Archive for November, 2011

Posted in Brand Managment, Consumer Behavior with tags , , , , , , on November 30, 2011 by Consultant

Brand Management

Brand management begins with having a thorough knowledge of the term “brand”. It includes developing a promise, making that promise and maintaining it. It means defining the brand, positioning the brand, and delivering the brand. Brand management is nothing but an art of creating and sustaining the brand. Branding makes customers committed to your business. A strong brand differentiates your products from the competitors. It gives a quality image to your business.

Brand management includes managing the tangible and intangible characteristics of brand. In case of product brands, the tangibles include the product itself, price, packaging, etc. While in case of service brands, the tangibles include the customers’ experience. The intangibles include emotional connections with the product / service.

Branding is assembling of various marketing mix medium into a whole so as to give you an identity. It is nothing but capturing your customers mind with your brand name. It gives an image of an experienced, huge and reliable business.

It is all about capturing the niche market for your product / service and about creating a confidence in the current and prospective customers’ minds that you are the unique solution to their problem.

The aim of branding is to convey brand message vividly, create customer loyalty, persuade the buyer for the product, and establish an emotional connectivity with the customers. Branding forms customer perceptions about the product. It should raise customer expectations about the product. The primary aim of branding is to create differentiation.

Strong brands reduce customers’ perceived monetary, social and safety risks in buying goods/services. The customers can better imagine the intangible goods with the help of brand name. Strong brand organizations have a high market share. The brand should be given good support so that it can sustain itself in long run. It is essential to manage all brands and build brand equity over a period of time. Here comes importance and usefulness of brand management. Brand management helps in building a corporate image. A brand manager has to oversee overall brand performance. A successful brand can only be created if the brand management system is competent.

Following are the important concepts of brand management:

 Definition of Brand

Understanding Brand – What is a Brand ?

Brands are different from products in a way that brands are “what the consumers buy”, while products are “what concern/companies make”. Brand is an accumulation of emotional and functional associations. Brand is a promise that the product will perform as per customer’s expectations. It shapes customer’s expectations about the product. Brands usually have a trademark which protects them from use by others. A brand gives particular information about the organization, good or service, differentiating it from others in marketplace. Brand carries an assurance about the characteristics that make the product or service unique. A strong brand is a means of making people aware of what the company represents and what are it’s offerings.To a consumer, brand means and signifies:

  • Source of product
  • Delegating responsibility to the manufacturer of product
  • Lower risk
  • Less search cost
  • Quality symbol
  • Deal or pact with the product manufacturer
  • Symbolic device

Brands simplify consumers purchase decision. Over a period of time, consumers discover the brands which satisfy their need. If the consumers recognize a particular brand and have knowledge about it, they make quick purchase decision and save lot of time. Also, they save search costs for product. Consumers remain committed and loyal to a brand as long as they believe and have an implicit understanding that the brand will continue meeting their expectations and perform in the desired manner consistently. As long as the consumers get benefits and satisfaction from consumption of the product, they will more likely continue to buy that brand. Brands also play a crucial role in signifying certain product features to consumers.

To a seller, brand means and signifies:

  • Basis of competitive advantage
  • Way of bestowing products with unique associations
  • Way of identification to easy handling
  • Way of legal protection of products’ unique traits/features
  • Sign of quality to satisfied customer
  • Means of financial returns

A brand, in short, can be defined as a seller’s promise to provide consistently a unique set of characteristics, advantages, and services to the buyers/consumers. It is a name, term, sign, symbol or a combination of all these planned to differentiate the goods/services of one seller or group of sellers from those of competitors. Some examples of well known brands are Mc Donald’s’, Mercedes-Benz, Sony, Coca Cola, Kingfisher, etc.

A brand connects the four crucial elements of an enterprise- customers, employees, management and shareholders. Brand is nothing but an assortment of memories in customers mind. Brand represents values, ideas and even personality. It is a set of functional, emotional and rational associations and benefits which have occupied target market’s mind. Associations are nothing but the images and symbols associated with the brand or brand benefits, such as, The Nike Swoosh, The Nokia sound, etc. Benefits are the basis for purchase decision.

Brand Name

Brand name is one of the brand elements which helps the customers to identify and differentiate one product from another. It should be chosen very carefully as it captures the key theme of a product in an efficient and economical manner. It can easily be noticed and its meaning can be stored and triggered in the memory instantly. Choice of a brand name requires a lot of research. Brand names are not necessarily associated with the product. For instance, brand names can be based on places (Air India, British Airways), animals or birds (Dove soap, Puma), people (Louise Phillips, Allen Solly). In some instances, the company name is used for all products (General Electric, LG).
Features of a Good Brand Name

A good brand name should have following characteristics:

  1. It should be unique / distinctive (for instance- Kodak, Mustang)
  2. It should be extendable.
  3. It should be easy to pronounce, identified and memorized. (For instance-Tide)
  4. It should give an idea about product’s qualities and benefits (For instance- Swift, Quickfix, Lipguard).
  5. It should be easily convertible into foreign languages.
  6. It should be capable of legal protection and registration.
  7. It should suggest product/service category (For instance Newsweek).
  8. It should indicate concrete qualities (For instance Firebird).
  9. It should not portray bad/wrong meanings in other categories. (For instance NOVA is a poor name for a car to be sold in Spanish country, because in Spanish it means “doesn’t go”).
Process of Selecting a renowned and successful Brand Name
  1. Define the objectives of branding in terms of six criterions – descriptive, suggestive, compound, classical, arbitrary and fanciful. It Is essential to recognize the role of brand within the corporate branding strategy and the relation of brand to other brand and products. It is also essential to understand the role of brand within entire marketing program as well as a detailed description of niche market must be considered.
  2. Generation of multiple names – Any potential source of names can be used; organization, management and employees, current or potential customers, agencies and professional consultants.
  3. Screening of names on the basis of branding objectives and marketing considerations so as to have a more synchronized list – The brand names must not have connotations, should be easily pronounceable, should meet the legal requirements etc.
  4. Gathering more extensive details on each of the finalized names – There should be extensive international legal search done. These searches are at times done on a sequential basis because of the expense involved.
  5. Conducting consumer research – Consumer research is often conducted so as to confirm management expectations as to the remembrance and meaningfulness of the brand names. The features of the product, its price and promotion may be shown to the consumers so that they understand the purpose of the brand name and the manner in which it will be used. Consumers can be shown actual 3-D packages as well as animated advertising or boards. Several samples of consumers must be surveyed depending on the niche market involved.
  6. On the basis of the above steps, management can finalize the brand name that maximizes the organization’s branding and marketing objectives and then formally register the brand name.

      Brand Attributes

Brand Attributes portray a company’s brand characteristics. They signify the basic nature of brand. Brand attributes are a bundle of features that highlight the physical and personality aspects of the brand. Attributes are developed through images, actions, or presumptions. Brand attributes help in creating brand identity.A strong brand must have following attributes:

  1. Relevancy- A strong brand must be relevant. It must meet people’s expectations and should perform the way they want it to. A good job must be done to persuade consumers to buy the product; else inspite of your product being unique, people will not buy it.
  2. Consistency- A consistent brand signifies what the brand stands for and builds customers trust in brand. A consistent brand is where the company communicates message in a way that does not deviate from the core brand proposition.
  1. Proper positioning- A strong brand should be positioned so that it makes a place in target audience mind and they prefer it over other brands.
  2. Sustainable- A strong brand makes a business competitive. A sustainable brand drives an organization towards innovation and success. Example of sustainable brand is Marks and Spencer’s.
  3. Credibility- A strong brand should do what it promises. The way you communicate your brand to the audience/ customers should be realistic. It should not fail to deliver what it promises. Do not exaggerate as customers want to believe in the promises you make to them.
  4. Inspirational- A strong brand should transcend/ inspire the category it is famous for. For example- Nike transcendent Jersey Polo Shirt.
  5. Uniqueness- A strong brand should be different and unique. It should set you apart from other competitors in market.
  6. Appealing- A strong brand should be attractive. Customers should be attracted by the promise you make and by the value you deliver.

