got a tractor-trailer license and began processing and hauling. We sold hundreds of tons of mint to Lipton and Celestial Seasonings.
tea and Kombucha market

JF: How did that transition into Stash Tea Company?

SL: We sold universal Tea Company to our bookkeeper for $45,000 in 1977. It had taken us five years to figure out what we wanted to do with Stash Tea, because everything we tried, failed. We finally decided to sell tea bags to the food service industry and through mail order. It was a slow build over 21 years. We did everything as inexpensively as possible.

JF: From what I heard, you had some very innovative marketing programs.

SL: Yes, have I told you the story of Stash? That’ll have to be another conversation… We had more than 100,000 people on our mailing list. We used gifts, discounts and eventually free shipping to create loyal customers. By the late 80’s mail order accounted for 10% of our revenues, but 35% of the company’s total profits. Eventually Fred Meyer called us, and asked if we’d be interested in selling our tea in their chain of stores here in the Northwest. So they were our first retail account.

By 1990 Stash was the second largest purveyor of specialty teas, behind Bigelow. Lee and his partner, Steve Smith, sold Stash tea in 1993 to Yamamotoyama, the oldest tea company in the world.

JF: What did you do differently after that, when you were starting Tazo?

SL: Well, we started Stash tea with $2500. Tazo was capitalized with a half a million. Plus, we had 20 years of experience under our belts. We had a lot of courage and a lot of confidence. We just marched right out there with it. We knew where to go. Who to contact. How to be creative…

branding blog on tazo teaWe got a very talented team of people together. The guys at the design firm and a copywriter worked with my partner, Steve Smith, and they were just brilliant together. Such a creative force!

There are a lot of people who get involved in the brand building process early on who set precedents. The name, for instance… With Stash, from the day we came up with that name, we had to back-peddle. “No, we’re not about marijuana.”

With a name like TAZO, and the right creative team, anything could happen. The writer said, “it’s kinda like marco polo meets Merlin on the crossroads of existence.” That was the beginning of the whole storyline. They pulled that one outta their hats.

Steve Sandoz, the copywriter on the Tazo project, once told a reporter that Tazo was “the name of the whirling mating dance of the pharaohs of ancient Egypt and a cheery salutation used by Druids and 5th-century residents of Easter Island.” Proof that sheer creativity can pay tremendous dividends when it comes to building a brand.

JF: It also helped that the specialty tea category was booming by the time you started. Didn’t Republic of Tea pave the way for Tazo?

SL: They certainly did. There were no longer just five or six tea companies out there. There was some real innovation happening and consumers were aware of better teas.

JF: Tazo launched with a product that cost almost twice as much as Stash. Was premium pricing a big part of your strategy, or was it just that the ingredients were more expensive?

SL: Our strategy was to launch with a product that was made of much higher quality ingredients, and that dictated the retail price. We made no more margin. 40 to 45% gross margin.

marketing kombucha tea marketingIn 1998, Steve Smith and Steve Lee noticed that Starbucks was piloting a brand of tea called Tiazzi, which they perceived as an infringement on the Tazo brand. A polite “cease and desist” letter led to a meeting in which Starbucks offered to buy the Portland company. The sale closed for a reported $9.1 million. Only five years from founding to acquisition. Tazo grew to be a billion dollar brand before being replaced by another Starbuck’s brand, Teavana.

JF: So at that point you had the exit that every entrepreneur dreams of. You could have done anything… What drove you to start all over again?

SL: That’s what I do. My forte is getting things started that inspire and motivate me, then surviving through tough times.

JF: (laughing…) That’s your entrepreneurial strategy??? Get it started and then hang on?

SL: Yeah. I’m attracted to esoteric, romantic categories that inspire me. Tea is very romantic. I was very inspired by that first taste of kombucha that I had in Russia.

SL: The first domestic commercial kombucha that I knew of was a brand called Oocha Brew, here in Portland, that started in 94. That was before GT Dave. I was ready to invest in their company. Unfortunately for Oocha Brew, they learned very fast that when you create a raw kombucha you have to be very careful… If it’s not handled properly all the way through the distribution channels to the store and all the way home into the fridge there’s a high risk of being too high in alcohol. In 1998 they sold a large quantity to QFC stores and the bottles all started exploding. The caps were coming off. That was enough to bankrupt them.

SL: GT Dave began in ’95, grew very slowly until he got some funding in 2003. At that point, Synergy quickly became #1 in the kombucha world with a raw product, and he never looked back.

We started developing Kombucha Wonder Drink in 1999 and launched in 2001. We had a lot of confidence then too, because all the retailers that I talked with said, “oh yeah, if you do kombucha we’re all over it.” So getting it in the stores was easy for us, but moving it off the shelves proved very difficult at first. What we discovered was, even natural foods consumers didn’t know what it was. We did a lot of sampling, and it was a real love/hate thing. Some people would just gag.

JF: An acquired taste…

SL: Yes. Even though our product was a little more palatable than some. Even now, less than 10% of American consumers are aware of what kombucha is. So it still has a long way to go among the so-called “early adopters.”

We determined from the very beginning that the way to go was shelf stable. Our premise is, most all the benefits of kombucha are in the acids. Those are not affected by pasteurization. But in two years time, in 2003, we were still struggling with consumers accepting the taste. It was a slow process.

kombucha marketing kombucha wonder drink brandJF: Was that a strategic error, not doing raw kombucha? Were you kickin’ yourself then?

SL: There was a five year period there of self doubt and struggle. We grew every year, but it was not like what was happening in the raw segment. The two other founders left… Didn’t want to do it anymore because it wasn’t growing like it had with Tazo or Stash.

We thought we saw the market, but it was tougher than we expected. Then in 2010 there was the mother of all recalls, when all unpasteurized kombucha brands got yanked off the shelves. Even Honest Tea had a raw kombucha that got recalled. CocaCola had a 1/3 interest in Honest Tea at the time, but they had no interest in doing anything with raw kombucha, so they just let it die. It never returned.

