The Brands That Still Matter

February 13, 2014

Dannon Oikos’s nostalgic Superbowl spot was a great advertisement for both the French multinational and its new yogurt product.

But will knowing Oikos is a Dannon product make consumers want to purchase it? Or will they turn instead to nutritional count, pro-biotic content, or price to make their decision? How strong is this brand?

How strong, these days, is any brand?

What I need right now is some good advice

Well, it depends. An excellent piece in the New Yorker this week explores “the end of brand loyalty” and whether this spells the decline of an age in which brands were useful shorthands for purchasing everything from baked beans to luxury sedans. In an era in which the customer review is king, all companies must compete product by product, it says, even established giants. The field is open for upstarts and smaller rivals who can win over a market on the strength of a single, well-reviewed product.

It’s easier than ever for young companies to establish a foothold with a signature product: think Crocs, which have expanded from those foam clogs to flip flops and winter gear, creating a whole new hideous/comfortable footwear market. What propelled Crocs to fame was the strength of customer testimonials saying that it really was worth the price and the look to get that level of comfort.

The same trends that allowed Crocs to happen also signal the decline of major brands. When we have so much information at the click of a button, the promise of a consistent level of quality – which is really all a brand is – becomes less important than the fact – actual product reviews. Why trust a company to make things you know you’ll love when you can trust other users to tell you their opinions instead? It’s true: the level of trust in a product’s brand as a shorthand for making a good purchasing decision is at its nadir.

However, the decline of product brands has led to the rise in service brands, particularly those giving advice. Booking a holiday? The competition for who gives the best advice on hotels, restaurants and attractions seems to have been decisively won by TripAdvisor. Purchasing a book? Bypass the publishing house and read the reviews on Amazon, and then let the site recommend a choice for you. Looking for a good movie? Hardly anybody makes decisions about movies based on the studios that produce them, but Netflix can tell you what to watch based on what you’ve seen before.

These are all Internet-based examples, because the advice industry has moved online for the most part, but brick-and-mortar service brands have also maintained their strength amid the fall of brand loyalty for products. Banks are an example of organizations that are judged based on the selection of products they have curated for their customers, but more importantly how they advise their clients, particularly in the higher end, higher-margin businesses of wealth management and institutional and corporate banking. Consulting firms continue to prosper through economic slowdowns because they can advise on both growing revenue (in good economic climates) and streamlining expenses (in bad). And it all began with things like Consumer Reports, J.D. Power, and other ranking agencies who built their reputations upon being the ones who choose the products that matter, and whose advice you can trust.

The service brand becomes personal

Those who host the platforms that enable others to recommend products – the information aggregators and analysts – are poised to be the big winners of the near economic future. And this extends to individuals as well, which explains the push in the last ten years to develop “personal brands.” I’ve written before about how this makes many feel a bit icky, and yet if we think of skills as “products,” and analytical ability as “service,” it makes sense to have a personal brand that emphasizes how you think and relate to others as opposed to what you know. (This is why most personal brands focus on a combination of attitude and experience, e.g. Oprah’s signature empathy which resulted from her life experiences.)

Skills can be learned and degrees earned by many individuals, just like many companies can manufacture clothing. They are interchangeable. But proof of being able to think well, in the form of awards, complementary experiences, and attitudes, expressed through a self-aware brand, is unique.

This is likely why LinkedIn has moved to a model that goes beyond listing skills and abilities to providing references (“recommendations” and “endorsements”) to indicate past performance, and “followers” to show how popular one’s ideas are. These serve the exact same function as the ranking and number of reviews a destination has on TripAdvisor.

No doubt this has contributed to the large number of individuals wanting to strike out on their own. At a recent networking meeting I attended, 100% of attendees were looking to become independent personal nutritionists, career or life coaches, or consultants. They weren’t wanting to sell things, they wanted to sell themselves and their advice.

A strong brand – a personal one – is essential for this kind of career change, and part of creating a strong brand is ensuring consistency. Working for an organization whose values don’t align with yours – even if you are doing the same thing you’d want to do independently – is a brand mis-match.

All of this highlights another key similarity to traditional product brands: service brands, once established, have a grip on market share. Most companies would prefer to have an accountant at an established firm do their taxes over a sole proprietor. TripAdvisor has few competitors in the travel advice industry, which is why travel agencies are faring so poorly. The barriers to entry are high and name recognition and brand still counts for a lot.

My advice to newcomers: time to call up Uncle Jesse to make an ad for you and get some brand recognition.

