Funny things, brands. As this BBC news story explains, the value of the world’s top 100 brands has increased in the last year, despite the fact that we’re being pulverised by the worst recession since – well, ever, probably.
Generally, the Brandz survey is fairly predictable: our lovely sponsor Google is a non-mover at number one, with a brand allegedly worth a so-much-its-silly $100 billion. Value-for-money retail brands are up, car manufacturers and financial companies are down; mobile phone brands are collectively outperforming everyone else. There’s no sign of the Marketing Donut (current brand value: £1.50 and two bags of Haribo), but I reckon we’ll be knocking on the door next year. Ahem.
So anyway, it strikes me that increasing your brand value during a recession is a pretty clever trick to pull. We’re used to casting brand experts as slightly sinister magician types pulling off clever deceptions (more David Copperfield than Paul Daniels, I would suggest) - but how the hell are they doing it?
My reading is, broadly, that the list confirms that trusted brands provide us with an anchor in stormy waters. As the waters swell around us, so we cling more strongly to what is familiar and dependable. The brand owners may not increase their revenue during a recession, but firms such as these can certainly consolidate their reputation – and this means they can make serious money when the upturn begins.
So if it’s all so obvious, why am I bothering to blog? Because the BBC has picked up on three brands whose good performance seems to defy easy explanation. None of McDonalds (+34% in value), Marlboro (+33%) and Budweiser (+23%) can really be called a necessity and you might think they would be among the first things struck from the shopping list when money is tight. What’s more, these brands are under attack as public campaigns against junk food, smoking and boozing take root in our culture. Logically, all three brands should be experiencing a decline.
But of course, brands are not logical – their value is strongly influenced by their emotional resonance. Each of these three are experiencing either increasing sales or steady sales – remarkable when you might expect the typical McDonalds, Marlboro or Budweiser customer to be munching fewer Big Macs, smoking fewer cigarettes or downing fewer Buds. What does this say about us as consumers?
Certainly, that we don’t necessarily make rational or predictable choices. It also says that we continue to treat ourselves when times are hard and that we value our treats more than ever. It might also be saying that we’ve decided to forget the future and throw ourselves collectively to the four winds, indulge our pleasures more than ever and let the fates decide where we end up. Seriously – that’s a possibility.
So really this is a story about consumers and not about companies. It’s about the rational and irrational impulses that drive us to endow something with value. I reckon there are three simple lessons we can draw from the BBC article about the Brandz survey:
1) We are more likely to turn to trusted brands when money is tight
2) We value what they have to offer more than ever
3) We do not necessarily make rational choices.
Funny things, customers.
Some of the most successful businesses and acclaimed entrepreneurs have achieved that recognition because they have gone against the grain. You only have to think of some of the highest profile business brands in the UK – Virgin, EasyJet, Egg, lastminute.com and dozens more – and the common ingredient is that they’ve all looked at what everyone else in the market place is doing and have then done almost exactly the opposite.
Sticking your neck out is not easy in any environment. This is particularly so in a business environment where failure is largely seen as shameful. It's risky to stick your neck out. But if you are clever about the way you do it, doing things differently, sticking your neck out, breaking the mould – call it what you like – is one of the most brilliant business strategies you can adopt.
Think about it. Why do what everybody else is doing, in the same way that everybody else is doing it, thereby becoming just another business in the marketplace providing the same thing to the same pool of people? Isn’t that creating a rod for your own back? Why not take the bold step of turning industry paradigms on their head and get some real attention?
I got thinking about this because two nights ago, I drove into London ahead of the Institute of Directors convention. For various reasons, I needed to stay at or near Heathrow Airport the night before. And the thought of staying at a dire airport hotel overnight filled me with dread. The other viable option was staying at the delightfully modern and comfortable Heathrow Hilton Hotel at Terminal 4, but the cheapest room they had available was more expensive than most reasonable hotels in central London. But then I remembered about a brilliant hotel concept which would absolutely meet my needs and which I was sure would be a very pleasant experience.
Yotel is a brilliant concept based on a combination of the podular hotels found in Japan and business class cabins on British Airways. Take a look at the image below and perhaps even click on the photo to take a quick look at the Yotel website. You’ll very quickly see that Yotel offers a very different service to the highly saturated accommodation market.
I’m pleased to report that I arrived at Yotel on Tuesday night sometime after midnight, swiftly checked into my pod (I should mention that booking was absolutely painless and swift online), and after finding my very comfortable room I was fast asleep in a very comfortable bed in a quiet environment within minutes. At the other end of my sleep I got up, got showered and got dressed was on the road into London for my meetings before most Londoner's alarms had gone off.
Interestingly, this whole experience cost me a third of what it would cost me to stay for exactly the same amount of time in the Hilton Heathrow Hotel, literally just 200 yards from Yotel. With my Yotel experience, there was no concierge, there was no fancy art work in the big foyer and it’s located inside an airport terminal rather than on its own plot of land.