   Brand Positioning

Brand Positioning – Definition and Concept

Brand positioning refers to “target consumer’s” reason to buy your brand in preference to others. It is ensures that all brand activity has a common aim; is guided, directed and delivered by the brand’s benefits/reasons to buy; and it focusses at all points of contact with the consumer.Brand positioning must make sure that:

  • Is it unique/distinctive vs. competitors ?
  • Is it significant and encouraging to the niche market ?
  • Is it appropriate to all major geographic markets and businesses ?
  • Is the proposition validated with unique, appropriate and original products ?
  • Is it sustainable – can it be delivered constantly across all points of contact with the consumer ?
  • Is it helpful for organization to achieve its financial goals ?
  • Is it able to support and boost up the organization ?

In order to create a distinctive place in the market, a niche market has to be carefully chosen and a differential advantage must be created in their mind. Brand positioning is a medium through which an organization can portray it’s customers what it wants to achieve for them and what it wants to mean to them. Brand positioning forms customer’s views and opinions.

Brand Positioning can be defined as an activity of creating a brand offer in such a manner that it occupies a distinctive place and value in the target customer’s mind. For instance-Kotak Mahindra positions itself in the customer’s mind as one entity- “Kotak ”- which can provide customized and one-stop solution for all their financial services needs. It has an unaided top of mind recall. It intends to stay with the proposition of “Think Investments, Think Kotak”. The positioning you choose for your brand will be influenced by the competitive stance you want to adopt.

Brand Positioning involves identifying and determining points of similarity and difference to ascertain the right brand identity and to create a proper brand image. Brand Positioning is the key of marketing strategy. A strong brand positioning directs marketing strategy by explaining the brand details, the uniqueness of brand and it’s similarity with the competitive brands, as well as the reasons for buying and using that specific brand. Positioning is the base for developing and increasing the required knowledge and perceptions of the customers. It is the single feature that sets your service apart from your competitors. For instance- Kingfisher stands for youth and excitement. It represents brand in full flight.

There are various positioning errors, such as-

  1. Under positioning- This is a scenario in which the customer’s have a blurred and unclear idea of the brand.
  2. Over positioning- This is a scenario in which the customers have too limited a awareness of the brand.
  3. Confused positioning- This is a scenario in which the customers have a confused opinion of the brand.
  4. Double Positioning- This is a scenario in which customers do not accept the claims of a brand.

  Brand Identity

Brand Identity – Definition and Concept

Brand identity stems from an organization, i.e., an organization is responsible for creating a distinguished product with unique characteristics. It is how an organization seeks to identify itself. It represents how an organization wants to be perceived in the market. An organization communicates its identity to the consumers through its branding and marketing strategies. A brand is unique due to its identity. Brand identity includes following elements – Brand vision, brand culture, positioning, personality, relationships, and presentations.
Brand identity is a bundle of mental and functional associations with the brand. Associations are not “reasons-to-buy” but provide familiarity and differentiation that’s not replicable getting it. These associations can include signature tune(for example – Britannia “ting-ting-ta-ding”), trademark colours (for example – Blue colour with Pepsi), logo (for example – Nike), tagline (for example – Apple’s tagline is “Think different”),etc.

Brand identity is the total proposal/promise that an organization makes to consumers. The brand can be perceived as a product, a personality, a set of values, and a position it occupies in consumer’s minds. Brand identity is all that an organization wants the brand to be considered as. It is a feature linked with a specific company, product, service or individual. It is a way of externally expressing a brand to the world.

Brand identity is the noticeable elements of a brand (for instance – Trademark colour, logo, name, symbol) that identify and differentiates a brand in target audience mind. It is a crucial means to grow your company’s brand.

Brand identity is the aggregation of what all you (i.e. an organization) do. It is an organizations mission, personality, promise to the consumers and competitive advantages. It includes the thinking, feelings and expectations of the target market/consumers. It is a means of identifying and distinguishing an organization from another. An organization having unique brand identity have improved brand awareness, motivated team of employees who feel proud working in a well branded organization, active buyers, and corporate style. Brand identity leads to brand loyalty, brand preference, high credibility, good prices and good financial returns. It helps the organization to express to the customers and the target market the kind of organization it is. It assures the customers again that you are who you say you are. It establishes an immediate connection between the organization and consumers. Brand identity should be sustainable. It is crucial so that the consumers instantly correlate with your product/service.

Brand identity should be futuristic, i.e, it should reveal the associations aspired for the brand. It should reflect the durable qualities of a brand. Brand identity is a basic means of consumer recognition and represents the brand’s distinction from it’s competitors.

 Sources of Brand Identity

What is source of Brand Identity?

  1. SYMBOLS- Symbols help customers memorize organization’s products and services. They help us correlate positive attributes that bring us closer and make it convenient for us to purchase those products and services. Symbols emphasize our brand expectations and shape corporate images. Symbols become a key component of brand equity and help in differentiating the brand characteristics. Symbols are easier to memorize than the brand names as they are visual images. These can include logos, people, geometric shapes, cartoon images, anything. For instance, Marlboro has its famous cowboy, Pillsbury has its Poppin’ Fresh doughboy, Duracell has its bunny rabbit, Mc Donald has Ronald, Fed Ex has an arrow, and Nike’s swoosh. All these symbols help us remember the brands associated with them.Brand symbols are strong means to attract attention and enhance brand personalities by making customers like them. It is feasible to learn the relationship between symbol and brand if the symbol is reflective/representative of the brand. For instance, the symbol of LG symbolize the world, future, youth, humanity, and technology. Also, it represents LG’s efforts to keep close relationships with their customers.
  1. LOGOS- A logo is a unique graphic or symbol that represents a company, product, service, or other entity. It represents an organization very well and make the customers well-acquainted with the company. It is due to logo that customers form an image for the product/service in mind. Adidas’s “Three Stripes” is a famous brand identified by it’s corporate logo.Features of a good logo are :
    1. It should be simple.
    2. It should be distinguished/unique. It should differentiate itself.
    3. It should be functional so that it can be used widely.
    4. It should be effective, i.e., it must have an impact on the intended audience.
    5. It should be memorable.
    6. It should be easily identifiable in full colours, limited colour palettes, or in black and white.
    7. It should be a perfect reflection/representation of the organization.
    8. It should be easy to correlate by the customers and should develop customers trust in the organization.
    9. It should not loose it’s integrity when transferred on fabric or any other material.
    10. It should portray company’s values, mission and objectives.

    The elements of a logo are:

    1. Logotype – It can be a simple or expanded name. Examples of logotypes including only the name are Kellogg’s, Hyatt, etc.
    2. Icon – It is a name or visual symbol that communicates a market position. For example-LIC ’hands’, UTI ’kalash’.
    3. Slogan – It is best way of conveying company’s message to the consumers. For instance- Nike’s slogan “Just Do It”.
  2. TRADEMARKS- Trademark is a unique symbol, design, or any form of identification that helps people recognize a brand. A renowned brand has a popular trademark and that helps consumers purchase quality products. The goodwill of the dealer/maker of the product also enhances by use of trademark. Trademark totally indicates the commercial source of product/service. Trademark contribute in brand equity formation of a brand. Trademark name should be original. A trademark is chosen by the following symbols:™ (denotes unregistered trademark, that is, a mark used to promote or brand goods);
    SM (denotes unregistered service mark)
    ® (denotes registered trademark).