In order to get back on the shelves Synergy and all of them had to change the way they made their kombucha. They had to filter out most of the bacteria and prove that they wouldn’t exceed the .5% alcohol limit. We never had a problem with that, with our brand.

JF: So where’s it going now? Around here, every time your turn around it seems like there’s a new brand of kombucha popping up. You have Brew Dr., Eva’s, Hmmm, Lion Heart, and dozens of others just in Oregon. Pepsi bought Kevita. Coke’s investment arm has an interest in at least one kombucha company…

Kombucha market Kombucha Wonder DrinkSL: Yes, everybody’s going to have a kombucha. Good tasting, functional drinks are rising by leaps and bounds right now. There are different sodas with less sugar and different sweeteners. There’s Kefir. It’s changing rapidly.

SL: Our trade association, Kombucha Brewers International has 80 members. And that’s not all… there are well over 100 brands. It’s an easy product for people to launch. You can brew kombucha in your kitchen, go to a couple farmer’s markets, become enthusiastic, find and a couple local stores, and you’re in business.

JF: Sure, the kombucha market is booming, so it’s easy to launch. But it’s not, necessarily, easy to succeed in. Just because they can brew it doesn’t mean they can build a brand, like you did.

SL: That’s true. It’s too hard for too many people.

JF: Even now that’s it’s a $600 million market it’s a relatively small pie. I’m sure it’ll get to a billion dollars soon enough, and it’s going to continue to grow, but the question is, is it growing fast enough to support all the new competitors who are jumping into it?

SL: The answer is no. But time will tell. Everything’s going to happen in kombucha market. Everyone is going to experiment and there will be every form and flavor possible. But there’s always a falling out of brands. Phenomenon or not, only five out of 100 startups make it. The shakeout is happening simultaneously as more brands are launched.

But Steven Lee has launched his last company. His future now is in writing. He recently wrote a book about kombucha for Random House, and he plans to use those connections to do something else that inspires him. Something romantic.

“Once I’m done with Kombucha Wonder, I’m going to go write children’s books,” he said.

 

If you’re thinking about entering the Kombucha Market or if you have an existing natural foods company, BNBranding can provide all the insight and creative inspiration you need. Call me. 541-815-0075.

2

These two words are NOT synonymous: Logo. Brand.

Here’s something I heard from a graphic designer recently: “Oh yeah, we’re going to create a new brand for that company. Totally.” No she’s not. She’s not going to create a brand, she’s going to create a brand identity. There’s a difference. Let’s get the terminology straight.

A brand identity job typically includes a logo and graphic standards that dictate fonts and colors for the company’s marketing materials. It’s a valuable service, but those graphic elements, in and of themselves, do not add up to a “Brand.”

In fact, the logo is just the tip of the tip of the iceberg.

Brand is everything above AND below the surface… The vast, floating mass below the surface is a thousand times bigger and more important than just the design work.

Take Nike, for example. The swoosh is one of the world’s most recognized logos, but the Nike brand goes way deeper than that. Deeper than the advertising. Deeper than the collection of Nike-endorsed superstars. Deeper than Nike’s manufacturing practices or the products themselves.

The Nike brand is a psychological concept that’s held in the mind of the consumer. Quite simply, it’s an idea. An idea with all sorts of affiliated images, feelings, products, words, sounds, smells, events, people, places, policies, opinions and even politics.

brand identity design brand insight blogThe sum of all those parts is the Brand.

The conceptualization of Nike, in my mind, is much different than the idea of Nike in my daughter’s mind or in Phil Knight’s mind. Business owners and chief marketing officers have a skewed image of their own brand based on insider knowledge, best intentions and dreams for the future.

The consumer’s idea of your brand is based more on history and personal experience, where one bad experience skews the whole picture.

The trick is to bring those two worlds together. Great “branding” combines the aspirational mindset of the business owner with the realities of the customer experience and the demands of the modern marketplace.

Which leads me to another tricky term: “Branding.”

The verb “branding” is often mistakenly associated with design services. You’ll hear an entrepreneur say, “We’re going through a complete re-branding exercise right now,” which in reality is nothing more than a refresh of the logo. It’s often a good idea, but it’s not going to magically transform a struggling business into a beloved brand.

You have to do a lot more than good design work to build a great brand.

Branding is everything that’s done inside the company that influences that psychological concept that is The Brand; If you redesign the product, that’s branding. If you engineer a new manufacturing process that gets the product to market faster, that’s branding. Choosing the right team of people, the right location, the right distributors, the right sponsorships… it all has an impact on your Brand.

Not only that, there also are outside events that you cannot control that affect your Brand. New competitors, such as Under Armour, affect Nike’s brand. Personnel changes, political policies, grass roots movements, Wall Street and even foreign governments can help or hurt the Brand.

So you see, branding is not the exclusive domain of graphic designers. It’s not even the exclusive domain of the marketing department.

I love working with great designers. When I bring a concept to the table, and the designer executes it really, really well, it’s absolutely magical. But the graphic designer and the brand identity are just tiny components of the branding equation for the client. In the course of her career a designer might craft thousands of gorgeous brand identities, but the only Brand that she truly creates is her own.

Sailing into a big, blue ocean of opportunity.

Kevin Plank, CEO of Under Armour, likes to tell the story of his origin as an entrepreneur. And it always revolves around focus…

Under Armour marketing on the Brand Insight Blog“For the first five years we only had one product. Stretchy tee shirts,” Plank said. “Great entrepreneurs take one product and become great at one thing. I would say, the number one key to Under Armour marketing – to any company’s success – plain and simple, is focus.”

Under Armour’s marketing focus on stretchy tees for football players enabled Plank to create a whole new pie in the sporting goods industry. He wasn’t fighting with Nike for market share, he was competing on a playing field that no one was on. It was a classic “blue ocean” strategy… instead of competing in the bloody waters of an existing market with well-established competitors, he sailed off on his own. And he kept his ship on course until the company was firmly established. Only then did they begin to expand their product offerings.