By turning the concept of hotels almost completely on its head, Simon Woodroffe has created a business which he is now going to expand in multiple locations. And if it’s anything like his Yo!Sushi concept (which started with just one sushi restaurant in London and has just opened its 50th restaurant in the global chain), it will be highly successful.
I also stayed there again last night - same deal, same experience, and I'll be back because it met my needs perfectly and it was a delightfully easy, completely comfortably, and "design-ily" cool experience.
So, why not turn your industry on its head?
The next 12-18 months will be one of the toughest periods that many will have experienced in their working history. A few of us remain who came through the last recession, but for the majority, this will be new. And not new in a good way. When you need to save costs, one immediate reaction is to look to your suppliers; going out to tender is a common occurrence when budgets need to be cut.
But is this the right thing to do? Your existing suppliers and service partners may be able to save you the required cash, as long as you work with them. Extended contracts, profit related bonuses, introducing new services into the offer are all initiatives that can improve bottom lines without losing invaluable experience. The same is true when it comes to solving what seem to be insurmountable issues.
When you speak to your suppliers, be open with them and clearly outline your objectives. Often there is a solution to your problem which you just don't know about yet. Now is the time that shared experiences can really reap benefits. Most problems aren't new, just new to you. If nothing else, a problem shared...
If your customers are not listening it is not their fault! It is your fault… you are not communicating in a way that they can hear your message.
Your sales presentations/offers and so forth are probably all wrong. Read on...
People have problems/hurts/needs that they want sorted out. You need to know what they are. Ask questions, shut up and listen to the answers.
Customers are only interested in how you can help them relieve the pain or get more pleasure.
People will buy from you if you are able to cut to the chase. Tell them what they will get… Don’t bore them. Be precise.
People don’t buy from you for what you do but for what your product or service will do for them (probably after you are gone). How will they be better off after you have gone?
Customers want you to make it absolutely clear what they will get by buying from you. Tell them how you will make things better for them.
Customers love it when you make it clear that you can deliver. So tell them: “We can do that” and give them some brief proofs or examples.
Customers love it when you shut up.
Last week I was helping a friend’s daughter with her application for a graduate internship in a prestigious organisation. In a discreet corner of the form, I read the ominous message: ‘Last year we received 3,000 applications for a similar position.’
This set me thinking: why do bright graduates so often gravitate to big corporates? Why aren’t they attracted to small businesses?
OK so we don’t have glamorous logos or universally-known straplines. And maybe we can’t compete on salaries. But if small companies are to be the engine of growth in post-recessionary Britain, we need to be able to attract the brightest and best.
In the face of dwindling graduate recruitment opportunities, students leaving university this summer are being encouraged to ‘take any job’. How gloomy. But this gives us small businesses an advantage. Rather than be the default choice (‘there’s nothing better’), we must market ourselves to show that we can and do offer exciting career possibilities, and that we provide those elements that any aspiring graduate will be seeking. It’s what you could call the TRIP factor.
Training: they will want to know that they will learn on-the-job
Responsibility: after years of study, they are eager to prove themselves in the real world
Initiative: you no doubt like recruits with the oomph that will help drive your business forward; if so, you will have to show that there are opportunities for them to use their initiative
Progression: and they would like reassurance that there is a future with you. It might not be a classic big-business ladder, but they need to know that recruits who show their worth will move up your organisation, sometimes faster and more effectively than in big businesses.
This is nothing ground-breaking, but it’s delivering the message (and living up to it) that’s the key.
So, I will tell my big-brand-chasing friend to refocus her sights, to broaden her lines of enquiry and to look to a sector where she will be able to get the TRIP of a lifetime!
Earlier this week, I posted about the Susan Boyle video which has gone astronomically viral in a matter of days. But not all viral videos need to be seen by 50 million people over the course of a few days to be deemed viral and clever. Introducing Where the hell is Matt?. If you haven’t heard or seen of this, it’s a great example of a viral video which is not only entertaining and slightly infectious, but has also helped a business to achieve substantial and measurable growth. [youtube=http://www.youtube.com/watch?v=zlfKdbWwruY] Although he started out doing this under his own steam in 2003, Matt was soon spotted by a clever marketing person at Stride, makers of chewing gum. They quickly spotted the opportunity and decided to sponsor him, enabling him to visit so many more countries, extend and update his videos and finally achieve massive virality and popularity on YouTube. So why would they bother doing this? Because they realised that by being associated with the video, they would raise the profile of their brand, and therefore possibly sales. So what happened? Sales rose, significantly. As one blogger put it: "What started as a silly vacation video is now a low-cost YouTube serial hit attracting greater buzz than some multimillion-dollar TV ad campaigns." This is a great case study. It’s a great example of video having a huge impact on business. And I particularly like it because it’s also a superb example of business understanding how social media works and rather than trying to hijack it, actually harnessing a social media opportunity. They've even given Matt a home on their website. Aw shucks ... But he's got his own home.