The Importance of Building Your Brand

(The following is a presentation given by Managing Partner Linda Anderson at a cooperative advertising conference at Disneyworld in Orlando, Florida.)

If I asked you why Starbucks, Nike and McDonald's were successful, how many would say, "easy, they have lots of money?" How about "smarter people?" Or "they just got lucky?"

In a way, you're all correct. But something else brought them together as a company. And that something else was a BRAND VISION they've stuck to all these years.

This morning, we're going to talk about branding – what it is and how you can start using it to improve your sales performance. In all fairness, this is the kind of presentation that makes more sense the more you think about it – so just keep it in the back of your mind as you get into other conference material.

It's fitting that we talk about branding here, in this incredible world that Disney has built. In marketing circles, Disney is a "legendary" brand. It ranks among the top 15 brands in the world. It's consistently among the top 25 companies in terms of media buying.

And yet, like everybody else, they deal with constant change. As I was getting ready for today, Disney was all over the press because Comcast was looking to buy them. As you know they rejected the offer, but it proves how valuable a good brand can be. The Wall Street Journal reported Comcast wanted Disney so they could get more control of the home entertainment business. Experts were debating whether Disney's business units were worth more together or separated. And CEO Michael Eisner was off buying the Muppets and fighting to keep his job.

The funny thing was, nobody talked about WHY Disney was so valuable. Even though Disney had years of lower earnings, Comcast was offering something like thirty times annual earnings. The reason why, in a nutshell, is the raw VALUE of the Disney brand.

It's one of the oldest entertainment businesses around, yet Disney is not about cartoons or films or toys or amusement rides. It's about "magic" and "storytelling" and "fantasy" and "imagination." THAT'S why it's worth thirty times more than it makes – and why they work so hard to protect that customer bond.

What about your company? What is YOUR brand about? Five years ago, everybody knew what a local newspaper was supposed to do and what its brand should stand for.

But today is a different story. No matter where you look, your industry is getting hit on all sides. Look at how your marketplace has changed. Other newspapers aren't your problem – it's 24 x 7 news radio, TV and the ever-growing Internet. Not to mention all the 24 x 7 sports channels, home gardening and lifestyle cable shows. This constant and world-wide access has redefined everything – and affects how your business runs, even the kinds of news you cover.

Your customers are also changing. People don't like to read or write much anymore – they're either in their mid-thirties and forties and too busy – or given America's educational situation, they could be part of today's illiterate graduates. Newspaper readers tend to be more educated – so what does this shift mean for the future?

Your community is different, too. Just look at the diversity of people and cultures. Does your newspaper know how many languages are spoken? How many languages do you speak? Do you have reporters to cover this diversity? What else must your publication do to reach these American consumers?

Lifestyles – well they've really changed. Scientists say the most dramatic change to affect American business is, well, ME – or women like me who've entered the workforce, started their own businesses, now employ roughly 20% of our national workforce. Why does that matter? Because, and I quote, "it's forever changed the way people buy things." Few people go from store-to-store to comparison shop anymore. Or clip coupons. No, now people want it all – mega-box stores like Wal-Mart and Home Depot and Petco crop up because people demand convenience AND value pricing.

Think about what that means to your advertisers – as well as their ad agencies and media buying firms. My clients today want more "one-to-one marketing" tools – because the Internet makes it possible to do – and because they're tired of not knowing what their money for mass media really buys.

In December 2003, a front page story in Advertising Age was entitled, "Cracks in the Foundation." It stated the tools clients have relied on to spend hundreds of billions of media dollars each year, especially TV and print, may no longer be adequate for the job. National news stories like Rosie's missing readers and Nielson's missing men on TV are symptoms of a far greater issue "accurately measuring what matters most, an advertiser's ROI."


What's the importance of building YOUR brand?

For some companies, it's a matter of survival. But for others, it's about WINNING. About seizing OPPORTUNITIES and GROWING.

A strong brand is a powerful tool that will affect your company in many ways. Strong brands increase customer loyalty. They help you differentiate yourself. They help you establish market leadership. Charge premium prices. Attract and keep the best employees. Building such a brand is a critical step toward ensuring market success.

And that's what we're going to focus on today – on success – specifically four ways you can apply branding to improve your company and your performance.

To get started, though, we ought to identify what a brand concept IS – and how it defines your company.
Experts have created many different and often contradictory definitions. I like to keep it simple. A brand is:

• The role your customers allow you to play in their lives (the emotional connections and associates they have – how they value who you are and what you do)
• A driving force within your company (to better serve your customers, guide decisions, and empower employees)
• A growth engine that boosts confidence, relationships and profits inside and outside the company

In a way, your company's brand is like the wind – you can't physically hold it – you may not see its subtle influence – but you do feel its effects – and you can harness its power. Companies who see that potential and put some effort into harnessing its power are nearly impossible to stop.

