Category: Blog

With the recent rumors that Apple will be announcing the release of a new iPhone sometime around September 8th, I’m reminded of the customer journey I experienced with Apple and the iPhone, one that has changed my technology buying behavior forever and led me to becoming a member of the Apple brand tribe.

The journey to becoming part of the Apple brand tribe began with my purchase of a G4 PowerBook in 2005 at the flagship Apple store on the Mag Mile in Chicago. It was there I found myself in a retail environment unlike any I had seen before, with products readily accessible in an open, modern and comfortable place. Then there was the purchase process, with customer service and sales handled by geeky hipsters in T-shirts that felt more like friends than salespeople hawking a product. Finally, there was the actual product experience itself, with the PowerBook packaged in a really cool, well-designed, attractive package that you reverently explored as opposed to simply tearing open. True confession; I saved the packaging my G4 PowerBook came in for years just because it felt like I should.

But what really converted me to being a full-fledged member of the Apple brand tribe was getting my first iPhone, the iPhone 3G, in July 2008. In what has since become a custom of iPhone releases, I lined up outside the Apple Store early in the morning and, along with hundreds of other people, and waited for hours to get my iPhone. Instead of simply buying a product, I felt part of something much larger. Complete strangers talked easily to each other, sharing their Apple experiences, and discussing the things they had done with various Apple devices. It was there that I became fully immersed in the Apple brand tribe.

As the new iPhone release approaches, it just so happens that I’m due for an iPhone replacement, and while I will definitely get the iPhone 7 (or iPhone 6S, depending on the rumor you believe), I don’t think I will go stand in line outside the Apple store for hours; my current iPhone still works fine, so there’s really no rush. But, it will be interesting to see the news reports of people who do, and to see just how large and committed the current Apple brand tribe is.

It also begs the question: what other brands come to mind that you can honestly say meets the definition of being a tribal brand, like Apple, and which ones are you part of?

“Google is not a conventional company. We do not intend to become one.”

So says Larry Page, and for the most part Google has lived up to that idea to greater or lesser degrees of success. And now the universe is weighing in on Google’s new logo and its role in communicating the future direction of the company. Was it the right move?

To cut to the chase, I like it, as do most of the design-types out there that are publicizing their views. The move toward simplicity obviously makes sense, creating a stronger and more consistent experience across devices and platforms. Maintaining the primary colors and playfulness extends both visual and attitudinal aspects of the brand that we’ve come to know and expect. Some people are criticizing certain details of the typography (which is to be expected) but I for one am happy to see the last of the former awkward & fussy serif logotype.

But even amongst the typographic detractors, there is a universal agreement that the system borne out of the new identity is terrific… the ability for the brand to engage, guide, delight and surprise users as they move through a range of experiences and applications is truly “Googly”.

But there is one aspect of this that still leaves me a little… disappointed? Perhaps too strong a word, but given the quote that I used to open this piece, I was waiting for something a little more unexpected. I first heard that Google had changed its logo by someone popping into my office and telling me. I instantly got an image in my head, and when I looked it up, the real thing was remarkably close to what I envisioned. It was almost… obvious.

The move to simplification for tech brands is certainly not new, and many major players have been flattening, simplifying, “de-serif-ing” and moving away from distinctive typography for years now when it comes to logo evolution. Think eBay, Yahoo, Facebook, Dropbox, YouTube, etc. But when you look at them together, they are starting to become a bit homogenous. So while I can’t knock what they did (for all the reasons I outlined above) I was perhaps hoping that Google, of any brand, could find a way to check all the application optimization boxes and still surprise us. Maybe next time.

Google recently announced a strategic shift in their organization, effectively reorganizing all of their business units under a new corporation: Alphabet. Looking into just how many business units Google had, and how diverse their spread of companies are, I’m intrigued as to just how each business unit will take advantage of this new structure. And just how does Alphabet stack up compared to other cross-industry holding companies?

Many news sources are sizing up Alphabet as similar to Berkshire Hathaway, with its cross-industry business units and subsidiaries. From Internet to health, energy, technology, social media and travel — there is incredible potential for this new organization and corporate infrastructure to pull in new talent, flesh out endeavors and do for various industries what they’ve already done for online search.

