If you’re responsible for the care and feeding of a brand, some of the insights gleaned at Strategy’s recent conference on branding, Building Customers for Life, may be fodder for revisionist thought. It is human nature to yearn to broaden the brand, see if maybe an airline could spring from the loins of a fashion or music brand, and yet, there is compelling evidence that focus builds a brand, and losing that focus loses your place in the consumer’s mind, which keynoter Al Ries describes as ‘the most illogical, irrational instrument ever invented’.
When Ries shared his thoughts/laws on the perils of broadening brands, many in the room seemed wary of his narrow focus philosophy. Yet, as he ran through example after example of narrow focus, big global brand – Heineken (expensive beer only), IKEA (knock-down furniture), NOKIA (narrowed focus from broad product range to mobile phones) – the furrowed brows and nervous twitching subsided.
Ries believes that if a brand centres on being one thing, you can ‘drive the brand inside the mind,’ with the intensity of a laser. Conversely, if you expand rather than contract the brand, you may end up bigger, but with diluted brand potency, leaving you less capable of forging as powerful a connection with the consumer, and open to competitive sniping. As evidence of the power of owning one attribute in the consumer’s mind, Ries provided a few examples, such as the fiscal success of single product-centric Starbucks and Subway. He also cited many that lost market share as they expanded their offerings, like Chevrolet.
This theory does not mean a brand can’t expand, just that growth must remain focused, as Target focuses on being cheap and chic, or Nordstrom’s on being synonymous with service. Or launch a second brand.
Ries co-wrote the classic Positioning: The Battle for Your Mind, and numerous other books on marketing (see story last issue), so his credentials in tandem with his examples to back up the theory seemed to sway the masses, but his message is easier to grasp and accept than to execute or sell up the food chain. Which is why the case studies presented may ultimately prove helpful in some future hostile boardroom scenario – to be used as evidence.
The brand philosophy of another speaker, Prophet prexy & CEO Michael Dunn, includes the admonishment that branding is not just what you say, it’s also what you do. For instance, Dunn noted that Starbucks changed its HR policies from the industry norm to offer more attractive packages for its employees, so that they could deliver the customer service critical to success. Nordstrom’s has a one-line employee handbook for customer service: ‘use your own good judgement.’
Perhaps the best argument for this putting-your-organization-behind-your-brand-promise directive, and the importance of focus, is the Krispy Kreme Canadian launch, as recounted by the other keynoter Roly Morris.
When investigating the feasibility of launching Krispy Kreme in Canada, Morris, a former Starbucks VP, was told Canadians don’t buy dozens of donuts, won’t queue, won’t drive far for a donut and won’t pay a premium (of 35% in KK’s case). So, they knew they had to sway Canucks big time on product and experience. Morris and fellow Kremeko investors, perhaps attesting to the addictive nature of the donuts in question, set up a majority-Canadian-run op, and proceeded to rake in $70,920 dollars on opening day in its Mississauga location, a North American sales record, and $465,003 in the first week. There was a two-hour wait for donuts, and people came from as far as North Bay.
The focus is hot donuts-by-the-dozen (over 90% of the sales are donuts). O.K., so they have the focus thing down. And the recipe Morris shared for building a great brand experience is people, product, place. The experience is as important as the product, the promise is to create magic moments, and the brand objective is to be the most loved brand in the world (and to drive outstanding comp store sales increases). ‘Nothing is trivial or insignificant, everything matters,’ from the washroom accessories to the packaging.
The product and the experience are designed to surpass expectations, and to create a distinct identification in the consumer’s headspace. The donut theatre, where you watch the entire donut-making process, is usually situated on a 1.5 acre lot. You notice it. Another very visible ingredient is the light-up Hot Doughnuts Now sign, which acts as a beacon.
Perhaps key to long-term success is the customer service handbook: ‘just say yes.’ This is unique to Canada. As is the staff designation: KremeKrew.
It starts with training the KremeKrew – there are 150 per store. Things they learn include: every customer gets a donut sample. A whole donut. If something happens to make the experience less than stellar, every employee is given the authority to hand out ‘get a dozen free donuts’ fresh start coupons. This is also unique to Canada, and the U.S. donut corp. is looking at adopting this. Also unique to this market, they are open 10 minutes before and 10 minutes after the posted time, so that customers don’t have to squeeze guiltily through the door while getting the hairy eyeball at five-to closing.
In addition to plans for opening 32 stores in Ontario, Quebec and Atlantic Canada over the next seven years, they’re looking at off-premises wholesale alliances with theatres, supermarkets and gas stores, and thus far have been approached by the major players.
The other greatest power in the universe – merchandising – is not overlooked. Collectibles in Canada are made by Roots, Ts and caps.
As to the value of focus, in the late ’60s early ’70s, Krispy Kreme had some dark days after it was bought by Beatrice Foods, and the chain expanded its menu into soups and salads. Franchisees banded together and bought it back, and lost the non-donut items; later the provincial southern chain expanded to NY and LA powered by donutcentrism. The company started as a wholesale biz (currently accounting for 50% of revenues in the South), and so product is everywhere, but here, the roll-out beyond the donut theatre will be carefully orchestrated, as is every Krispy Kreme moment.
As per Morris, ‘Great brands have design consistency. They understand what they are, and what they are not. And they’re built from the inside out.’
Mary Maddever, Editor, mmaddever@brunico.com
