I have seen and read so many positioning statements that sound like wonderful features or wish lists from the organization. They are often written by people inside who want those on the outside to believe the fantasy--that they are what they claim in the positioning. Words like "best", "exclusive", etc., find their way into the positioning without any sense of internal challenge as to whether or not they can be defended or supported. Too often, outside firms that are brought in to help with the positioning only hurt the process further when they think of positioning as trying to influence the market rather than explaining choices form the market perspective.
Positioning solves a number of issues for an organization: it identifies the target, it establishes the point of differentiation, it frames a promise, and its offers a reason to buy, invest, join, etc. In other words, solving the positioning puzzle is one of the the most important steps in the strategic process.
There are a number of must haves in a positioning:
--First, it must have a target. The target can be stated in demographic terms, or psychological terms, or behavioral terms, or any other way that we normally segment a market and identify a target. It doesn't have to say that the product or service is intended for men or women or craftsmen or some other group, but it should say who the product or service is intended for.
--Second, the positioning must create a frame of reference. All brands create a promise of performance and positioning helps, as a major part of the branding process, to state the promise that the target will receive
--Third, the positioning needs to offer a point of differentiation
--Finally, the positioning should give a reason to buy. In other words, what does the target get out of this experience, investment, etc.?
Companies need to recognize that positioning is a competitive endeavor. In other words, one is not just positioning ones own company, but one is juxtaposing the company against competition. Everyone in an industry group has similar offerings. The question is why you are different? Why should I give you my time, money, etc. versus someone else? This is a zero-sum game. We need to assume that when one buys us they do not buy someone else, or the corollary, that when they buy our competition, they are excluding us. It is called positioning because we are trying to establish our position in the market. Our customers and other key stakeholders will determine where they position us. Hopefully, our desired position will resonate with stakeholders.
So, positioning is critical in marketing strategy and branding. Good positioning should create a bit of angst internally. It is a mirror to the company from the client or customer perspective. If it is universally liked it is, like works of art, probably not that good. Great brands are not universally liked, but they are absolutely loved by some-- enough people to make them valuable. We want to differentiate, not be universally loved in our positioning. If we are for everyone, we likely don't have much to offer. We need to figure out who really needs us and why and make that clear in our positioning.
Showing posts with label branding. Show all posts
Showing posts with label branding. Show all posts
Monday, June 28, 2010
Thursday, June 3, 2010
Is Reputation About Delivering on Expectations, or Just the Expectations?
I recently heard a presentation by Charles Fombrun, perhaps the most widely published academic in reputation management. He defined brand as the promise that sets expectations and reputation as the delivery on expectations.
I have the utmost respect for Fombrun, but I disagree with him. I believe that reputation is related to expectations, not to the delivery on expectations. Brands do indeed create expectations. Reputation, then, is related to the branding effort--does the promise meet the desired expectations of stakeholders? If it does, our reputation will rise; if not, it will lag. Expectations can come from the company's efforts, from touch points at which the stakeholder meets the company, from one's peers, or from 3rd party influentials, such as the media or others.
Expectations run on a continuum. One can have negative expectations of a company. What would it mean if we delivered on those expectations, as Fombrun argues? Would we build reputation? Of course not, we would simply reinforce the negative perceptions of value. For example, it could be argued that for many stakeholders the BP oil leak in the Gulf reinforced their negative expectations of the oil industry. BP, then, delivered on those expectations.
On the other hand, let's take the current situation of J&J's crises related to Tylenol for children in which there were quality problems in the plant. J&J had one of the best reputations in the world. Most people had high expectations of the company. Their actions were below expectations. In this case, J&J would suffer some reputation damage, although the high expectations prior to the crises would likely buffer it compared to a company with lower reputation (lower expectations of its value).
