Hylton tipped me off to Bob Cauthorn's post: Newspapers, meet precipice: It's the product, stupid. Here's the nub for Brandshift readers:

Business thinking tends to run in generational cycles. For the last 15 years or so, the fashion in business thinking has focused on the ascendency of The Brand. Instead of being product oriented, modern companies tend to be brand driven. There are precious few companies left that fuse the two orientations -- think Apple, which defines itself entirely by its products and thus gets a brilliant brand in the process.

Brand logic is the bulwark of defending the status quo. Product logic is where the revolution comes.

When it comes to a war between products and brands, products almost always win in the end.

In sprit, I am with Bob. Sadly, just as there will always be successful conmen, there will always be some brands that succeed with rubbish and noble products that fall through want of smart marketing. And, of course, there will always be arguments about what category any brand belongs to. BUT I do think the net is making it harder for the fanciful image making and narcisstic marketing to work.

Thank to Suw Charman for spotting an excellent article by Simon Caulkin in the Guardian: The language of management is devoid of meaning Here's sample, referring to Gate Gourmet, the airline catering firm with a less than wonderful reputation in industrial relations.

Gourmet, as in Gate, is a good example. I mean, I've had airline food that didn't actually taste awful. I've even had airline food that was OK. But gourmet? Come on

Trivial, perhaps. But it matters because the name is an affront to common sense and makes you query the company's good faith, grasp of reality, or both. The uncertainty deepens as you read the company's website's references to 'passion', 'world class' and (full house!) 'our most valuable resources - employees'. When you get to 'We communicate in an open way and promote inspiring teamwork; we treat our colleagues, customers and suppliers with respect and dignity; we pay market competitive salaries and offer adequate social security,' you know you're no longer in the universe inhabited by most people: you are deep in Tlön.

(Tlön being a parallel world in the literature of Jorge Luis Borges).

If you have time, please read the whole thing, it's wonderful.

Boing Boing reports that Virgin Enterprises is suing a small business owner for using the name Virgin Threads. This strikes me as grandiose and obnoxious.

Like David Burn at AdPulp, I agree with Michelle Miller's line on Costco:

According to an article in yesterday's New York Times, Costco puts Wal-Mart to shame in the arena of low pricing. They steadfastly hold to the rule that nothing shall be marked up more than 15% (compared with competitor's markup of 25% and more). They pay their employees an average of $17 per hour... 42% higher than Sam's Club... and have one of the best health plans in the industry.

Costco's stock has risen more than 10% in the last year. Employee turnover rate is nearly non-existent. Sales revenue for June of 2005 is up 9% from the same period last year.

What does Wall Street have to say about this? If you can get their thumbs out of their mouths long enough to tell you, they wail that Joe is too generous. He just isn't shaving enough off the top for them to get their greedy little hands on. An analyst from Deutsche Bank whines, "it's better to be an employee or a customer than a shareholder." "They could probably get more money for a lot of items they sell," complains another analyst at ThinkEquity...

My God. A business that puts its employees and customers before the Almighty Profit does exist. Isn't it amazing that a simple thing like that would create cult-like customer loyalty and $40 billion in revenue... with almost no advertising?

(Michelle also hits the spot in her thoughts on Delta's Memo to employees.)

Jeff Risley's firm is sposoring a survey on cause-related marketing. They're talking to marketing people and not-for-profits. Jeff's looking for suggestions for questions.

Very good article by Jay Rosen, about media coverage of the appointment of a new Supreme Court Justice in the US. He suggests that two sides are preparing to do battle in a way that seems to be about activists battering away at each other without noticing that they're not likely to achieve much. Here's a snippet:

Reaching for her cliché gun, Robin Toner can say "nothing less than a national political campaign had begun," but she has no idea how it's supposed to work, either. Everyone parades around as if this mobilization of opposing armies makes perfect political sense, when in fact "all the time and money spent on campaigns may have little influence on the outcome."

Why does this go on? One reason is that activist groups, by opposing each other, use each other for mutual self-definition. They too don't know how their e-mail blasts and TV ads are supposed to work. Like spammers, they just send the stuff out. What they know is that the other side will be sending e-mail blasts and running TV ads. Spam must meet spam.

I don't want to dwell on US politics in this blog, but I think what Rosen sees here is a kind of folly that marketing folks often get trapped by: obsessing with positioning and defining themselves against their perceived competitors, rather than focussing on expressing their own views or (heaven help us) thinking whether any of these campaigns really touch the customer.

(Cross posted from my own blog)

I just had an interesting interview with Liam Mulhall, co-founder of Blowfly Beer in Sydney. He talks about how he launched his brewing business using open source principles he'd learned working at the Red Hat Linux consultancy. I've blogged fuller details and a link to the podcast here.