    Registration of trademark is essential in some countries to give exclusive rights to it. Without adequate trademark protection, brand names can become legally declared generic. Generic names are never protectable as was the case with Vaseline, escalator and thermos.

    Some guidelines for trademark protection are as follows:

    1. Go for formal trademark registration.
    2. Never use trademark as a noun or verb. Always use it as an adjective.
    3. Use correct trademark spelling.
    4. Challenge each misuse of trademark, specifically by competitors in market.
    5. Capitalize first letter of trademark. If a trademark appears in point, ensure that it stands out from surrounding text.

 

 Brand Image

What is Brand Image

Brand image is the current view of the customers about a brand. It can be defined as a unique bundle of associations within the minds of target customers. It signifies what the brand presently stands for. It is a set of beliefs held about a specific brand. In short, it is nothing but the consumers’ perception about the product. It is the manner in which a specific brand is positioned in the market. Brand image conveys emotional value and not just a mental image. Brand image is nothing but an organization’s character. It is an accumulation of contact and observation by people external to an organization. It should highlight an organization’s mission and vision to all. The main elements of positive brand image are- unique logo reflecting organization’s image, slogan describing organization’s business in brief and brand identifier supporting the key values.Brand image is the overall impression in consumers’ mind that is formed from all sources. Consumers develop various associations with the brand. Based on these associations, they form brand image. An image is formed about the brand on the basis of subjective perceptions of associations bundle that the consumers have about the brand. Volvo is associated with safety. Toyota is associated with reliability.

The idea behind brand image is that the consumer is not purchasing just the product/service but also the image associated with that product/service. Brand images should be positive, unique and instant. Brand images can be strengthened using brand communications like advertising, packaging, word of mouth publicity, other promotional tools, etc.

Brand image develops and conveys the product’s character in a unique manner different from its competitor’s image. The brand image consists of various associations in consumers’ mind – attributes, benefits and attributes. Brand attributes are the functional and mental connections with the brand that the customers have. They can be specific or conceptual. Benefits are the rationale for the purchase decision. There are three types of benefits: Functional benefits – what do you do better (than others ),emotional benefits – how do you make me feel better (than others), and rational benefits/support – why do I believe you(more than others). Brand attributes are consumers overall assessment of a brand.

Brand image has not to be created, but is automatically formed. The brand image includes products’ appeal, ease of use, functionality, fame, and overall value. Brand image is actually brand content. When the consumers purchase the product, they are also purchasing it’s image. Brand image is the objective and mental feedback of the consumers when they purchase a product. Positive brand image is exceeding the customers expectations. Positive brand image enhances the goodwill and brand value of an organization.

To sum up, “Brand image” is the customer’s net extract from the brand.

 Brand Personality

What is Brand Personality ?

Brand personality is the way a brand speaks and behaves. It means assigning human personality traits/characteristics to a brand so as to achieve differentiation. These characteristics signify brand behaviour through both individuals representing the brand (i.e. it’s employees) as well as through advertising, packaging, etc. When brand image or brand identity is expressed in terms of human traits, it is called brand personality. For instance – Allen Solley brand speaks the personality and makes the individual who wears it stand apart from the crowd.Infosys represents uniqueness, value, and intellectualism.Brand personality is nothing but personification of brand. A brand is expressed either as a personality who embodies these personality traits (For instance – Shahrukh Khan and Airtel, John Abraham and Castrol) or distinct personality traits (For instance – Dove as honest, feminist and optimist; Hewlett Packard brand represents accomplishment, competency and influence). Brand personality is the result of all the consumer’s experiences with the brand. It is unique and long lasting.

Brand personality must be differentiated from brand image, in sense that, while brand image denote the tangible (physical and functional) benefits and attributes of a brand, brand personality indicates emotional associations of the brand. If brand image is comprehensive brand according to consumers’ opinion, brand personality is that aspect of comprehensive brand which generates it’s emotional character and associations in consumers’ mind.

Brand personality develops brand equity. It sets the brand attitude. It is a key input into the look and feel of any communication or marketing activity by the brand. It helps in gaining thorough knowledge of customers feelings about the brand. Brand personality differentiates among brands specifically when they are alike in many attributes. For instance – Sony versus Panasonic. Brand personality is used to make the brand strategy lively, i.e, to implement brand strategy. Brand personality indicates the kind of relationship a customer has with the brand. It is a means by which a customer communicates his own identity.

Brand personality and celebrity should supplement each other. Trustworthy celebrity ensures immediate awareness, acceptability and optimism towards the brand. This will influence consumers’ purchase decision and also create brand loyalty. For instance – Bollywood actress Priyanka Chopra is brand ambassador for J.Hampstead, international line of premium shirts.

Brand personality not only includes the personality features/characteristics, but also the demographic features like age, gender or class and psychographic features. Personality traits are what the brand exists for.

Brand Awareness

What is Brand Awareness ?

Brand awareness is the probability that consumers are familiar about the life and availability of the product. It is the degree to which consumers precisely associate the brand with the specific product. It is measured as ratio of niche market that has former knowledge of brand. Brand awareness includes both brand recognition as well as brand recall. Brand recognitionis the ability of consumer to recognize prior knowledge of brand when they are asked questions about that brand or when they are shown that specific brand, i.e., the consumers can clearly differentiate the brand as having being earlier noticed or heard. While brand recall is the potential of customer to recover a brand from his memory when given the product class/category, needs satisfied by that category or buying scenario as a signal. In other words, it refers that consumers should correctly recover brand from the memory when given a clue or he can recall the specific brand when the product category is mentioned. It is generally easier to recognize a brand rather than recall it from the memory.

Brand awareness is improved to the extent to which brand names are selected that is simple and easy to pronounce or spell; known and expressive; and unique as well as distinct. For instance – Coca Cola has come to be known as Coke.

There are two types of brand awareness:

  1. Aided awareness- This means that on mentioning the product category, the customers recognize your brand from the lists of brands shown.
  2. Top of mind awareness (Immediate brand recall)- This means that on mentioning the product category, the first brand that customer recalls from his mind is your brand.

The relative importance of brand recall and recognition will rely on the degree to which consumers make product-related decisions with the brand present or not. For instance – In a store, brand recognition is more crucial as the brand will be physically present. In a scenario where brands are not physically present, brand recall is more significant (as in case of services and online brands).

Building brand awareness is essential for building brand equity. It includes use of various renowned channels of promotion such as advertising, word of mouth publicity, social media like blogs, sponsorships, launching events, etc. To create brand awareness, it is important to create reliable brand image, slogans and taglines. The brand message to be communicated should also be consistent. Strong brand awareness leads to high sales and high market share. Brand awareness can be regarded as a means through which consumers become acquainted and familiar with a brand and recognize that brand.

 Brand Loyalty

What is Brand Loyalty?