If a company with a bad reputation attempts to invest in social responsibility efforts to improve its reputation in order to meet stakeholder expectations, according to Fombrun, we would expect that the company's reputation would improve. However, research has found that the opposite can in fact occur. Companies with poor reputations that attempt to build their reputations too quickly run into stakeholder disbelief. The expectations of stakeholders is that the company is a bad actor. If it tries to do something that it thinks would deliver on the value stakeholders would like to see, it risks further alienating stakeholders. Its actions are questioned--stakeholders assume that the company must be trying to buy a good reputation.
Companies with poor reputations need to build an organizational culture that allows them to act reputably and do so for some time before trying to engage in a program to convince stakeholders that it is reputable. In other words, reset expectations.
So, reputation is the expectations of value perceived by stakeholders. We manage reputation against those expectations, we do not deliver on them.
I have the utmost respect for Fombrun, but I disagree with him. I believe that reputation is related to expectations, not to the delivery on expectations. Brands do indeed create expectations. Reputation, then, is related to the branding effort--does the promise meet the desired expectations of stakeholders? If it does, our reputation will rise; if not, it will lag. Expectations can come from the company's efforts, from touch points at which the stakeholder meets the company, from one's peers, or from 3rd party influentials, such as the media or others.
Expectations run on a continuum. One can have negative expectations of a company. What would it mean if we delivered on those expectations, as Fombrun argues? Would we build reputation? Of course not, we would simply reinforce the negative perceptions of value. For example, it could be argued that for many stakeholders the BP oil leak in the Gulf reinforced their negative expectations of the oil industry. BP, then, delivered on those expectations.
On the other hand, let's take the current situation of J&J's crises related to Tylenol for children in which there were quality problems in the plant. J&J had one of the best reputations in the world. Most people had high expectations of the company. Their actions were below expectations. In this case, J&J would suffer some reputation damage, although the high expectations prior to the crises would likely buffer it compared to a company with lower reputation (lower expectations of its value).
If a company with a bad reputation attempts to invest in social responsibility efforts to improve its reputation in order to meet stakeholder expectations, according to Fombrun, we would expect that the company's reputation would improve. However, research has found that the opposite can in fact occur. Companies with poor reputations that attempt to build their reputations too quickly run into stakeholder disbelief. The expectations of stakeholders is that the company is a bad actor. If it tries to do something that it thinks would deliver on the value stakeholders would like to see, it risks further alienating stakeholders. Its actions are questioned--stakeholders assume that the company must be trying to buy a good reputation.
Companies with poor reputations need to build an organizational culture that allows them to act reputably and do so for some time before trying to engage in a program to convince stakeholders that it is reputable. In other words, reset expectations.
So, reputation is the expectations of value perceived by stakeholders. We manage reputation against those expectations, we do not deliver on them.
Wednesday, March 10, 2010
Customer Service is a Major Driver of Reputation
There has always been a debate about the extent to which reputation really matters to investors. On the one hand, there has been research showing a positive correlation between positive financial results and reputation. On the other hand, some hard-nosed quantitative types argue that investors only care about getting rich and are willing to forgo reputation when they are getting favorable returns.
However, we often fail to step back and consider what reputation does to the sell-side analysts who influence the market value of the stocks we buy. In an October 2009 Journal of Marketing Research article, Eugene Anderseon and Sattar Mansi looked at the impact of customer satisfaction on bond ratings. They found that customer satisfaction by those handling the bond does influence the ratings of the bond.
Customer satisfaction is a major driver of reputation. It is interesting, though, that it often does not show up in the literature as a focus of reputation. Most of the reputation literature and many of the people who profess to be reputation experts, focus instead on good public relations or corporate advertising or corporate social responsibility. They seem to neglect the fact that reputations, like brands, are built, enhanced and destroyed at all of the "touch points" a company meets its various stakeholders.
Step out of the bond market for a moment, since it may be a bit too esoteric for many readers. Consider the reputation of a hotel. Where does a hotel's reputation rest? To a large extent, it rests on customer service. We determine if we are going to like a hotel before we enter the room--how are we greeted, how long are the check-in lines, is our room ready, does the bell-hop let us carry our own bags if we wish to? By the time we get to the room, we are already predisposed to either enjoy or not enjoy our stay. This is customer service. But, where do hotels spend their so-called reputation dollars? On advertising, websites, public relations, and social media. Why is customer service not considered part of reputation management?