That’s good branding. That’s a Blue Ocean Strategy. That’s Under Armour marketing.

bend oregon advertising agency blog post blue ocean strategyOften the lure of far-away treasure is just too tempting for the entrepreneur. The minute they get a taste of success, and have some good cash flow, they sail off into completely different oceans.

It’s a common phenomenon among early-stage start-ups, where it’s spun, for PR purposes, into a strategic “pivot.” Every meeting with a potential investor or new strategic partner triggers a dramatic shift in the wind…

“Wow, that’s a great idea. We could do that.” “Oh, we never thought of that. Yes, definitely.” “Well, that would be a great pivot for us. We’ll definitely look into that.” Those are usually the ones that burn through their first round of funding and then sail off into oblivion. Because there’s no clear purpose. No definitive direction. No substance upon which a brand could be built.

W. Chan Kim and Renee Mauborgne wrote the book “Blue Ocean Strategy” back in 2005. They don’t mention Under Armour, but it fits their blueprint of success precisely… “Reconstruct market boundaries to create uncontested market space.” “Use value innovation to make a giant, disruptive leap forward in your industry.”

Plank was sailing into uncontested waters with one simple, focused idea. Plus he had a well-executed brand identity that was perfectly aligned with his blue ocean strategy. The name, Under Armour, fits perfectly. It sounds strong because it was originally targeted toward strong, burly football players. Plus, it’s under shirts, not outter shirts. It even implied safety in an inherently unsafe sport.

Plank didn’t have to explain his value proposition to anyone… From the very beginning it was ridiculously clear what the company was all about. Potential customers grasped the idea immediately.

635951675884228258570468626_ikea-shoppingWhen it comes to branding, simplicity trumps complexity. The strongest brands are always built on simple, single-minded ideas.

Take Ikea, for instance. They have thousands of products, but they all revolve around one simple core brand concept: Furniture for the masses. They figured out how to offer functional, contemporary furniture for a lot less money… by leaving the assembly in the hands of the customer. The products themselves are cheap, cheesy and downright disposable. But that’s not the point. You can furnish an entire apartment for what you’d normally pay for a couch. Plus, Ikea created a shopping experience that makes you feel like you’re getting something more. And consumers eat it up.

Ikea has a cult-like brand following. People camp out for days at Ikea store openings. They drive hundreds of miles and devour 191 million copies of Ikea’s printed catalog. All because of two things: price and shopping experience.

Ikea didn’t try to compete with traditional furniture manufacturers who focused on craftsmanship and quality. Instead, they ascribed to the old saying, “If you want to live with the classes, sell to the masses.” Every Ikea design begins with one thought in mind: How to make common household items less expensive.

Their single-minded focus on cost-conscious consumers is their “Blue Ocean” strategy and the cornerstone of their success. They design products and a retail shopping experience to fit that core brand concept.

So the next time you walk into one of those giant, blue stores for some Swedish meatballs and bed linens, think about that… Are you trying to slug it out with bigger competitors in the bloody waters of a red sea, or are you charting your own blue ocean strategy?

Go where the enemy isn’t. Take a page from the Under Armour marketing handbook and zig when everyone else zags. That’s how you’ll create a brand, and a business, that sticks.

Automotive Ads: Another ride down that twisting, mountain road of tired clichés.

I don’t know what it is about automotive advertising. No other category is so rich in promise, yet so void of inspiring insight and unique execution. But there is something any marketer can learn from the long history of mediocre automotive advertising.
automotive advertisingFor instance, there’s a nice Alpha Romeo ad that’s running right now. But it’s nothing new… just gorgeous video of a sexy red Italian sports car doing its thing in the curves with a pretty good voice-over that nobody’s going to listen to.

That’s easy. It’s harder producing a decent spot for a mundane automotive product, like a minivan.

Chrysler single-handedly created the minivan market when the Caravan and Voyager debuted in 1984. Sales skyrocketed and imitators quickly sprang up, but only after Chrysler had firmly established itself as the segment leader.

automotive advertisingChrysler’s minivans moved the segment from niche vehicle to the pinnacle of the mainstream. Minivans have become part of the pop culture. And the marketing people at Chrysler/Dodge have a pretty good handle on what their target audience is looking for.

The advertising routinely features simple slices of family life: we see a baby sleeping peacefully in a car seat. Kids playing cards in facing rear seats. Kids watching videos. Moms & Dads reconfiguring the seats and loading up the endless volume of kid’s stuff.

That’s what minivans are all about: Lugging kids, looking for lost binkies between the seats, and running errands. That’s the reality of it. It’s not glamorous, and it’s not the least bit appealing to anyone who doesn’t have kids. But it’s totally relevant for parents who are carting three kids around everyday.

The main benefit of all minivans is practicality. Plain and simple. And Caravan advertising conveys the idea very clearly. They’re not trying to be anything other than that. Honda, on the other hand, once careened off the road with their spots for the Odyssey.

The Honda spot goes like this: There’s an attractive young couple driving along a winding, country road. In a mini van, for pete sake! The husband, who’s doing the driving, glances at his wife suggestively as she reaches up and grips the panic handle above her window. She gives him a quizzical, turned-on look. He gives the van a little more gas and grips the wheel tightly as he lugs into another corner with all the agility of a Winnebego.

She holds on even tighter and looks at him as if to say, “ohhhh yeah, bring it on big boy.” I almost expect them to pull over and jump into the back for a roadside quicky. Instead, she just holds on for the ride while the voice-over chimes in: “Just because it’s a minivan doesn’t mean you have to treat it like one.”

Oh, c’mon. There’s even a more blatant execution of that idea from Britain, where a couple are about to do it in their Honda Odyssey until they get interrupted by an elderly parent. The voice-over on that spot says “It doesn’t seem like a family car.”