Brand Loyalty is a scenario where the consumer fears purchasing and consuming product from another brand which he does not trust. It is measured through methods like word of mouth publicity, repetitive buying, price sensitivity, commitment, brand trust, customer satisfaction, etc. Brand loyalty is the extent to which a consumer constantly buys the same brand within a product category. The consumers remain loyal to a specific brand as long as it is available. They do not buy from other suppliers within the product category. Brand loyalty exists when the consumer feels that the brand consists of right product characteristics and quality at right price. Even if the other brands are available at cheaper price or superior quality, the brand loyal consumer will stick to his brand.Brand loyal consumers are the foundation of an organization. Greater loyalty levels lead to less marketing expenditure because the brand loyal customers promote the brand positively. Also, it acts as a means of launching and introducing more products that are targeted at same customers at less expenditure. It also restrains new competitors in the market. Brand loyalty is a key component of brand equity.

Brand loyalty can be developed through various measures such as quick service, ensuring quality products, continuous improvement, wide distribution network, etc. When consumers are brand loyal they love “you” for being “you”, and they will minutely consider any other alternative brand as a replacement. Examples of brand loyalty can be seen in US where true Apple customers have the brand’s logo tattooed onto their bodies. Similarly in Finland, Nokia customers remained loyal to Nokia because they admired the design of the handsets or because of user- friendly menu system used by Nokia phones.

Brand loyalty can be defined as relative possibility of customer shifting to another brand in case there is a change in product’s features, price or quality. As brand loyalty increases, customers will respond less to competitive moves and actions. Brand loyal customers remain committed to the brand, are willing to pay higher price for that brand, and will promote their brand always. A company having brand loyal customers will have greater sales, less marketing and advertising costs, and best pricing. This is because the brand loyal customers are less reluctant to shift to other brands, respond less to price changes and self- promote the brand as they perceive that their brand have unique value which is not provided by other competitive brands.

Brand loyalty is always developed post purchase. To develop brand loyalty, an organization should know their niche market, target them, support their product, ensure easy access of their product, provide customer satisfaction, bring constant innovation in their product and offer schemes on their product so as to ensure that customers repeatedly purchase the product.

 Brand Association

What is Brand Association?

Brand Associations are not benefits, but are images and symbols associated with a brand or a brand benefit. For example- The Nike Swoosh, Nokia sound, Film Stars as with “Lux”, signature tune Ting-ting-ta-ding with Britannia, Blue colour with Pepsi, etc. Associations are not “reasons-to-buy” but provide acquaintance and differentiation that’s not replicable. It is relating perceived qualities of a brand to a known entity. For instance- Hyatt Hotel is associated with luxury and comfort; BMW is associated with sophistication, fun driving, and superior engineering. Most popular brand associations are with the owners of brand, such as – Bill Gates and Microsoft, Reliance and Dhirubhai Ambani.Brand association is anything which is deep seated in customer’s mind about the brand. Brand should be associated with something positive so that the customers relate your brand to being positive. Brand associations are the attributes of brand which come into consumers mind when the brand is talked about. It is related with the implicit and explicit meanings which a consumer relates/associates with a specific brand name. Brand association can also be defined as the degree to which a specific product/service is recognized within it’s
product/service class/category. While choosing a brand name, it is essential that the name chosen should reinforce an important attribute or benefit association that forms it’s product positioning. For instance – Power book.
Brand associations are formed on the following basis:
  • Customers contact with the organization and it’s employees;
  • Advertisements;
  • Word of mouth publicity;
  • Price at which the brand is sold;
  • Celebrity/big entity association;
  • Quality of the product;
  • Products and schemes offered by competitors;
  • Product class/category to which the brand belongs;
  • POP ( Point of purchase) displays; etc

Positive brand associations are developed if the product which the brand depicts is durable, marketable and desirable. The customers must be persuaded that the brand possess the features and attributes satisfying their needs. This will lead to customers having a positive impression about the product. Positive brand association helps an organization to gain goodwill, and obstructs the competitor’s entry into the market.

Brand Promise

Brand Promise – Our brand is a promise of what we deliver

Brand evokes the responses. There are many people who love their Apple iPod or love their car etc. There are certain feelings that come to your mind when you think about your favorite brands. People expect that these brands should demonstrate brand promises every time whenever they are, encountered. Inconsistencies in the performance of services can lead to damage in further relations. This can cause a customer to select some other brand.Brand promise is what you say to the customer and what is to be delivered. If you are not able to meet the expectations of the customer, your business will either flounder or die. If you are not able to deliver the brand promise you will not be able to meet the expectations that have been created in the customers mind.

There are three major mistakes that the business leaders make while executing and developing the brand promise:

The first mistake is when you refuse to recognize the customer expectations that are created in customers mind before it comes in contact with that particular brand. The customers are very easily able to realize your brand promise by the business you are dealing with. For example, if you have a gourmet restaurant then the customers will have a image in their mind that it will different from the local restaurant. This is one of the major reason, why one should work for every smallest detail. For example, the image of a gourmet restaurant does not include plastic menus or paper placemats.
The second major mistake is to implement a system which gives a negative experience to the customer. Business leaders work on creating efficient results for saving time and money. Human beings are self-centered creatures with a thought in their mind to save money and time for us. For example, a customers asks do you accept credit card? Do you accept all credit cards or only master card and visa? If you don’t accept these cards, does it make any difference in the cost? Its just that you are losing sales. Then what are the other services you are giving to the customer in place which is the attraction for the customers. Any small inconvenience which will force the customer to say that “you are not completely service oriented” and encourages the customer to some other brand.
The third major mistake is that when you are not able to hire the best candidate. You easily hire anyone who applies and don’t even put some efforts to train them gives a really terrible experience to the customers. Brand promises are delivered by the staff. If your goal is to be a business leader you will invest time to train the staff. If you select a person who is very polite and does not even know how to dress up for an interview then you competition should send a thank you card for all the business you will send his way.

People who want to become the business leader understand they are a great product brands. They are authentic, dependable and reliable. Their icon is their name. Delivering the best of themselves is their brand promise. Do you want to become winner at working? Then, deliver the brand promise.

Building a Brand

Steps in Building a Brand Name Product or Service

At times, organizations are often inspired by a variety of ideas to create products and services which can be offered locally or globally. Generally, such products or services require the establishment of a brand or company name. Often these brands include both logo and lettering and can do a long way in advertising such products or services. Therefore, one of the most important steps in building a Brand is decide upon a brand name for the product or service one wishes to sell.Branding is a process that allows an individual or a group of individuals the ability to provide a brand image and lettering to an idea. Upon doing so, one has a better chance of selling such items to a broader audience whether that be on a local or global level. Therefore, while the old adage “nothing happens until somebody sells something,” still stands true to some extent, at times almost seems as if the process of advertising and branding has overtaken the desire to sell.

Although branding generally identifies the company and philosophies behind same, it can also be representative of those working for such a company. This is a good thing as it generates the right type of audience to the product or service being sold based on personal relationships with those running the company. Therefore, benefiting both the organizations selling the branded product or service and the dealers buying same.

One of the most important steps in selling any product or service is the belief one holds in relation to the item. Therefore, only those who strongly believe in the products and services offered by the company are going to be good at selling same. Otherwise, one may want to work from an advertising or graphic artist perspective in relation to advertising rather than sales when it comes to time to market same.

Another step is to build a brand that maintains loyalty with its customer base and has a strong customer service department. For, having such a department in today’s world where one is both experienced and knowledgeable when it comes to helping others can be a rare find. So, companies who represent oneself has having a strong customer base and even stronger customer service department are often more successful than those who do not.