It is a waste of time and energy to attempt to "spin" a reputation. There is too much transparency today. Expectations of performance are low. That's the good news. Companies that care can exceed expectations more easily than ever. But, what is happening in many companies is that they look to their competitors and see them cutting costs for customer service and figure that they can also cut costs. Sounds like a bunch of kids saying: "all the kids in school are doing it so I want to do it". Let the rest of the "kids" do what they want to follow one another--be an adult. By doing so, you may actually differentiate and not only increase reputation but also customer attraction and retention, which means greater profits.
However, we often fail to step back and consider what reputation does to the sell-side analysts who influence the market value of the stocks we buy. In an October 2009 Journal of Marketing Research article, Eugene Anderseon and Sattar Mansi looked at the impact of customer satisfaction on bond ratings. They found that customer satisfaction by those handling the bond does influence the ratings of the bond.
Customer satisfaction is a major driver of reputation. It is interesting, though, that it often does not show up in the literature as a focus of reputation. Most of the reputation literature and many of the people who profess to be reputation experts, focus instead on good public relations or corporate advertising or corporate social responsibility. They seem to neglect the fact that reputations, like brands, are built, enhanced and destroyed at all of the "touch points" a company meets its various stakeholders.
Step out of the bond market for a moment, since it may be a bit too esoteric for many readers. Consider the reputation of a hotel. Where does a hotel's reputation rest? To a large extent, it rests on customer service. We determine if we are going to like a hotel before we enter the room--how are we greeted, how long are the check-in lines, is our room ready, does the bell-hop let us carry our own bags if we wish to? By the time we get to the room, we are already predisposed to either enjoy or not enjoy our stay. This is customer service. But, where do hotels spend their so-called reputation dollars? On advertising, websites, public relations, and social media. Why is customer service not considered part of reputation management?
It is a waste of time and energy to attempt to "spin" a reputation. There is too much transparency today. Expectations of performance are low. That's the good news. Companies that care can exceed expectations more easily than ever. But, what is happening in many companies is that they look to their competitors and see them cutting costs for customer service and figure that they can also cut costs. Sounds like a bunch of kids saying: "all the kids in school are doing it so I want to do it". Let the rest of the "kids" do what they want to follow one another--be an adult. By doing so, you may actually differentiate and not only increase reputation but also customer attraction and retention, which means greater profits.
Saturday, February 13, 2010
Philadelphia Orchestra Sounds a Sour Note with New Brand Campaign
The Philadelphia Orchestra, long considered one of the greatest orchestras in the world, is nearly bankrupt. It is little wonder. Costs continue to escalate but the audience has not. Attend a symphony performance in almost any American city and you will feel young if you are under the age of 70. The audience is graying and dying and donations are dwindling and orchestras are having a difficult time finding new devotees.
To make themselves more relevant to a younger audience, the Philadelphia Orchestra has embarked on a new campaign with the tag line--ready for this-- "Unexpect Yourself". That's right, the symphony, the bastion of high culture, has gotten so desperate that it has gone low culture, bastardizing the English language in hopes of drawing in younger people who think that it must be a pretty hip place. If letters to the editor and blogs can be a measure of reaction, the current symphony membership base is not too enthralled with the campaign.
The creators of this disaster is a firm called Annodyne. According to their own press release, Annodyne "utilized its strengths in digital marketing to create a campaign that cultivates and engages a growing and diverse audience that may be unaware of the Orchestra as an entertainment option. Annodyne’s creative strategy focused on communicating the extrasensory experience of attending the Orchestra with a unique positioning aimed at competing against the growing entertainment market that now includes options both in and outside of the home".
As someone who has worked in the brand and reputation business for a long time, the only thing I can respond to this is: "Huh?? I can't even imagine what my reaction would have been had this plan been presented to me. I likely would still be laughing or walking out of the room.
