B2B-bloggen | Micco Gronholm

Author Archive for: Micco Gronholm

Hur b2b-köpare väljer varumärke

08 Jun
8 juni, 2011

Vid Lunds Universitet,  Lund Brand Management Group, har Doktor Niklas Bondesson (f.d. Persson) och Docent Johan Anselmsson ägnat 20 forskningsår åt att utveckla en metodik för att spåra de bakomliggande orsakerna till varför köpare väljer ett visst varumärke framför ett annat, samt vad som gör att de kan acceptera att betala ett jämförelsevis högre pris.

Det kan tyckas vara bortkastad tid – det räcker väl med att fråga kunderna, tänker du kanske.

Nja, riktigt så enkelt är det tyvärr inte. Dilemmat är nämligen att när vi människor får en direkt fråga, särskilt när frågan handlar om val som förväntas vara kloka, saknar vi förmågan att avslöja de sanna skälen till våra beslut. Orsaken är att alla beslut baseras på emotionella grunder. Beslutsfattande sker i en del av hjärnan som saknar både rationell och språklig förmåga. Efter att besluten fattats (oftast i en serie ”mikrobeslut”, varav de flesta på ett omedvetet plan), hamnar uppgiften att motivera dem på det den rationella delen av hjärnan, där också språkförmågan finns. Kort sagt: Vi rationaliserar våra val.

Eller uttryckt på ett annat sätt: Om någon frågar, ger vi ett svar. Det är så vi har blivit uppfostrade. Och när vi svarar vill vi inte framstå som idioter som inte kan verbalisera varför vi valt som vi valt. Alltså formulerar vi ett klokt, socialt gångbart och gärna rationellt skäl. Men svaret vi ger är alltså inte (hela) sanningen. I många fall är vi inte ens själva medvetna om vad de sanna skälen bakom vårt val är.

Därav de 20 forskningsåren.

Den metodik som Johan och Niklas har utvecklat är, mig veterligen, världsunik. Den baseras på en enkätundersökning med ca 25-35 frågor om hur företaget, dess service, produkter, rykte m.m. uppfattas. Och svaren analyseras alltså inte baserat på vad kunderna uppger är viktigt vid valet av varumärke, utan på det som i verkligheten driver intäkter i form av kundernas vilja att köpa (s.k. volympremie) och vilja att betala mer (s.k. prispremie).

Till dags dato har dryga dussinet analyser gjorts av ca 60 b2b-företagsvarumärken i 50 länder. Dessa varumärken representerar hela skalan från renodlade produktföretag till renodlade tjänsteföretag, med den stora majoriteten någonstans mitt emellan (b2b-varumärken som erbjuder en kombination av produkt och tjänst).

Resultaten har undantagslöst varit intressanta och mycket användbara. Ett genomgående mönster har bl.a. varit att de mer ”mjuka” faktorerna, som t.ex. pålitlighet, kundfokus och prestige, varit viktigare för b2b-köpare vid valet av varumärke/leverantör än produktrelaterade associationer. (Men också att b2b-köpare tenderar att säga att det är de ”hårdare”, mer produktnära faktorerna som är viktigast. )

Nyligen sammanställde Niklas och Johan samtliga hittills genomförda varumärkesstudier för b2b-företag i en meta-studie över försäljningsdrivande varumärkesassociationer. I meta-studien har 19 generella associationer, som alla visat sig vara viktiga inom b2b-forskning, analyserats. (Med hänsyn till att meta-studien kan komma att publiceras som forskningsrapport har jag utelämnat delar av informationen.)

Baserat på meta-studien är de fem mest intäktsdrivande varumärkesassociationerna inom b2b:

1. Värdeskapande
2. Kundfokus
3. Prestige och status
4. Pålitlighet
5. Leveransförmåga

Dessa associationer till ett varumärke är alltså de som starkast driver både kundernas vilja att köpa (volympremie) och deras vilja att betala mer (prispremie). Varumärkesassociationer som ”produktkvalitet” (plats 12), ”innovation” (plats 10) och ”service” (plats 6) är m.a.o. mindre viktiga vid valet av b2b-leverantör än t.ex. ”prestige och status”.

Intäktsdrivande varumärkesassociationer inom b2b

Intäktsdrivande varumärkesassociationer inom b2b

Undersökningsfrågan i meta-studien är vilka varumärkesassociationer som – generellt sett – starkast driver försäljning i termer av volym- och prispremie. (Notera att 10 av totalt 19 variabler har utelämnats.)

Som du ser i bilden ovan är det olika associationer som har starkast inverkan på volym- respektive prispremie. Associationerna som driver volympremie ser ut att ha vissa drag av riskreduceringsmotiv, medan de som driver prispremie verkar präglas av positiva motivationsfaktorer, med tydliga sociala inslag. De här skillnaderna i intäktsdrivande associationer kan vara bra att ha i åtanke beroende på om din främsta utmaning är att vinna eller försvara marknadsandelar (volympremie) eller att motivera varför dina varor och/eller tjänster kostar mer än konkurrenternas (prispremie). Inte minst med hänsyn till att vissa varumärkesassociationer kan vara gynnsamt för det ena men hämma det andra. Exempelvis har “unikhet” visat sig ha just den effekten i många branscher; associationen driver prispremie men hämmar volympremie.