A very important step in marketing a brand is to identify the target audience before creating the logo and lettering in relation to marketing. This is because different age groups react differently to a variety of logo and lettering especially as so much is misrepresented by a variety of gangs and others using such material inappropriately. Therefore, if one can define the brand name, logo and lettering and present same to a marketing research review panel or the like, one may be able to gain a better understanding of which audience one needs to direct their product or service to in order to create the most sales.

Still, if one can communicate the use of their product or service clearly, establish trust within the community, be that locally or globally, aim marketing at the right audience, build a base of buyers and customer loyalty and offer great customer service, then one is on their way to not only creating and advertising an excellent brand but selling one as well.

Therefore, when looking for steps in building a brand, there are many steps which one can complete to help make the creation of such brand an easier task. These include, knowing your audience, building your brand, finding a great logo and lettering to represent same, targeting the appropriate audience and placing a number of ads in as many online and offline advertising venues one can find. For, after doing so, one may just find that they are selling even more products and services than one had ever dreamed possible.

 Brand Equity

Brand Equity – Meaning and Measuring Brand Equity

Brand Equity is the value and strength of the Brand that decides its worth. It can also be defined as the differential impact of brand knowledge on consumers response to the Brand Marketing. Brand Equity exists as a function of consumer choice in the market place. The concept of Brand Equity comes into existence when consumer makes a choice of a product or a service. It occurs when the consumer is familiar with the brand and holds some favourable positive strong and distinctive brand associations in the memory.

Brand Equity can be determined by measuring:
Returns to the Share-Holders.
Evaluating the Brand Image for various parameters that are considered significant.
Evaluating the Brand’s earning potential in long run.
By evaluating the increased volume of sales created by the brand compared to other brands in the same class.
The price premium charged by the brand over non-branded products.
From the prices of the shares that an organization commands in the market (specifically if the brand name is identical to the corporate name or the consumers can easily co-relate the performance of all the individual brands of the organization with the organizational financial performance.
OR, An amalgamation of all the above methods.
Factors contributing to Brand Equity
  1. Brand Awareness
  2. Brand Associations
  3. Brand Loyalty
  4. Perceived Quality: refers to the customer’s perception about the total quality of the brand. While evaluating quality the customer takes into account the brands performance on factors that are significant to him and makes a relative analysis about the brand’s quality by evaluating the competitors brands also. Thus quality is a perceptual factor and the consumer analysis about quality varies. Higher perceived quality might be used for brand positioning. Perceived quality affect the pricing decisions of the organizations. Superior quality products can be charged a price premium. Perceived quality gives the customers a reason to buy the product. It also captures the channel member’s interest. For instance – American Express.
  5. Other Proprietary Brand Assets: Patents, Trademarks and Channel Inter-relations are proprietary assets. These assets prevent competitors attack on the organization. They also help in maintaining customer loyalty as well as organization’s competitive advantage.

Brand Equity & Customer Equity

Brand Equity is defined as value and strength of the Brand that decides its worth whereas Customer Equity is defined in terms of lifetime values of all customers.

Brand Equity and Customer Equity have two things in common-

Both stress on significance of customer loyalty to the brand
Both stress upon the face that value is created by having as many customers as possible paying as high price as possible.

But conceptually both brand equity and customer equity differ.

While customer equity puts too much emphasis on lower line financial value got from the customers, brand equity attempts to put more emphasis on strategic issues in managing brands.
Customer Equity is less narrow alternative. It can overlook a brands optional value and their capacity effect revenues and cost beyond the present marketing environment.
Just as customer equity can persist without brand equity, brand equity may also exist without customer equity. For instance I may have positive attitude towards brands – McDonald and Burger King, but I may only purchase from McDonald’s brand consistently.

To conclude, we can say brands do not exist without consumer and consumer do not exist without brands. Brands serve as a temptation that utilizes other intermediaries to lure the customers from whom value is extracted. Customers serve as a profit-medium for brands to encash their brand value. Both the concepts are highly co-related.

  Brand Extension

Brand Extension – Meaning, Advantages and Disadvantages

Brand Extension is the use of an established brand name in new product categories. This new category to which the brand is extended can be related or unrelated to the existing product categories. A renowned/successful brand helps an organization to launch products in new categories more easily. For instance, Nike’s brand core product is shoes. But it is now extended to sunglasses, soccer balls, basketballs, and golf equipments. An existing brand that gives rise to a brand extension is referred to as parent brand. If the customers of the new business have values and aspirations synchronizing/matching those of the core business, and if these values and aspirations are embodied in the brand, it is likely to be accepted by customers in the new business.Extending a brand outside its core product category can be beneficial in a sense that it helps evaluating product category opportunities, identifies resource requirements, lowers risk, and measures brand’s relevance and appeal.

Brand extension may be successful or unsuccessful.

Instances where brand extension has been a success are-

  1. Wipro which was originally into computers has extended into shampoo, powder, and soap.
  2. Mars is no longer a famous bar only, but an ice-cream, chocolate drink and a slab of chocolate.

Instances where brand extension has been a failure are-

  1. In case of new Coke, Coca Cola has forgotten what the core brand was meant to stand for. It thought that taste was the only factor that consumer cared about. It was wrong. The time and money spent on research on new Coca Cola could not evaluate the deep emotional attachment to the original Coca- Cola.
  2. Rasna Ltd. – Is among the famous soft drink companies in India. But when it tried to move away from its niche, it hasn’t had much success. When it experimented with fizzy fruit drink “Oranjolt”, the brand bombed even before it could take off. Oranjolt was a fruit drink in which carbonates were used as preservative. It didn’t work out because it was out of synchronization with retail practices. Oranjolt need to be refrigerated and it also faced quality problems. It has a shelf life of three-four weeks, while other soft- drinks assured life of five months.
Advantages of Brand Extension

Brand Extension has following advantages:

  1. It makes acceptance of new product easy.
    1. It increases brand image.
    2. The risk perceived by the customers reduces.
    3. The likelihood of gaining distribution and trial increases. An established brand name increases consumer interest and willingness to try new product having the established brand name.
    4. The efficiency of promotional expenditure increases. Advertising, selling and promotional costs are reduced. There are economies of scale as advertising for core brand and its extension reinforces each other.
    5. Cost of developing new brand is saved.
    6. Consumers can now seek for a variety.
    7. There are packaging and labeling efficiencies.
    8. The expense of introductory and follow up marketing programs is reduced.
  2. There are feedback benefits to the parent brand and the organization.
    1. The image of parent brand is enhanced.
    2. It revives the brand.
    3. It allows subsequent extension.
    4. Brand meaning is clarified.
    5. It increases market coverage as it brings new customers into brand franchise.
    6. Customers associate original/core brand to new product, hence they also have quality associations.
Disadvantages of Brand Extension
  1. Brand extension in unrelated markets may lead to loss of reliability if a brand name is extended too far. An organization must research the product categories in which the established brand name will work.
  2. There is a risk that the new product may generate implications that damage the image of the core/original brand.
  3. There are chances of less awareness and trial because the management may not provide enough investment for the introduction of new product assuming that the spin-off effects from the original brand name will compensate.
  4. If the brand extensions have no advantage over competitive brands in the new category, then it will fail.

Co-branding

Co-branding – Meaning, Types and Advantages and Disadvantages

What is Co-branding

Co branding is the utilization of two or more brands to name a new product. The ingredient brands help each other to achieve their aims. The overall synchronization between the brand pair and the new product has to be kept in mind. Example of co-branding – Citibank co-branded with MTV to launch a co-branded debit card. This card is beneficial to customers who can avail benefits at specific outlets called MTV Citibank club.