The orchestra is a brand. Yes, the brand needs to be revitalized, but not against the growing media options inside and outside the home. One does not choose a symphony against playing video games. One chooses a symphony against other cultural activities. Our selectivity process is more narrow than that. Has this firm really every heard of customer segmentation analysis and perceptual mapping? The symphony is not competing against all other activities. It is competing against "in-kind" activities within the same cultural category. That's how people make choices--not from a huge arrangement, but from smaller categories of choice. I would really suggest that Annodyne read some of the more current work on customer choice, selection and segmentation. No wonder they went for a "street cred" slogan--they really think that they are up against a wider selection of choices than they really are. The problem is the symphonic music, as a category, is no longer within the alternative selection criteria of most baby-boomers, let alone Gen X and Y and Millenials. You have to recapture the category, not try to sell against entertainment alternatives.
Annodyne suggests on their website that the Internet is a channel that has become essential. It is not a channel. It is a technology that has created and will continue to create social and cultural upheaval and change, as fundamental and the advent of the printing press. So, a group of orchestra leaders--most who have little or no understanding of the Internet--listened to a group that told them they they must communicate to the web-based generation on their terms. This was a disaster compounding itself.
Needless to say, the campaign has become the fodder of countless news media commentaries deriding it. How could a board of a symphony allow an ad agency to sell them on something like this? That, of course, is a rhetorical question because it appears that a desperate board turned to an agency that likely had some board connections that sold them on a poorly conceived campaign. It makes me embarrassed for the Philadelphia Orchestra. If this is the best that the orchestra board could come up with, they may soon be considering a new theme: "Stick a Fork in Us... We're Done!"
To make themselves more relevant to a younger audience, the Philadelphia Orchestra has embarked on a new campaign with the tag line--ready for this-- "Unexpect Yourself". That's right, the symphony, the bastion of high culture, has gotten so desperate that it has gone low culture, bastardizing the English language in hopes of drawing in younger people who think that it must be a pretty hip place. If letters to the editor and blogs can be a measure of reaction, the current symphony membership base is not too enthralled with the campaign.
The creators of this disaster is a firm called Annodyne. According to their own press release, Annodyne "utilized its strengths in digital marketing to create a campaign that cultivates and engages a growing and diverse audience that may be unaware of the Orchestra as an entertainment option. Annodyne’s creative strategy focused on communicating the extrasensory experience of attending the Orchestra with a unique positioning aimed at competing against the growing entertainment market that now includes options both in and outside of the home".
As someone who has worked in the brand and reputation business for a long time, the only thing I can respond to this is: "Huh?? I can't even imagine what my reaction would have been had this plan been presented to me. I likely would still be laughing or walking out of the room.
The orchestra is a brand. Yes, the brand needs to be revitalized, but not against the growing media options inside and outside the home. One does not choose a symphony against playing video games. One chooses a symphony against other cultural activities. Our selectivity process is more narrow than that. Has this firm really every heard of customer segmentation analysis and perceptual mapping? The symphony is not competing against all other activities. It is competing against "in-kind" activities within the same cultural category. That's how people make choices--not from a huge arrangement, but from smaller categories of choice. I would really suggest that Annodyne read some of the more current work on customer choice, selection and segmentation. No wonder they went for a "street cred" slogan--they really think that they are up against a wider selection of choices than they really are. The problem is the symphonic music, as a category, is no longer within the alternative selection criteria of most baby-boomers, let alone Gen X and Y and Millenials. You have to recapture the category, not try to sell against entertainment alternatives.
Annodyne suggests on their website that the Internet is a channel that has become essential. It is not a channel. It is a technology that has created and will continue to create social and cultural upheaval and change, as fundamental and the advent of the printing press. So, a group of orchestra leaders--most who have little or no understanding of the Internet--listened to a group that told them they they must communicate to the web-based generation on their terms. This was a disaster compounding itself.