Trots att Niklas Bondessons och Johan Anselmssons meta-studie visar att det finns tydliga, generella mönster för vad som får b2b-kunder att vilja köpa och betala mer är det ytterst viktigt att du beaktar att det är just generella mönster. För att verkligen lyckas att bygga, förstärka eller försvara ett starkt varumärke måste du ta reda på exakt vilka associationer som driver försäljning i just din bransch och på dina marknader. Att lita enbart på generella tumregler kan vara farligt; det som driver försäljning i en kategori kan vara helt oviktigt i en annan.

Vill du veta mer om metodiken, hur b2b-köpare väljer varumärke och hur du bygger ett starkt b2b-varumärke tycker jag att du skall anmäla dig till Pyramids kostnadsfria frukostseminarium. Där får du bl.a. träffa och lyssna på Niklas Bondesson, samt möjlighet att ställa frågor till honom (anmälan hittar du nedan).

Avslutningsvis: Ett varumärke är inte starkt förrän det bidrar till att sälja mer eller till att motivera ett högre pris.

Välkommen till seminariet!

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Ny varumärkesstrategi för Swedish Space Corporation

03 May
3 maj, 2011

ssc_logoSwedish Space Corporation, SSC, grundades 1972 och ägs av svenska staten. Företaget finns i sju länder, bland andra Sverige, Tyskland, Chile, USA och Kina, men har kunder i betydligt fler. SSC:s främsta verksamhet är att utveckla och bygga satelliter, raketsystem, forskningsballonger och avancerade havsövervakningssystem.

Under drygt ett år har Pyramid agerat bollplank och strategisk konsult för SSC med syfte att skapa ett kommersiellt och globalt attraktivt företag inom rymdindustrin. Uppdraget har omfattat att, tillsammans med SSC:s ledning, se över och uppdatera verksamhetens visionramverk och samordna verksamhetens alla bolag under ett varumärke och en varumärkesplattform. Pyramid har också tagit fram en  övergripande kommunikationsstrategi för de olika delarna inom SSC.

Den i nuläget offentliga och synliga delen av arbetet är SSC:s nya webbsajt, www.ssc.se.

What is your customer willing to pay?

12 May
12 maj, 2010

One of the core issues for B2B marketing is often: ”What is the customer willing to pay?”

The answer is simple (at least in theory): the price the buyer can accept (P) is the product’s perceived value (V) divided by the perceived risk of buying from you (R).

Right Price formula in b2b

The perceived value (V) is the actual, rational value that your product or service can be expected to create for the buyer in the short- or long term. This value is almost always about your product’s or service’s ability to in some way contribute to higher revenues, lower costs or improved cash flow. And it is this value the buyer is interested in, as a B2B transaction almost always originates from a rational, defined need – to streamline a process, improve a product, etc. It is more the rule than the exception that the purchaser identifies the need and contacts those suppliers he or she believes have the ability to satisfy it.

The perceived risk (R) is the perceived value’s inverse. Just as rational as the value of your offer can be assessed, just as irrational is the buyer’s risk evaluation about buying from you. And just as easily as perceived value can be described, just as complex are the factors affecting perceived risk.

Let me generalize.

There are two kinds of risk variables in a B2B transaction: the degree of uncertainty concerning the transaction’s outcome, and the degree of negative consequence if a wrong decision is made.

The first variable, the risk of unwanted outcome, is very much a question of credibility – that is the buyer’s confidence in you as a seller. ”Can they really deliver what they promise? Are we really going to save 20% in material costs?”

The second variable, the risk of making the wrong decisions, is about dealing with the consequences for both the company and the individual. ”What is the result for the company if we make the wrong decision? How much does this risk expose me as a professional buyer?”

Examples of the perceived risk can be read about in Hawes & Barnhouse’s Study from 1987, in which they asked B2B buyers to rank the risks they perceived as most serious. ”That I feel professionally incompetent” came in first, followed by, for example, ”that the relationship with the company’s customers will be strained”, ”that this reduces my chances of promotion” and ”that my status among colleagues will be diminished”.

Risk assessment is substantially emotion-based. Fear of making a bad choice – a choice the buyer may subsequently regret. And, many times, the fear of making a bad choice is stronger than the desire to do good. ”What has worked so far has, despite everything, worked. And the companies I know I do, after all, know.”

According to the IMP Group, B2B-transactions are characterized by buyers being reluctant to sever existing business relationships, and their concern about all the technical and logistical problems that may arise in connection with a possible change of supplier. But also by B2B buyers being reluctant to spend too much time making detailed evaluations and comparisons of competing brands.

In addition, the perceived risk in a B2B business is seldom linked to a single individual. In the vast majority of B2B purchases, the choice of appropriate supplier/brand is made by a group, explicitly or implicitly. In the end, this means it becomes a compromise – the lowest common denominator of the group’s perceived risk. The choice becomes the option that everyone in the group can accept (or believes to be acceptable), rather than the option that one or a few in the group prefer.