I attended an interesting session at the Reboot 7 conference in Copenhagen at the weekend. Malthe Sigurdsson, from Skype, did a talk about how they built the brand, which he blogged here, with a pdf of his slides here and an MP3 audio recording here.

I was struck by the principles Malthe articulated: do simple things really well; release all the time (ie keep updating the application in small bites); evolve; open up; and viral features. A good illustration of the idea of simplicity is their preference for plain language - so talk about sharing and calls, not peer-to-peer and VOIP or telephony. Bearing in mind Skype has about 45 million registered withouth advertising, I think it's a pretty interesting case study.

One of the things that he said that caught my attention was what he said about fear. They do fear their competitors (eg the big telecoms)... and that makes them stay busy innovating. I like the notion of acknowledging fear and using it, instead of blocking it.

It seems to me that Skype is a brand with a lot of vitality - and this presentation makes good sense of how it operates.

Technorati tags:reboot7 skype branding

Jeff Jarvis pointed me to Tim Porter's report on the conference of the American Society of Newspaper Editors:

One of the most telling moments of the hour occurred just as the meeting opened when Nachison and Peskin put a slide up of Craig Newmark and asked how many people in the room of several hundred recognized him or his name. Only a smattering of hands rose. A few more hands went up at the mention of Craigslist and its free classifieds.

Nachison reminded the editors that the competition of Craigslist didn't grow out of a business model, but arose more spontaneously from Newmark's desire to create a community of trust - the same trust newspapers are struggling to regain.

Jarvis also spotlights this comment by Andrew Nachison

The bigger point was trust - and that there's someone "out there" who has built a business at the expense of newspapers not by trying to compete *against* anyone, but by trying to help others.

The business followed Craig's authentic devotion to helping people find each other in a trusted environment.

There's serious food for thought here for a lot of brands beyond newspapers.

I've just posted over at 173 Drury Lane about a fascinating article by Judi Bevan in The [UK] Sunday Times of April 3: How Davis lost the Sainsbury throne. It recounts how Sir Peter Davis was fired as Chairman of the supermarket chain Sainsbury's, as well as touching on the issues Justin King, the new CEO, has had to deal with. Apart from being a highly engaging, if gossipy, tale, it's a good example of how human relationships and their weaknesses are at the core of any business, for good or ill. And further evidence that your brand in the public eye will be shaped by a lot more than just your polished, official communications.

Last Friday, I interviewed two of the the founders of Zopa, a new organisation that is a kind of "eBay for Money". Zopa is a British company that creates a new market for individuals to lend and borrow money, bypassing the banks altogether. Zopa makes a 1% charge for matching up borrowers and lenders and provides essential infrastructure to support the lending process.

This interview gives some great insights into the vision behind Zopa, a brand which I think is a radical new departure in financial services.

It will be very interesting listening for anyone who has followed the long discussion here about co-creation.

I was excited by what Zopa is up to, and this interview gives some great insights into the innovative thinking behind the organisation.

The interview lasts just under 33 minutes and features Zopa's CFO, James Alexander and its Inventor, Dave Nicholson. My apologies for occasional lapses in sound quality - I think you'll find James and Dave well worth listening to.

Download the Podcast - 32.32 - MP3

Highlights

0.00 Introductions by Johnnie Moore

0.20 Dave Nicholson explains Zopa is a lending-borrowing exchange, aiming to give borrowers and lenders more control over their finances. "We're not a bank... we're a way for people to lend and borrow money between themselves"

1.03 James Alexander emphasises that Zopa is an idea that is likely to adapt. They are at the beginning of a journey.

2.50 James: the core idea is about people trusting people with money

3.40 James: "99% of people are good and 1% of people are bad. Here is an industry that's set itself up to serve the 99 but through lens of the 1% that's bad. And what we'd much rather do is... create a sort of perimeter fence to keep the 1% out and then let the people within (be in) a much better position to work out how they exchange and what the appropriate rates are and what the appropriate products are... work that out for themselves...

...The central planning, product management role of the world shouldn't exist... why does someone sitting in a head office somewhere who's a product manager design products for everybody when people are better able to do that for themselves..."

4.40 Johnnie talks about fear and greed as the main levers used in traditional financial marketing and explores how Zopa breaks this pattern. James talks about how Zopa research showed how people wanted more control over how they transact. He says Zopa uses new technology to support an old idea: people lending people money; and talks about how people might be able to lend to specific communities or for specific causes.