First of all, sex and minivans DO NOT go together. No one gets turned on by a minivan. A corvette might help you get laid, but not a dual-sliding, seven passenger, Chrysler or Honda product. Curvy roads don’t go with minivans either. Put a minivan on a windy road and you here’s what you get: Puking children. Horrendous messes of vomit. Leave the windy roads to the Porsche commercials.

There’s no pleasure in getting from Point A to Point B in a mini van. Believe me, I’ve done it. There is some satisfaction in packing up both kids and the entire kitchen sink for a simple, cross-town play date. There’s satisfaction in changing a diaper on the side of the road without hanging your baby out on the tailgate. But not pleasure.

So Honda’s idea of promoting the minivan as something sexier than just a minivan, simply doesn’t wash. They could spend a billion dollars trying to convey that idea, and parents would still buy it for the cupholders. It’s like trying to kitten-up a milk truck.

So how did the message get so messed up, and what can we learn from Honda’s one-spot marketing blunder?

  1. As a brand, be authentic. Don’t try to be something you’re not. Minivans are not 450 horsepower Italian chick magnets. (Unless maybe Alpha Romeo decides to get into that niche)
  2. Realize that technical specs and insider information is often irrelevant to consumers. The automotive press consistently ranks The Honda Odyssey above its Chrysler competitors in performance and reliability. It’s a great vehicle. Best in class even. And the Honda executives are fully aware of this.

automotive advertising

The problem is, in the minivan category nobody gives a hoot about “chassis refinement and driving feel.” By letting insider information dictate their marketing, Honda ends up with a message that’s relevant to their own executives and to the automotive cognoscenti, but completely irrelevant to the target audience. It’s a classic case of getting in your own way. Of knowing too much.

Of course it probably wasn’t the Honda executives who came up with the idea of using sexual tension in their Odyssey spots. Maybe the ad agency creative team just couldn’t find inspiration in boring old minivan. Maybe there wasn’t any consumer insight or personal experience to go on. Maybe it was just wishful thinking. Or maybe they were just trying to steer clear of a technical, engineering message. Wise move, but they really blew it with the hot couple concept.

Somewhere, the process took a wrong turn and the end result is a waste of marketing dollars. In the scheme of things, one spot isn’t going to kill Honda. But in the meantime, Dodge is sticking to an approach that simply demonstrates relevant features. Their advertising is not going to win any awards, but at least it’s somewhat authentic. It hits the hot buttons of a specific target audience and it wins the head-to-head battle with Honda. In automotive advertising anyway.

For more on Brand Authenticity, click here.

1 "Brand" Trumps Managerial Incompetence.

I need to stop being surprised by managerial incompetence. Honestly. I need to reframe my expectations and just be pleasantly surprised when I encounter an exception to the rule. Because everywhere I turn, knumbskulls, nuckleheads and nitwits rule the managerial world.

Witness the retail store owner who has no handle on her inventory or her labor costs.

The non-profit executive who has a revolving door of talent, going only one direction.

incompetenceThe managing partner of a professional services firm who constantly, habitually, over- bills his clients.

The director of communications who doesn’t communicate with anyone internally.

The CEO who can’t pull the trigger on anything more meaningful than which consultant to hire.

Failures like those are rampant. One leading consulting firm reports “with solid empirical justification, that managerial incompetence across all levels is 50%.” (Of course, their study didn’t include the companies that went out of business due to managerial incompetence.)

So the bad news is, there’s a 50-50 chance that your boss or your manager is incompetent. The good news is, half of companies you compete with are also chock full of managerial incompetence.

And here’s more good news: It’s well documented that strong brands can weather all sorts of managerial miscues.

Strong brand affinity can help companies weather a price war. According to the International Journal of Business Research, a brand acts as a buffer when the company fails on the customer service front. And beloved brands can weather PR storms that would make most companies melt.

Look what happened to Toyota.

branding blog about toyotaIn 2009 and 2010 Toyota recalled 8.8 million vehicles due to safety concerns with accelerator pedals. Time magazine ran a feature story titled “Can Toyota ever bounce back.” One industry expert told CBS Anchor Harry Smith, “We’ll be seeing major problems with the Toyota brand for at least a decade, maybe two.”

Toyota’s CEO quipped that he was not Toyota’s top executive as much as the company’s chief apologizer for blunders, mishaps and overall sluggish business. It was a PR disaster, and another example of managerial messiness.

Business Insider reported “The company failed miserably in its initial crisis management, but that’s what makes Toyota’s case so intriguing. Despite its monumental mistakes early on, Toyota still bounced back. Why? It didn’t take long for the public to remember Toyota’s previously stellar reputation.”

Contrary to all the doomsday speculation, the Toyota brand made a quick recovery, recapturing its status as the #1 selling car brand in America. (In 2016 they had the #1 and #2 selling car in America.) Not surprising really, given the consistency and long-term track record of the Toyota brand.

“The Toyota brand showcased its resiliency, with its positive reputation built up over decades of good performance. The company leveraged this, focusing its marketing once again on safety and its proven track record. It had to show that this disaster — including its own horrible mishandling of the situation — was an aberration.”

branding blog about toyotaToyota has been one of the world’s most beloved brands for over 30 years. People absolutely love their Land Cruisers, Corollas Camrys and Civics. AdWeek magazine puts Toyota at #67 of the world’s top 100 brands, the highest ranking of any automobile company. (Volkswagen is the only other car brand that makes the list, at #89. Forbes reports that Toyota is the 9th most valuable brand in the world.

So what does this all mean for the typical small to mid-sized company? Here are a few lessons:

1. It pays to consistently deliver on your brand promise. Toyota’s resurgence proves that branding is a process of consistency and endurance. Year in and year out they keep delivering on the idea of reliability and resale value. So when the company hit that bump in the road, it didn’t really slow them down. What’s your brand promise, and are you delivering on that promise every day?