Put simply, it is more convenient for B2B companies to choose a supplier that everyone knows and has sufficiently high regard for than a brand that is unknown to most, but which has the (rationally) better offer. Paradoxically, that makes it easier to later defend the purchasing decision, both for oneself and one’s colleagues.

The bottom line is that the B2B buyer is prepared to pay more as the perceived value of a good or service increases, but only so long as the risk is deemed acceptable.

And as more and more brands in more and more industries become more and more similar in their offerings, it can often be more profitable – especially in terms of ‘closing the deal’ – to try to reduce the buyer’s perceived risk than to try to increase the perceived value.

This post was originally published in Swedish on the blog The Brand-Man. There, you can also read about the price formula for comsumer markets (also in Swedish).

You have no idea why your products are bought

21 Apr
21 april, 2010

I dare to say that the vast majority of all companies have not a clue about why their products are bought. Or rather what perceptions about their company, product and brand actually drive sales.

Ask practically any CEO, and he or she will probably tell you that ‘quality’, ‘technology’ and ‘service level’ are the key factors.

But as a rule, it is not superior quality, revolutionary technology or ridiculously high levels of service that attract more people to buy – or even to justify paying a higher price.

For we buyers, it is most often sufficient that product or service quality is good enough. We actually make our choices based on entirely different parameters – at least if we are to believe the research into sales drivers carried out by John Anselmsson and Niklas Persson.

For nearly 15 years, John Anselmsson has researched marketing and purchasing behavior at Lund University School of Economics and Management, and the last five years he has been joined by Niklas Persson. Together, they have examined the purchasing behavior of both consumers (B2C) and companies (B2B).

The results of their studies show that the factors driving sales in B2C and B2B are more alike than different. And much more alike than I had previously believed.

Allow me to generalize.

Quality is an overrated concept. In most mature industry categories, given ‘ripe’ buyers who understand why they should buy a product or service, quality is considered a hygiene factor. A minimum level must be achieved, but not much more.

The same is true of recognition. That a brand is well known in the industry is important to a certain degree, but not more. Once that level is reached, the degree of ‘celebrity’ status has no further bearing on sales.

However, concepts like genuineness, authenticity and status, or prestige, are often high on the list of factors that actually drive sales. That the buyer (consciously or unconsciously) feels that the brand has a real purpose or an authentic foundation and that it raises or confirms the buyer’s social status (the person’s or organization’s) is far more important than such sales-promoting parameters as specific product features or quality and service parameters, whether you’re selling machines or marmelade.

Everybody_lies
A simplified but actual example, B2B, showing the difference between criteria customers say are important in the choice of supplier (Y axis) and the criteria that actually determine the choice (x-axis).

But even more important seems to be the sense of belonging – of being rewarded – the highly irrational experience of the brand’s ability to give the purchase some form of meaning in a social context.

Successful brands have understood and applied this. They establish psychological ties with their customers by offering the buyer a little help to build and consolidate her own identity by offering a form of social security in the choice of brand, for instance by showing that others have also made the same choice.

After all, we often buy the same things our friends buy, listen to the same kind of music, see the same movies and read the same books. Or as advertising guru Rory Sutherland recently wrote in a very readable blog post (slightly paraphrased):

”Most people, most of the time, are not using insane amounts of mental energy to attempt to optimise every decison. They are instead simply trying to avoid making a decision that is actually bad or which might cause them to look or feel foolist. For those people, good enough generally is. […]

They are not using their brand choices to compete with their fellow man, or to draw distinctions between them and their peer-group. They are using them to fit in. To conform, not to outdo. […] And, when making a purchase, what most people want, most of the time, is not the best they can buy: they want something that’s very unlikely to be crap. […]

Regret is a huge emotion, and people will pay huge sums to avoid it.”

In addition, far from all decisions are decided on an individual basis. In many cases, the choice of both product and brand are a compromise – a kind of ”the group’s lowest common denominator”. The choice falls to the alternative that everyone can accept, rather than the choice that one or a few people in the group prefer. And it probably applies just as equally to household purchases as company investments (more on this subject here, in Swedish).

So much for generalization.

More specifically, the dilemma is that companies are seldom aware of the connection between people’s knowledge, views and feelings, and what actually stimulates them to want to buy or pay a higher price. Put another way: Companies know perhaps if the brand is well-liked or not, but not if it is popular for the right reasons.

Almost all traditional brand studies therefore deliver irrelevant results. They cannot show why the brand is purchased or not purchased. Which in turn makes it totally impossible to prove that the branding work actually contributes to the company’s business performance.

Johan and Niklas have a cure for this. Their research has resulted in a study model which, with a high level of certainty, can identify what sort of parameters actually drive sales in a given industry and in any given market. And what associations with a particular brand are most beneficial to build on, or consolidate, to maximize market share and/or justify price premium.