For units like Google itself, and well-established brands generally with “Google” preceding it (e.g. Drive, Glass, Maps, Hangouts, etc.), it’s pretty safe to say those will be well maintained under the new structure. And as Andrew Bogucki discussed last week, Google itself recently updated their visual identity to mixed reviews and opinions on the new style and font choices.

As for the less visible units though… the Calico’s, the Pixate’s, the Makani’s…how will those fare in this new Alphabet landscape in regards to marketing and communications resources, talent, and funding?

Just recently, the first announced company under the Alphabet umbrella — Life Sciences — may be a peek into just how the new corporate structure will handle industry specific endeavors. Life Sciences appears to be combining Google’s Calico, with efforts to create smart contact lenses, utilize nanoparticles, and create baseline studies on the human genome. I’m curious to see if they’ll take a similar route with their energy industry efforts.

And, as there were Google-named units, will there be Alphabet-named units in the future? Time will tell, but if Life Sciences is any indication, we may be seeing more industry spanning companies soon enough.

I may be alone in this, but with the current layout, I’m now equating Google to Berkshire Hathaway in scale and to Apple in ingenuity. Berkshire Hathaway’s depth and breadth across industries is incredible. And Apple has evolved the tech industry with the iPod, iPad and iPhone. Google redefined the search engine industry, and has the ability to do so in healthcare (Calico) and energy (Makani).

As a frequent user of Google-fied brands (Mail, Drive, Maps, Hangouts), I’m all for Alphabet becoming a multi-industry brand curator influenced by some of Google’s main tenets.

Is there really such thing as an “untacklable” or unstoppable brand? After two decades as a brand consultant, my gut reaction is, “of course not, any brand can meet its demise through mismanagement, malfeasance and a host of other activities whether in or out of control of the leadership”. Although, not so fast…

It seems as though the NFL’s offseason (or in season for that matter) is beset with ever growing scandal each year. From a commissioner who is perceived as anti-labor to domestic abuse, animal cruelty, drug abuse and more by players. Organizations who hold their municipalities’ hostage in negotiations for facilities. Teams accused of outright cheating, which many thought would be the death sentence for the league, challenging the very integrity of the game.

All of that said, anyone who thought that the NFL would suffer any financial impact from any of this, clearly has never set foot in an NFL venue on game day. The fans, the truest example of fanatics, will not be deterred. Full disclosure, I am a big fan of the NFL, in particular the Pittsburgh Steelers (who have had their own issues), but nonetheless I am fascinated by the resiliency of this brand which has faltered so grandly and on such a public stage yet is immune to any financial repercussions.

The cause of this could be the very structure of this brand. It really is a composition of many brands, the league itself and its 32 teams. It’s this structure that allows fans to adopt an attitude that, “it’s my team vs. the NFL, the other teams”. It allows people to rationalize their passion for the team and absolve themselves of any guilt. It’s a case where fans can say, “the league has its problems, I’m just glad that isn’t what my team stands for”. For example, are Tom Brady and the Patriots cheaters, does Ray Rice deserve a second chance or should he be scorned forever because of domestic abuse and the gruesome images that we saw on that video. The NFL has made commercials to address the fact that domestic violence is wrong, but shouldn’t that just be common sense? In spite of this and other episodes of domestic violence, the female fan base continues to grow. What about Adrian Peterson? Michael Vick? Civic pride and passion for your team allows people to overlook the shortcomings of their favorite team.

As a Steelers fan, it has been interesting to watch the reaction to Michael Vick as he’s been welcomed to the team. While he was not brought to Pittsburgh without some rumblings, some of the fans that screamed the loudest when he was first reinstated to the league aren’t screaming so loud these days.

In the final analysis of the success of the league, TV ratings, which lead to the all mighty dollar, none of this appears to matter. Ratings for the NFL kickoff game on NBC just keep getting stronger, up 5% from last year and 9% from the year before that. I think ultimately, the NFL is about competition, story lines, passion and drama. Far from damaging the brand, I think these things make it grow. It has been ingrained in our society, the Super Bowl is a national holiday. It may not be “unsinkable”, but it’s hard to imagine the crisis that would derail the NFL. I’m not making a value judgement on whether that’s a good thing or a bad thing, I’ll leave that up to the individual to judge, it’s just the reality of it.