2. Managers make monumental mistakes. CEOs come and go, often in a flaming blaze of glory. Products sometimes fall drastically short. But if you’ve built a strong brand your devoted fans will cut you some slack. The emotional connection they have will prevail over any short-term disappointment.

3. A solid brand platform is critical to the success of your management team. They gotta know what you stand for, and they’re not necessarily going to get it unless you spell it out for them. You have to communicate your brand promise all the time, and promote it feverishly with your team. How else are they going to understand the culture, the core values, the expectations of consumers, and the business goals? Don’t assume anything.

4. Great managers are hard to find. No one has the childhood wish of becoming a great manager, so if you have some on your team, keep them there! Reward them handsomely. Treat them like Gods. Transform their relatively mundane, under-appreciated work into something truly valuable.

5. Create an atmosphere of forgiveness, where failure is rewarded rather than punished. They’re going to make mistakes — remember the 50% incompetence stat — so you might as well embrace it. Encourage action and let your managers know that doing something wrong is better than doing nothing at all.

6. Make every manager a die-hard brand champion. If they’re not, get rid of ’em.

For more about the power of a great brand, read this post.

too much information in your advertising

TMI. How information is killing your advertising.

Contrary to popular belief, information is the enemy of persuasion. Not the friend. Too much information is the number one killer of advertising, presentations, speeches and brand messages in general.

Most people think they can convince, sell or persuade by piling on facts and stats. Well, it might make you feel smart, but it’s not going to produce results. In fact, the more information you stuff into an ad, the less you’ll get out of it.

imagesInformation is what web sites are for. You can cover all the nitty gritty details in the content of your site. That’s where you go deep. Don’t try doing that in your advertising.

Effective advertising leads prospects to that information and moves them further down the primrose path to conversion. It doesn’t change minds, it simply gets people moving in the right direction… from ad, to website, to content, to store, to purchase. That’s how it’s supposed to work.

Many people try the short cut, thinking they can do it all in one ad. There’s no thinking behind it. No strategy. No emotional hook. And worst of all, no story.

Just get the word out there. Load ’em up with product specs and features. Give ’em every detail of the coming event. Show ’em every product that’s on sale! Baffle ’em with the bullshit.

Here’s an example: Several local hearing aid businesses run huge, full-page ads in the paper every week. It’s a wise media strategy, because the newspaper reaches senior citizens quite effectively. Terrible execution though. The ads are all type and hype… packed with nothing but facts, retail features and weasels. Someone could easily win that marketing battle simply by removing the facts and taking a less-is-more approach.

Because seniors don’t like being bored to death either.

If you ignore the emotional benefits of hearing well, and start droning on about the techno-wizardry of the latest, greatest hearing aid, you’re missing it entirely.

too much information in your advertisingAdvertising is an arena geared specifically for stories and emotional benefits. The imaginative part of the sales pitch, if you will. Save the product features, details, proof points and testimonials for your website or for the sales pitch once they’re in your store. And even then, you need to use information wisely.

A Harvard Business Review study revealed the underlying problem with more information… unnecessarily confusing paths to a purchasing decision. “Companies have ramped up their messaging, expecting that the more information they provide, the better the chances of holding on to increasingly distracted and disloyal customers. But for many consumers, the rising volume of marketing messages isn’t empowering—it’s overwhelming. Rather than pulling customers into the fold, marketers are pushing them away with relentless and ill-conceived efforts to engage.”

The study compared the online advertising of two digital camera brands. Brand A used extensive technical and feature information such as megapixel rating, memory and resolution details. Nothing about the beautiful images you could capture.

And guess what? All that information didn’t lead people closer to a decision. It led them down a frustrating rabbit hole and drove them to consider Brand B.

“Brand B simplified the decision making process and helped prospects traverse the purchase path quickly and confidently.” The approach focused more on the end results have having a great photo, rather than the features of the camera. Duh.

yellow-blue-primroses-18237652“The research showed that customers considering both brands are likely to be dramatically more “sticky” toward Brand B… The marketer’s goal is to help customers feel confident about their choice. Just providing more information often doesn’t help.”

I’ve had bosses and clients who believe that every inch of every ad should be utilized to its fullest extent. In other words, pack it with facts. Leave nothing out. “White space is for people with nothing to say.”

The underlyintoo much information is killing your advertisingg reason for that is usually insecurity and/or inexperience. The results are predictably dismal… You end up with a frustrated creative team, confused consumers and lousy response rates.

So if you’re working on a new ad campaign, make friends with the Delete button. Embrace the white space. Learn when to shut up. When in doubt, take it out!

 

For more on this subject, check out THIS post.

 

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Making websites work — on many levels.

It’s been very interesting to witness the progression of web design over the last 20 years. Trends come and go at a fashion-runway pace. Technology changes even faster than that. The graphic style is continually evolving, but there’s not a lot that I would really call strategic web design.

Regardless of the latest trends or technological bells and whistles, there are some timeless facts about strategic web design that will always apply. First and foremost: The most effective websites are multi-dimensional. That is, they communicate on many different levels…

The phonebook level.

yellowpagesIn case you hadn’t noticed, the phone book is fading faster than you can say “ok google.” Now that everyone has a computer in hand at all times, Google IS the phonebook.

So on the most basic level, your website needs to function as a phonebook listing. There’s nothing fancy about that.

Cover the basics, front and center on the home page, and make it very simple for people to access more information if they want it. Just like a phonebook listing: who you are, what you do, when you’re open, where you’re located, and of course, the phone number and links to where prospective customers can learn more.

But that’s just the first 5 seconds of engagement. Effective sites also work on a 50 second level and in many cases, the five minute level. That’s strategic web design.

Here’s an example: Say you’re locked out of your car on a cold night and you’re searching for a locksmith on your cell phone. You’ll probably call the first company that pops up that offers emergency service. Comparison shopping doesn’t come into play.

yellowbookpittsburghBut six months later you might find yourself searching for a locksmith with a completely different set of expectations. For instance, if you need new locks on all the doors of your office building you’ll probably sit down at the computer and compare a few locksmith websites before calling anyone.

