Creating a One-Word Brand Statement

What do your customers think of when they see your organization name and logo? Your public image is important and should be up-to-date and fresh, especially during times of swift technology, cultural changes, and new generations. Every organization should go through a periodic review of how it is viewed and how it wants to be viewed by customers, donors and prospects.

What do your customers think of when they see your organization’s name and logo? Your public image is important and should be up-to-date and fresh, especially during times of swift technology, cultural changes, and new generations. Every organization should go through a periodic review of how it is viewed and how it wants to be viewed by customers, donors and prospects.

While sitting in an organization’s Board of Directors meeting last month, the topic came up of the desire to create a new logo. It had been the 1990s when it was last updated, and at that, it still had visual remnants of a decidedly 1970s feel. It was agreed a new logo should be developed, but it was also agreed that before going too far, a branding statement should be created to guide along the process more efficiently and result in a better outcome.

If you’re like many organizations, you might not have a branding statement. This isn’t to be confused with a mission statement (which can too often be filled with empty language that rings hollow to customers and staff).

A branding statement is a marketing tool. It reflects your organization’s reputation: what you are known for, or would like to be known for. It articulates how you stand apart from competitors. A branding statement is often written by individuals to define and enhance their own careers. If that’s of interest to you, adapt these steps and you can be on your way to creating your personal branding statement.

Today we launch into steps you can take to freshen your organization’s brand and image. This first installment will lay out five research and brainstorming steps to distill your image down to a single word. My next blog post, published in a couple of weeks, will focus on how to succinctly state your logical and emotional promise, both of which must be formulated in order to create a hard-working branding statement for your organization.

  1. Audience Research:
    Are you confident you accurately know the demographics, psychographics, and purchase behavior of your audience? If you’ve recently profiled or modeled your customers, then you probably have a good grasp of who they are. But if it’s been a year or longer, a profile is affordable and will yield a tremendous wealth of information about your customers. Demographics (age, income, education, etc.) are a good foundation. Knowing psychographics (personality, values, opinions, attitudes, interests, and lifestyles) takes you further. And knowing categories of purchase behavior enables you to drill down even further.
  2. Competitive Analysis:
    You can’t completely construct your own brand identity without understanding how your competitors position themselves. A competitive analysis can be conducted along two lines of inquiry: offline, such as direct mail and other print materials, along with what you can learn online. If you have print samples, you can discern much about a competitor’s marketing message. But you may not be able to pin down demographics, psychographics, and purchase behavior by looking at a direct mail package. There are a number of tools you can use online to deliver insights about your competition. Here are a few:
    • Compete.com offers detailed traffic data so you can compare your site to other sites. You can also get keyword data, demographics, and more.
    • Alexa.com provides SEO audits, engagement, reputation metrics, demographics, and more.
    • Quantcast.com enables you to compare the demographics of who comes to your site versus your competitors. You’ll be shown an index of how a website performs compared to the internet average. You’ll get statistics on attributes such as age, presence of children, income, education, and ethnicity.
  3. Interpretation and Insight:
    Now that you’ve conducted research, you’re positioned to interpret the data to create your own insights. This is where creativity needs to kick in and where you need to consider the type of individual who will embrace and advocate for your organization. You may want to involve a few people from your team in brainstorming, or perhaps you’ll want to bring in someone from outside your organization who can objectively look at your data. What’s key is that you peer below the surface of the numbers and reports. Transform facts into insights through interpretation. Use comparison charts and create personas. Then create statements describing who your best customers are.
  4. One-Word Description:
    Now the challenging work begins. Distill your interpretation and insight into one word that personifies your organization. Then think deeply about that word. Does it capture the essence of who you are (or want to become) and what your customer desires? For example, a technology company might use a word like “innovative,” “cutting-edge,” or “intuitive.” Car manufacturers might use a one-word description like “sleek,” “utilitarian,” or “safe” to describe their brand and what they want their customers to feel when they hear a brand’s name. You might think that by only allowing one word, you are short-changing everything about your organization’s image. It won’t. Finding the one word that describes your organization’s image will force you to focus.
  5. Reality Check:
    So now you’ve identified a word to describe your organization’s brand and image that resonates with both your team and your customers. It’s time for a reality check. Can your organization or product actually support that word? Or if it’s aspirational—that is, a word that you’d like your image to reflect in the future—is it achievable? And if it’s aspirational, what plans are in place to take it to reality?

My next blog will extend the important foundational work you’ve done working through these five steps. It will discuss how to look at your brand as it appeals to both logic and emotion, as well as credibility, uniqueness, and ultimately an example branding statement that you can use with your team. Watch for it in two weeks.

As always, your comments, questions, and challenges are welcome.

Loyalty Programs? We Don’t Need No Stinkin’ Loyalty Programs!

Without fear of (much) argument, it’s a fair statement to say that all companies want, and try to generate and achieve, optimum loyalty from their customer bases. They should want this, because study after study shows the financial rewards of having loyal customers. Some companies reach this goal through superior value delivery, built on quality products and services, and positive, consistent customer experiences. For the past several decades, many companies have relied on customer loyalty cards or programs, by which they can track purchase behavior and give rewards for repeat and volume buying activity.

Without fear of (much) argument, it’s a fair statement to say that all companies want, and try to generate and achieve, optimum loyalty from their customer bases. They should want this, because study after study shows the financial rewards of having loyal customers. Some companies reach this goal through superior value delivery, built on quality products and services, and positive, consistent customer experiences. For the past several decades, many companies have relied on customer loyalty cards or programs, by which they can track purchase behavior and give rewards for repeat and volume buying activity.

