Protect Your Brand Before You Have One

The following post originally appeared in the April edition of Innovate Arkansas

For whatever reason, we love to follow big name brands as they spiral down in their latest public relations tail spin. Whether it’s Southwest Airlines and their recent and very public encounter with director Kevin Smith, or Tiger Wood’s travails, or BP, this year's poster boy for image mismanagement, we tend to be captivated by their problems.

We’re so fixated we overlook those brands that get it right. Most of us have to go back to Johnson & Johnson’s handling of the 1982 Tylenol crisis to find a role model.

Is brand and reputation management relevant to a start up? “Hey, we just started, so we don’t have an establish brand.” Actually, brand management is even more important to a start up than to an established company. Here’s why.

I teach a marketing management class at the local university. According to the textbook, released in 2009, the average dissatisfied customer gripes to 11 others. Now that Facebook and Twitter have gone mainstream, that number is probably 1,100 or more. Plus, smart-phones allow you to complain to the world in real time, while you argue with the ticket agent, while the server defends the well done steak when you most certainly said medium rare, or while the conference key note speaker is slogging through slide 12 of a 55 slide presentation. An established company has a reservoir of brand equity it can draw on. Start ups don’t. One crisis could sink a new firm.

So how does a start up protect its brand when a crisis happens? Here are three imperatives.
1. Be human –Companies are made up of humans but often appear faceless. Remember that brands are emotional connections with customers. Connect with your customers by saying:
• “I’m sorry
• “I was wrong”
• “Please forgive me”

This is risky and especially hard for technology-based firms, but it will start you on the way to repairing the relationship.

2. Be transparent – Now is not the time to hide behind lawyers or techno-speak.
• “Here’s what we found”
• “Here’s what we’re doing to fix the problem”
• “Here’s what we’re doing to keep it from happening again”

Common sense (and your attorneys) will guide you about how much to say, but the point is your customers want to know you’re doing something about the issue.

3. Be quick – Finally, do what you said you were going to do and then tell your customers when you finished it. Quick, pretty-good results trump long drawn out excellent actions every time.

The beauty of managing your start up’s brand is that your cycle time is usually a fraction of that of the larger firm. You’re closer to the problem (heck, you probably caused it) and you can fix it faster.

How you respond to problems speaks volumes about your company and your brand and could turn complainers into advocates.

Smart Customers versus Dumb Policies (the customer will always win)

Why is it that some companies seem to go out of their way to frustrate their customers? A friend of mine related the following story about his experience with a fast-growing regional wireless company, we’ll call them Wireless North (WN for short).

My friend has four phones, unlimited texting, two data plans, and who knows how many other features in his plan. He also has two children in college. One of those children, David (not his real name, lest WN figures this out), lives in another state this semester at his co-op job. My friend got an email from WN saying David has used over half his calling minutes (400) outside the calling area. So, like any good Baby Boomer, Dad calls WN customer service to get more details. He’s told that the calling plan prohibits a customer from having more that 50% of their minutes “roaming.” He’s then told his two options are: 1) stop using the phone until David gets back into the calling area, or 2) find another provider.

Now, is it just me, or does this not make sense? WN wants a long time customer to STOP using the service or go to a competitor? Do they not realize it costs at least 5 times more to get a new customer than to keep an existing one?

Meanwhile, David, in true Millennial fashion, has a solution. “Don’t worry, Dad,” he said. “When I come home this weekend, I’ll call you before I go to bed. Leave the phone call going over night, and by morning I will have more than half my minutes in my calling area.” Problem solved.

So what can we learn?
• First, don’t underestimate the intelligence of your customers. If you come up with a policy, rule, or process that is not in their best interest, they will find a way around it.
• Second, make it easy for existing customers to find solutions when the way they use your product conflicts with a company policy. Don’t suggest they go away….they probably will.
• Third, get rid of company policies that don’t make sense (see #2).

The customer service rep was following the rules. Your customers, however, won’t. Recognize that up front and find ways to make it easy for your customers to deal with you. They are always smarter than you when it comes to spending THEIR money.

Charging for a Free Lunch

No one likes to pay for something that used to be free. And no company likes to tell its customers they have to start paying for a service they got for nothing. Nevertheless, it happens all the time and, in many cases, it causes hard feeling and ill-will between customer and company.


The folks at Pandora, the online streaming music service that allows you to create your own radio “channels,” faced the same problem. Due to royalty issues with its providers, Pandora had to begin charging for some of their content. As a devotee of the service, I was leery about what was coming. After all, Jott used to be free, and after they hooked me, they cut off the free service.


Here’s an excerpt from the email I got from Tim Westergren, the founder of Pandora.

First, I want to let you know that we’ve reached a resolution to the calamitous Internet radio royalty ruling of 2007. After more than two precarious years, we are finally on safe ground with a long-term agreement for survivable royalty rates – thanks to the extraordinary efforts of our listeners who voiced an absolute avalanche of support for us on Capitol Hill. We are deeply thankful.

While we did the best we could to lower the rates, we are going to have to make an adjustment that will affect about 10% of our users who are our heaviest listeners. Specifically, we are going to begin limiting listening to 40 hours per month on the web. Because we have to pay royalty fees per song and per listener, it makes very heavy listeners hard to support on advertising alone. Most listeners will never hit this cap, but it seems that you might.

