Branding in the ‘Sindustry’

For traditional, comfort-based brands, the potential to build long-term competitive differentiation is great. But can the same be said of brands in the categories perceived as more taboo? Can you build brands where either public perception or regulations limit your ability to message directly to the customer?
For 'sindustry' brands, such as tobacco, alcohol, gambling and sex, the answer is yes - providing their brand-building initiatives are holistic in nature.

For traditional, comfort-based brands, the potential to build long-term competitive differentiation is great. But can the same be said of brands in the categories perceived as more taboo? Can you build brands where either public perception or regulations limit your ability to message directly to the customer?

For ‘sindustry’ brands, such as tobacco, alcohol, gambling and sex, the answer is yes – providing their brand-building initiatives are holistic in nature. While many of these companies may be restricted in their ability to leverage advertising and other promotion, the potential for more experiential branding across a wide variety of customer touchpoints – ranging from Web site to customer service – is limitless.

Successful companies such as alcohol giant Diageo, of London, Eng., and Connecticut’s Foxwoods Casino have found that sustained growth requires brand development that:

* is rooted in a keen and nuanced understanding of the customer;

* recognizes the customer’s desire to express himself or herself through association with the brand – or stated another way, the brand’s place on the ‘permission spectrum’; efficiently and effectively leverages each place where the brand influences or interacts with the customer.

Studying customers’ relationships with brands across the sindustry reveals some interesting commonalities. The first is risk. Each category presents a level of potential risk to customers, whether to health, financial wellbeing or to breaching societal taboos.

These brands also represent rituals and habits – some of which may pose health risks or lead to addiction. Finally, the functional benefits of these brands, many of which are physical in nature, are ones that individuals tend not to broadcast.

Insight into customer motivations may yield opportunities to build a more emotional connection with customers.

Las Vegas casinos, for example, understand they are providing the equivalent of an adult playground. Yet at the same time, casinos such as Foxwoods and the Mohegan Sun in Connecticut each donate many hundreds of thousands of dollars annually to the National Council on Problem Gambling, run programs on gambling responsibly and provide numbers to Gamblers Anonymous next to ATM machines within their casinos.

Indulging the fantasy while providing a potential lifesaving link back to reality demonstrates a unique understanding and care for their customers.

This customer insight also helps indicate where the category lies on the permission spectrum. This spectrum represents the boundaries around which customers are willing to acknowledge their active engagement with the brand. For example, a subscriber to a pornography Web site is less likely to divulge his or her allegiance than an individual drinking Stolichnaya vodka or gambling in Vegas.

The permission spectrum ranges from the private, to the acceptable, to the more stylish/lifestyle oriented brands. Most product/service sindustry categories will have difficulty moving across this spectrum.

Companies like Playboy have attempted to move from acceptability to more of a lifestyle brand with limited success.

Yet liquor brands such as Diageo’s Smirnoff have built more style or lifestyle associations into their brands, for example with its new premium malt beverage Smirnoff Ice. Mentions of responsible use of alcohol plays off the customer understanding that advertisers need to respect the boundaries implied by the spectrum as they develop a level of trust with customers. It’s the reason the names of adult movies do not show up on hotel bills.

Once the permission spectrum is understood, sindustry brands should identify the most suitable customer touchpoints. These may include Web sites, channel partners, salespeople, customer service and word of mouth. For example, the friendliness of a dealer at a casino or the discretion of a Web site has a greater potential impact on the brand-customer relationship than advertisements.

Interestingly, customer complaints regarding alcohol advertisements in Canada are upheld more often than not by Advertising Standards Canada, indicating that some advertisements may, in some eyes, be seen as damaging to the brands.

The sindustry demonstrates that brand building is not limited to those with large television and magazine advertising budgets. Brand development and execution are within the control of all companies in all industries, regardless of public perception or customer attractiveness. The key lies in understanding the customer needs and addressing those needs through high-impact customer touchpoints.

Ray George is a director with the New York office of Prophet (www.prophet.com) a consulting firm that specializes in brand and business strategy. He has over 11 years of experience in helping companies understand, develop, and implement market-driven branding and business strategies.