Types of Co-branding

Co-branding is of two types: Ingredient co-branding and Composite co-branding.

  1. Ingredient co-branding implies using a renowned brand as an element in the production of another renowned brand. This deals with creation of brand equity for materials and parts that are contained within other products. The ingredient/constituent brand is subordinate to the primary brand. For instance – Dell computers has co-branding strategy with Intel processors. The brands which are ingredients are usually the company’s biggest buyers or present suppliers. The ingredient brand should be unique. It should either be a major brand or should be protected by a patent. Ingredient co-branding leads to better quality products, superior promotions, more access to distribution channel and greater profits. The seller of ingredient brand enjoys long-term customer relations. The brand manufacture can benefit by having a competitive advantage and the retailer can benefit by enjoying a promotional help from ingredient brand.
  1. Composite co-branding refers to use of two renowned brand names in a way that they can collectively offer a distinct product/ service that could not be possible individually. The success of composite branding depends upon the favourability of the ingredient brands and also upon the extent on complementarities between them.

Advantages and Disadvantages of Co-branding

Co-branding has various advantages, such as – risk-sharing, generation of royalty income, more sales income, greater customer trust on the product, wide scope due to joint advertising, technological benefits, better product image by association with another renowned brand, and greater access to new sources of finance. But co-branding is not free from limitations. Co-branding may fail when the two products have different market and are entirely different. If there is difference in visions and missions of the two companies, then also composite branding may fail. Co-branding may affect partner brands in adverse manner. If the customers associate any adverse experience with a constituent brand, then it may damage the total brand equity.

 

Posted in B2B, Brand Managment, Consumer Behavior, CRM, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , , on November 30, 2011 by Consultant

Top US Brands Getting Strategic About Social Media

Over the past year, America’s top brands have made improvements in how they use online branded communities to reach their customers, but some opportunities for engagement remain untapped, according to a new report by ComBlu.

More brands are taking a strategic approach to social media engagement in 2011. Among the 251 online branded communities studied, managed by 92 brands: 

  • 41% of brands now have a cohesive strategy for social engagement in which multiple activities roll into a single online experience, compared with 33% in 2010, and 20% in 2009. 
  • The social experimentation stage is most prevalent: 50% of brands are experimenting with social communities, lacking a long-term engagement approach, using instead a series of one-off experimental marketing campaigns. That level is up from 45% in 2010.
  • Community ghost towns (unpopulated communities) now make up 5% of communities, down from 15% in 2010.
  • Community overload (multiple communities fighting for attention from the same audience) afflicts 4% of online communities, down from 5% in 2009.


Below, additional findings from the third annual “State of Online Branded Communities” issued by ComBlu.

Community Engagement Strategies

Some brands are using multiple strategies of engagement within the same community.

ComBlu defines three such strategies, or “pillars” of engagement as the following: 

  • Advocacy is essentially word-of-mouth marketing around a product, service, issue or idea to develop deeper relationships with stakeholders or activate them to support a specific mission.
  • Support refers to using customer experts to provide or extend the customer service (includes post-purchase and support forums).
  • Feedback refers to crowd sourcing new ideas for products or services, or gathering input on product quality, customer experience, marketing campaigns, and messaging.

Among the communities studied, most (75%) are focused on advocacy, whereas 33% focus on customer support and 20% focus their efforts on customer feedback.

Adoption of Best Practices

Over the past year, many brands adjusted their social media engagement tactics; among key changes:

  • The presence of a community manager fell to 48% in 2011, down from 51% in 2010.
  • The adoption of user reviews and content fell to 27%, from 54% in 2010. 
  • The use of advocates in online branded communities remained unchanged at 20%.

Among the most significant gains in the adoption of best practices: 

  • More brands implemented personal dashboards, from 38% in 2010 to 60% in 2011. 
  • Content aggregation (share features, content rating, and social bookmarking) registered sharp gains, to 95% in 2011, from 32% in 2010.

Among other best practices, 43% of communities offer rewards and recognition programs, up from 39% in 2010, while 16% offer a mobile app. 


Looking for real, hard data that can help you match social media tools and tactics to your marketing goals? The State of Social Media Marketing, a 240-page original research report from MarketingProfs, gives you the inside scoop on how 5,140 marketing pros are using social media to create winning campaigns, measure ROI, and reach audiences in new and exciting ways.


Top-Performing Brands

One-third (33%) of brands were ranked as high performers, based on their adoption of best practices. On a scale of 0 to 60, such high performers received a minimum of 42 points.

Among the highest performers, Verizon Communications led with 55 points; followed by EA and SAP with 54 points; Bravo, Intel, and Sony with 52 points, American Express with 51 points; and Discovery Channel, Microsoft, Sears, Whole Foods, and Sony with 50 points. 

Top-Performing Industries

Among the 16 industries in the study, the gaming and telecom industries were the two highest scoring (with 45 points each), followed closely by technology and consumer electronics (43 points). 

The retail and travel/hospitality industries tied for the most improved, each jumping nine points in average score.

About the data: The audit of 251 online branded communities among 92 US companies was conducted by ComBlu during the summer of 2011.

Posted in Brand Managment, Consumer Behavior, CRM with tags , , , , , , , , , , , , on November 30, 2011 by Consultant

Challenge the Status Quo! Take on a Dominant Market Player [Slide Show]

111118-01. Intro111118-02. 1. Establish your brand111118-03. 2. Build trust
111118-04. 3. Do something different111118-05. 4. Dive in111118-06. 5. Be patient
111118-01. Intro

We all learned on the playground in elementary school that it’s never a good idea to take on the big kid. That first physics lesson we learned—that larger objects push harder than smaller ones—reinforced that notion in our rapidly developing, dodgeball-obsessed minds.

But was that really an accurate lesson? After all, ordinary-sized David defeated giant-sized Goliath with nothing more than a pebble and a slingshot. So why can’t you? The answer is, You can! But to effectively beat the giant in your industry, you’ll need to focus on these five things.

111118-02. 1. Establish your brand

1. Establish your brand

As a startup, establishing your brand is the first and most important step in building a business. Coming in as a new player, you will encounter uncertainty about your brand from potential consumers who are unfamiliar with your name, products, quality, differentiation, etc. But you can use that to your advantage.

Humans have an innate curiosity and desire to explore. If you disagree, watch a young child be entertained for hours upon hours by ordinary objects, such as kitchen utensils or cell phones. Even though your target market has most likely grown out of playing with common objects for hours, that curiosity remains.

How can human curiosity benefit your brand? Draw on that human trait by positioning your business as something new and unique. Don’t give up all of your information up front; catch your targets’ interest and make them wonder. Their curiosity will take over and subconsciously motivate them to seek, search, and investigate, which will ultimately drive traffic to your website. Then, it’s your job to get them to stay.

So, how do you keep the market share you’ve gained?

111118-03. 2. Build trust

2. Build trust

Customers will not give you their money if they do not trust you. As a new company, you’ll have a hard time building trust via past buying experiences, because your target market has likely never before bought from you. So the next best way to build immediate trust is to identify with your customers on a personal level. Be transparent. As a small business, you actually have the advantage; you aren’t viewed as a faceless corporate monster. Use that advantage to develop closeness with your customers, and you can bet that they will multiply.

111118-04. 3. Do something different

3. Do something different

Whatever you do, don’t try to enter a market dominated by a major player by using the exact same business model as the Goliath. Customers’ brand loyalty to the “big kid” will quickly destroy your business. But finding a way to improve or diversify the market will create an avenue for you to compete.

