April 2011

Winning the Brand Relevance War

Co-creation with an Internal Focus

Noshokaty, Döring & Thun and Prophet: A Winning Combination

Look at More and Start Transforming

2010-2011 Reputation Winners, Losers

Recommended Reading

News & Events

Winning the Brand Relevance War

By David Aaker

Prius. Whole Foods Market. iPod. Kindle. These brands are not only phenomenally successful, but are examples of product categories where competitors are nearly irrelevant.

It's because of brand relevance. Any company can use "brand relevance" as a strategy to achieve long-term, competitive success. It should replace today's extensive reliance on brand preference strategies that mean constantly striving to be faster, cheaper, and better than the competition – an endless battle where competitors quickly match each other's product improvements.

With brand relevance, the goal is to make competition irrelevant – to offer something so different and special that it creates its own unique category, leaving customers believing there are no alternatives to consider.

Four key tasks are required to attain brand relevance:

  • Finding New Concepts. An organization can enhance the chances of creating a transformative new offering by becoming proficient in creative thinking. From deep observation of customers, P&G developed the Magic Reach device for use in cleaning bathrooms. From his wife's frustration with managing the family's finances, Quicken's founder got the idea for Quicken financial software. By questioning why non-customers weren’t biking, bike components manufacturer Shimano developed the "coasting" bike.
  • Evaluating a Concept's Prospects. Companies must learn to identify those concept ideas that have the greatest potential to be game changers. The three key questions to ask are: Is there a market? Can we compete and win? Will a market leadership position endure? The evaluation process must avoid biases that are overly positive and overly negative. Assuming customers will be as excited about a new offering as its corporate champions can result in failure, like the Segway. The opposite view may doom a high potential project. It was the commitment of a single scientist that saved what ultimately became Tide after P&G killed the product's development.
  • Defining and Managing the Category or Subcategory. A brand relevance strategy demands a new marketing mindset. It is not enough to manage the brand; it is necessary also to manage the perception of the category and influence what category people will buy. This requires defining the category so it is differentiated from others, appeals to customers, delivers benefits, and drives choice decisions. The key to doing this lies in identifying the category's key associations – such as functional benefits (Westin's Heavenly Bed); aesthetic design (the translucent Apple iMac); customer involvement (Nintendo's Wii); or personality (fashion retailer Zara).
  • Creating Barriers: Sustaining the Differentiation. Creating a new category can generate a marketplace in which there are no good alternatives – but for how long can this lack of competition be maintained? It depends on the barriers created. These can range from investment hurdles to building difficult-to-replicate customer relationships. Such barriers have been used by Dreyer's Slow Churned Ice Cream (proprietary technology), Best Buy and its Geek Squad (credibility), and Pampers (relationship with customers through its baby care website) to prolong the relevance of their brands.

Understanding and managing relevance can be the difference between winning by becoming isolated from competitors or being mired in a difficult market environment where differentiation is hard to achieve and often short-lived.

Interested in learning more? Visit here to read a sample chapter or buy the book. Or catch the highlights with this webinar.

Co-creation with an Internal Focus

By Rune Gustafson

These days, most people think about co-creation with an external focus: collaboration with customers that results in new products, new offers, and mass customization.

But apply a different lens to the concept, and consider the potential impact of internal co-creation on a business. Where multiple disciplines – marketers, business strategists, designers, and innovators among them – surmount their silos to find ways to work together.

The fact is that a brand strategy must be based on business imperatives. And design can create more than just the visual hook upon which the business strategy hangs. In a broader sense, it's the backbone to the brand strategy in the way it engages all the senses across customer touchpoints. But too often, there are sequential hand-offs that ultimately limit the strength of the strategy as well as the execution.

Businesses would do well to open their thinking to the possibility that marketers can contribute to business strategy. That designers can contribute to brand strategy. And that business strategists can contribute to design execution.

The outcomes of this sort of multi-disciplinary co-creation will be greater efficiency and less overlap, less internal competition, a much improved competitive position externally, and a business that’s united with a greater sense of shared purpose.

So what does it take to foster a successful internal co-creation environment?

First is to develop a culture where collaboration is prized. That requires the right people – those who are open to letting others into their comfort zones, to being challenged on their areas of expertise by non-experts, and who welcome wider debate to spark creative thinking. It also takes fostering a sense of "one-firmness," which can be difficult, especially in larger organizations where disparate businesses, geographies, and distinct P&Ls foster a territorial climate, not a collaborative one.

Which leads to an even more important factor: clear leadership support for this type of culture. Leadership must enable and empower people at every level of the organization and encourage cross-pollination of functions and geographies.

At Prophet, the linkage between creativity, brand, and business strategy grows stronger all the time. This philosophy was a key element of the successful launch of The Cosmopolitan resort in Las Vegas several months ago and is central to our current efforts to help Korean company Emart become one of Asia's leading retailers. The richness of the multidisciplinary approach ultimately creates a winning experience for our clients, our customers, and ourselves.