Unlike traditional customer satisfaction and image measurements – which basically only identify what people know and what they think – this enables you to identify which, of all these thoughts and feelings, are most important to maximize your sales.

But be prepared to be surprised.

The factors that drive sales are, as mentioned, rarely product-related.

Niklas Persson’s doctoral thesis, ”Tracing the Drivers of B2B Brand Strength and Value”, willl be published May 11. You can pre-order it now by sending me an email. (This post was originally published in Swedish on the blog The Brand-Man.)

What is the product, and what is the brand?

26 Mar
26 mars, 2010

A product is a good, service or idea that caters to (of fulfills) the needs and desires of organizations, social groups or individuals. A brand is a diverse collection of thoughts, emotions and opinions that are channeled into conscious as well as subconscious expectations of the product.

Products can be described intellectually and compared rationally. The brand, however, comprises a whole range of mental associations which, by their nature, are much harder both to describe and to compare.

I like to simplify this argument by dividing each offering into three parts:

  • Function/Performance
  • Value/Benefit
  • Relationship/Trust

When I lecture salespeople, I often say that they prefer to focus their sales arguments on function, performance and price (the latter is the most basic part of Value/Benefit). Unfortunately, the same argument can be applied to how many brands communicate.

The dilemma is that that which makes the buyer want to buy, and spurs her to arrive at the decision to do so, is almost exclusively the benefits she believes she will gain and how she experiences her relationship with, and confidence in, the seller (and/or the brand). Science has in fact confirmed that basically all decisions – big and small, in B2B as well as in B2C – are based on emotional factors, not rational. We choose with our hearts, but justify with our brains, the proof of which brought Daniel Kahneman the Nobel Prize.

In addition, the salesperson – by focusing on function, performance and price – lays him or herself open to what I call intellectual competition, because the offering can be easily compared to any competitor’s. When that happens, there is always at least one other company which can surpass the salesperson’s offering on at least one point.

On top of that, since the offering can be measured, weighed and valued intellectually, the slightest mistake in delivery, performance or service is cause for the buyer to experience disappointment. Confidence is damaged. The relationship is weakened. The perceived value is reduced. And this also reduces the buyer’s willingness to pay the price (or incentive to buy again).

Product_vs_Brand

Mark Michalek is probably one of the world’s best car salesman ever. For a long period of time he averaged an amazing 37 car sales per month, against an average of maybe 10-15, and his record is 13 cars sold to retail customers in one day(!). He was once asked what he does that others do not, and replied that the secret is in his motto:

”Make a friend, sell a car, make money.”

What Mark Michalek intuitively understood, and managed to achieve in practice, is that people buy from people they like and trust. Mark does not sell cars by focusing on function, performance and price, but by focusing on (and answering) the buyer’s needs and desires, and by building and maintaining a strong relationship with each of his approximately 3 500 customers.

The same applies to brand building. Companies that focus on the customer-perceived benefits of their offering, and then build strong customer relationships, apply what I call emotional competition. This makes it much more difficult for other brands to offer an alternative that the buyer actually feels is ‘better’, because ‘better’ is a complex and subjective decision which, in most cases, is won by the brand the buyer likes most. This preference also makes the buyer considerably more tolerant of any errors or omissions in the product, because we always find it easier to forgive those we like. It’s a watertight strategy, because the purchase is not based on rational, measurable considerations (the product itself) but on emotional and un-measurable considerations – the perceived usefulness of the product and the buyer’s relationship with and confidence in the brand.

Function, performance and price are not irrelevant. A strong brand is most often anchored in a good product. However, the importance of function, performance and price is secondary – not least in all those industries where differences between different products’ actual performance (and price) are so arbitrary that the buyer does not perceive them as being relevant.

In short: distinguish the difference between product and brand. Between what it is and what it does.

And please don’t put all your effort into communicating what the buyer already takes for granted – that the product is what it is, and that it costs money to buy.

This post was originally published in Swedish on Micco Grönholm’s blog The Brand-Man.

Rory Sutherland: It’s all about perception

16 Feb
16 februari, 2010

[youtube]http://www.youtube.com/watch?v=audakxABYUc[/youtube]

In this highly entertaining TED talks speech, held in Oxford last year, the advertising giant Rory Sutherland discusses how advertising adds value to a product by changing our perception about the product, rather than changing the product itself. He also makes the daring assertion that a change in perceived value can be just as satisfying as what we consider as “real” value. And the conclusion has interesting consequences for how we look at life…

Enjoy!

(See also Rory explain why we need to broaden the definition of what we do, to reflect the new reality of the marketplace: Behavioral Economics. And read more about it here [in Swedish].)

About brand personality and archetypes

04 Jan
4 januari, 2010

To define a brand’s personality or character is often perceived as advertising hocus-pocus. One of the reasons is of course that we who work with brand development fail to convey the value of a well-defined brand personality. Another is that the result often seems vague and difficult to apply in practice. But the fact is that a strong brand personality can often be the crucial distinguishing factor that creates preference for your brand and long-term, profitable customer relationships.