As Partner of CoreBrand Analytics, Brad Puckey is charged with helping leading brands and organizations understand how their brand builds value. Having helped establish the CoreBrand^® Index, a quantitative database based on continuous benchmark tracking of nearly 1,000 companies, we thought we’d delve into the Volkswagen brand and examine the forces and implications of “dieselgate,” the company’s latest crisis that could significantly tarnish its brand reputation, value and appeal in the minds of both consumers and investors.

Tenet, through its CoreBrand Index (CBI), has been measuring the strength and value of corporate brands since 1990. Providing prescriptive insights on brand performance, it is based on two critical dimensions that contribute to a company’s ability to drive long-term growth: Familiarity (brand awareness) and Favorability (measuring corporate reputation, perception of management, and investment potential). Turning to Tenet’s CBI data, what trends or general movement is revealed when looking at the Volkswagen brand before and after this event?

Volkswagen has had a very strong and relatively stable brand when compared to the 1,000 companies that we track. The company’s Familiarity score is around 90 out of 100 making them one of the most highly recognized brands in the world. Their Favorability has been hovering in the mid-70’s out of 100, indicating that they have been fairly well perceived.

With Familiarity that high, it means that Volkswagen will not be able to hide from this event. In a crisis, typically we see Familiarity increase as media attention grows and Favorability plummet as the perception is damaged. It remains to be seen how the three attributes we measure (Overall Reputation, Perception of Management and Investment Potential) will be impacted. Because there was condoned lying and cheating by management, Perception of Management will likely be driving the expected downward spiral. However, the company has also given away a significant portion of its market cap so the damage to Investment Potential may be significant as well. Investment Potential can recover relatively quickly if the company’s stock performance improves soon. The damage to Perception of Management is likely going to suffer in the long-term since they were knowledgeable about this and complicit beforehand.

The company said it would set aside $7.3 billion to cover the cost of repairing nearly 11 million vehicles impacted by the scandal, in addition to other efforts to win back the trust of customers. In your view, what steps should the company take to undo the damage it has done?

First of all, they need complete transparency and cannot try to cover their tracks or deflect blame. They have been caught red handed and now must fully commit themselves to do right. Any further lies or attempts to cover the truth will have a disastrous impact on the company’s already declining credibility.

They have to put their customers above all else. They need to quickly implement the recalls and fix any deficiencies in these vehicles. The customers don’t want to hear about it, they want action. A recall is an inconvenience to their customers and they have to act to minimize this inconvenience.

The problem that Volkswagen faces in restoring trust is that this was not an accident – it was intentional fraudulent activity meant to fool regulatory bodies. The knowingly installed so-called “defeat devices” to make their cars pass federal emissions tests. They will likely need the help and expertise of crisis communication consultants to help them convey appropriate messages moving forward, but even that may not be enough. We live in a society that will forgive accidental missteps. However, in this case, they devised a methodology to defeat the regulators. That is a tough, if not impossible fix.

In today’s data-driven business landscape, companies want greater transparency and a clear line of sight into what’s driving the value of their brand equity. Could you describe Tenet’s approach to Brand Equity Valuation? Is it possible that VW has already incurred a loss of brand value following this event?

Our valuation approach uses an explicit measure of the strength of the brand, BrandPower (Familiarity and Favorability), which has been consistently tracked across 1,000 companies since 1990 and is available quarterly. BrandPower is then one variable in a statistical model that identifies the brand’s contribution to market cap and the dollar value of the brand.

We have examined what this crisis has already meant to the brand and it is not good. In terms of brand valuation, the company’s brand was at its peak for 2015 in March at $11.2Bil. It was already headed downward and on September 18th was at $8.8Bil. By the close of the market on September 21st the brands’ value was down to $7.3Bil, and as mid-morning trading on the 22nd brand value continued to drop and was at $5.9Bil,a drop of $2.9Bil from Friday afternoon until mid-morning on Tuesday. This represents a loss of nearly 1/3 of the brands total value in just a day and a half. The financial damage already has been horrific.

When looking at other global brands that have faced a similar, large-scale crisis, both BP and Toyota come to mind. In what ways is this situation to Volkswagen unique and lessons can brands learn from their response and efforts to engage audiences?

