Nancy Koehn, a business historian at Harvard Business School, researched the lives of six famous entrepreneurs for her new book, Brand New: How Entrepreneurs Earned Consumers' Trust From Wedgwood to Dell (Harvard Business School Press). She learned that those entrepreneurs were obsessed not only with an idea, but with meeting a consumer need. Consider Josiah Wedgwood, an 18th century British potter who saw the average Briton yearning for social status. He positioned his products by targeting the aristocracy, knowing this would attract customers from lower economic brackets as well. His strategy worked, and still works today.
The entrepreneurs also kept their ears to the ground. Estée Lauder constantly updated her skin-care formulas based on what customers told her. Though Howard Schultz of Starbucks initially resisted using skim milk in the company's authentic Italian lattes, he finally gave in after spending time in a Starbucks location listening to customers repeatedly ask for it.
What those entrepreneurs did so well, Koehn says, was create ongoing, two-way dialogues with consumers-and alter their products based on what they heard. Wedgwood met a need for status, Lauder played into the post-war 1940s glamour boom, and Schultz tapped into the need for community in a disconnected world. Along the way, consumers got the branding message: This product is unique, and therefore better. Advertising didn't buy consumers' loyalty. Instead, long-term loyalty came from consistently fulfilling a promise and creating a great customer experience.
Branding has become a monologue instead of a dialogue. Entrepreneurs need to leave their ivory office towers and talk to people.
It's that dialogue that's been missing lately, Koehn says, and it's essential to any branding strategy. Branding has become a monologue instead of a dialogue. Entrepreneurs need to leave their ivory office towers and talk to people. They need to be responsive to their customers. (See "Case Study: Krispy Kreme" below.) They have to make sure their branding messages are understood by everyone inside the company. "Over the last few years, people [didn't realize] how hard branding really is," Koehn says. "But its rewards are equal to its difficulty."
Harpell recently studied a group of new companies to see how ingrained their branding messages were inside those companies. She found that many employees weren't aware of their companies' branding messages at all. "There was no brand connection, no teaching of employees and no communicating with consumers," Harpell says.
The Web's a problem, too. When management and technology consulting firm Accenture and technology research company Online Insight surveyed 2,000 online consumers last year, they found that a lot of the givens about the Web that marketers operate under are false. While most marketing is aimed at youth, the average online shopper is 35 to 44. Entrepreneurs also assumed that ads drew consumers to their sites while customers surveyed relied on search engines. And the low prices companies touted weren't what customers were looking for: They wanted a satisfying customer encounter that was fast and convenient.
"[Branding] is about more than the sock puppet. It's about the total customer experience," says Kelly Dixon, co-author of the study and director of e-branding at Accenture in Chicago. "Companies haven't focused on the entire package."
Consumers developed a love-hate relationship with late-'90s branding strategies, observes David Schumann, consumer psychologist and associate dean at the University of Tennessee in Knoxville. On one hand, seeing logos invade every inch of public space has left U.S. consumers over-exposed to branding. On the other hand, consumers are paying attention, if only briefly, to discover whether you'll reveal that one clear benefit your product or service offers that'll make them try it. The problem is, this "one clear benefit" has been missing in plenty of branding campaigns, and Schumann sees companies facing the fallout: consumers sticking with the products they've trusted for a long time instead of taking a chance on products they don't really understand. When the value proposition is missing, Schumann says, risk-averse consumers will go with what they know.
|THE TOUCHY-FEELY BRANDER|
|CASE STUDY: KRISPY KREME|
This Winston-Salem, North Carolina, company produces more than 3 million doughnuts a day. When it opened its first Denver location in March, doughnut fans camped out the night before, and lines extended out the door for days. Customers who want Krispy Kremes in their area or just want to say how much they like the doughnuts send 5,000 e-mails a month.
But Krispy Kreme relies on word-of-mouth and doesn't advertise outside of the occasional billboard. So why is it such a successful brand?
"We look at every touch point with consumers as an opportunity to brand," says Stan Parker, Krispy Kreme's senior vice president of marketing. When the "Hot Doughnuts Now" neon sign is on, customers come running. You can peer through glass windows as doughnuts make their way along the conveyor belt, and the smell is irresistible. "You can eat them hot," Parker says. "That's a huge brand-building asset for us."