Ok, so far so good, although I was expecting the big “but” that was going to nail me with big fees. This is what came next:

We hate the idea of capping anyone's usage, so we've
been working to devise an alternative for listeners like you. We've come up with two solutions and we hope that one of them will work for you:

Your first option is to continue listening just as you have been and, if and when you reach the 40 hour limit in a given month, to pay just $0.99 for unlimited listening for the rest of that month. This isn't a subscription. You can pay by credit card and your card will be charged for just that one month. You'll be able to keep listening as much as you'd like for the remainder of the month. We hope this is
relatively painless and affordable - the same price as a single song download.

Your second option is to upgrade to our premium version called Pandora One. Pandora One costs $36 per year. In addition to unlimited monthly listening and no advertising, Pandora One offers very high quality 192 Kbps streams, an
elegant desktop application that eliminates the need for a browser, personalized skins for the Pandora player, and a number of other features: http://www.pandora.com/pandora_one.

Tim goes on to add that a third option is to stop listening once you get to the 40 hour cap for that month. He closed the email by saying they’ve created a counter that will let you see where you are to date toward your 40 hour cap and by thanking me once again for using the Pandora service.


What’s the catch? There is none. Pandora has had to change their business model and did so in a way that almost makes you feel good about paying a small fee to continue being a customer. What did they do right and what can marketers learn from this? I see three things:

1. Lay out the issue clearly – Tim spoke of the royalty settlement and its impact on his business. No fluff, just straightforward talk.


2. Give the customer options – I now have three choices (four if you count stopping listening altogether). One of these three will surely work for me.


3. Give the customer time to react – I got Tim’s email in early July. His changes won’t be effective until August, giving me plenty of time to consider my options (not that this is a life-changing decision, but I do like my Bob Seeger and James Brown channels).

Product management’s role is to set pricing strategy. Part of that strategy includes how / when you change price. Pandora’s decision on how they increased their price says a lot about their brand and the type of company they want to be.


P.S. I responded to Tim’s email and got a prompt (less than 24 hour) response from Jasmyn, a “listener advocate” thanking me for my comments and my support of Pandora. Well done!

Reading, Writing, and Red Sauce?

A Pocatello, Idaho teacher is trying to do his part to fill his school's budget gap by offering advertising on exams. On a recent history exam, at the bottom of each page in 1" red letters was: MOLTO'S PIZZA 14" 1 TOPPING JUST $5. The principal wasn't thrilled, but Jeb Harrison convinced him that it helped to illuminate topics such as the Great Depression.

Molto provided 10,000 sheets of paper, valued at $315 for Harrison's five classes, with their ad on each page. I would suspect the $315 was more than offset by the PR storm the school had to handle.

I won't get into the merits (or demerits) of advertising and branding in schools. But you have to hand it to Molto Caldoro Pizzeria. They:

1. Understand their target market (teenagers)


2. Understand the importance of being first in a new channel (at the bottom of exams)


3. Understand the value and receptiveness of cash strapped intermediaries (school districts facing budget cuts)

As an instructor at a local university, and as a parent of a high school student, I don't want ads on the bottom of tests. But we marketers should all take a lesson from Molto and look for innovative ways to engage our customers.

General George Patton on Image

This is the second in a series on General George S. Patton, famous American military figure during World War II. Last month we looked at what old Blood and Guts had to say about speed versus haste. This month, Patton talks about image.

“I am tremendously proud of your deportment, the way you behave towards private property. But the way you carry yourselves is shockingly bad. You, the soldiers of the greatest army of the greatest nation in the world, wander around like furtive pickpockets with your shoulders sloping, your stomachs sticking out, and your hands hanging down. The act of standing properly gives you that feeling of superiority which you have so nobly won. Show the world how great you are. Look like soldiers!”

What image do we portray? As marketers, we should know better than anyone about impact of a compelling “brand.” Do our companies “wander around like furtive pickpockets” in the market place? Our image includes everything from the way our employees answer the phone to our e-mail tone to our website to, yes, the way we dress.

In this challenging economy, most people will forgive you for becoming lax with your image. But they will remember you for standing tall and showing the market how great you are. Look like soldiers!

Fish = Sea Kittens?

Some topics just beg to be talked about. This is one. Our friends at PETA (People for the Ethical Treatment of Animals) have upped the ante on branding. A recent “Day to Day” segment on National Public Radio featured PETA’s effort to save the fish. They’ve started a campaign to get people to think of fish as Sea Kittens. To quote Dave Barry, “I’m not making this up.”


Campaign coordinator Ashley Byrne explained it this way, “PETA thought that by renaming fish sea kittens, compassionate people who would never dream of hurting a dog or cat might extend that sympathy to fish, or sea kittens.”


Make no mistake. I am not a fan of PETA’s mission or tactics. But you have to hand it to them for trying to remake an image that’s thousands or millions of years old (depending on your view of Creation). General Motors has been trying to change its image for years with no success, and they’re only a hundred years old.

From a marketing standpoint, they’re going about it the right way:

• Think small: the campaign is being tested in North Carolina before going nationwide. That gives them a chance to test and tweak positioning and messaging early in the process.


• Think long term: a cornerstone of their campaign is aimed at getting children to think in terms of Sea Kittens. PETA understands rebranding doesn’t happen overnight.


• Think emotionally: brands are nothing more than an emotional reaction to tangible and intangible stimuli. Fish don’t melt your heart. Kittens do (for some people).
  

It will be interesting to see how this plays out. If they can pull this off, what’s next? Used car salesmen will be rebranded yellow Labs? Lawyers become koala bears? This could become the “golden age” for marketing consultants!!!

What do you think about PETA’s campaign?