Needless to say, the campaign has become the fodder of countless news media commentaries deriding it. How could a board of a symphony allow an ad agency to sell them on something like this? That, of course, is a rhetorical question because it appears that a desperate board turned to an agency that likely had some board connections that sold them on a poorly conceived campaign. It makes me embarrassed for the Philadelphia Orchestra. If this is the best that the orchestra board could come up with, they may soon be considering a new theme: "Stick a Fork in Us... We're Done!"
Sunday, February 7, 2010
More Commonality and Less Functionality is Needed
As a result of the Internet and social media, marketing, branding and corporate communications are converging. All all looking at a multi-stakeholder world in which relationships become king. Each of these disciplines has begun arguing that they deserve to have prominence in the management of social media.
Social media are surrounding companies and pulling knowledge that was once held inside the company to the "edge of the network". Companies can no longer push information at a stakeholder. Conversations and relationships are what predominate in the social media world. Consumers and other stakeholders have gained power of information and the ability to create and destroy value. They expect to be dealt with in a respectful dialogue, not as passive consumers of old.
So, who should own social media? Marketing argues that social media is part of the marketing mix. Brand management argues that people are talking about brands in social media and they should be the owners. Corporate communications (public relations) argues that they have always been relationship-driven and so they are best prepared to own social media.
The correct answer, I believe, is that none of them should own social media. Social media are not new channels, but rather conversations happening in cyberspace that involve the organization in one way or another. The Internet is fundamentally changing society and all organizations. The best way to deal with social media is to organize horizontally, not delegate social media to a vertical function within the organization. The reputation of the company depends on the organization's ability to manage all "touch points", and since no one function owns all the touch points, they should be managed in a coordinated, integrated fashion. However, this is not happening in most organization.
The old way of thinking is that a function within the company was given prominence or ownership over an activity. They could decide whether or not to partner with anyone else. It made for a very ineffective way of dealing with various stakeholders. Investors heard one message; customers heard another; employees still another. Things have gotten better, but improvements are still needed to keep pace with changes in the market environment.
Social media is a disorganized set of relationships and conversations. The best way to deal with social media is through the integration of marketing, branding and communications, along with employee engagement and sales management. Companies should be trying to create networks within their own organizations that mirror the networks on the outside. It's the best way to enhance the effectiveness of all of these functions and the perceived value of the company.
Social media are surrounding companies and pulling knowledge that was once held inside the company to the "edge of the network". Companies can no longer push information at a stakeholder. Conversations and relationships are what predominate in the social media world. Consumers and other stakeholders have gained power of information and the ability to create and destroy value. They expect to be dealt with in a respectful dialogue, not as passive consumers of old.
So, who should own social media? Marketing argues that social media is part of the marketing mix. Brand management argues that people are talking about brands in social media and they should be the owners. Corporate communications (public relations) argues that they have always been relationship-driven and so they are best prepared to own social media.
The correct answer, I believe, is that none of them should own social media. Social media are not new channels, but rather conversations happening in cyberspace that involve the organization in one way or another. The Internet is fundamentally changing society and all organizations. The best way to deal with social media is to organize horizontally, not delegate social media to a vertical function within the organization. The reputation of the company depends on the organization's ability to manage all "touch points", and since no one function owns all the touch points, they should be managed in a coordinated, integrated fashion. However, this is not happening in most organization.
The old way of thinking is that a function within the company was given prominence or ownership over an activity. They could decide whether or not to partner with anyone else. It made for a very ineffective way of dealing with various stakeholders. Investors heard one message; customers heard another; employees still another. Things have gotten better, but improvements are still needed to keep pace with changes in the market environment.
Social media is a disorganized set of relationships and conversations. The best way to deal with social media is through the integration of marketing, branding and communications, along with employee engagement and sales management. Companies should be trying to create networks within their own organizations that mirror the networks on the outside. It's the best way to enhance the effectiveness of all of these functions and the perceived value of the company.
Thursday, December 10, 2009
Credo Mobile--a New Take on Social Marketing
I just got mail for a new phone carrier called Credo Mobile. The concept is a really interesting one, combining a product with concepts learned in social activisim and now called social networking when applied to the Internet.