Noshokaty, Döring & Thun and Prophet: A Winning Combination

It was an extended assignment for eBay that brought the team together: Tosson El Noshokaty from the client, and Jan Döring and Simon Thun as consultants with BBDO Consulting. The engagement had them working together to build the strategic alliance department of the giant online auction site in Germany, and the experience revealed like minds with complementary competencies. And the basis for a new business was established.

In the ensuing five years, Berlin-based management consultancy Noshokaty, Döring & Thun (NDT) caught the eyes of several would-be suitors, attracted by its positioning, capabilities, sustained client relationships with name businesses, and growth. When Prophet came calling, however, the trio decided that this was a proposition that represented a win/win all the way around. On January, 19th 2011, it became official, and NDT was brought into the Prophet fold.

In this Q&A, Jan Döring talks about NDT's evolution, what has differentiated the firm, and the mutual benefits the new team – and current and prospective clients – will enjoy.

In what areas does NDT consult, and how has that changed since its founding?
We focused our offering in the beginning in the area of strategic partnerships, because we found no others who were specializing in this area. Over time, our clients would ask whether we could help in other areas, and it led us to expand into brand and marketing, business strategy, and, especially in the last two years, digital strategies.

What do you believe has differentiated you from other consultancies?
One appeal to clients from the start has been that we are entrepreneurs, and try to integrate that particular drive in all of our projects. A second has been our emphasis on bridging the gap between strategy and execution. This has been particularly important as digital has grown more influential, as the tendency by digital agencies and clients alike is to just jump in without first evaluating platforms, context, and fit with overall business objectives. A third differentiator has been our luck in building a very good team with very low employee turnover. The continuity builds clients’ trust, especially important when at other consultancies they can’t get the same team twice because people switch jobs so fast.

When you were first approached by Prophet, NDT was in the midst of a five-year growth plan and you'd never considered selling. What changed?
We were a little skeptical at first. But with the first conversations, we got the feeling that we had a common understanding about marketing and brand consulting, but, more importantly, it would be a good cultural fit. All the discussions were at eye level – which we really liked, and impressed us a lot. And we identified a lot of development opportunities for our team. We also saw that there could be value added for our clients as we developed, learned new things, and were able to offer new capabilities. The big question for us, though, was the level of Prophet's commitment to invest in Europe and especially Germany. It was our satisfaction on this point that led us to take this step.

What did you do to try to make the transition as seamless as possible for clients?
We talked with our biggest clients and also with people we had worked with in the past. Many of them already knew Prophet, which did a lot of pitches in the market, and, of course, David Aaker is very well known. A year ago, the general attitude was that Prophet was so U.S.-oriented or unable to help in the general market, so it wouldn't be invited in. Our clients were really quite curious and positively surprised that Prophet was entering the German market more rapidly, through an existing firm that they knew. Their fear was of losing their contact persons or getting new faces that they didn't want. But ultimately, we found that if we focused on building and maintaining our relationships, there would be no problem.

Can you talk about the most important benefits you bring to the table?
Well, of course, we have some capabilities we can integrate into the organization, like strategic partnerships and our digital experience. But more important is our local know-how. We work with such businesses as Allianz, Deutsche Telekom, General Motors Europe, Postbank, Skandinaviska Enskilda Banken (SEB AG), Sony, and Volkswagen. The expectation is that their consultants will know the specific challenges and how industries develop in Germany. It's always helpful to have a worldwide organization behind us, but clients want people who know the market.

What are the three most important accomplishments you see yourself tackling in the months ahead?
The first is that existing clients receive the benefits of our joining Prophet, and that we continue to strengthen those relationships so clients will trust us even more. Second, we want to strengthen the Prophet brand in Germany, winning new clients and showing them the Prophet way – and how it's different than other consultancies. Third is to grow and develop our team in Germany, so we really belong to the Prophet family and can sell and deliver all over the world.

Look at More and Start Transforming

By Andy Stefanovich

If people in business can give themselves permission to hunt and gather ideas and inspiration, all that they've gathered will gel into greater solutions, renewed energy, and purpose. It's that simple, it's just a matter of shifting your mindset.

It begins with LAMSTAIH – Look At More Stuff; Think About It Harder. It's less complicated, easier to learn, and a lot more effective than the other approaches to innovation that you may have come across. And it's complemented by a framework for unleashing creativity, the 5Ms:

  • Mood - the attitudes, feelings, and emotions that create the context for inspiration and creativity.
  • Mindset - the intellectual foundation of creativity, the baseline capacity each of us has for getting inspired, staying inspired, and thinking differently.
  • Mechanisms - the tools and processes of creativity that help you engineer inspiration into the way you work and empower your organization to embrace the kind of behavior that fosters innovation.
  • Measurement - takes into consideration qualitative and quantitative performance and provides individuals and organizations with guidance and critical feedback. Measurements send a strong signal of what is important and where people should focus their passion and energy.
  • Momentum - the active championing and celebrating of inspiration and creativity that foster a self-reinforcing cycle for growing innovation. Momentum is an organizational priority for inspired leaders who have a clear understanding of the other four Ms.