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Nations of Extroverts and the Friendliness of Americans

February 3, 2014

Picture this: a bus full of people, mid-day on a Tuesday. A passenger with a seeing-eye dog chatters away about her experiences to the lady beside her, who also has a dog. She then asks a family visiting from Italy what sights they have seen in the area. Further back, two men joke about how their knees are too old to bend sufficiently to fit into the seats. When one gets off the bus, he shakes the other’s hand, saying “Pleasure to meet you!” An elderly couple asks a young, pregnant woman about her children and say “God Bless!” to every passenger that exits the bus.

This is a typical bus ride in San José, at least in my experience riding public transit. Far from scowling at the lack of elbow room, passengers seem to use their proximity to other travellers as an excuse to strike up a new friendship, or at least pleasant conversation for the duration of the ride. On my way back from a book club once, a man told me about his opinion of every Margaret Atwood, Alice Munro, and Michael Ondaatje book he’d read after finding out I was a recent transplant from Canada.

It’s all very unusual for me, and left me wondering: why are Americans so friendly? Several transplants I know from Europe think it must be false, that a waitress in a restaurant can’t genuinely care whether you liked your cajun pasta or had a good day – but is it?

To get a sense of whether there might be a national character at all, and if that might explain my transit experiences, I looked into what is often referred to by psychologists as the “Big 5 Inventory” personality test, or “five-factor model,” which measures the following traits:

  • Openness to experience
  • Conscientiousness
  • Extroversion
  • Agreeableness
  • Neuroticism

My hypothesis was that Americans might, on a stereotypical, national level, score highly on the extroversion and agreeableness scales. Many have noted that at least two thirds of Americans are extroverted (see, for example, Susan Cain’s excellent book and TED talk on Introversion), and high levels of extroversion have also been correlated with traits such as assertiveness and individualism, other behaviours oft noted as common to Americans.

I wasn’t the first to have this idea. I recommend watching this short video, which maps out the Big 5 by nation:

It’s a fascinating study, and largely confirms that Americans are likely to be, on average, more extroverted than people from other nations, and more agreeable. They are also more calm and “hardy” than the average, and able to withstand setbacks, and are extraordinarily conscientious and disciplined.   These would all seem to be important traits for immigrants seeking to build new lives and a new nation.

The French, to take a comparison, are among the most introverted nations on the map. They also tend toward disagreeableness and prefer stability and routine to variety and new experiences. (Interestingly, they are very organized and conscientious, even more so than their German neighbours, which may surprise some in European politics.) An individual with these traits would undoubtedly find the can-do friendliness of the stereotypical American quite unpleasant, and the American, in his turn, would find the reserved Frenchman similar to the fellow below (which I found while searching for “American perceptions of French people”):

Image

It would also seem that my experiences in Argentina were not abnormal: Argentines, according to this video, also tend to be disagreeable, yet quite calm and emotionally stable, enjoying variety. This would explain the tendency we noticed to shrug in an irate fashion and bemoan the state of the economy with no expectation of it changing, then stomp off to dance a tango.

It may also be possible to explain the friendliness of Americans as a lack of the formality and respect for hierarchy that characterizes many Old World nations. There is no easy correlation with any one five-factor model trait here, but it would make sense that a society founded on principles of extreme meritocracy would support individuals bypassing the usual deferences common to aristocracy and other Old World power structures. If all men are created equal, why not say hello to those tourists on the bus?

A side note

Their friendliness doesn’t spare Americans the derision of the world in other areas. Keying in “why are Americans so…” into a search box does not yield very friendly autofill results: “stupid” and “ignorant” are the most common hits.

This perception might also be explained by the Big 5 model. In the “Openness to Experience” dimension, Americans score at a fairly average level. Examples of this trait include being “intellectually curious, open to emotion, interested in art, and willing to try new things.” (Denmark scores highest on this trait. Might explain Lego, The Little Mermaid, and vikings.)

Certainly, Americans are inventive and curious. However, many have also noted a national pride that can extend to an inward focus, a lack of interest in or awareness of the world outside its borders. The persistent and oft-debated data point of fewer than a third of Americans having passports would support an argument for isolationism.

Why bother to travel, though, if everyone will only respond to their friendly overtures with disagreeableness and scorn? Fortunately, there is a place where, according to this map, the locals are even more friendly, sympathetic, and kind, perhaps so much so that they’re willing to forgive some old bad blood and show American tourists around…

Russia.

Have fun at Sochi.