Same, exact unique visitor — different context. Different search criteria. Different behavior. So in that case, the locksmith’s website needs to work on another level.

The first impression level.

The most basic rule of strategic web design is to make a good impression. Quickly! If you don’t, you’ll never make it to conversion. Doesn’t matter if it’s a business card, a Powerpoint presentation, any other tactical marketing tool… the first step to success is making a good impression.

So how do you do that on a website?

strategic web design leo burnettFamous Chicago MadMan, Leo Burnett, once said, “Make is simple. Make it memorable. Make it inviting to look at. Make it fun to read.” There you go. That old-school thinking still applies.

Unfortunately, that’s a tall order for web developers who are accustomed to writing code, not copy. And it’s almost impossible for small-business owners who are muddling through a do-it-yourself website… “Choose a color. Insert logo here. Put content there. Proceed to check out!”

BECONVINCING_VThe fact is, most small-business websites fail miserably on this basic, 50-second marketing level. They’re not memorable. They’re not simple or fun to read. And they look just like a million other websites built on the exact same design template.

That’s why the bounce rate from home pages is so ridiculously high. The site doesn’t make a good first impression. In fact, most make no impression at all.

The conceptual, branding level.

Pliny The Elder once said, “Human nature craves novelty.”

More recently, marketing guru Seth Godin said, “In a crowded marketplace, fitting in is failing. Not standing out is the same as being invisible.” The whole premise of his book, Purple Cow, is “if you’re not Distinct, you’ll be Exctinct.”

Being distinct is what branding is all about.

Unfortunately, most business owners have no idea what “distinct” looks like in a website. They are only comfortable with designs they’ve seen before. Plus, web programmers have a hard time disrupting the conventions of their tech-driven business, so you can’t rely on them for innovation.

The conceptual level of your website revolves around your core brand concept — that one, engaging idea that goes beyond your product and price, and touches on a deeper meaning for your business.

bmw_uou

For example, BMW’s core brand concept is stated very clearly: “The Ultimate Driving Machine.” It’s about engineering, handling and speed. It’s not a brand for soccer moms. The first glance at their website makes that clear.

When communicated consistently, a core brand concept will provide three things: Differentiation. Relevance. And credibility. Every great brand maintains those three things over time.

Often it’s not an overt statement, it’s a collection of symbolic cues and signals that come together to provide the ultimate take-away for the web user.

It’s the use of iconic, eye-catching images rather than stock photography. It’s a headline that stops people in their tracks, like “U. O. U.” It’s navigation design that’s both intuitive to use, AND distinctly different. It’s clear, compelling messages each step of the way.

It’s good, old-fashioned craftsmanship in a high tech world.

When your site is well crafted your conversion rates will dramatically increase. Guaranteed. So rather than just jumping into a quick, do-it-yourself site, stop and think about your brand. Do you even know what your brand stands for? What your promise is? Can you communicate your idea in one sentence? Do you really know your market, your customers, your value proposition?

Those are the fundamentals. That’s the homework you need to do before you even start thinking about HTML programming. Because no amount of technological wizardry can compensate for the lack of a clear, 2349098787_2cd660c18csingle-minded brand idea.

The research or “how-to” level.

The deepest level of engagement is content that educates. People are hungry for information and quick to examine the details of just about any purchase, so give them the meat they need to make an informed decision. Don’t make them go to your competitor’s website for honest insight on the decision they face.

On business-to-business websites this level include webinars, white papers, videos, articles, blogs and tutorials. (Strategic web design ties in closely with content marketing.) On retail sites it’s third party reviews, product comparisons and user-generated content. This content is where you site can get very deep and very relevant for serious prospects. Don’t overlook it.

The conversion level.

Lest we not forget the ultimate goal of most sites… to persuade, sell, motivate and move people to action. If your site’s working on all those previous levels, conversion will happen quite naturally.

So the bottom line is this. Great sites aren’t’ just pretty. They aren’t just factual. They aren’t just chock full of content. They’re all those things, tied up in a package that’s delightful for the user.

If you want to improve the performance of your website, and transform your ordinary business into a powerful brand, give me a call. 541-815-0075.

1 Is the term “inspiring bank” an oxymoron?

It’s interesting, where people find business inspiration. For some, it’s the pages of Forbes or biographies of big-name entrepreneurs. For others it’s an impressive P&L statement. For me it’s the bookstore, the ski slopes, or the golf course.

old-bankThe bank is definitely not where I would look for inspiration.

Banks are not known for their inspiring environments or groundbreaking business practices. The most exciting thing to ever happen at my bank was the emancipation of the counter pens… They were released from their chains and replaced with crappy logo pens that are now free to take home with just a purchase of a $10,000 15-year Certificate of Deposit.

Nope. The banking industry is the last place I’d look for business inspiration or marketing insight. That is, until I met Ray Davis, the CEO of Umpqua Bank.

business inspiration from the brand insight blog and Umpqua BankTurns out, he’s not inspired by the banking industry either.

According to Davis, the key question driving strategy discussions at Umpqua has been, “How can we get people to drive by three other banks to get to ours?” That question has steered the bank’s team to look outside the financial sector for inspiration. For instance, Umpqua’s brand has been heavily influenced by the retail industry. “Build the branches around interactions, not transactions.”

Umpqua Bank has grown from $140 million in assets in 1995 to $24 billion in assets. Today it has 350 stores in three states, but perhaps more importantly for the brand, Umpqua has been included in Fortune Magazine’s list of 100 best places to work — eight years in a row!

Bankers and banking consultants from all over the world visit the Umpqua headquarters in Portland and the San Francisco branch to see what they’re doing and how they’re doing it. And what’s even more impressive is that executives in completely different industries are also looking to Umpqua for inspiration.

Turns out, we really can learn from a bank when it comes to branding.

