The tragedy of the day is Sears. They are nose-diving with no end in sight. After comparable store sales falling off between 16-17% in 2017, no one can see a way to reverse this trend. Wall Street ‘s collective view is that they will be lucky to survive 2018. They should have focused on reinvention all along.
What makes this so sad is they were not able to build upon the venerable brand equity established over generations. For much of the last century, Sears was the source of quality and durability for many things. It was literally where America went to shop. Most appliances that our grandparents counted on came from Sears. Their catalog was where Americans bought what they needed. Quality was assured. So powerful was the brand that it could carry the product offering of the “mail order bride”, then used by homesteaders who could look at a Sears and Roebuck or Montgomery Ward catalog and order a wife delivered to his home just as easily as an appliance. (The Zoosk, Match.com and eharmony of the time). That’s how embedded the brand was in our culture.
But things changed, and successive leadership never focused on reinvention to keep the brand relevant.
To prevent the erosion of a strong brand, leaders need to constantly evaluate where they are and where markets are headed. Of the powerful brands of the mid-to-late 1900’s, what happened to Kodak, Howard Johnson’s, Polaroid, Borders, and Blockbuster? Imagine the extraordinary brand equity each had built. At In the end, each brand did not manage their business into a changing future. Kodak didn’t believe in the digital revolution. Howard Johnson’s yielded being America’s rest stop to fast food chains, etc.
The big message here is having the forethought and will to acknowledge change can help a company navigate the future. It is about embracing disruption. Great leaders must continually make this a primary responsibility. Particularly with the ever-increasing acceleration of change, the mandate is here, right now.
One significant consulting firm that specializes helping companies focus on the future in a rigorous and strategic manner is Innosight. They have developed formalized processes to look at the future and manage to it. We have seen it in action and it is impressive.
Net… don’t put your head in the sand. Embrace that change will happen, identify what the future will look like and have a strategy to navigate there. If you do this well, you won’t become a Sears.
January 12, 2018 Comments Off on Reinvention is the Key to Sustaining a Brand
Build a great differentiated brand or drown in a sea of sameness. Today having a strong investment management brand is not a nice to have, it’s an imperative.
For years building an investment management brand was left to the big mutual fund players and others vying for retail clients. Then, with the global financial crisis and the massive outflows across segments, firms of all shapes and sizes rushed into the market with what they thought was “branding”. Today, just about every investment management firm has a name, logo, website and a trusty pitch book—likely all blue and peppered with navigational images and icons. Many thought, therefore, that they had built a brand and that this, combined with good, consistent performance was enough to get them noticed, win business and develop loyal clients. Once upon a time that may have worked, but not today.
With the increased complexity of the financial markets, expansion globally where firms may be virtually unknown, commoditization and a growing preference for specialty managers—many are taking serious stock of their brands.
The Value of Truly Building an Investment Management Brand
Brand strength is the second most important attribute in selecting an investment management firm after performance. As the lines between retail, intermediary and institutional buyers blur, more stringent disclosure requirements are imposed and with the move to more global distribution, brand and reputation are increasingly more important drivers in clients’ decision to invest. As the following chart shows, according to intermediaries, brand strength and reputation ranked as the second highest factor when considering a firm.
Key Drivers of Asset Growth
The field is crowded, noisy and confusing. Today hundreds of investment management firms with countless strategies and vehicles are battling it out for assets. Add to that the lack of distinction between firms, it’s nearly impossible for potential investors to see through and understand what a firm does and does better than its competitors. Net, it takes a lot to win and retain loyal clients.
Key promises sound the same. Without doing the work to create meaningful differentiation, most firms push out promises that sound the identical, creating a virtual sea of sameness. Here are some commonly used messages that permeate the market and have no specific insight into the manager:
So, to get noticed in an over-crowded marketplace a firm must build a brand that means something and ultimately matters to its clients. To do this, the story it tells must be clear, differentiated and memorable.
Investment Management Firms Face Unique and Formidable Challenges
Simply put, investment management brands are different—from their products and services to their diverse audiences—and operate by a different set of brand rules.