Toyota followed this similar crisis pattern where Familiarity briefly was elevated by increased media attention and then returned to previous levels. Favorability though was damaged and continues to decay. The company once had exemplary brand scores with Familiarity above 90 and Favorability around 85, they were well known and highly regarded. Today, they are still widely known, but their sterling reputation has been tarnished. Favorability is just above 70, and continuing to decline across all three attributes. The best news for Toyota is that the rate of decline has slowed considerably so they might be nearing bottom. For them, the focus needs to be on rehabilitating their brand.

Similarly, BP followed the same crisis pattern as Toyota. Interestingly, BP retained its Familiarity gains which were modest, about 6-points. And while Favorability dropped even more than Toyota, from 83 to 67, BP has restored some of its lost Favorability and now resides just above 75. BP’s Favorability bottomed out at the end of 2011. Therefore indicating that their rapid response, community outreach and efforts to rehabilitate their image and be seen as doing right have kept this crisis somewhat contained and lessened what could have turned into an even bigger financial disaster for the company.

This is just the beginning of the crisis for VW. The company’s CEO, Martin Winterkorn, just announced that he would be stepping down, and I expect other management shuffles to take place as a result. While only days into this scandal, the $7.3Bil that they have set aside is about 11% of what the BP crisis cost the company. I believe by the time VW is hit with fines, penalties, lawsuits and who knows what next, this crisis will have caused more damage to the brand and will be even more expensive for them.

When it comes to uniquely American success stories Fred DeLuca’s story of building the Subway brand is one of the best. Fred had an amazingly prescient vision for a 17 year-old kid in 1965. His idea started from just a deli in Bridgeport, CT and became one of the largest fast-casual franchise restaurants in the world. It was a visionary concept that pioneered the idea of providing a healthier, less fattening meal option at a significant value price point. When asked if that was his strategy all along? His smiling response was, “You’re assuming I had a strategy.”

He borrowed $1,000 from Dr. Peter Buck, a family friend, and began to make that vision a reality. He instinctively understood and learned through trial and error that visibility and marketing were essential to growing his brand and the company.

Fred’s success cannot be denied – he grew that one store originally known as “Pete’s Submarine” to a chain of over 44,000 franchised Subway stores around the world. The company just reached its 50th anniversary on August 28th 2015. The company’s annual convention, which also celebrated its 50th anniversary this year, was held in July and despite Fred being in ill health, he insisted on attending – a true testament to his passion and love of a company that he built from the ground up.

Fred’s net worth went from the “$0” starting line to a Forbes estimated worth of $3.5 Billion. Fred established a legacy of wealth creation for others to emulate. The average franchise costs only $150,000 to build making it one of the more affordable franchise opportunities. Franchise owners came from every class and built their business and inspired others to grow their wealth the way Fred did it and many other millionaires and multi-millionaires were created in the process.

Fred also gave back to the community without fanfare. For example, he partnered with Pete Buck to create Franchise Brands, a company that invests in and helps other entrepreneurs find success in the franchise industry. Fred believed in entrepreneurism as a key component of the American Dream. He believed it is the quickest way to improve the financial wellbeing of the most people in our country, or any country.

The world needs more business leaders like Fred DeLuca.

2015 has been a banner year for corporate mergers and acquisitions, Driven by low interest rates and easy access to money, corporations have been scooping up companies to grow, eliminate competition and expand their markets.

CVS’ purchase of Omnicare gives the pharmacy healthcare chain access to an older demographic. Charter Communications merged with Time Warner to create one of the largest cable television and broadband Internet providers in existence. And fast paced ACE insurance just purchased the venerable, yet conservative Chubb Group of Insurance companies.

Unfortunately, mergers aren’t always successful. Some fail because one company overestimates the worth of the other—and overpay. Other times, failure can be linked to a lack of synergy in services, products, resources or markets. But history—and research from the Society for Human Resources Management—has proven that over 30% of mergers fail because of simple culture incompatibility. For example, in 2003, the America Online and Time Warner merger could be considered one of the most epic failures in business attributable in large part to huge cultural divides. The 2005 merger of Sprint and Nextel Communications was also a cultural disaster. Within 3 years, Sprint wrote off $30 billion, almost the $35 billion they paid for Nextel in the first place. And the infamous Daimler Chrysler merger imploded due to a myriad of reasons, but primarily because of cultural differences in management and operational style.