So what’s behind it? What’s turned this small town brand into one of the fastest growing banks in the nation?

inspiring bank brand insight blog post by BNBranding a bend, oregon advertising agency“Umpqua started to take off once we realized what business we’re really in,” Davis said. “I don’t believe we’re in the banking industry. We’re in the retail services business.”

When Davis applied for the job at Umpqua he warned the Board of Directors that he was going to throw out all the old conventions of the banking industry and start something completely different. Because he believed they couldn’t compete against the big guys in any conventional way.

“Banking products are a commodity,” Davis said. “You can’t differentiate yourself that way. The big guys are just going to copy any good new product we come up with. But they can’t copy the way we deliver the service. They can’t copy our experience.”

For that, he borrowed ideas from two great retailers… Nordstrom and Starbucks. Umpqua stores look more like the lobby of a stylish boutique hotel than they do a bank. You can settle into a comfortable leather chair and read all the leading business publications. Have a hot cup of their Umpqua blend coffee. Check your e-mail or surf the web. Listen to their own brand of music and maybe even make a deposit or open a new account. Who knows.

It’s a dramatic leap when you compare that experience to the cold, marble standards of the banking industry.

Clearly, Davis knows how to execute. He doesn’t talk about “execution” per se, but he obviously has the discipline to match the vision. He’s knows how to motivate and how to manage an organization through dramatic changes. And he’s built a corporate culture that aligns with the brand promise.

2014.10.17_Umpqua_BankHere are some of the things Davis has successfully implemented and some reasons why his bank is now on my inspiration radar…

• Random acts of kindness: Local Umpqua teams just do good stuff, like buying coffee for everyone who walks into a neighboring Starbucks. They don’t have to ask permission.

• They get their customer service training from Ritz Carlton.

• Every Umpqua employee gets a full week of paid leave to devote to a local charity. That’s 40 hours x 1800 employees! Any other banker would do the math and say it’s too costly. Davis says it pays off 100 fold.

• They have their own blend of coffee. Shouldn’t every great brand have its own blend of gourmet coffee?

• Proceeds from Davis’ book “Leading for Growth. How Umpqua Bank Got Cool And Created A Culture of Greatness”go to charity.

• They invented a way to measure customer satisfaction. As Fast Company Magazine put it: Umpqua Bank has a rigorous service culture where every branch and each employee gets measured on how well they deliver on what they call “return on quality.” Our research division, BNResearch, handles that kind of work for another innovative, billion-dollar company in an even less glamourous industry… veterinary medicine.

• They embrace design as a strategic advantage. At Umpqua branches, everything looks good, feels good, and even smells good! It’s the polar opposite of a crusty old bank. It’s a pleasing environment, which makes an unpleasant chore much nicer.

• Davis GETS IT! He knows, intuitively, that his brand is connected to their corporate culture. “Banking executives always ask, ‘How do you get your people to do that?’ It’s the culture we’ve built over the last 10 years. It doesn’t just happen. You don’t wake up one day and say, gee, look at this great culture we’ve got here. Our culture is our single biggest asset, hands down.”

Umpqua-bank-interactive• He’s a great communicator. Davis doesn’t use banking stats to motivate and persuade. He uses stories, analogies and real world examples.

• He embraces the idea of a big hairy audacious goal. In fact, everyone answers the phone “Thank you for calling Umpqua Bank, the world’s greatest bank.”

So the next time I’m looking for inspiration, maybe I’ll skip my usual haunts and head down to the bank for a cup of coffee.

For more inspiration, try THIS post.

For inspiration regarding your own marketing efforts, call me at BNBranding.

 

2 Five things every marketer should be thankful for.

Once a year we all sit down at the dinner table and express our gratitude and appreciation… for the food, the friends, the family, the abundance. You might want to do the same thing at work once in a while.

As business people, it’s easy to forget the stuff we should be thankful for in the workaday world. We get so wrapped up deliveriWindowsLiveWriter_1000PostsManyThanks_36B6_thousand_3ng the next deliverable, doing the next deal, and appeasing people who may be unappeasable, we just forget to be appreciative. Or worse yet, we don’t see the good stuff at all.

But that’s pessimistic. I believe that great marketers are optimists. We see opportunities where others don’t and we choose to be positive, even in the ugly face of adversity.

So here are a few things that I believe are truly Thanks-worthy for anyone who’s involved in branding, marketing, advertising, or business in general.

1. Be thankful for the power of a brand.

After some years of care and feeding, a brand can be etched into the subconscious mind of your prospects. When faced with an overwhelming number of choices, those enduring emotional connections will surface and influence their purchase decision. Somehow.

As Kevin Roberts says, it’s loyalty beyond reason, and that can help you overcome all sorts of operational issues, personnel problems, management changes and market fluctuations.

2. Be thankful for your clients and customers.

Even if you only have a couple, measly accounts, be thankful that someone is paying you for your service or buying your product. They have so many choices, but they believe in you or your product enough to give you their hard-earned money. That’s worth a heartfelt Thank You, so take this opportunity to reach out to your clients and show your gratitude.

In his book, “Selling the Invisible” Harry Beckwith says, “Few things feel more gratifying than gratitude, and few companies show as much as they should. There’s no such thing as too often, too appreciative, too warm or too grateful. Keep thanking.”

3. Be thankful for all your lousy bosses.

If you’ve been in business for any length of time, you have undoubtedly encountered at least one boss who was downright disagreeable. Sometimes they can wear you down and leave you feeling frustrated and powerless. If you’re in that boat, here’s a different perspective for you:

branding bend oregon Be thankful for the screamers — they help thicken your skin and teach you how to deal with conflict in a constructive manner.

Be thankful for the completely un-qualified “got-nothing-to-bring-to-the-table ” bosses — they help you recognize your own strengths and often push you to something bigger and better.

Be thankful for the micromanagers who won’t let go of the littlest things — they teach you what NOT to do when you get to that level of management.