This is a unique and different way to create a community and one with the power in the palm of its hand to influence policies. For some time we have been hearing about social investing. Now, we have a product that focuses on a community that cares about liberal social causes. They are out there. They came out in record numbers to help elect Barack Obama President. They are connected through social networks, just like other communities of interest. There are communities on the right as well.
The CEO is Laura Scher, a social activist from San Francisco. The slogan for the company is "More than a network, a movement". From the literature and website, it seems that Scher was upset by positions taken by AT&T, Verizon and others who decided not to back liberal social positions to avoid potential conflicts in their market. They also were upset by the political contributions from the big phone companies that go to conservative politicians who oppose abortion rights or woman's rights.
So, the idea is that one switches away from their current wireless carrier and contracts through Credo, which runs its own network. They will buy you out of your current wireless contract. A portion one pays each month to Credo goes to organizations like Greenpeace, ACLU, and others.
I'm going to assume that the network is viable and that one will not have problems making and receiving calls or dropping calls in progress. Regardless of commitment, people are not going to stay with a wireless network that does not meet fundamental, function requirements.
I find this concept really interesting because it is once again a use of technology to find and collect a community of like-minded people. While Scher lives in San Francisco where there are many people who will find Credo of interest, I am most happy for the poor liberal who finds him/herself stuck in a conservative community and feels like a complete alien. Now, they can find others to connect with. That's the beauty of technology.
Credo and other such plans serve the niche market. The web has made it possible to create what Christopher Anderson termed the "Long Tail", the ability to serve niche needs that were not economically possible in markets governed by economies of scale. I'm sure we will see others networks like Credo. I would imagine that some conservative group will hear about this on Hannity or Glenn Beck and start a phone service that gives only to those who oppose abortion rights or are against climate change legislation.
What we are seeing again is that brand is an emotional connection between product and consumer. In the past, we had to deal with the mass market, even if we did not identify with the attributes. We had few choices. Laura Scher and her team were put off by the attributes and associations of Verizon and AT&T. In the old days they would have sent letters to the editor and send out fliers to their neighbors. Today, they create a new company to collect people with similar values and beliefs who not only will talk on the telephone, but also can use it to lobby and further build the case for their causes. Very ingenious! While some will be offended by the causes Scher supports, they now have a business model they too can follow for their own community.
This is a unique and different way to create a community and one with the power in the palm of its hand to influence policies. For some time we have been hearing about social investing. Now, we have a product that focuses on a community that cares about liberal social causes. They are out there. They came out in record numbers to help elect Barack Obama President. They are connected through social networks, just like other communities of interest. There are communities on the right as well.
The CEO is Laura Scher, a social activist from San Francisco. The slogan for the company is "More than a network, a movement". From the literature and website, it seems that Scher was upset by positions taken by AT&T, Verizon and others who decided not to back liberal social positions to avoid potential conflicts in their market. They also were upset by the political contributions from the big phone companies that go to conservative politicians who oppose abortion rights or woman's rights.
So, the idea is that one switches away from their current wireless carrier and contracts through Credo, which runs its own network. They will buy you out of your current wireless contract. A portion one pays each month to Credo goes to organizations like Greenpeace, ACLU, and others.
I'm going to assume that the network is viable and that one will not have problems making and receiving calls or dropping calls in progress. Regardless of commitment, people are not going to stay with a wireless network that does not meet fundamental, function requirements.
I find this concept really interesting because it is once again a use of technology to find and collect a community of like-minded people. While Scher lives in San Francisco where there are many people who will find Credo of interest, I am most happy for the poor liberal who finds him/herself stuck in a conservative community and feels like a complete alien. Now, they can find others to connect with. That's the beauty of technology.
Credo and other such plans serve the niche market. The web has made it possible to create what Christopher Anderson termed the "Long Tail", the ability to serve niche needs that were not economically possible in markets governed by economies of scale. I'm sure we will see others networks like Credo. I would imagine that some conservative group will hear about this on Hannity or Glenn Beck and start a phone service that gives only to those who oppose abortion rights or are against climate change legislation.