What and why
Brand Personality, or brand character, is about the characteristics that your target group associates with your brand. It’s about conveying the emotional associations – not the rational. The whole point of Brand Personality is to add a (differentiating) dimension to a brand that the product alone cannot convey. The idea behind this thinking is that this particular dimension will contribute to strengthening the customer’s emotional relationship with the brand, which in turn strengthens preference and loyalty.

To identify and formulate a company’s (or product’s) Brand Personality often requires association- and word-choice exercises. The result tends to be a number of adjectives – preferably three if the consultant is to decide – that are expected to summarize and describe the very complex relationships that constitute a company or product’s personality traits. But what does it actually mean for the seller in Portugal that your company is a dolphin? Or that it is associated with BMW, rather than Skoda, and that the brand will be perceived as ‘Knowledgeable, Flexible and Dedicated’? And do these associations and adjectives communicate the same personality traits for employees and customers in Helsinki, New York and Beijing?

Usefulness
The concept of Brand Personality was originally conceived by the advertising agency Young & Rubicam (and is basically the same as ”Brand Character”, which is a registered trademark owned by Gray Advertising). If they are the font of the association games and word-choice exercises I have no idea. But I firmly believe that the phenomena, with very few exceptions, are a waste of time and money. Perhaps they mean something very specific and precise for the agency and marketing manager who did the job but, for the rest of the organization, they are perceived, in my experience, as so much corporate BS. And, if you change agency or marketing manager, the company’s Brand Personality will probably be one of the first things that appear on the ”we gotta do something about this” list.

Do not misunderstand me: Brand Personality is important. Very important. A strong brand personality can often be the crucial, distinguishing factor for your brand. The reason is logical: emotional relationships are stronger than rational, because the emotional relationships can create loyalty beyond rational argument. They make competitors’ rational arguments less important, your customers become more lenient towards your mistakes or substandard product performance, and you get recommended more enthusiastically and more often.

A better way
Fortunately, there is a more efficient way to identify and define a brand’s personality (which is also significantly better scientifically informed). Let’s call it ”Brand Archetyping”, because the starting point is the archetypes that we all carry within us.

If you study religions, myths and legends from different cultures and times you will discover that they contain roughly the same cast of characters. Compare, for example the gods of Hinduism and the Asa faith with the gods in Greek mythology. There are distinctive creators, rulers, heroes, virgins, explorers, lovers and at least one that portrays the common man.

It is these characters, or ur-types, which are called archetypes. According to Christopher Vogler, screenwriter for Disney (The Lion King, Aladdin, Hercules, etc.), they are used consciously and diligently by the film industry, because they facilitate storytelling:

” … As soon as you enter their world, you will be aware of recurring personality traits and relationships.”

The modern archetype theory was launched by Carl Jung. He analyzed and sorted archetypes, and claimed that they possess cross-cultural communication skills because, he said, they reflect our collective subconscious. In the archetypes we recognize our own impulses, needs, fears and desires. Archetypes, according to Jung, are hardwired in us all.

Each archetype is represented thus by a history and a pattern of behavior that we can relate to. These personality patterns, as we learn in early childhood and then pass on to the next generation, are processed very quickly in our brains. We uncritically accept the characteristics, because they reflect our world.

And so it is these immediate connections that you can use to give your brand an unassailably clear personality – a personality that conveys the same story for a salesman in Johannesburg or a customer in Jukkasjärvi.

What brands are archetypes?
All brands that affect us on a deeper level contain a story created around an emotionally charged character or personality. Without it, we would simply not be able to have an emotional relationship with the brand. In the transparent and global world we live in, where the rational characteristics of competing products are simple to compare, the story around the brand increasingly becomes the only relevant factor for the buyer to distinguish it by.

So we buy sneakers from Nike not because its shoes are the best but because we want to share the feeling of winning and crushing all resistance. And we buy a motorcycle from Harley-Davidson not because its bikes are better than everyone else but because it makes us feel like a rebel – a Hell’s Angel – whether we live in the suburbs of London or in the deserts of Nevada.

Nike thus represents the archetypal champion/hero, and Harley-Davidson the archetypal rebel/outlaw.

Other trademarks that may be linked to the archetypes is Disney the jester, 3M the creator, Jeep the adventurer, IBM the ruler, Haagen Dazs the lover, McKinsey the thinker, IKEA the universal  man and Virgin the rebel.

A rebel, a jester and a common man
That Virgin is such an obvious rebel, the company can thank its, founder Richard Branson for. It is his nature, business philosophy and values reflected in the brand’s personality. Unfairly simple, one might think. But the same principle applies in fact for most strong brand archetypes.

A company’s values and purpose are a consequence of the founder’s or management’s values and vision – even if they are all too rarely identified and formulated. And values, purpose and vision in turn create the conditions for the archetype the brand will (credibly) be associated with.

Disney’s jester archetype is recognized in the company’s purpose: ”Make people happy.” And what is the heart of everything that IKEA – the common man (everyman) – does? Well, to ”offer a complete range of homewares at prices so low that as many as possible will be able to afford them”. (Ikea’s vision is, moreover, “Creating a better everyday life for many people.”)