How do you brand thinking, advice and insight —all intangibles?
With consumer goods or manufacturing, customers can “experience” a product, they can taste it, wear it or drive it, and this offers more opportunities for differentiation. However, with an intangible based brand, creating an experience and ultimately building a brand is much more difficult. In investment management, the proposition rests largely on the thinking, insight and expertise of the managers and they are therefore chiefly responsible for conveying the brand to investors. It is important to identify and cultivate a brand idea that captures the essence of the “intangible”, is at the core of what the firm stands for, and that all can rally around.
How do you build an authentic brand experience when your audience is layered —sometimes its B2C, sometimes its B2B, sometimes it’s both and both at the same time?
Investment management brands are neither consumer brands or B2B brands, they’re different. Their primary audiences are a mix of professional buyers—financial advisors, plan sponsors, institutional consultants—and consumers with very different needs and expectations. They must be perceived as offering the deep insight and information required by professionals and at the same time instill a sense of trust and confidence with end investors. Adding to the challenge, is that all of this needs to be conveyed through a complex distribution system. Deep knowledge of the markets and investment products—from traditional to non-traditional—and a solid understanding of the nuances of various distribution channels is key to mapping out relevant propositions and communications.
Investment Management Layered Distribution
How do you build an investment brand when what investors are buying is a promise that their assets will grow and outperform, when the future lacks certainty and that promise is based upon past performance?
Customers and intermediaries alike are ultimately expecting that their assets will grow and they are being asked to believe that they will based on past performance and information. The problem is that the future is uncertain, promises are just that, and history doesn’t necessarily repeat itself. Therefore, clients need reasons other than history to believe that a firm will deliver. It ultimately comes down to trust. Crafting a brand of reliability, openness and confidence are keys to gaining that trust.
How do you build trust, because that’s what it takes, in an industry that is largely considered not trustworthy?
With the financial crisis came significant investor skepticism and lack of trust in financial institutions. It was a logical outgrowth. Rebuilding trust starts with uncovering the firm’s authentic identity and value and from there a compelling brand can be constructed.
The Keys to Building a Powerful Investment Management Brand
Developing an investment management brand takes not only an understanding of the complexities of the industry—intermingled audiences, complex distribution and nuanced products—but also the knowledge and expertise of brand-building.
Identify a core, unifying brand idea that embodies the purpose of the brand and the ultimate benefits to all that it engages. Brands are essentially about a firm’s identity, driven by purpose and meaning, and the connection that people make to that purpose and meaning. So, getting to the essence of a firm, who it is, what it believes, how it’s better or different than others and telling a credible, compelling story is how great brands are created.
Understand what each target audience needs to hear to engage. Because audiences are often layered and over-lapping, spend time developing a brand messaging strategy that communicates effectively to each important audience and at the same time builds common equity for the benefit of each product or service.
Tell a meaningful and differentiated story. For years, investment management firms stayed in a very narrow range of brand building—lackluster messages focused largely on performance, rock-star teams, and complex, at times mysterious, descriptions of who they are and what they provide. It became a maze of mirror images making it difficult to distinguish one firm from the next. So, the new rubric is about telling a true and meaningful “story” that is the surest route to clarity and differentiation.
Be consistent in all communications and behaviors. Again, investment management firms must appeal to a variety of different audiences. Add to this that each distribution channel has a distinct process and preferred system of communication. This condition offers ample opportunity for messaging to break down and ultimately dilute brand awareness and appreciation. To develop investor confidence and build brand equity, careful attention must be paid to consistency in communication and alignment with the brand messaging strategy.
Invest in building the brand. For a time, with good performance, generally content investors, reasonable compliance constraints and an intermediated sales process, many firms were reticent to develop a powerful brand. In fact, their strategy was to “stay under the radar”. Then the markets melted down in 2008 creating a fog of mistrust of the industry. This changed the game almost overnight with clients looking for reasons to believe beyond performance. This is where investing in a powerful, differentiated investment management brand is now an imperative.