Culture drives employee behavior
When two companies with their own distinctive cultures combine, there’s a huge potential for failure. Even with integration consultants working to forge a new synthesized culture, there are bound to be issues.

All institutions and companies have their own cultures. Some are shaped by strong beliefs of their founders, such as Steve Jobs and Apple; others by a sense of social responsibility evidenced by Toms Shoes; still others consciously create a culture that reflects their customer-focused business model like Zappos.com.

Corporate culture influences how employees behave and shapes what is expected of them. It is seen in the large and small decisions of every day business. In a merger, the acquired company must adopt and adapt to a new set of cultural norms and make new behavioral choices. Which isn’t always easy.

Behaving is believing.
After all the stock shares have been divided, the payouts made and the organizational structure solidified, it can be the employees who will make or break the ultimate success of the deal.

That means, all the employees of the newly formed company—from management on down, and especially those who were acquired—need well defined, specific examples of what behaviors are the new norm. If the old value of slow, thoughtful conservativism is being replaced by a value of speed, risk-taking and aggressiveness, there’s a huge need for employee re-education.

Measuring employees’ awareness and expression of a new brand through their behaviors and actions—along with helping employees self-define and integrate on-brand behavior through brand workshops—can bridge merged cultures and aid in more successful brand integration.

Cultural values—and their demonstrated behaviors—need clear definitions. Even from one person to another, cultural values such as integrity, collaboration and innovation need to be defined by each person in terms of their job, tile, function or role. “Tell me what you want me to do? How should I behave? How should I be living the new brand’s culture?” These are the questions that must be addressed or a merger runs the risk of the failures of the past.

It’s that time of year again, where The Hess Truck is back for its 51st year. This is after Marathon Petroleum purchased all Hess stations and rebranded them as Speedway stations. With only 10 mall kiosks and a website to share their latest model with, how will the Hess Truck be received? Will the customer experience be just as enjoyable? Will their Hess Truck jingle return for yet another year? I certainly hope so.

Since 1964, The Hess Truck has focused on several key values. They’ve consistently offered a well-built toy, with various bells, whistles, lights and accessories each year. As a sign of goodwill, batteries have consistently been included with every truck since its inception. At the time, it was a significant move and fit in with their concept of goodwill. Nowadays, included batteries are a point of entry for toys.

While the Hess Truck is different each year, they’ve kept within themes of fire, rescue and safety vehicles. Early on, they were primarily tankers, and service trucks, with an occasional helicopter, space shuttle or racecar added into the mix. And with a few red-colored exceptions, all models have retained the Hess green color scheme.

And since 1988, they’ve annually created adaptations of the song “My Boyfriend’s Back.” While I’ve never received a Hess Truck for the holidays, I’m very familiar with the jingle (A majority of their past jingles can be found on their YouTube channel) and could recite it from memory if ever needed to. Most friends I asked remember Hess Trucks fondly from childhood and are familiar with the jingle as well.

While not to the same scale of prestige as last year’s 50th anniversary model, this year’s model is also selling a Silver Edition amidst the regular models, making it a bit of a lottery as to who will obtain one. For those nostalgic of past years’ models, there is a full breakdown of each model on a dedicated website.

Perusing their website, they show a clear dedication to consistent quality in their models. That consistency has definitely made an impact, as articles cite that the Hess Truck accounts for 10 percent of toy truck sales each year. (Presumably, just the US)

The biggest takeaway I’ve gotten while researching the history of Hess has been: Putting value in your customers creates long-lasting brand value.

From focusing on a goodwill item to offer customers, to moving their release date from Thanksgiving to early November to discourage holiday shopping on a holiday (a very contrary action to today’s “Gray Thursday/Black Friday” retail mindset), to creating a very memorable audio brand through their jingle, Hess has held up their tradition of giving value to their customers.

What other brands out there have focused on the customer experience, and customer value?

As with humans, it is important for brands to know what behaviors are socially acceptable.

Another day, another social media blunder seems to be cropping up in my Facebook newsfeed. It’s become almost second nature for me to wonder, “which brand will it be today?” with so many brands overstepping their boundaries and issuing apologies for their mistakes.