What is your brand archetype?
Unlike IKEA, Virgin and Disney, most companies do not have a story and narrative that offers a natural archetype. To identify the genuine and true archetype for your brand needs a systematic structure.

One of the most useful archetype models is Carol S. Pearson’s system consisting of 12 prime archetypes. Carol S. Pearson is a professor of leadership studies at the University of Maryland at College Park, and is author of books like “Awakening the Heroes Within: Twelve Archetypes to Help Us Find Ourselves and Transform Our World”  and “The Hero and the Outlaw: Building Extraordinary Brands Through the Power of Archetypes”.

Pearsons_Archetypes

Her system, which is based on Jung’s work, consists of two dimensions: self-focused vs. group-oriented and order vs. change. For example, if the culture of your company is to strive, or to offer, good order – to have control – you are likely an archetype in the upper semicircle. If you also tend to focus more on what is possible to make than what the customers think they need or want, your correct archetype will be on the right side. The truth is thus the archetypal ruler, creator or innocence.

The names of the archetypes can vary. Warriors may also be called champions and heroes; the rebel might be called outlaw or anti-hero; the joker a jester or rogue; adventurers could be called explorers or pathfinders; sages can be called wise ones or gurus; innocents can be called naïf’s or saints; the creators can be called innovators and artists, and so on. But the meaning of each archetype is always the same.

The most notable magician
The magician is for example an archetype who makes things happen, who brings visions to life. Magicians can be framed in many different forms, from the obvious Gandalf in Lord of the Rings to Vianne in Lasse Hallström’s film Chocolat. But regardless of the guise, we are fascinated by the magician’s ability to make the impossible possible. A Magician’s motto is ”I make things happen”, his goal is to realize dreams, and his strategy to articulate an exciting vision. And then follow it.

A magician brand is characterized therefore by its power to open new horizons or opportunities for customers. Its product or service may be in constant change, but it is user friendly and it drives development forward. Apple (as well as the company’s founder Steve Jobs) is probably one of the most notable magicians.

Make your mark to a legend
Pearson’s system is therefore an excellent tool for identifying the real and true archetype for your brand. But before you tackle it, ask these five questions of yourself:

  1. How well known is our story today?
  2. How consistent is it?
  3. Do people understand its meaning? Does it convey the same meaning for everyone?
  4. How credible and motivating is it?
  5. Which famous character, or archetype, fits into our story?

If you manage to connect your brand to an archetype, and thus to a strong and rich story, you have laid the groundwork for something powerful – you have given birth to a legend.

Or, as Scott Bedbury, former marketing director at both Nike and Starbucks, said:

“A brand is a metaphorical story that … connects with something very deep – a fundamental human appreciation of mythology…”

Companies that manifest this sensibility invoke something very powerful.

Sources: Books mentioned above, by Carol S. Pearson and Margret Mark, article by Jon Howard-Spink, What is your story? And who is your brand?. Originaly posted in Swedish on The Brand-Man, here and here.

It’s time to bury the four P’s.

14 Dec
14 december, 2009

In 1960 E Jerome McCarthy published Basic Marketing. In it, he suggested that a company or product’s strategic position in the market could be described by four P’s: Product, Price, Place and Promotion.

According to McCarthy, the 4 P’s are the tactical tools at companies’ disposal to streamline their marketing, and they collectively became known as the marketing mix.

A few years later, Philip Kotler built further on McCarthy’s P’s. Kotler’s books were much more popular than McCarthy’s, which probably explains why most marketers now give Kotler credit for the 4 P’s.

Kotler, however, soon realized that the four P’ s were insufficient, and tried in the 1980s to introduce two more: Public opinion and Political Power. Other marketing thinkers have come up with more suggestions that further complement – including Packaging, People, Process and Physical Evidence.

Despite their obvious shortcomings, McCarthy’s soon-to-be 50 year-old 4 P’s remain one of the elemental laws of nature in the marketing universe.

But the world in which the four Ps first prevailed held completely different marketing conditions than today’s.

In the 1950s and 1960s, the Western world was in the midst of unprecedented social change and growth. After World War II, there was a strong need for practically everything, and the rapidly growing consumer machine had to be fed with more and more products. If anything, in any way, benefited the standard of living, it essentially sold itself.

The media world also looked different. The consumer obediently adapted him or herself to the relatively few media channels through which news, information and advertising were trumpeted out – with neither opportunity nor expectation of being able to influence when, where or how he or she would consume the messages, or contribute to public thinking or opinion on the subject.

Those who made and sold products quite simply held both the baton and the megaphone.

And it was thus, in this from-the-inside-out world, that the four P’s were born – as well as a number of other fundamental marketing theories.

Common to these post-war theories is that they assume that the seller has the power to define how the buyer should interpret the offer – and thus the value, usefulness or experience of the product, service or idea.

That power no longer exists.

Firstly, globalization and ever increasing competition have marginalized the importance of product features and functionality, as competing products in almost all categories now offer essentially the same basic functionality. In addition, prices have become almost completely transparent, and geographical distance now very rarely has any real significance. Last but not least: customers no longer want to listen.