Building a strong and enduring brand in the investment management business is both an art and a science. The pursuit involves two essential pieces; understanding the true and authentic identity of a firm to create powerful differentiation, and deep understanding of key audiences to unlock what they need to hear to engage. From this foundation, strong brand can grow.
For any questions, contact:
John K. Grace
President & Managing Partner
February 22, 2017 Comments Off on The Investment Management Brand Imperative
The question is… can trust be revived in a brand that is seriously damaged? Almost every year there are brands that amaze us with incredible stupidity… mostly generated by a drive for bigger sales numbers. Volkswagen not only misled consumers and dealers about emissions and gas mileage claims, but
tried to make it a small and inconsequential issue until investigators uncovered an ever-growing circle of management and leaders who actually knew exactly what was going on. [Read more →]
September 30, 2016 Comments Off on Can Trust in a Brand Be Revived?
Brand experts everywhere are scratching their heads about how the candidates (“brands”) in the current primary system are challenging beliefs and apparently re-writing the rules. The candidates in both political parties are exhibiting unpredictable, and in some cases abhorrent, behavior. We have looked beyond the immediate to remind ourselves that there are very true and proven principles about short and long-term brand development. Lest we forget, great, powerful, sustainable brands do share important characteristics. They are:
Clear and focused. Powerful brands know what they stand for and stay focused on their core positioning. Rather than bounce around with multiple promises, they understand the need to be almost singular in purpose. At this stage of the run up to the primaries, some of the candidates have demonstrated clarity and focus, and they are being rewarded for this.
Authentic and true. Great brands are authentic. Authentic brands understand what they are and do what they say. Their behavior is consistent with their promises. That means that the organization making the brand promise must be congruent. So “brand” goes way beyond communications or image. It is a mandate for behaviors. Love a candidate or not, those that rise to the top are true to what they are and do not get distracted.
Truthful and honest. Brands that win, over the long haul, are ones that are true and honest. They don’t duck and weave between claims they make, but say things that they can back up. The gap between truth and fabrication will be a key determinate over the longer run.
Transparent. Strong brands develop a level of transparency so their key audiences understand that they are telling the truth, and not hiding or shielding key information. They understand that this transparency is the basis of the bond they have with their advocates. It would be fair to say that all the candidates, in both parties, are not transparent enough. Some believe that shouting louder masks the need to be transparent. In the long term, this strategy rarely works.
Consistent. Brands that last understand the need to be consistent over time. Brands that fail flip-flop from one position to another to satisfy immediate needs usually fail. That is because, in the long term, consumers and voters scratch their heads being unable to attach clarity and purpose to a constantly shifting target.
Delivery focused. Many brands can induce trial by making compelling claims and promises but only brands that actually deliver on promises will endure and develop loyalty. Consumers don’t tolerate bait and switch, and what may push a short-term victory could actually develop long-term detractors.
Shouting the loudest is not an enduring platform for a brand. It certainly gets media coverage and awareness. But in the end, it is the guiding principles above that will shape the outcome and the future.
We believe that the degree to which a candidate embraces these principles will determine their long-term viability. Not just in their electability, but also in terms of their effectiveness. So while the American electorate is attempting to select one “brand” over another, those that survive over the long-term will have met the test better than others.
March 10, 2016 Comments Off on Political Primaries Spotlight Principles of Strong Brands
This past week has been a flurry of activity between Apple and the U.S. Justice Department about unlocking an iPhone used in the San Bernadino terrorist attack. It is a profound question, and not a new one. Apple’s response so far has been consistent with the brand bond it has with its loyalists… that the relationship with consumers takes precedence.
In the New York Times, Eric Lichtblau and Matt Apuzzo cite that Apple’s refusal “appears to be based on its concern for its business model and public brand marketing strategy” rather than a legal rationale. They are partially correct. Apple knows that it is in the “relationship” business… and will, at all costs, defend that relationship with its consumers.
In a recent post, we focused on “Why Authenticity Matters”. As we wrote, “Authentic brands do what they say. Their behavior is consistent with their promises”. Apple is being true and authentic to its very reason for being. In the face of the immediacy of a legal challenge, it has deferred to its brand before compromising.
