Growing an eBrand Profitably
Much of the marketing thinking appropriate to the online world is the same as that which applied to its traditional equivalent. Some, however, is not. The important thing is to know the differences. Thankfully, the first phase of e-Branding ("All we need is a great name! No really guys!") has passed. Things have moved on, and the resulting business environment is one in which e-Brands are part of the fabric of commerce - part of the future competitive advantage and profitable growth of virtually all enterprises. That's a fact. So it is self-evidently crucial to know the facts about making an e-brand work, and that centers around getting and retaining customers through excellent CRM.
The Truth May Be Out There - But What Is It?
The World Wide Web has changed our world, but one Big Prediction hasn't really happened yet - at least, not on the scale that was initially predicted. Online retailing. Thus far at least, shoppers have not flocked unquestioningly to a glorious, mouse-powered super mall to indulge in a plastic-fuelled shopping binge all the way from Rodeo Drive to Oxford Street and the Champs Elysées. The "universal online outlet" concept is very attractive - a store that everyone can reach, with no pilfering, no staff tantrums, and no night or day - but, generally speaking, it still remains too sparsely populated.
Why? Overall, the reasons fit under two broad categories: branding & marketing issues and technical & logistical issues. Expensive mistakes have been made in both areas, which is hardly surprising bearing in mind the fact that the early pioneers were boldly going where no one had gone before. However, some clear signposts are now emerging to indicate the way forward. Here, I want to address specific aspects of the branding & marketing issues, although it is impossible to isolate them completely from the technical/logistical axis because, as Datamonitor European research findings show, technological and logistical matters will directly and powerfully affect, for good or ill, a company's brand image with its customers:
These horrors can, obviously, result in heavy financial penalties. For the European arena, respected industry commentator, Forrester1, has claimed that: "Single country sites cost 26 million euros, and each country entered can double the expenditures. Fewer than 100 European dot-coms will make it through the cost crunch by 2003." The figures for North American and Asia Pacific companies will be different, but the principle is the same. The important point is that, to be counted among the long-term survivors in the e-World, there is a need to take on board some crucial e-branding lessons.
There are three main areas of e-Brand activity - Launch, Growth, and Protection (which is to say, ensuring the ongoing, secure success of an established brand). Because the e-Brand Launch Phase is the subject of acres of comment in all manner of media, here I shall just touch on some basic issues around e-Brand naming and values. The remainder of this chapter then focuses on achieving successful e-Brand growth, possibly the most difficult of the three stages in the e-Brand life cycle, offering neither the excitement of the launch nor the stability of the protection phase. For a fuller exposition of all three aspects of e-Brand activity, you may care to obtain Optimizing e-Brand Profitability.2 First, then, let me touch on the launch phase by offering up a few points about brand names and brand values - the key definers and differentiators that must underpin any e-branding activity.
Figure 1 - The principle problems encountered with online retailing (Source:
Datamonitor, Pan-European Study, 2000)
A Rose by any Other Name Would Not Smell as Sweet
A real challenge for any new player in the online marketplace is the selection of a name. Is it best to use an existing or a new name? There is no prescriptive answer to this question but, suffice to say, the greater the similarity between a new online operation and its existing real-world counterpart, the greater the value and possibility of leveraging the existing brand.
Sometimes a predetermined market positioning will drive the strategic thinking and influence the choice of name. For example: lifestyle brand, usually representing an aspirational style of living rather than a specific product; challenger brand, adopting a position to offer better value than the established leader in a given market space; or customized solution, a positioning that helps customers cut through the product choice clutter of several million alternatives currently available on the Internet (particularly useful in categories that are swamped by similar sounding descriptive names).
The biggest challenge that faces new online entrants is the identification of a name that communicates and resonates accurately with the potential customer base. To help with this issue, try the time-honored "name game." First, show randomly selected people a card with a candidate name and logo. After 10 seconds, take the card away and ask each person: a) Can they guess the nature of business of the online operation? b) Can they remember the name? c) Can they describe the logo? The greater the number of blank responses, the harder it will be to build an e-Brand using that name and logo combination.
This said, finding good product and corporate brand names is a strangely imprecise art. Let's face it, there is nothing intrinsically powerful in the names, for instance, of McDonald's, or Tesco, or Sony, or, even Coca Cola. Yet these are four of the world's greatest brands.
They are strong because they have had a long time to establish their presence and, as or more important, because there is a consistency of the communicated brand values associated with them. Sony, for example, ensures that all of its market messages, across whatever channels, communicate the brand value, "sensory excitement." The Virgin brand has been successfully built on the key brand value "Trust" - using the Group's founder, Sir Richard Branson, as the embodiment of the message, "You can trust me. I'm on your side. I'm the people's champion." Which is why Virgin Group has been able to hop into various market sectors - air travel, financial services, and so on.
So, establishing an e-Brand name and logo needs to be accompanied by absolute clarity around the brand values with which they are to be associated. Once these are accurately defined, there is the opportunity to grow the brand.
Remember, History Is the Means by Which We Avoid Entering the Past by Another Door
When creating e-Brands, organizations seem, sometimes, to become mesmerized - bamboozled, even - by the relatively unfamiliar technological mechanics of the process. So much so, that normally well-understood and long-practiced skills get somehow sidelined. Things like looking after customers, for instance.