Obviously, brands aren't built or delivered in a vacuum. To make a brand REAL, it has to reflect how your customer's feel – address what your competitors are doing – and be specific about what your organization will deliver. Disney has made their brand priority one, but even a modest effort produces good results.

It starts with an honest self-evaluation. If you want a STRONG brand, you can't cheat the process by looking at just your own opinions or by stopping with generic statements that don't say anything.

Step One:
The first step toward improving your company and performance is to take out a pen – take a good look at your customers and your company – and write a relevant and deliverable brand statement.

To get started, good brand statements include four elements:

• The purpose of your business
• The advantages you have that others don't
• The benefits your customers gain
• The experience you want to create

Let's spend a moment on the purpose of your business. Sounds simple doesn't it? You're in the newspaper business, right? But what does that really MEAN today? On the editorial side, you no longer own "the latest news" position – thanks to those 24 x 7 competitors, the news is often old by the time you cover it. So what do you stand for now? Is it still the NEWS business or the LOCAL news business? Maybe it's the information business – or a publishing business? All of these say very different things about your brand.

And what about the customer group YOU touch – potential advertisers?

What products do you really sell? Ad space? Monthly contracts at discounted rates? Or do you sell a way for clients to generate more traffic? Or sell access to a well-defined and special group of customers? Do you help national clients connect at local levels? Or sell a unique distribution network no one else has? Again, all of these say very different things about your brand.

You've probably all heard the example of the railroad industry – who lost its dominance because they insisted they were in the "train" business and not in the "transportation" business.

That's why a good brand positioning starts with a well-defined PURPOSE – recognizing there's an outside world to content with. Your brand has to be competitive – customers need to see its value – and you must be able to deliver results consistently.

Let's look at some examples outside the newspaper business to spark your imagination:

Apple Computer® – Produce radically easy-to-use computers and technology that enables people to do things that can change the world. Allow people to do old things better; do new things they could not before; and do things they never dreamed of.

• Business purpose: Computers and technology
• Advantages you have: Easy to use & unique applications
• Customer benefits: People can do things better, and even do new things
• Experience: People can dare to dream big

Cinnabon® – Deliver the unique cinnamon roll that is Cinnabon – an indulgence of the senses, a truly emotional experience, the discovery of essential goodness.

• Business purpose: Baked cinnamon rolls
• Advantages you have: Uniqueness (cinnamon is specially imported) – made in the open (never see Cinnabon rolls behind a glass door in grocery & convenience stores – the location in high traffic areas like malls and airports matter)
• Customer benefits: They taste good and satisfy many senses
• Experience: Delight and discovery of something wonderful

Whirlpool® – Create the world's best appliances that make life easier and more enjoyable for all people. Our goal is a Whirlpool product in every home, everywhere.

• Business purpose: Make household appliances
• Advantages you have: Make them better than others; practical for every home globally
• Customer benefits: Easier and more enjoyable to use
• Experience: Better, more relaxed lifestyle

Any one of these companies could have stopped by saying we make computers … or cinnamon rolls… or appliances. Or they could have written generic features and benefits.

But by defining HOW they do it differently (and by imagining the customer experience) a more complete picture is formed – one that connects everyone from top management down. And that's the only way a company's TOTAL resources are applied to making it happen.

I can promise you that if you take the time to write that kind of brand position, you will see results – very quickly:

• You'll give your sales team more confidence (they'll know what to say)
• You'll communicate better with customers (they'll know what you stand for)
• You'll consistently deliver on the goods (because you know what you'll deliver)
• You'll become valued and indispensable to customers (they'll count on you)
• You'll grow the business profitably (because you'll establish relationships)

And why should YOU write it? Your group drives sales. You have a direct impact on growth and profitability. You have day-to-day contact with customers. So who better than you can know what they expect and value?

Step Two:
The second step is to incorporate and apply that new brand position into your current sales process.

For instance, put that brand statement loud and clear in your media kits. Show the research you have on your readers not just in terms of circulation and basic demographics, but also in terms of lifestyles and interests. And TAILOR the presentation to fit your audience – whether it's media buyers, ad agencies and clients you do business with (or want to do business with).

So many media kits focus on things that just don't apply. Most use a one-size-fits-all approach and generic data to back it up. As I mentioned earlier, advertisers now expect more. They want a better understanding of the audience they're reaching, and more accountability for the return on their investment.