For example, my company created a new pay-per-click (PPC) billing model that was completely unique in the automotive industry. Having a unique offering allowed us to quickly develop strong relationships with suppliers and create the critical mass necessary to start driving traffic (pun intended) to Netcars.com, our website.

But what if being different doesn’t work? Another benefit you have as a small, upcoming competitor is flexibility. Exxon Mobil might not be able to change its business model overnight, but Mom and Pop’s Convenience Store can. So listen to customer feedback, integrate it, and adapt.

111118-05. 4. Dive in

4. Dive in

We’ve all been in a situation where it was necessary to “test the water.” When I go to the pool, I dip my toe in first to see how cold the water is. But that’s not going to work in a market dominated by a major player.

When you dip your toe into a big pool, you hardly create ripples. On the other hand, doing a cannonball into the pool would create major waves all around you.

When taking on a major player, then, your goal is to disrupt the market—to do a cannonball into the market. So, make your entrance a massive push. Market like hell. Prepare for growth. Staff early. Get the right people on board, and then figure out where they fit into your business as the ripples grow.

After all, you get only one shot to launch.

111118-06. 5. Be patient

5. Be patient

Penetrating a concentrated market isn’t a game of Jenga. (In that game, pulling out one block could cause an entire tower to topple.) Instead, making an impact on the market is more of a marathon, not a sprint. Cheesy analogies aside, don’t expect to bring down the competition overnight.

Keep your brand consistent and unique, continue to innovate, and challenge the status quo. Time will bring results.

* * *

You’ll still have to find your own pebble, but I hope this information will be the slingshot you need to take on the Goliath that your company faces. Happy hunting!

Posted in B2B, Consumer Behavior, CRM, eMarketing, Search Engine Optimization with tags , , on November 30, 2011 by Consultant

Branded Facebook Pages ‘Liked’ by Few Web Users

Though more than two-thirds (68%) of surveyed Internet users say they use Facebook, only 21% have “liked” a branded page on Facebook, whereas more than one-third have given a thumbs up to other Facebook content* such as wall posts (36%), pictures (37%), and comments (37%), according to a survey from Crowd Science.

More than one-quarter of surveyed Internet users say they have “liked” video content on Facebook, while nearly one in five (19%) say they have not clicked the “like” button.**

 

Nearly one-third of Internet users surveyed (32%) say they don’t use Facebook.

Below, additional findings from a survey conducted by Crowd Science.

Those who “like” branded pages skew younger: 27% of Internet users age 18-34 say they “like” branded pages, compared with 18% of those age 45-64 and 9% of those age 65+.

People with higher education levels use Facebook and the “Like” button less:  

  • 40% of those more with an advanced (graduate) degree say they don’t use Facebook, compared with 27% of those with a high school education or less and 29% of those with some post-secondary education. 
  • 25% of those with graduate degrees say they use Facebook but don’t use the Like button, compared with 16% of those with some post-secondary education and 20% of those with a high school education or less.

Asked about their reasons for “liking” Facebook content (from individuals and brands), most cite showing support (28%) or expressing enjoyment (28%) for the content. 

Some 14% of those who “like” brands say they have like items on Facebook because they simply like a brand and 10% want to stay informed. Keeping other friends informed (7%), discounts (6%), and taking advantage of a sweepstakes offer (5%) are less important to online users.



Posted in B2B, Consumer Behavior, CRM, eMarketing, Marketing Mix (New Concepts), Search Engine Optimization on November 29, 2011 by Consultant

Tap the Power of Customer Feedback

In 2010, there is no excuse for keeping your marketing insight languishing in a silo, away from your core business processes.

Thanks to today’s Web-based technologies, you have an unprecedented number of opportunities to generate real business value from such insight.

By embracing a customer-feedback program, you can gain insight into customer attitudes and learn important truths about buying behavior as well as the evolving attitudes that will determine future buying behavior.

Understanding customer attitudes enables you to act quickly to prevent customer churn. Additionally, you can maximize cross-selling opportunities.

Marketing departments can use a customer-feedback program to drive tailored marketing campaigns and strengthen the relationship between brand and customer. Such programs are not just about making customers happy; they deliver real commercial value, too.

Exercises for the Brand

By implementing a feedback program, you initiate a two-way conversation, helping your customers become entrenched within your brand— from product creation to response to complaints.

The increased consumer engagement forges tighter purchasing relationships and builds significant brand value. The constant communication also provides an excellent platform for the creation of personalized, relevant promotions, creating a win-win that further builds the relationship.

Moreover, as you capture customer experiences and embed the resulting insight into your business, you are able to make better-informed business decisions.

Learn How to Share

Few organizations today have created the tightly integrated framework required to maximize the value of customer feedback companywide. In many cases, feedback data sits in a series of silos. Keeping it completely separate from other customer data reduces its value to little more than “mildly interesting.”

The marketing team’s lack of access to customer data means that irrespective of customer-relationship management (CRM) and marketing-resource management (MRM) investments, Marketing’s interaction with the business remains, at best, as provider of sporadic leads to the sales team.

Time Is of the Essence

Timing is crucial to getting the most from the feedback you gather. If a customer’s poor experience with a service representative leads that customer to defect to a competitor, there is little point in contacting that customer three months later. The opportunity has been missed.

If you had gained insight into that customer’s attitude when the problem occurred, with alerts to the relevant customer-complaint team, the issue could have been resolved immediately and the defection avoided.

Volumes of evidence show increased loyalty among customers whose issues were resolved successfully. Improved customer retention and increased loyalty: What’s not to like?

Marketing Team Harnesses Customer Insight

Timely, focused surveys can also transform the speed, relevance, and value of product-development campaigns and foster unprecedented customer loyalty and commitment.  Survey information is critical to infusing the value of customer attitudes directly into your business.

Consider the following example of loyal customers who stood ready to share their experiences:

Egg, the world’s largest online-only bank and now a Citigroup division, used its feedback program to reduce an innovative product’s time to market from up to one year to five weeks.

Egg surveyed 30,000 customers about the proposed customer proposition. A key success factor was that Egg’s customers were already accustomed to regular, personalized online contact.

The company had been using online-survey technology for five years to manage the customer experience. The customized nature of those surveys—with customer name and recent activity— led to higher response rates.

* * *

Building a program that enables you to continually take your customers’ pulse and build an ongoing dialogue in times of trouble is crucial to aligning your business with your customers’ attitudes.

To avoid generic feedback that you can’t act on, ensure that the pulse-check happens in conjunction with key customer interactions.

For example, a retailer feedback request should coincide with a purchase, return, or a contact-center inquiry. With the right tools and approach, you can use an alert system to ensure immediate action.

Only by combining  real-time understanding of customer attitudes with true business integration can you fully leverage the good work done in creating a customer dialogue.

Silos are so 2009, so get integrating!

Posted in B2B, Consumer Behavior, CRM, eMarketing, Marketing Mix (New Concepts), Search Engine Optimization with tags , , , , on November 29, 2011 by Consultant

Social CRM: Measuring Relationships (the Wrong Way, and the Right Way)

I can’t tell you how many things—magazine articles, email newsletters, Facebook updates, tweets, blog posts—come across my desk every week that purport to be about “social CRM” (customer relationship management) measurement tools.

Actually, I could.

I could make a pretty little chart and break it down by type of article, and even by source.

And it might look something like this:

I think we could all agree that the value of this chart is questionable, at best. It’s pretty, and if we tracked it over time, we might even be able to find some insights. We could use it as an indicator of how much interest there is in this topic. Some might even use it to predict growth in this area of marketing.