What we are seeing again is that brand is an emotional connection between product and consumer. In the past, we had to deal with the mass market, even if we did not identify with the attributes. We had few choices. Laura Scher and her team were put off by the attributes and associations of Verizon and AT&T. In the old days they would have sent letters to the editor and send out fliers to their neighbors. Today, they create a new company to collect people with similar values and beliefs who not only will talk on the telephone, but also can use it to lobby and further build the case for their causes. Very ingenious! While some will be offended by the causes Scher supports, they now have a business model they too can follow for their own community.
Tuesday, December 8, 2009
Kudos to Comcast
I had a great luncheon discussion today with Frank Eliason, the head of social media for Comcast. I am a customer of Comcast in Philadelphia. I also am a customer of Mediacom at my beach house in southern Delaware. Comcast looks like the best customer service company in the world and the most advanced technology company in the world compared to Mediacom. The latter gives new meaning to thinking and acting like a public utility--you know the attitude: "if you don't like the electric company, live in the dark". That's a public utility mentality and it typically hits those companies that are monopolies or close to it.
Comcast has historically been a company customers have loved to hate. They had terrible customer service numbers. They were a company featured in a famous YouTube video of a service man falling asleep on a customer's couch.
The business model of Comcast has made for problems. They run cable to a home and bring the home TV. A few years ago they started bringing in computer network and now telephone. They realized that they had to change. Many companies in similar positions do not sense the market forces requiring change and stay the course--think GM, Westinghouse (remember them?), and many others.
Comcast, either due to more competition or just waking up and wanting to be better, has focused on customer service. A few years ago, they hired Frank Eliason to begin blogging, Twittering, etc. to connect with customers. He has helped Comcast listen and respond. With the technology, Comcast has responded so quickly that customers have started to notice. And, what they have started to notice is that Comcast cares more than they thought they did. This is changing opinions and helping Comcast keep its installed customer base and attract back lost customers.
It is interesting that Comcast chose to put is social media group in customer service. Typically, the group is attached to either marketing or corporate communications. All too often, marketing wants to use social media to sell and corporate communications wants to use social media to either listen or "spin" its take on an issue. By putting the social media group in customer service, Comcast put it where it could do the most good.
Social media is becoming an important part of Comcast and a key part of its ability to fulfill its brand promise. I give Comcast lots of credit for recognizing its own problems, dealing with them, and trying to become better. Its use of social media is exemplary.
Comcast has historically been a company customers have loved to hate. They had terrible customer service numbers. They were a company featured in a famous YouTube video of a service man falling asleep on a customer's couch.
The business model of Comcast has made for problems. They run cable to a home and bring the home TV. A few years ago they started bringing in computer network and now telephone. They realized that they had to change. Many companies in similar positions do not sense the market forces requiring change and stay the course--think GM, Westinghouse (remember them?), and many others.
Comcast, either due to more competition or just waking up and wanting to be better, has focused on customer service. A few years ago, they hired Frank Eliason to begin blogging, Twittering, etc. to connect with customers. He has helped Comcast listen and respond. With the technology, Comcast has responded so quickly that customers have started to notice. And, what they have started to notice is that Comcast cares more than they thought they did. This is changing opinions and helping Comcast keep its installed customer base and attract back lost customers.
It is interesting that Comcast chose to put is social media group in customer service. Typically, the group is attached to either marketing or corporate communications. All too often, marketing wants to use social media to sell and corporate communications wants to use social media to either listen or "spin" its take on an issue. By putting the social media group in customer service, Comcast put it where it could do the most good.
Social media is becoming an important part of Comcast and a key part of its ability to fulfill its brand promise. I give Comcast lots of credit for recognizing its own problems, dealing with them, and trying to become better. Its use of social media is exemplary.
Saturday, December 5, 2009
Pharmaceutical Branding Leave Them Vulnerable to Generics
Pharmaceutical companies have historically been product focused. While the companies might talk about marketing, they are really sales organizations. Sales companies view themselves as product developers who push their products at a market. Drug companies take products from R&D and detail them to doctors. A marketing company would be more focused on customer needs and relationships and would measure themselves not by sales, but rather by customer satisfaction and retention.