Here's how the innovation process can be spurred into action. Executives from Disney joined me one day in a Richmond, Va. cemetery to shift their perspectives and ways of thinking. I once used the lessons of a farmer and his sustainable growing techniques to inspire organizational behavior at a technology protection company. Then, there's the time we took marketing executives from the United States Olympic Committee to visit a night club, a clothing store, a park, and a movie director to help generate fresh ideas for attracting a younger audience to the Olympic Games.

Look at More…and become a curator of inspiration in your own life and in your business.

Learn more about Andy's book, Look at More, by clicking here. While there, use our online diagnostic to see where your company ranks across the 5Ms.

Share on Twitter Want a free copy of "Look at More"?

We’re giving away 25 signed copies via Twitter and a grand prize of an iPad loaded with the book and bonus content. Every time you RT between now and April 19th, you will be entered to win. (Winner will be announced on April 20) First, follow @AndyStefanovich on Twitter, and RT the following (either copy/paste or click the button above): Just entered to win an autographed copy of "Look at More" or an iPad. Follow @andystefanovich and RT. #lam http://tinyurl.com/4ceyoto 

2010-2011 Reputation Winners, Losers
Crises Cause BP, Toyota Tumble; Kraft Ends Up on Top

By Jeff Smith

Prophet's new study on corporate reputation finds consumers are more concerned with ethics and transparency than the issue of economic viability that dominated their perceptions in 2009, the study's first year.

Our recent study saw BP and Toyota, former reputation high-flyers, tumble in the face of the Gulf oil spill and product recalls. BP landed at the very bottom of the ranking at 145 from last year's rank of 78; Toyota fell to 139 from 18.

But some of the businesses whose reputations suffered most during 2009's economic woes made a significant comeback in 2010. General Motors, for example, jumped to the 85th spot from 123 in 2009, a reputation rebound experienced by the auto industry as a whole.

Our findings reinforce how fragile reputations are, and how much they're influenced by news coverage along with word-of-mouth buzz. Add in macro-economic forces and industry-specific factors, and it all combines to make reputation management more challenging than ever before.

  • Reputation winners: Our 2010-2011 U.S. study found two business sectors that command a high level of consumer trust and engagement dominating the list's top 25: Consumer packaged goods and technology. Kraft edged out Kellogg's for the No. 1 spot, with others in the top 10 including General Mills (four), Sara Lee (17), Coca-Cola (eight) and Nestle (10). On the tech side, Sony moved up to No. 5, ahead of Amazon (nine) and Apple (13). Google, however, slid to 28 from 10, possibly a function of its pervasiveness.
  • Reputation losers: At the bottom were three sectors that have been under tremendous public scrutiny: oil and gas, healthcare, and financial services. The oil and gas industry saw a 10-point drop in its overall score from 2009. ConocoPhillips was its high performer with a ranking of 127. In healthcare, Blue Cross and Blue Shield led the pack. And despite financial services' overall poor-to-failing ratings, individual companies saw marginal reputation improvements. JP Morgan Chase, for example, outperformed nearly all its peers except Wells Fargo, with improvements on all key reputation drivers.

We polled 4,900 U.S. consumers about 145 Fortune 500 companies in 18 sectors. We also polled 3,200 consumers about 30 companies in five industries across the United Kingdom, Germany, and Switzerland. Findings were similar to the U.S., with the tech and automotive sectors sharing top reputation rankings and the energy industry, the lowest.

Read the executive summary here, or tune into our webinar discussing the results.

Recommended Reading

David Aaker's Blog: Aaker on Brands

Should my Brand Follow the Trend
By Joseph Gelman
In this article, Joseph explains why it is important for companies to pay attention to trends and understand if they are relevant for their category and brand.

The Corporate Innovation Incubator
By Andy Stefanovich
Andy shows how organizations can be engineered to create an innovation competence through five key drivers: mood, mindset, mechanisms, measurement, and momentum.

Think Social Act Social
By Tosson El Noshokaty
Tosson explains how to have a more easy-going approach to social media.

News & Events

Prophet launches a German-language website.

Prophet expands European presence with strategic acquisition of German consultancy Noshokaty, Döring & Thun.

Rune Gustafson joins Prophet as President of EMEA Operations.

Philip Otley joins Prophet as Senior Partner.

David Aaker and Andy Stefanovich both interviewed by Inc. about their respective books: Brand Relevance and Look At More.

Spotlight on Speaking

TEDex London
May 6th - London
Andy Stefanovich is speaking on the topic of bringing innovation into your business.

Radio Advertising Bureau
May 10th - New York
David Aaker keynotes this event discussing his new book, Brand Relevance.

American Restaurant Association Conference - "Shift Happens"
May 19th - Chicago
Scott Davis is presenting concepts from his book, The Shift.

CMO Conference
September 29th - Zurich
The European CMO Conference is Europe's leading platform for marketing executives to access strategic marketing knowledge and exchange marketing insights. *Use the discount code "Prophet" to register and get 20% discount.

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Consultants’ Corner

In this issue, it's all about Brand Winners and Losers: the risks and rewards of creating a new logo.

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