The typical ‘stupid’ consumer, who previously had neither voice nor influence, has now – thanks to the Internet and social media – been replaced by ever more knowledgeable and critical participants – each with a growing influence on how brands are perceived and experienced.

In short: the buyer has grabbed the baton and seldom even hears the megaphone.

Yet many marketers continue desperately to try to make the 4 P’s work. Maybe the P’s time has passed. Maybe it’s time to bury them once and for all.

That’s the opinion of marketing professor Robert Lauterborn, author of books like The New Marketing Paradigm: Integrated Marketing Communications. He proposes an alternative approach based on the customer rather than product, which helps us see the business from the buyer’s point of view, not the seller’s. Lauterborn’s 4 C’s are  Consumer, Cost, Convenience, Communication.

The starting point is a Consumer (or customer, if you wish). Forget about the product. There is simply no longer any reason to develop something just because it is possible to do so, and expect that it will automatically sell. Focus instead on really understanding the customer’s needs and wishes. People, after all, no longer buy products. We want what the product results in: a value, a utility or an experience. What do customers expect of your business or product?

As a strategic positioning and tactical variable, the product’s actual price is also irrelevant. Price is just one part of the buyer’s total cost to experience the usefulness or value of the product. Think instead in terms of Cost to Satisfy. Most companies do not compete, after all, with a few percent price difference here or there, but with the sum of the customer’s perceived costs – both monetary and emotional. In addition to the price tag, for example, a tin of snuff costs the time it takes to go to the kiosk, the guilt of being nicotine-dependent and even the remorse that the money is not being used for something more valuable – maybe a summer vacation with the family. ”The most snuff for the money” is not the main value measure – not even ”the best nicotine kick for the least money”.  The value, benefits and experience are determined instead in a multitude of complex relationships, each of which differs slightly from customer to customer.

‘Place’ is, if possible, even more irrelevant. People no longer need to go anywhere to buy just about anything they want – unless they want to. Everything is available on a computer screen or in a catalog right in front of them – around the clock. Think, then, in terms of ‘Convenience to buy’. That does not mean that the distribution channels are unimportant – only that their role has changed. Think about how your customers would like to buy, and how the buying process itself can make your customers’ lives easier and less time consuming. Think about whether there is anything related to your product that the customer wants to experience, something that will give you her undivided attention. If you can manage that, you can actually get customers to travel great distances and still experience it as an easy, convenient, timesaving way to buy.

And, lest we forget, promotion is an obsolete way to look at the role of marketing communications. Mass marketing is history. Customers expect, rightly, a two-way communication with the brand. Think Communication (or conversation, if you wish). To communicate is to exchange thoughts, knowledge, feelings and ideas – to both listen and speak. In brief, it’s collaboration between buyer and seller in order to create a desired value and a desired benefit or experience on both sides.

Lauterborn’s four C’s reflect a thoroughly customer-oriented marketing philosophy. One which, in my opinion, much more accurately describes a brand’s strategic positioning and tactical opportunities than McCarthy’s four P’s.

Whether it is wise to limit ourselves to the number 4 and the letter C, is open to discussion.

So let’s do it. Discuss, that is.

Originally posted in Swedish on The Brand-Man, here.

Is a brand really a promise?

11 Nov
11 november, 2009

Probably the most commonly accepted definition of a brand is brand guru Walter Landor‘s:

”A brand is a promise. By identifying and authenticating a product or service it delivers a pledge of satisfaction and quality.”

I agree. But I’ve also long had a nagging feeling that the logic of his definition is shaky. Until recently I couldn’t say why, but now I think I’ve got it: his definition is inside out.

Brands are made in the minds of the customers – not in the marketing department, management team or boardroom. Brands should therefore be defined from the buyer’s perspective, not the seller’s.

In that case, a brand is not what the seller promises about it, but rather what the buyer expects of it. In short:

”A brand is expectations.”

A brand is, after all, whatever people know, think and feel about a company, organization, product, service or concept. It is an aggregate of snippets of viewpoints, feelings, myths, rumors and experiences that become anchored in the mind of the buyer.

Consequently, a brand is not the product or service you buy. Nor is it your relationship to the seller or his company. However, your experience of the product or service – as well as your contact with the seller – affects your experience of the brand. This, in turn, affects your expectations of it, positively or negatively.

Strong brands make promises they can keep. And, at the very least, they always deliver what you expect, making you a loyal (and probably profitable) customer.

Weaker brands try to deliver what they promise. In practice, however, they meet expectations only rarely. They might sell goods or services in high quantities, and may even make money, but their customers have no abiding loyalty, and will switch to another brand the moment a better alternative comes along.

Weak brands promise many different things. Or they promise things that don’t concern us. We experience them as fragmented or irrelevant, which means that we either cannot or do not want to build any real expectations of them. They may sell on price or performance, but they are always vulnerable to any competitor who can stir exciting, relevant expectations in the mind of the buyer.