7.40 Johnnie contrasts the exploratory style of Zopa with conventional marketing. Dave and James talk about the importance of customer feedback in shaping Zopa's approach. There's a discussion of the role of bloggers in this process. James says he is "stunned by the speed of response from blogs" and the "depth and quality of the input" If this had been paid for like traditional consulting advice, it would have cost "thousands if not hundreds of thousands of pounds."

10.20 How does Zopa contrast with egg, where Dave and James worked before? How did the idea start? They talk about how the idea of "eBay for Money" came into being, meeting the needs of consumers who want more control, and looking at why companies get better financial deals than invididuals.

14.25 Where might this evolve to? James reveals that they don't think of themselves as a financial services company. Their first move might be into social lending, moving on from setting loans only by term and risk category. What if you wanted to support, eg, social housing in Liverpool? The customers themselves could decide what markets to work with. There's a plan to expand into the US, where there is already a team at work for Zopa.

17.20 Johnnie talks about the possibility of using Zopa to help people currently trapped by money lenders with high interest rates. That this might offer him more incentive than just a better interest rate. James comments that Zopa hasn't so far emphasised the idea of customers becoming bankers themselves, but they could allow this idea to evolve. The opportunity for Zopa might not be in the prime market.

19.52 The theme of co-creation, where customers help to define the product. Dave gives one example of the sort of customer interaction they want to help build. James elaborates on the theme of co-creation and how, for instance, they are hoping to reinvent the way risk rating is done, getting away from credit-scoring... a system that denied their own CEO a mobile phone account! He talks about how eBay's system for assessing trust offers pointers to a quite different approach. Zopa wants to develop more human ways to help borrowers and lenders evaluate risk. "Zopa is a trust entity, that's all it is" Zopa shares credit ratings with customers, a different attitude from the banks.

25:50 James talks about the challenge of offering freedom of information while keeping a simple user experience.

26:25 The subject of "freeformers" is discussed. This term describes a growing group of consumers who distrust institutions and emphasise creating new ways to live lives that accord more with their values. James talks at some length about what Zopa understands about the needs of this group, based partly on ethnographic research in finding out what customers really want (in contrast to conventional market research). He believes these freeformers have needs that simply aren't satisfied by conventional banking.

31.30 James talks about how Zopa's own people are freeformers, often working more as consutlants rather than employees. Johnnie relates this to the attitudes of many bloggers.

32.30 End

Download the Podcast - 32.32 - MP3

Regina Miller points (with appropriate disdain) to this event: Chaos in the Public Square offered by Harvard Business School Publishing Conferences. (And I thought it was only advertising agencies that had ridiculously long names; but if I were at HBS I'd be happy to be two additional words away from a direct association with what follows).

The blurb is a great example of really dreary communication. First off what's with this new phrase "corporate speech"? Is that what used to be called PR in less complicated times? I wonder if they really mean "corporate drone", as eloquently fingered by Cathy Moore in her blog. This promo page seems like a pretty good example of it, with such gems as

In this forum we will tackle the contentious issues – not to advocate one side or the other but to define the parameters of the new reality

In short, the rules of corporate speech have changed -- and continue to change – making life turbulent in the executive suite.

How do you craft a strategic approach for navigating the new terrain?

Hmm, interesting theme here of "chaos in the public square" and "turbulence" in the exective suite. Sounds like some folks are terrified by what strikes me as an exciting time for engaged, informed public debate.

I was also intrigued at how they define their target audience:

Director and above management who are directly responsible for the public persona of the company

which strikes me as laughably sycophantic. Basil Fawlty was more direct; he ran an ad that just said "no riff raff". Why don't they just come clean and say "This is an important conference that only important people will understand".

Seriously, if the organisers haven't woken up to the fact that EVERY EMPLOYEE is responsible for the public persona of a company then they need to go to a conference themselves. And not this one.

Jake points to Forbes' list of the top corporate hate sites. They are

KB Homes
KBhomesucks.com

PayPal (part of eBay)
Paypalsucks.com

Allstate Insurance
Allstateinsurancesucks.com

Microsoft
MS-Eradication.org

American Express
Amexsux.com

Wal-Mart
WalMart-Blows.com

Verizon
Verizonpathetic.com

UAL (parent of United Airlines)
Untied.com

United Parcel Service
UnitedPackageSmashers.com

We're now getting KFC's operatic ads in the UK. I thoroughly enjoyed what Mosher's Unimaginatively Titled Blog had to say. Here's some of it:

Let me first say that I am a great fan of KFC and have been known in recent history to quite literally "live off" the stuff for stupidly long periods of time. Recently, however, I have been forced to make the harsh decision to boycott the restaurants. I have even gone as far as to blog my decision, much to the disbelief of most of my friends who know that I'll likely starve as a result.