Customer loyalty programs are especially popular among retailers. During the years, retailers have found these programs to be powerful business tools within their highly competitive markets. But some retailers have completely disavowed loyalty programs, either never initiating them in the first place or canceling them, in favor of reduced pricing. In fact, this has become something of a trend. What’s behind it?

Let’s start with the biggest retailer—Walmart. The company has long claimed that a loyalty program isn’t needed because its prices are so low. Walmart believes that loyalty programs can, indeed, provide excellent information about customers who participate; however, as one Walmart executive put it: ” … some of the loyalty programs are very expensive, and we don’t think that serves everyday low cost and everyday low price.” Lower-than-competition everyday prices has been Walmart’s merchandising and marketing mantra since its inception. But, at least for groceries and sundry products, that often isn’t the case. Supermarket chains like Save-A-Lot and Aldi’s, neither of which has a loyalty program, will often beat Walmart’s item-for-item pricing by a significant margin. And other competitors can use their loyalty programs to selectively pick products, and individual customers, to offer pricing—which undermines Walmart.

As for generating customer purchase data, Walmart has a “scan & go” app for mobile devices, which allows customers to scan their own items as they shop; and this provides the company with valuable information on what customers are purchasing, the length of time they’re shopping in the store, and what offers and coupons might drive future purchases. Walmart uses additional methods of understanding individual customer purchases. One of these is Walmart credit cards. Another is reloadable MasterCard and Visa debit cards. A third is “Bluebird,” a prepaid debit card which functions as Walmart customers’ alternative to having a checking account, with which they can make deposits, pay bills—and shop at Walmart. Like Tesco is already doing in the U.K, Walmart has been considering development of its own bank, which would provide even more customer data.

Asda, a Walmart-owned supermarket chain in the U.K, also has no loyalty program. It’s the second-largest supermarket company, behind Tesco; and, as in the U.S., newer low-priced chains, such as Aldi, are actively competing with Asda. In place of a loyalty program, Asda believes it provides customers with what they want most, a “great multichannel retail experience.” The chain, according to executives, focuses on the key fundamentals: prices, quality, convenience and service. Alex Chrusczcz, Asda’s head of insights and pricing, offers two explanations of how the organization is endeavoring to build customer loyalty:

  • “Aspire to treat customers equally, or you’ll create a fractured brand and shopping experience. If you have someone paying one price and another customer with a coupon paying a different price, the perception of the brand is becoming fractured. Make sure it’s consistent.”
  • “Be pragmatic in terms of technology and analytics. They aren’t a silver bullet. Use these tools and combine them with the experience of your team.”

From my perspective, the second explanation is common sense; however, the first statement is really questionable—even counterintuitive, if a subordinating goal of loyalty behavior is to help drive customer-centricity. Simply put, all customers are not equal in value; and marketing strategies which treat them as such often create lower revenue.

In the U.S., regional supermarket chain Publix has no loyalty program. The company doesn’t have, as a result, the ability to track, at a household level, what customers are and aren’t purchasing in their stores. What Publix does, instead of loyalty cards, is try different alternative approaches to build sales. One of these, for example, was to test a program where shoppers could set up an online account where they could digitally clip coupons; and then, in the Publix store, the discounts they’d set up online could be automatically applied by typing in their phone numbers. Publix also has a BOGO program for their own brands, and accepts competitors’ coupons in their stores.

Some retailers do more than emphasize the sales and service fundamentals. They build genuine passion for, and bonding with, the brand by creating a more human, emotional connection. And, though there are few organizations like this, retailers such as Trader Joe’s are the exception that proves the rule. Trader Joe’s has no customer loyalty program. What they have is enthusiasm, achieved through differentiated, every-changing customer experiences, enhanced by upbeat, helpful employees. This has enabled Trader Joe’s to generate sales per square foot that are double the sales per square foot of Whole Foods. So, another way of stating that Trader Joe’s creates loyalty behavior without a program is to say: The shopping experience is, defacto, the loyalty program.

Now, we come to retailers which had customer loyalty programs, usually of long-standing, and elected to discontinue them. Actually, much of this has been done by one organization, Cerberus Capital Group, the early 2013 purchaser of multiple regional retail supermarket chains from Supervalu (Shaw’s, Acme, Star, Albertson’s and Jewel-Osco). Calling the new positioning “card-free savings,” and reflective of the first strategy stated above by Asda, each of the chains issued statements with themes like “We want buying to be simple for all, so that every (name of company) customer gets the same price whether a loyalty card has been used or not.” Additionally, and again like Asda, these chains have said they will go back to the basics: clean stores, well-stocked shelves, reduced checkout time, clearly marked sale items and creation of a more customer-focused culture. Some of their executives have also theorized that the chains will now adopt a more local-level approach, rather than customer-level, to their decision-making, and that individual store managers will now be more actively involved in driving successful performance.

So, the chains acquired by Cerberus appear to believe that “sunsetting,” or eliminating these programs, is a calculated risk and that they would still find good ways of providing value to retain more loyal customers, as well as incentives for those with the potential to move from purchase infrequency. Most analysts, however, felt that Cerberus eliminated the programs largely because the chains they purchased were either not mining card data, or not effectively analyzing and applying this material for better marketing and merchandising, thus making the loyalty systems too expensive to maintain.

Cerberus has entered into takeover discussions with California-based Safeway, which also owns Vons and Pavilion. If this sale takes place, it’s a good bet that these chains will also drop their reward cards, because Cerberus-owned supermarkets clearly don’t need, or want, no stinkin’ loyalty programs.