There is no question that this issue is complex. From a technical and legal standpoint, opening up the code could set a significant precedent that could have broad impact across many companies with strong intellectual property as a basis for their differentiation. Imagine some people being poisoned by drinking Coca-Cola and the company being asked by the Justice Department to reveal it’s 130 year-old, secret formula for the purposes of helping in a criminal investigation. This example isn’t as emotionally loaded as dealing with a terrorist situation, but the precedent is similar.
On the other hand, any way the authorities can gather information to thwart terrorist activities is a good thing to do. So this becomes a thorny problem.
There is no question that Apple needs to find a way to help the Justice Department without compromising its bond with consumers. Reading between the lines, both Apple and the Justice Department have essentially acknowledged this. The question is how to provide this information while protecting the Apple brand. I am confident, once the bluster dies down, this will be accomplished.
February 22, 2016 Comments Off on Apple’s Refusal to Unlock it’s iPhone is “On-Brand”
One universal characteristic of market leaders and powerful brands is that they are authentic. Business leaders should challenge if they have embraced what authenticity means.
Authentic brands do what they say. Their behavior is consistent with their promises. That means that the organization making the brand promise must be congruent: its business processes have to be designed and aligned to ensure behavior that supports and delivers the brand promise. So ‘brand’ goes way beyond communications or image. It is an organizational mandate.
There have been three recent examples of brands that have broken this trust. Volkswagen completely diluted its brand by not only installing software in cars to cheat on emissions standards, but also hiding and denying this behavior for years. They impeded and obstructed regulators and provided misleading information, and thus violated not only customer trust, but also employee affection for the company. It will take years for VW to recapture its market position.
Takata, a leading supplier of air-bags, tried to duck responsibility for airbags that can explode when deployed by implying that it was a data manipulation issue. The truth did come out, and after years of denial, Takata is now paying the price for misleading customers. Their brand has suffered immeasurably. To quote the lead plaintiff, “The only thing they did not know was the names of the individuals who were going to be injured or killed, and the date it was going to happen.” Ouch.
Chipotle did not appear to react fast enough when it learned about a Norovirus outbreak. Apparently, the procedure for “washing down” produce didn’t seem to be effective. They have subsequently apologized, closed some restaurants and put in place new procedures. The question is whether consumers will believe that they will continue to act in a truthful manner. We give them praise for not denying the problem, but time will tell whether consumers believe Chipotle acted fast enough in the best interest of their consumers. For a brand based on credibility, they are dancing very close to the edge.
One of the benefits of being authentic is word-of-mouth recommendations and repeat purchases. In other words… loyalty. Whether B2B or B2C, understanding what authentic means and living it every day is a mandate in today’s complex markets.
February 19, 2016 Comments Off on Why Authenticity Matters
Brands are ultimately about meaning. Stories are the building blocks of meaning. And stories that connect your brand with a fundamental human need can help you build a powerful bond with your clients.
In our experience, this is as true for management consultants, accountants, law firms and architects as it is for carmakers, technology manufacturers, fashion designers and food brands. The difference is that while we have long accepted that emotional connection can drive consumer purchases, we like to think that business-to-business purchases are driven entirely by cold reason. They are not.
We have spent many years interviewing C-suite executives who purchase professional services. Sometimes one firm has a “silver bullet”, a tool or insight or method that nobody else has, so the choice is obvious. It happens, but it’s vanishingly rare (and quickly copied).
More often, clients have to choose between firms that have very similar offerings, people and approaches. So how do they pick? We have found that they make choices based on the story the brand tells them… the story that the brand allows them to tell about themselves.
Certain narrative patterns or storylines tend to recur within particular categories of professional services firms. The table below illustrates a few of the story patterns we often see in our work with these firms.
Each of these narrative patterns enables a brand to evoke and address a deep human need, even when offering an abstraction such as professional advice. And each of these stories can be told in a multitude of different ways.