Acquiring a customer is only the first step in a long relationship building process. This fact was and is true in the real world, and remains entirely so in the online environment. And yet, in the online world, organizations often engage in complex and expensive customer acquisition programs, only to ignore those same customers immediately upon enrollment. Odd. Particularly given the fact that the online environment provides the optimum conditions for the tracking, storage and analysis of the customer data that is the raw material of customer insight and precise customer offers. Perhaps our slowness to recognize this fact is a historical hangover?
Marketers may always have talked about target audiences, customer satisfaction, personalization, and the rest, but in reality the mass market that prevailed through most of the twentieth century and on into the twenty-first meant that manufacturers and service providers had it over the consumer. Lip service was paid to the concept that customers were identifiable individuals but, in reality, sheer weight of numbers dictated that they remained just units (pace the direct marketing community who for years have tried to pioneer a more personalized marketing approach in the offline world). Increasingly, however, the interactive and transactive online world is forcing the change that direct marketing could not quite drive home. The customer is now firmly in the driving seat. But that does not necessarily mean that we have yet acknowledged the full set of implications of that change.
It means, for instance, that unremitting sales patter and browbeating will be self-defeating and destructive of the brands they seek to promote. Organizations have to learn to engage in regular, two-way, non-sales communication with customers. Dialogue, not monologue, is crucial, and "active listening" is a skill to be inculcated and prized. The imperative is to work with customers to identify their needs and wants, and then create the wherewithal to meets those expectations. This trend will become ever more important, the more it becomes possible to make accurate and valuable assumptions based on customer context and proximity. (For more on this subject, see The CRM Project white paper by Glover T. Ferguson at http://ferguson.CRMproject.com.)
Another mistake that some organizations carry into the online world is that of boring their prospects into keeping their wallets closed. The advertising industry long ago came up with a little ditty to sum up this problem:
If a client proves refractory,
Show a picture of his factory.
But only in the direst case
Show a picture of his face.
It holds equally true in the online environment and yet many companies front-end-load their websites with seemingly interminable messages about themselves, with little connection to what it means for the customer. What the customer or prospect wants quickly to know is, "What's in it for me?" It's as obvious and simple as that. The closer the answer is aligned with the visitors' key motivators, the greater the likelihood of an initial visit turning into a long-term relationship.
Enterprises that sideline their marketing know-how when establishing online presences risk seriously damaging their brands. At all cost, avoid denial and anger:
o Denial - as represented by the inability of a visitor to access a site, or extended download times. These faults often mean that visitors will not return to a site for a long time - if ever.
o Anger - as generated by visitors' frustration at not finding any valuable content, or being trapped by poor navigation. Present would-be customers with these problems and they will abandon their online shopping carts, along with the site.
These are particularly dangerous emotions because another feature of the interactive world is the freedom it provides for disgruntled visitors to share their views with the world. We all need fans, not terrorists!
If You Don't Measure, How Do You Know What's Working?
Depending on which side of the Atlantic you come from, the famous management complaint, "I know half the money I spend on advertising is wasted. I just don't know which half" was voiced either by Philadelphia retailer, John Wanamaker, or English soap magnate, Lord Leverhume. Whichever of them said it, it's a great line and it dates back over half a century.
Subsequently, the direct marketing sector worked hard to bring some degree of measurability and accountability to marketing, with some degree of success. In parallel, as computer technology generally, and databases in particular, increased in sophistication, the wherewithal to provide better marketing measurements emerged until, now, they are enshrined in CRM systems in leading enterprises around the world.
Online activity theoretically takes us to the ultimate point along the measurement track because every item of information can be noted, analyzed, and used to further enhance the customer experience. But online measurement involves genuinely new factors that need carefully to be considered. The following list gives a few examples of the kinds of measure to be taken into account:
Travel Wisely and in Good Company
The Silk Road from Samarkand in the 7th century. The Spice Road from the New World to Europe in the 15th. Trade routes have always held out the promise of great reward, but are fraught with danger for the rash or ill-prepared. So it is with the great 21st century trade route - the Internet. Which is why those tasked with building profitable e-brands must apply rigor to the planning and execution of their campaigns. For a venture to sail safely and rapidly into profit, every aspect of the branding and marketing must be carefully thought through. However, this needs doing without over-compromising in terms of speed to market.
Figure 2 - Understanding e-Advertsing and e-Marketing measures - and their limitations
(See larger image)
Opportunities in the e-world often arise within a punitively narrow timeframe. We either deliver, or watch an opportunity just sail on by. An important factor in helping meet these strict timeframes, and create precisely customer-focused offerings, is, frequently, partnership.
The Internet is the perfect example of an interconnected world. Such interconnection should extend to the online business model used by an organization, because it is neither wise nor necessary to produce every single product or service that comprises the online offering.
The guiding imperative in any online commercial activity must be excellent delivery against customer expectations. Profit will come from delighting customers, and if that is best achieved by partnering with complementary skills providers, then so be it. It is essential, however, that the integration of a partner's complementary products and services be undertaken in a manner that allows access seamlessly to the end user. This should be done preferably without leaving, or at least appearing to leave, the initial site.
The Internet is, arguably, the most important trade route in history, and optimizing e-brand profitability is a challenge that is as exciting as it is new. Those brands that succeed in establishing themselves as trusted online suppliers will automatically position themselves to advantage as cellphones, PDAs, and interactive TVs all come fully online. Don't miss out.
References
1 The Cost of Cross-Border Retail, November 2000.
2 Kris Wadia, published in the Financial Times Executive Briefings series, 2001.