I am one to stick to my principles, and I am also not one normally swayed by advertising. However, the recent "operatic" campaign is just so painfully awful that I have chosen never to set foot in a KFC again until they are removed from the television. The whale-mouthed screacher who takes a full 30 seconds of "woooaooaooaoohhh" to tell her colleague that he can't have her mini-fillet burger is a bigger deterrant for KFC than Supersize Me was for McDonald's...

Incidentally, I also think that another of the ads was rather ill-advised. Who on earth thought that having a bunch of "African Americans" singing about fried chicken was going to help shift burgers? What next? Watermelon desserts and a kids meal with a toy butler that says "Yus, Massah?".

When your fans are saying this...

Another expensive rebranding bites the dust...

From The Sunday Herald:

IT may go down as one of the biggest rebranding disasters in corporate history.
When, in September 2003, Luqman Arnold, then chief executive of Abbey National, declared the institution was “turning banking on its head” by shortening its name to Abbey and slapping a lower-case logo in pastel shades on its branches and product literature, there were a few raised eyebrows. In Scotland there was much gnashing of teeth as it emerged insurance brands Scottish Provident and Scottish Mutual were for the chop.

The exercise – which brought an end to Abbey’s famous “couple under an umbrella” logo – was overseen by brand agency Wolf Ollins at a cost of some £11 million. It was led by former Abbey director Angus Porter, who when at Mars rebranded Opal Fruits as Starbursts, and recently left the bank with a near £1m pay-off.

In marketing terms, however, the rebrand was a clear disaster. Last year, pre-tax profits in Abbey’s core retail business shrank by 20% to £814m compared with 2003 and there was another big slump in market share. New mortgage lending is also down year on year from 9.9% to 3.1%, reducing its overall mortgage share from 10.7% to 8.6%.

£11m is a lot of money to waste on wishful thinking.

I'm pleased to say that Brandshift's RSS feed (here) is now set to give you the full entry, with a comment and trackback count. For our hardcore fans, there is also a comment feed (here) - I think the comments on this blog are often the best part of it.

Don't know what RSS is? Try this explanation of the whole syndication/newsreader/aggregator mullarkey.

My friend James Cherkoff has written a Change This Manifesto: What is open source marketing?. It's good stuff. Disclosure: I am horribly biased. (James and I are running a workshop together in March).

Jon Strande comments on Larry Lessig's experience of flying his millionth mile on United, and them not noticing.

Imagine had United taken the time to reward an obviously loyal customer even in the smallest way, say with a Thank you card on his seat when he boarded the plane.

Imagine the post he would have written had they done something really nice for him...

This coincides with the arrival of my pack from United, confirming that I have (after many years of being just a very ordinary passenger) recently gone back to Premier status.

Hmmm. A few years ago, I really got hooked into these frequent flier schemes, but now I am much less convinced. When they tell me I get 5" more economy legroom than the hoi-polloi, I don't so much celebrate as think, crumbs, if I don't keep this status I may switch to an airline that gives all its economy passengers a bit more legroom. This may be a carrot today, but there's a stick in the background for tomorrow.

Many of the other benefits are potentially more hamster wheel... get more miles by getting your mates to fly with us; earn more miles by spending more money at our hotel partners etc.

I wonder about the frictional cost of maintaining these elaborate schemes, an expense the budget operators cheerfully do without.

I see they've also included a book of vouchers to give to staff in recognition of good service. When they did this a few years back I quite liked it. It changed the game in Business Class from see who can look least excited about the service cos that will make you look more important to let's see who can enjoy this flight the most. Maybe it's just the passing years but now the little voucher scheme starts to feel like... more hamster wheel.

It's funny, I think of myself as unsentimental about brands but I feel sad that United are struggling. When they took over from PanAm on the transatlantic routes there was a palpable sense of pride about them. Ironically, they now feel a bit like PanAm did, sort of struggling to maintain a past grandeur.

I don't mean to seem ungrateful. After all, I only qualified for this treatment by flying on Singapore Airlines in the Star Alliance. So it's nice to get the recognition and the Alliance seems a smart idea.

I think that in larger organisations it's inevitable that things get bureaucratised and made into systems. The thing is, that can only get you so far in delivering a good experience. I also think that when times are hard, people tend to become more anxious and more wedded to systems. (And that's a pity, as probably innovation and risk taking are likely to be the best ways out of the hole). I sense there is a sort of denial going on at United. I think their people are trying hard but are demoralised; somehow the confident blurb (eg "the best frequent flyer programme" seems implausible to me). A bit like someone putting on a brave face... you don't really believe them and it creates distance - the opposite of what loyalty might be about.

I see Kathy Sierrra is posting some more smart thinking today about creating a spirit of caring. I wonder what sort of caring behaviours the high-ups at United are generating today?