Left to right: Russ Meyer, Chan Suh, Steve McKee, Robert Passikoff, Tim Hill, Don Peppers
Are brands so fragile, so weakened by Internet-empowered consumers that branding is on the verge of losing its value? That’s one way to read the recent article in The New Yorker, “Twilight of the Brands,” by noted business writer James Surowiecki, who leads off with the recent debacle at Lululemon Athletica as emblematic of what the article’s page header dubs “The End of Brand Loyalty.”
It’s a brief article containing a number of striking assertions, and were it not for its appearance in an influential publication I might have written it off as another of the many unimaginatively sensational “Death of _________” posts. Instead, I reached out to six branding and brand loyalty experts, authors and agencies to ask for their insights on several of Surowoiecki’s key contentions:
“…brands have never been more fragile. The reason is simple: consumers are supremely well-informed…” Do you agree?
Russ Meyer, Global Director, Strategy and Insights, Brand development, Leadership at Siegel+Gale: No. If by “fragile” he means more subject to negative news, perhaps. Yes, brands like Lululemon get subjected to what one could call a “brand storm” of negative press faster than in the past. That’s the real power of the Internet: speed and reach, not necessarily “fragility.” Negative news about a brand (bad reviews, product recalls, missteps in communications, etc.) gets distributed faster and more broadly than it did in the press…often amplified by a “democratized” news system that constantly needs something to talk about. So, for instance, over a weekend, Excedrin can screw up with moms and be subjected to negative brand press.
But those “brand storms” also seem to pass faster and, perhaps, have less impact on the brand than they did in the past. Yes, the iPhone 4 had an ‘antenna problem.’ Remember the storm around that? And ultimately how damaged was the iPhone because of it? They fixed the problem and the vast majority of iPhone owners barely remember it would be my guess. These days those storms appear, strike and then disappear faster and faster. But I don’t know that a single ‘storm’ leaves a brand irreparably damaged.
Don Peppers, co-founder of Peppers & Rogers Group and co-author most recently of the book Extreme Trust: The truth is, Surowiecki’s point could have been made with a similar article arguing that, if anything, consumer-driven transparency turns AUTHENTIC brands into super-powers, while stripping the covering off of the fake ones and flash-in-the-pan PR wonders.
“But what’s really weakened the power of brands is the Internet, which has given ordinary consumers access to expert reviews, user review…” Does your experience with brands and the Internet indicate a weakening or strengthening impact?
Steve McKee, President, McKee, Wallwork & Company, Businessweek columnist, and author of the new book Power Branding. “Neither. And both. I first learned about Lululemon online, and before it had expanded much my wife and I actually sought out the store on a trip to San Francisco. The brand appeal was that powerful. And that was just a couple of years ago. Lululemon, as much as any company, demonstrates the incredible power of branding in this day and age. But the brand’s recent problems would indicate a weakening impact. Since both are possible, I think what the Internet underscores is the need for a strong and consistent brand foundation, with no cracks and no man behind the curtain. That translates to corporate culture, which is rightly where brands are increasingly turning their focus. It’s getting ever more difficult to fake authenticity (although some politicians still get away with it).
Tim Hill, Worldwide Development Director of The Brand Union: The internet facilitates both – yes, there is a chance of mass criticism, but the internet presents brands with an amazing opportunity to directly communicate with individual consumers, enabling more intimate positive moments of interaction.
Surowiecki cites, and then dismisses, one global branding agency. Interbrand is quoted as holding that “In a world where consumers are oftentimes overwhelmed with information, the role a brand plays in people’s lives has become all the more important.” He then declares, “But information overload is largely a myth.” Do you agree/disagree with either the Interbrand position, or the author’s contention that “information overload is largely a myth.”?
Chan Suh, Chief Digital Officer of Prophet, and formerly co-founder of the ground-braking digital marketing firm Agency.com. “As someone who comes from the digital side of branding, I fear that we often miss the forest for the virtual trees. While we justifiably marvel at the abundance of “information” and opinion, we are often too quick to draw far-reaching conclusions based only on trending, but shallow evidence. Surfing should be for websites, not branding. What the digital activists (I count myself one) often miss is the fact that branding is not just a shortcut for information. It is a promise, an experience and a symbol as much as it is an object for selection and transaction.
Robert Passikoff, Founder & CEO of BrandKeys, which has just published its latest Customer Loyalty Engagement Index: “I think brands have been more fragile but not just because consumers are more well informed… they have been for 20 years… brands not differentiating is what makes them fragile. I found the notion of the well-informed consumer to be very simplistic.”
Russ Meyer: I disagree with the Interbrand argument. It isn’t about information overload. It’s about lack of time. Brands have always been ‘shortcuts’ for people: perhaps once ensuring quality, then reliability, now often ensuring consistency or stature or ‘right for people like me’, etc. It’s true that finding and managing information is relatively easy, thanks to Google. But sorting through the realities of literally hundreds of types and sizes of toothpaste to choose from, brands help with navigation. Humans love shortcuts. Brands play that role so we don’t have to start from scratch and research hundreds of types of product versions every time we shop. The challenge isn’t information overload… it’s product overload.
“For established brands, this [decline] is a nightmare. You can never coast on past performance…” Do you think that branding has ever allowed “coasting?”
Tim Hill: “I really dislike the word ‘coasting,” it implies that brands focus on one activity or campaign to see them through a prolonged period of time. I don’t think that this has ever been true. Innovation is happening at every touchpoint and brands of all sectors are feeling the pressure to not only develop and maintain high levels of service on new platforms, but entice consumers with newness.
Robert Passikoff: The truth is, expectations increase more than brands keep up. What you need to be doing is looking own the road… there seem to be some extraordinarily prosperous brands that are doing just fine on past performance… I think if you look at companies that have only gotten better, they’re not coating on past performance. Amazon has been Amazon and they’re doing a great job.
“…the economic value of brands – traditionally assessed by the premium a company could charge – is waning.” Do you see this happening?
Russ Meyer: As a brand, if you’re relevant and different people will pay more for you. The challenge for brands is we now have more products than needs, differentiation is easier to copy and harder to maintain and consumer needs change faster than they did in the past
Robert Passikoff: If you’re a real brand, you are a surrogate for added value and people are willing to pay for that… all you need do is look at luxury brands. I suggest that the author look closer at the luxury category and realize that “There’s never a sale at Tiffany’s”
While there was a range of opinion about Surowiecki’s article – and more commentary than could fit here (watch for more to come) there was no lack of interest. In fact, Don Peppers got so intrigued by the article and questions that, rather than answer each, he created a post specifically about it for his 100,000 LinkedIn followers. Likewise, Prophet tells me it is in the process of preparing a “deeper dive” into the subject matter.