Friday, March 24, 2017

Virgin America Ends. When Brand Love Isn't Enough.

Fly Virgin America as much as you can and revel in an experience that is memorable. Soon you won’t be able to make new ones. The Virgin America brand will be phased out over the next two years and disappear for good. Hopes it would survive the merger with Alaska Airlines were raised by its own marketing: Different Works was launched as the spirit uniting both brands for their shared journey ahead.

As such a storied and successful brand it seems odd that Virgin America should end. It is a classic example of a challenger brand, required study in many college marketing courses today. Virgin American is a brand that is loved. It inspires ardent fans and admirers. It got 5.8 million people to watch a safety video without stepping on a plane. Unthinkable before this brand did it. (Digital Synopsis)

Why did this happen? There is a lesson in every failure; what we understand we can avoid. A few thoughts on why love wasn’t enough:
Brand love is in vogue but it can be a trap. For marketers brand love suggests its customers have passion, preference, advocacy and loyalty. It may be true. But brand love can be a trap when it masks a deeper issue and encourages complacency with the status quo. Brand love measures are misleading when they don’t connect to consumption.

People's standards for love have changed, too. Social media has profoundly changed people’s relationship to many things including brands. Though different from the 1960’s era of ‘free love’, declarations of brand love today have become easy for people to make when they live only in social media and do not come with commitment. These expression of love are genuine acts but when they remain inside the social media bubble their value is unreliable.

How brand love is valued needs to be rethought. Love expressed in social media needs to be understood separately from ‘transactional love’ - the decision to buy that is driven by brand love over other elements (price, convenience, etc). And of course marketers should be exploring the relationship and dynamics between the two. 

True brand leadership means taking on business responsibility. While working to inspire a strong bond with its customers, brand strategists need to take into account the operational realities of the business they are supporting. Though flying Virgin America was awesome something was clearly misaligned if the cost to deliver the experience couldn’t be supported by the price the market would bear. While classic brand stewardship focuses on defining the core idea, shared values, character/tone and collective expression through experience, stewardship needs to have business accountability by being connected to value. One way to assess brand value is from the premium that customers are prepared to pay over alternatives. The bigger the margin, the greater the love. Price threshold research can be useful here. Understanding the levels of switching that different price points trigger can give a financially grounded sense of how much people really love a brand.

Though sad, the demise of this widely admired and once pioneering brand is a timely reminder. Just because a brand is loved doesn’t mean it is enough: it has to translate into an active commitment and be scaled sufficiently to support the margin needed to remain financially viable. Without it, a brand will disappear from view however much it might be loved. Richard Branson’s euology.

Sunday, February 26, 2017

Brand FOMO: the risks and remedies that come from the fear of missing out.

The fear of missing out - 'FOMO' - is one we all had as teenagers, wondering if a great  experience was happening that we were not a part of.  Today those most suffering from FOMO are brands. Brands and those that care for them fear not being a part of the right cultural moments. The speed with which cultural moments evolve today heightens this fear of missing out.
But, there are serious consequences for brands that react because of a FOMO when they act the wrong way. Saying or doing the wrong thing in the vast social sphere does more than fragment a brand or squander a budget. The downside of FOMO and knee-jerk reaction has the potential to alienate fans and even create a backlash.
The Drum published 6 principles I've identified that give marketers a way to approach cultural moments and choose the ones best for the brand, while steering clear of the risks. Full article here.  
1. Don't believe the brand radicalization hype
2. Begin with an assessment of brand fit
3. Money doesn’t buy authenticity
4. Use culture for strategic as well as short-term goals
5. When it’s cause related, actions speak louder than words
6. Lead, fast-follow or don’t bother

Monday, January 2, 2017

What An Era of Post-Truth Portends For Strategy

We are in the midst of a maelstrom whose end is nowhere in sight. The term ‘post truth era' was recently coined to describe a cultural shift that became particularly topical during the 2016 US Presidential campaign, in which the integrity of 'facts' were rivaled by opinions unsupported by the rigor of proof. This cultural shift exceeds far beyond the political economy origins and mass media popularization from which it began. The impact of this shift on strategy is as yet unknown but its implications are worthy of being explored given the considerable effect it could have on the quality of strategic activities and outcomes.
The roles of intuition vs analysis in shaping and making decisions is a long-fermenting debate in leadership fields and strategy in particular, one that is likely to be shaped by the post-truth shift. Intuition and analysis are not alternatives: any tenure in a senior position inevitably requires the right blend of both. The issue is the balance of the two and the degree of trust in each. As with complex topics there are pros and cons to each side. Proponents of analysis typically have the consistency (and comfort therein) of an observable, repeatable process but its form can seriously limit the scope and richness of findings and therefore its value. Proponents of intuition assert its value when informed by deep experience. Its lack of observable origin - the result of ‘system 1’ type activity in Kahneman terms - is a limitation that leaves some audiences unable to trust it. At the very least they struggle to reliably differentiate between real insight and biased opinion.
The impact of a post-truth culture will sharpen the burden of proof required of seasoned strategy professionals as a reaction against the ambiguous trustworthiness of opinion and feeling-based claims in pop culture and mass media. Clients will demand more tangible proof and origin for the strategy work they buy. This is not a bad thing. Strategy is not an improv sport but it's become somewhat fashionable of late for it to behave this way. Under unmanaged conditions, opinions and even conjecture become easily merged and adopted as fact. In a work setting anecdotes of personal experience assume a currency whose perceived value rivals independent sources. The ripples from a post-truth culture will challenge intuition as a legitimate source of strategic activity as well as the easy confidence that often accompanies it (intuition after all is often presumed to be right). Overall, the lower standard of truth 'proof' in wider culture won't lower the standard in the strategy world. On the contrary, it will raise it.
Post-truth culture will raise another bar for the business world, for marketers rather than strategists. Brands and their marketing claims will be more scrutinized as the result of swirling ambiguity people increasingly come to expect everywhere else. A crisis of trust is itself not new (see The Crisis of Trust in A Social Age, 2011) but the nature and magnitude of its impact is. Where there is challenge there is opportunity. Brands that provide useful transparency and deliver consistency in terms and claims across their service and product ecosystems stand to do much better than those who do not.