But no one would propose we use this method to determine the value of the relationships I have with the topics I’m measuring.

So why are so many brands using tools just like this to measure social media engagement?

The problem, in a nutshell, is this: garbage in, garbage out. But before we can discuss how to get the proper data inputs, we need to explore what social CRM could and should be to an organization.

I was quite surprised and saddened to see a quote from someone at Eloqua implying that social CRM is about support requests (at least that’s what the quote seems to imply). “Although social CRM and support are, justifiably, hot topics in the media, calls for support account for only 1% of all tweets,” Joe Chernov wrote in a post titled “Your Social Media Followers Are Your Best Customers.”

Social CRM is about building and managing relationships of value in a world where brands require a digital and social presence:

  • For someone with a promotions background, that means identifying likely candidates for offers and tracking them through to conversion.
  • For someone with a lead-generation or B2B background, that means getting candidates to self-identify and passing them into a lead-management system.
  • For someone with an advertising or media background, that means paying lots of money for TV ads with some mysterious end result of increasing sales. (OK, that is a bad example.)
  • For a digital marketer, it means everything. We can no longer afford to not attach profit and revenue valuations to our efforts.

I will talk more about building social CRM programs in a later article. Here, I want to focus on a key aspect of social CRM: our ability to measure our success at building relationships of value.

Let’s go back to that first chart. It’s an indicator that could show us increased interest, over time, in the topic we’re monitoring. I could run a search in January. Then in February, I could run the search again and compare how many people are promoting these tools vs. January. Rinse and repeat.

We end up with a chart that appears in just about every social media monitoring report:

Here, we see the number of people talking about terms that are of interest to us, month over month. It could be about product mentions. It could be about key issues. That doesn’t matter. What really matters is how this data helps us understand the value of the relationships we are building (or not building).

But wait. That’s not what this chart shows us. It just shows us how many people are talking about something we are searching for. They could be the same people every period, or there could be 100% churn with no consistency across periods. For all we know, our efforts could simply be driving volume at the cost of relationships.

Someone usually pipes up at this point and shows me how they are tracking sentiment. Great. So we’re carefully tracking whether overall group mentality and conversation is trending positive or negative, but we still have no way to measure the relationships. Awesome.

I should point out that the fault for all of this confusion lies partly with the tool providers. We are all starting with measurements that social media monitoring tools just happen to provide. But what if we weren’t? What questions would we ask if we were designing this measurement program from the ground up? What knowledge would we want? How would we design the reporting tools to help us build long-term relationships of value to our brand?

Here are just some of the types of key questions we should be asking:

  • How many of the people from January are also active in February? What about in March?
  • Is there a core group of people driving different conversations?
  • What percentage of these people want to engage with our brand?
  • Is the group that talks about us more often over time more or less likely to purchase or participate in an activity?

In the charts presented earlier, we’re actually throwing away the data we gathered the previous month. So the first question we need to answer is this: What percentage of people from one period is still taking about us in a later period?

We need to start creating and seeing charts like this one:

If you’ve invested a lot in social or digital media, I hope you have a growing percentage of people talking about you or engaging with you month over month and quarter over quarter. And, if you do, who are these people? Which ones are driving the conversation? How do their sentiments compare with those of the rest? Or, my favorite question: what else are they talking about?

In short, it’s also important to look at how influence is being defined. Tools like Klout provide great shortcuts for understanding the activity and reach of individuals online. But what if your influencers don’t rate highly in Klout? What if they are everyday people who are so passionate about your brand that they are talking about you every month… and you just don’t know who they are?

Posted in B2B, Consumer Behavior, CRM, eMarketing, Marketing Mix (New Concepts) with tags , , , , , , on November 29, 2011 by Consultant

How Vulnerable Are You to Customer Defection?

In the early ’90s, the term “customer relationship management” (CRM) joined the marketing lexicon. Though the idea is often thought to refer to the implementation of some kind of technology, the real idea behind CRM is that the management of customer relationships is a business imperative.

CRM is about deciding which customers or segments to target, and then developing customer acquisition, retention, and growth plans that will attract and keep your best customers. CRM is really about making your customers the heart of your business.

Our job as marketers is to acquire, grow, and retain profitable customer relationships to create a sustainable competitive advantage.

How do you measure customer relationships?

We’ve all come to accept that creating customer loyalty is an integral part of any organization’s strategy and focus. Various factors influence the success of any customer relationship initiative. Here are five critical success factors:

  1. Clearly defined business outcomes related to customer acquisition, retention, and growth
  2. Agreement about who the customer is and what they want and need from your category (and you)
  3. Well-defined customer segments (and their desired behaviors) and customer-experience objectives
  4. A documented, integrated customer strategy
  5. Explicit measures of success, and the data and processes needed to support the metrics

 

Customer satisfaction and loyalty are two of the most common measures of success. A variety of models are used to measure and quantify customer loyalty, ranging from simple recency and referral models to RFM and customer lifetime value models. Recent research is examining those models to ascertain which, if any, truly measure customer loyalty.

Many organizations would agree that a loyal customer…

  • Stays with the brand despite competitive offers, changes in price, negative word-of-mouth, and product failures
  • Increases business/engagement in some way
  • Actively promotes the brand to others

Though there are many approaches to measuring customer loyalty, one metric that many organizations should consider is the Vulnerability Index.

Add the vulnerability index to your marketing KPIs

A vulnerability index serves as a way to measure loyalty in the face of competitive pull. Its purpose is to help you identify your most loyal customers—those who are going to stick with you through thick and thin.

To calculate your vulnerability index, you will need excellent market intelligence about your competitors’ campaign’s channel, offers, and markets. Once you have this information, follow these seven steps to construct your vulnerability index:

  1. Map the competitive activity. Include the competitor’s name, offer, duration of offer, and the offer’s focus area and market.
  2. Generate a list of loyal customers in the market where the campaign ran.
  3. Map their repurchase and engagement cycle based on frequency and last purchase date.
  4. Isolate all the customers whose repurchase or renewal dates fall within the competitor’s campaign period. This is your observation set (OS) and the set of customers who will experience the greatest competitive pull and are, therefore, the most vulnerable.
  5. Define your observation period, which is generally the campaign launch date and one purchase cycle after the last date of the competitor’s campaign.
  6. Monitor the purchases by vulnerable customers. Track all the customers whose purchases drop during the observation period. These customers constitute your vulnerable set (VS).
  7. Calculate the vulnerability index. Divide your VS by your OS and multiply that number by 100:

    Vulnerability Index = (VS/OS) x 100.

The index will give you a good idea of the proportion of customers who are succumbing to competitive pressure and some idea about the level of loyalty in those customers. If the index is high, you know that there is something to worry about. If the index is low, you can assume, with some degree of certainty, that your customers are exhibiting robust loyalty to the brand.

Because Marketing is charged with finding, keeping, and growing the value of customers, customer retention falls within the domain of marketing. Therefore, marketing organizations should have at least one objective aimed at retaining customers.

In addition to monitoring customer loyalty and advocacy and customer churn, Marketing should also keep tabs on customer vulnerability. If your vulnerability index begins to climb and exceed that of your competitors, you can anticipate that your defection rate is going to increase.

By monitoring your vulnerability index, you will know who your most loyal customers are, and you will be able to develop and implement strategies to withstand competitive pressure.

Read more: http://www.marketingprofs.com/articles/2011/4629/how-vulnerable-are-you-to-customer-defection#ixzz1f5bJmseK