The editorial side is focused on giving readers a compelling reason to buy your product. YOUR job is to give your advertisers a compelling reason to choose you over someone else. The best compelling reason is because "you deliver the audience they need to build their brand better than anyone else."

That's especially true when you're talking to regional or national advertisers. Local papers get skipped because the buyers are looking at numbers and MASS REACH. If you want to get their attention, you need to show how your BRAND attracts an audience they WANT and are missing without including YOU. Done correctly, your brand statement shows how you deliver on that promise.

Besides media kits, applying your brand statement boosts results in other ways, too:

• Help you prioritize and target the right customers (not everyone is profitable)
• Help you hire effective sales people (who believe in what you stand for, not just sell ad space)
• Help you train your sales team to position you quickly and consistently – making it easier for newcomers to be as successful as veterans
• Avoid costly errors and conflicts (clients value their brand, too – ad agencies & media buyers are paid to be keen watchdogs – many times newspapers lose revenue because of simple mistakes – switching fonts, shrinking logos, violating other brand standards, poor media placements – when you show you respect their brand, you'll earn more of their business)

That will also help you attract more co-op advertising income. I guarantee you co-op advertisers are the keenest, most precise brand cops around. Because without policing their brands carefully, they run a big risk of diluting them. On average, for every dollar an advertiser spends on its own, it may offer three times or more of that in co-op reimbursements. Many reimbursements are a fifty/fifty split – turning that into a six-to-one ratio – one dollar the advertiser controls versus six dollars of exposure they DON'T control. Respect their brand and you'll get the business.

Step Three:
The third step is develop pricing and promotions that reflect your brand position. Strong brands allow for premium pricing, so be thoughtful about how you set prices – and make sure your promotions build your presence rather than discount it.

Last year, newspaper paper rates nationally either stayed the same or went up only 1-2%. That tells me too many are selling on price alone, and that's treading on dangerous ground.

Now don't get me wrong – even a strong brand has a limit to what it can charge. Apple Computers still compete with Dells – Cinnabon still competes with the local supermarket. And stores like Wal-Mart and Home Depot are also changing the rules.

But stronger brands allow for premium pricing because they understand who their customers are and what they want.

They use that know-how to concentrate on finding MORE of those customers – on keeping their products and service different and better than the competition – and to distinguish themselves at all levels, from returning phone calls to earning record profits.

Today, you either have to be BEST at something or the cheapest – the guys in the middle are getting killed because they're not exceptional at anything.

And being the cheapest is no job security, because it's temporary. There's always somebody who can undercut you. Selling price doesn't make you indispensable to a customer. Even Wal-Mart can't rest on price (Target is right on their back) so they've got to deliver service, convenience and value as well.

When you work to create a strong brand value – then you can charge what you need to (what it's worth!) and your customers won't focus on the price. People buy Volvo for safety – McDonald's for Happy Meals and toys – IBM for service & solutions.

In addition to pricing and promotions, a strong brand can guide other business decisions:

• Help you identify appropriate new revenue streams (not waste time on things that don't support the brand)
• Help you prioritize other resources, such as equipment purchases, personnel, marketing programs (what supports the brand best?)
• Help you establish critical measurements to gauge progress and results
• Help you fully leverage your brand assets (in community partnerships, other brand affiliations, licensing deals, etc.)

It's ironic, but the more ways you begin to leverage those assets, the more those assets influence and guide your future.

Step Four:
The final step is to transform that brand statement from a series of day-to-day tactics into an overall strategy – a growth strategy that helps you proactively plan for the future.

A strong brand is a growth engine because it zeroes in on RELEVANCY. It has the capacity to EVOLVE based on a changing customer and a changing marketplace.

As you continue to ask yourself, "What role does my newspaper play in our customers' lives?" you'll need to be persistent in gathering research about readers and developing critical measurement tools for advertisers.

By doing so, you build BRAND EQUITY – a tangible asset worth, for some companies, more than the value of their equipment, buildings, inventory and personnel combined. It's what makes some companies when they're sold worth ten, twenty, thirty times over earnings. It's how real growth is fueled. And like an inverted funnel, it all starts with a brand statement of intent and persistent execution.

Why is it important to build a strong brand? Let me leave you with an amazing statistic.

It's now estimated that there are about one million SKUs (standard stocking units) in America today, with the average supermarket housing roughly 40,000 SKUs. But here's the thing. An average family gets 80-85% of its needs from 150 SKUs – which means there's a good chance they ignore 39,850 items in that store every single week

You think you have a tough time standing out from the crowd? For your company and mine, the key to winning is a strong and recognizable brand. Never underestimate its power.