By understanding these patterns, a professional service firm can drive differentiation and preference.
So how do you discover and then develop your authentic brand story? There are strong clues in your firm’s origin story and in the recurring iconic stories about the firm that your professionals tell themselves. The stories that clients tell about you (and the language they use to tell them) are also powerful sources. In both cases, it takes skilled questioning and astute listening to draw out the truth in the tale.
Once you have discovered the fundamental brand story that reflects the truth of your organization, it can then be developed into compelling market-facing messages, woven through all your communications and crucially, embedded in the culture of the firm and the behavior of your people.
August 7, 2015 Comments Off on Stories are the Building Blocks for Professional Service Firm Branding
Mean Something If You Want To Matter
Any brand that endures and stands out from the pack does so by connecting with a fundamental human need.
Professional services firms, which deal with abstractions and intangibles, can begin to build and leverage this deep human connection by first understanding what they stand for – what they intend to mean to their clients and employees.
A powerful, authentic brand captures and signals the underlying human meaning in your business – the thing that sets you apart and makes you matter to your marketplace of potential clients and recruits.
Your brand is therefore a strategic business issue, way more profound than issues like name, logo, tagline, or visual style. Those are symbolic expressions of the brand, shortcuts to the meaning in the business: they are not the brand itself.
One of the key challenges for a professional services firm is how to encourage clients to have a committed relationship to the organization, not just to the individual consultant. Brand offers a way to do this, by building a shared sense of the meaning in the business, while at the same time enabling individual professionals to express that meaning in a way that is authentic to them.
Our experience helping professional services firms to differentiate and market themselves effectively has helped us identify three key factors that set professional services brands apart:
- Relationship is the envelope that wraps the client work. Professional services firms need to understand and leverage the emotional value of the client relationship as a key differentiator
- Attracting and developing talent is as important as attracting and developing clients. Aligning the internal and external brand is crucial
- Vision, values and beliefs drive the behaviors that convey the brand. Understanding and clarifying these areas is essential to building a meaningful professional services brand.
Take McKinsey and The Boston Consulting Group (BCG), the top two global strategy consulting firms. They each recruit similar people from the same set of elite schools, and they each address similar business challenges with similar intellectual tools. And yet clients see real differences and make choices between the two. How and why?
The answer lies in the meaning that both firms have built as they have developed their respective brands. McKinsey has come to mean power and control – the stability and order that enables prosperity. BCG on the other hand, has built its brand meaning around understanding and transformation – the insight that empowers you to change your circumstances for the better. Both are compelling meanings that speak to fundamental human needs, but each appeals to a different client mindset.
These two iconic consulting brands have used narrative and story to create meaning and differentiation as they compete for clients and talent. Our next post will explore how to use story as a tool to differentiate your firm, and to create meaning that attracts the right clients and the right recruits.
July 1, 2015 1 Comment
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May 20, 2015 Comments Off on recherche rencontres lyon
I was asked by a friend about the Washington Redskins name issue, which was so eloquently written about in the New York Times Opinion Pages on June 24 by Michael Lewis and Manish Tripath.
Here is essentially what I wrote as a reply….
This is an interesting branding question on many levels. I am in complete agreement with the Michael Lewis and Manish Tripath conclusion.
1. Money aside, (changing the name) is the right thing to do.
2. The “model” they used (have not seen it) indicates no significant loss in revenue. My experience with name changes would bear this out. In fact, the opposite is often the case. I understand the argument about existing brand equity, but there are other important factors.
3. We would advise that the team owners look at a new name as an opportunity to re-energize the fan base. What if it attracted more fans and advertisers? Looking at the upside might help all involved think about a different and better brand and future for the franchise.
4. Lewis’s idea of involving the Native American community leaders is a brilliant way to move forward in a positive manner. It could result in an even larger upside, albeit the process might be complex so as not to disenfranchise anyone.
Change is scary for many, but, in this case, necessary. Not only has the U.S. Patent & Trademark Office voted to strip the team of trademark protections, but changing the name is the right thing to do.
June 26, 2014 2 Comments