Obviously, pharma companies are heavily regulated and the concept of customer attraction and retention might be a bit alien. Some would argue impossible. I would argue the opposite. Because of the way pharma companies see their value, they brand products with no connection to the parent company, which leaves them highly vulnerable when their patents expire and generic companies enter. When that happens, the market immediately becomes commoditized, i.e., dependent on price.
Pharma companies have screamed for years about the fact that they develop the drugs, investing, on average, $800 million and 12-years to bring a drug to market. Those are those that succeed through Phase III. There are many failures along the way. The heavy investments by drug companies in R&D has made the US the leader in pharmaceutical innovation.
Think about the intangible asset value of a research-based pharma company. They have the organization, the people, the resources and the ingenuity to develop life-saving drugs. It bewilders me, then, that these companies do build their corporate reputations and instead focus on product branding. Product branding is typically done because the scope of brands of the company and the number that compete with one another lend themselves to letting the product carry the value. This is a consumer products model. There is little value in the company. The value is with the product.
In more scientific companies, we typically find masterbranding or endorsed branding, where the company associates itself with the product because the customer finds value in the company behind the product. One would think that this would be the case for pharma companies. If there is significant intangible value in Merck, Novartis, Pfizer, Genentech, AstraZeneca, etc., etc., would it not be smart from a branding perspective to utilize that equity in their branding strategy?
This has not been the case in pharma. So, when the patent expires, generic companies can seize more value than they should be able to grab because the value was almost totally within the product. If there were association to the parent, it would be more difficult for the generic company to take as much value. There could be an opportunity by the original manufacturer to differentiate on value rather than price alone. Pharma companies always try to make the claim that they were the original discoverer and distributor of the drug. Why would they not invest in bringing that value to the market more forcefully? It could prove to be a turning point for many companies that creates a barrier to generics. While they would likely still loose the patent to a generic company, they would be able to maintain more of the real value in the drug for a longer period of time.
Obviously, pharma companies are heavily regulated and the concept of customer attraction and retention might be a bit alien. Some would argue impossible. I would argue the opposite. Because of the way pharma companies see their value, they brand products with no connection to the parent company, which leaves them highly vulnerable when their patents expire and generic companies enter. When that happens, the market immediately becomes commoditized, i.e., dependent on price.
Pharma companies have screamed for years about the fact that they develop the drugs, investing, on average, $800 million and 12-years to bring a drug to market. Those are those that succeed through Phase III. There are many failures along the way. The heavy investments by drug companies in R&D has made the US the leader in pharmaceutical innovation.
Think about the intangible asset value of a research-based pharma company. They have the organization, the people, the resources and the ingenuity to develop life-saving drugs. It bewilders me, then, that these companies do build their corporate reputations and instead focus on product branding. Product branding is typically done because the scope of brands of the company and the number that compete with one another lend themselves to letting the product carry the value. This is a consumer products model. There is little value in the company. The value is with the product.
In more scientific companies, we typically find masterbranding or endorsed branding, where the company associates itself with the product because the customer finds value in the company behind the product. One would think that this would be the case for pharma companies. If there is significant intangible value in Merck, Novartis, Pfizer, Genentech, AstraZeneca, etc., etc., would it not be smart from a branding perspective to utilize that equity in their branding strategy?
This has not been the case in pharma. So, when the patent expires, generic companies can seize more value than they should be able to grab because the value was almost totally within the product. If there were association to the parent, it would be more difficult for the generic company to take as much value. There could be an opportunity by the original manufacturer to differentiate on value rather than price alone. Pharma companies always try to make the claim that they were the original discoverer and distributor of the drug. Why would they not invest in bringing that value to the market more forcefully? It could prove to be a turning point for many companies that creates a barrier to generics. While they would likely still loose the patent to a generic company, they would be able to maintain more of the real value in the drug for a longer period of time.
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