This is logical, but not at all rational.

The fact is that our expectations are rarely (if ever) about the product itself. Our needs and desires have to do with what the product or service results in – not what it is. My expectations of Apple are not a powerful laptop, a cheap music source, a spacious mp3 player or a cell phone with good sound quality. What I expect of Apple is to always give me a great (and intuitive) user experience, compared to goods and services from competing brands.

Moreover, the strength of our expectations varies depending on how important the benefit of the product experience is to us. For example, if I am buying a new car, my expectations are primed with many strong emotions, linked to what I think I need and want, and my expectations of my chosen brand are equally important. However, when buying toilet paper, my expectations of its performance are much less emotionally charged.

The comparison is certainly unfair, insofar as a car is a much larger financial investment. Quite simply, the potential consequences of my choice will be greater. But not all consequences are financial.

The fact is that the price is not necessarily directly proportional to the product’s emotional value for us – at least not automatically. Think Coca-Cola, Google, Lego, Absolut and Cheap Monday.

The point is that our feelings to, our expectations of, and even our experiences of a band can be manipulated. Nike makes its sports shoes into something much more than just sports shoes by addressing our desire to win and crush all competition. When we buy Nike, we see ourselves as part of the winning team. Harley-Davidson never just sell motorcycles. It speaks instead to the 43-year-old lawyer’s desire to encase himself in leather, glide out in the wilderness and, if only briefly, feel dangerous, rebellious and free.

Which brings us to the key point.

If a brand creates expectations linked to what its products or services are, it will find it very difficult to always keep its promises. Every time something in the product, delivery or service fails, the recipient experiences the brand’s broken promise.

If, on the other hand, a brand creates expectations about what its product or service results in, it will have every opportunity to make promises it can keep. Customer tolerance level for occasional errors and weaknesses in the product, delivery or service is very high – as long as the customer believes he is getting the expected experience or benefit.

This is easy to say, but difficult to achieve. And the less important your product category is for the customers, the more difficult it is.

But difficult is not the same as impossible.

The first step is to accept that your brand is a metaphor for something quite different from your product or service. It is people’s expectations of a benefit or experience. And this is something you can influence.

The next step is then to answer the question: What does every person, on every occasion, have a right to expect of your brand?

Depending on your brand’s product category, and the expectations currently placed on it, you can then select one of the following five strategic alternatives (the simplest approach first):

  1. Focus on and refine what your brand results in (and what differentiates it from competitors).
  2. Strengthen the perceived importance of what your brand will result in.
  3. Reduce the perceived importance of what your worst competitor’s brand results in.
  4. Add a completely new benefit or experience.
  5. Modify the decision rules, i.e. the selection criteria by which buyers make their decisions.

In conclusion: A brand is not an isolated promise. A brand is what people expect to receive in terms of utility, value or experience as a result of choosing it.

Therefore, make sure the expectations of your brand are always realistic in relation to the perceived delivery. Never promise more than you can deliver. If you do, your promise will be a burden to you, rather than an asset.

Brand strategist Marty Neumier summarized it brilliantly:

”A brand is a person’s gut feeling about a product, service or organization.”

(This post was originally published in Swedish on The Brand-Man.)

Lärdomar från snabbväxande svenska företag

05 Oct
5 oktober, 2009

På Pyramids kampanjsajt Väx i Motvind, där vi fokuserar på marknadsföringens och reklamens roll i lågkonjunktur, skriver idag Thomas Ahrens om vad som krävs för att vi skall få fart på Sverige. Thomas – som är grundare av Ahrens Rapid Growth, författare av bl.a. ”Rebelledaren” och ”Tidsmonopolet”, och som tillsammans med Affärsvärlden publicerar den årliga Tillväxtlistan – skriver bl.a.:

”Gemensamt för de företag som vi så väl behöver, alltså snabbväxande företag med ambitioner att bli storföretag, är att de fokuserar mer av sin marknadsföring på sådant som ger affärer än på sådant som bygger image. De investerar i att skapa distributionskanaler globalt. Och sist, men inte minst, de hyllar det som [Ingenjörsvetenskaps]akademien fnyser åt: SÄLJ!!!”

Huvudtesten i hans inlägg är att vi i Sverige inte behöver mer FoU, Forskning och Utveckling, utan snarare mer SoU, Sök och Utveckla. Han exemplifierar med en dryg handfull svenska företag som vuxit med mer än 25% per år de senaste sju åren, och som dessutom passerat en miljard i omsättning. Thomas konkluderar:

”Våra studier över snabbväxare visar att de som kommit över vallen runt 50 anställda också tenderar att fortsätta att växa i decennier. Så låt oss rikta in sökarljuset på de företag som har potentialen att bli det nya IKEA, Tetra Pak och Ericsson.

Men då krävs en gemensam förståelse för att tillväxtföretag växer på annan gödsel än forskning och utveckling. De växer väsentligt mycket mer genom kombiinnovation, marknadsföring, effektiv logistik och sälj.”

Du kan läsa hela Thomas Ahrens inlägg här.