However, the more I think about it, the more it makes sense that we’re seeing these social missteps on a recurring basis. As brands work to become more social – more human – they are being held accountable for being just that: human.

As a millennial working in the social media and branding space, I’m well attuned to the notion that when it comes to brands and social media, almost anything goes. A brand’s ability to react and engage quickly with their audience is not only lauded, but also expected of fans. Also, given its real-time nature, some of the most successful posts and tweets on social media are those that a brand posts on the fly. But unfortunately, this spur of the moment thinking often results in borderline offensive and inappropriate posts and tweets.

One incident that caught my attention comes from IHOP, the International House of Pancakes restaurant chain. The company recently posted a particularly controversial tweet (that has since been deleted), alluding to the flat yet great personality of their pancakes. The tweet was quickly shot down by fans citing its overtly sexist and off-brand tone, especially given the fact that IHOP refers to itself as a family restaurant.

Many commentators have been quick to note that IHOP is likely trailing on the success of its competitor Denny’s, who has been pushing the proverbial envelope across all of their social media platforms with witty comments and snarky responses. Denny’s has developed a particular knack for catering to a fan base of intelligent and socially active millennials, who have conversely grown to love the brand’s surprisingly youthful marketing tactics. A quick glance at Denny’s Tumblr page shows just how fun and engaging the brand has evolved to become in order to keep pace with millennials. It should come as no surprise then that IHOP would hope to take back a share of this market that they lost by attempting similar tactics.

I see countless posts and comments on Facebook with claims that our generation is becoming overly sensitive and that people don’t know how to laugh anymore – but in my opinion, we’re becoming wiser, whether it be through protesting cultural appropriation in Halloween costumes like the use of blackface and Native American feather headdresses, or through understanding why #BlackLivesMatter, and why those advocating #AllLivesMatter contradict this effort.

Brands seeking to appeal to millennials should know that, while we are impressed by brands that can make us laugh, we aren’t willing to overlook political correctness for it. The growth in cultural sensitivity and awareness of sexism in recent years – which in my opinion, has been fueled in large part by millennials – is shaping how we react to the media around us, and no amount of brand loyalty will ever outweigh this scrutiny.

As millennials continue to eclipse older generations in terms of buying power and consumption, it will be interesting to see how brands continue to hone and refine their online practices to avoid future incidents like this. Looking for a suggestion from a millennial? Stay relevant, but mindful of the expectation that this generation wants to get it right the first time.

In the last few years, one of the brands that we have long tracked in our CoreBrand^® Index, General Electric (GE), has been working to change its brand image from that of a large, industrial manufacturer, to being a brand that is (along with being a large industrial manufacturer) at the forefront of innovation and technology.

As one of the most powerful brands in the index (they finished 17th overall in 2015), for GE to intentionally move away from their brand legacy towards a new and different brand persona might be considered risky. However, GE has taken an interesting approach by trying to show the benefits of applying innovative solutions and technology to what GE is best known for; large scale equipment that drives businesses and industries.

Throughout 2014, much of that effort was based on advertising and marketing directed at B2B audiences (investors, partners, industrial buyers, etc.) and consumers that was centered on stories about GE providing better solutions for businesses and industries, whether it means greater efficiencies, higher performance or in being more environmentally friendly. An example can be seen in this ad, where a little girl talks about what her mother does at GE:

Now, in 2015, GE has added to this effort with very clever advertising and marketing campaign that not only speaks B2B and consumer audiences investing in, or purchasing from GE, but also to the TALENT GE will need to attract in order to sustain a leadership position in innovation and technology.

Called ‘What’s the Matter with Owen’, it is built around a nerdy computer programmer who has been hired by GE to write code that, as he put’s it, ‘will change the world’. However, friends, family and acquaintances, upon hearing of Owen’s new job, have difficulty reconciling GE’s brand image as a manufacturer, with Owen’ being a programmer. Perhaps the best example is ‘The Hammer.’:

Obviously, it remains to be seen how this new messaging will impact the GE brand, and whether or not it contributes to GE ranking high in the CoreBrand^® Index in 2016. But what this new messaging does do, in my opinion, is show GE to be a brand with exceptional self awareness in knowing that success is not just about convincing people that you offer a better solution, but also knowing that in order to build that solution, you need talented and capable people to help you get there.