And be thankful for the aloof bosses who are too high and mighty to be bothered with details like treating their people well — they teach you to be humble and appreciative.

On the other hand, be even more thankful if you have a great boss. They are a pleasant exception, so don’t take a good boss for granted. That’s worth a lot more than a pay raise.

changes4. Be thankful for change.

In business, stagnation is a smelly, insipid enemy. If you’re not changing, adapting, and dodging bullets your brand will languish and your business will eventually die.

I have a saying… “If I keep reinventing myself often enough, I might get it right one of these days.” But it’s not the outcome that counts, it’s the process of reinvention that really matters. So make reinvention a core value. Stop looking in the rear-view mirror all the time, and forge ahead in new directions. Be thankful when things change and relish the fact that you can always learn more, get smarter, acquire new skills and do new things.

5. Be thankful for all the modern tools at your disposal.

We take it for granted now, but for those of you who don’t remember what it was like before the internet, let me tell you… Every facet of business is easier now; communication with colleagues and clients, research, advertising, networking, sales management, HR, collaboration, bookkeeping, design. It all used to be more painstaking than it is today.

Now there are marketing automation tools, social media channels, mobile apps and all sorts of technological wonders that make it easier to to do your job. (Just keeping up with all those tools is a challenge, so be thankful for IT guys who help with that too.) All the answers are, seemingly, at your fingertips.

And yet they’re not. You still have to connect the dots.

Marketing and brand building always have been, and always will be, dependent on human insight and the big ideas that stem from that insight. Despite all the newfangled tools and channels, success still hinges on a compelling emotional idea.

These days we’re swimming in information and data, but starving for ideas. So be thankful that it’s all easily accessible, but don’t forget those who think differently and come up with the big ideas. We deserve your gratitude.

Thank you for reading. I do appreciate your time, and I wish you a very grateful week.

-John Furgurson is the founder of the Brand Insight Blog and Owner/Creative Director at BNBranding in Bend, Oregon.

 

4 ipod branding on the brand insight blog

Zero-in on Branding success.

I love this saying: “The main thing is to keep the main thing the main thing.” I think Steven Covey coined that one.

the main thing for a top 100 branding blogWhen you boil it all down, that’s the essence of branding success: Zero-in on one thing you can honestly, passionately, expertly hang your hat on, and stick with it. Then when it comes to marketing communications, come up with one idea to convey the main thing, and just pound that home in every way, shape and form you can afford. One idea, multiple executions.

Unfortunately, most business owners and brand managers don’t have that kind of focus. Once they get a taste of success in one little niche, the temptation is just too much… They take their eye off the main thing, and dive into a lesser thing, hoping it will become the next big thing.

It seldom works out that way. The single biggest barrier to success, especially for young brands, is lack of focus.

Geoffrey Moore spelled it out in his seminal work, “Crossing the Chasm: “Target a specific niche as your point of attack and focus all your resources on achieving dominant position in that segment. It’s far better to be the big fish in a smaller pond, rather than flopping around in several small puddles.”

Al Ries and Jack Trout call it the most violated of their “22 Immutable Laws of Marketing.” They rail against line extensions and point to IBM, Microsoft, Levis, Heinz and this classic case: Crest.

viewdental116eBay_Store_Jan_1959_Crest_Little_Boy_001It used to be very clear… Crest fights cavities. That was the micro script for the brand. The Main Thing. Crest was the “first mover” in the cavity prevention category and it was a strategy that worked brilliantly, cementing Crest as the #1 toothpaste for more than 30 years.

Unfortunately, over time, other toothpaste brands entered the same niche and everyone seemed to offer cavity prevention. Crest abandoned the claim and didn’t find anything to replace it. After holding almost 40% of the market through the 1970s, Crest’s position began to erode at about the same time they launched their first brand extension”Advanced Formula Crest.”

Now there are 41 different kinds of Crest toothpaste. Count ’em! Crest Complete Multi-Benefit Extra White, Crest + Scope, Crest Lasting Mint, Crest Pro-Health Clinical Gum Protection, Crest Invigorating Clean Mint, Crest glamorous white, Crest vivid white, Crest baking soda & peroxide, Crest gel, Crest liquid gel, Crest whitening, Crest gum protection, Crest fluoride anti-cavity and sensitivity relief and even Crest Night Toothpaste.

Give me a break! The Main Thing now for Crest is just the next new gimmick. And it’s no longer the #1 brand.

Marty Neumeier in “Zag” says… people want choice, but they want it among brands, not within brands.” All that Crest clutter just dilutes the brand and confuses the consumer. We have no idea what Crest stands for anymore.

It’s natural for successful owners and marketers to lose focus and start adding stuff to their portfolios of goods and services. They don’t want to miss any opportunities, and they argue that many successful companies have a wide range of products. Apple, for instance.maxresdefaultiPodposter

ipod-advertising1But every Apple product is designed around the one Main Thing: Delightful Simplicity. All the innovation, design and technological prowess of Apple comes together in those two words. That’s the heart of the Apple brand.

Remember this spectacular product launch for the iPod. Even the advertising was delightfully simple. The white cord let everyone know you were listening to something different. And the graphic execution of the ads was a huge branding success.

But you’re not running the world’s most valuable company. And chances are, you don’t have the main thing really nailed down. When you do, things will become easier.

Reis and Trout say: “Focus is the art of carefully selecting your category and then working diligently to get your self categorized in people’s minds.” In other words, branding success is a process.

A good way to start is by saying no. Because what you DON’T do is actually more important that what you do do.

Say no to the new investor that thinks you should add a mobile app to your mix. Say no to the engineers who say “we can do this, wouldn’t this be cool.” Say no to the marketing consultant who says you’re missing a great opportunity. Say no to the guy who thinks you should open another location. Sometimes you even have to say no to your biggest customer.

It’s not easy, and it’s often unpopular within the ranks, but that’s what focus is… NOT trying to be all things to all people.

 

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