What is the secret to creating more meaningful relationships with consumers and experiencing significantly higher growth as a result?  According to a recent Stengel Study of Business Growth, the answer is no more complicated than this: develop a strong brand promise.

Using Milward Brown's Optimor technique (explained in the box at the end of this discussion), the Stengel analysis was performed over a ten-year period spanning 31 countries and 28 categories. The top 50 brands--that is, those that outpaced their competition in brand value over the past decade and formed “unusually strong connections with consumers” are listed alphabetically in the following chart.  The so-called the ‘Stengel 50’ grew three times faster in financial terms during the period studied than their competitors and the overall universe of brands.

The Stengel 50 reveals quite a disparity in brand categories, ranging from luxury brands like Hermès, Louis Vuitton, Moët et Chandon, Hennessy and Mercedes-Benz to e-commerce brands like Amazon.com and Zappos to consumer goods brands like Coca-Cola, Sensodyne, and Red Bull.  Among these brands we see some of the usual suspects, ones that have been identified in other analyses, particularly engagementdb's social media engagement study of the top global brands (which compared Business Week's top 100 global brands according to number of channels and depth of engagement), as well as assessments of company's performance on Facebook and Twitter.  Albeit with differences.  For example, the top three brands that emerged from the engagementdb analysis were Starbucks, Dell, and eBay.  The top three Stengel brands were Apple, Google and Pampers, growing as much as 10 times faster than average company growth between 2001 to 2011.  Both studies found that connecting with consumers was associated with financial growth.

Looking a little more closely at the Stengel study, however, the basic question is what exactly does it mean to 'develop a strong brand promise' or identity?  Insight into this question is provided by the study's director, Jim Stengel, former CMO of P&G.  According to Stengel the high ranking brands were built around a central ideal that clarified their core purpose, such as IBM's goal to 'create a smarter planet' and Jack Daniel's 'maverick independence.'  In marketing jargon we call these central ideals  'brand essence' - the essential and intrinsic nature of the brand; its spirit and soul; a single thought that captures that soul.

The man behind the research – high profile US marketer and former CMO of Procter & Gamble, Jim Stengel – suggested all of the high ranking brands were built around a central ‘ideal’ that fostered a tight focus on their core purpose.  As described in his book Grow. How Ideals Power Growth and Profit at the World's Greatest Companies, Stengel elaborates on brand ideals:

 “A brand ideal is not social responsibility or altruism but a programme for profit and growth based on improving people’s lives.”

“Maximum growth and high ideals are not incompatible. They’re inseparable.”

As an example, Stengel points to Pampers, a brand that lost sight of its core ideal by focusing too narrowly on the dryness of diapers.  Market share continued to drop until Pampers successfully redefined its brand ideal as ‘helping mothers care for their babies’ and toddlers’ healthy, happy development’. Anybody can talk about dry diapers, but helping mothers care for their newborns is a message that helps distinguish a winning brand from the also-rans.  The best-performing businesses, according to Stengel, are driven by ideals that touch on one of five human values: eliciting joy, enabling connection, inspiring exploration, evoking pride or having an impact on society.

Source: http://www.millwardbrown.com/Sites/Brand_Ideal/The_Study.aspx

The Stengel study adds another notch to Starbucks' growing collection of successes in outperforming just about everybody else when it comes to connecting with consumers.  That I've admired Starbucks' strategy and tactics in the past is certainly evidenced by my extensive discussion of the company in my book, Connecting With Consumers, and in the many lectures I've given on the topic.  Nonetheless, based on some recent experiences associated with my forthcoming book, Psychological Foundations of Marketing (Routledge, June 2012), I'm beginning to reassess my image of Starbucks.  I'm now beginning to think their 'connecting' is nothing more than a lot of smoke and mirrors.  More on this in a subsequent installment.  Stay tuned.

Call me a stickler for proper language usage, a cantankerous old goat, or an old-fashioned traditionalist, but I happen to think that it's important not to dumb down social discourse through the improper use of terminology, poor spelling ("I 8 dinner 2nite"), and lousy grammar. But I get it, the emergence of texting, which is rapidly supplanting email among youth, seduces one rather quickly into a lazy writing modality which, for want of a better description, may more appropriate be referred to as 'de-texting,' in the sense of its efficiency at deconstructing language. When was the last time you texted a complete and accurately-written sentence, devoid of abbreviations and childish emoticons? I rest my case.  Making matters worse is the growing number of commentators who, as commentators are wont to do, comment on various aspects related to social media and connected marketing who bandy about terms without seeming to have clear insight into what it is they are talking about. Case in point - if it has anything to do with social media it is described as 'viral.'

Definitions are important because they provide us with a common ground for discussion. A conversation about word of mouth isn't going to get very far if the discussants are operating from different perspectives on what WOM is. I usually begin my presentations about WOM with George Silverman's definition from his book The Secrets of Word-of-Mouth Marketing, in that it is typical, but also problematic:



A good start, one highlighting the fact that WOM may be positive or negative in nature.  But what about neutral?  For example, say I hear from a neighbor that our local satellite TV/cable provider is about to change its name.  Most of us would agree that is WOM - I have been informally provided with news about a local service company that I personally do not find positive or negative in connotation.  Silverman also points out that WOM is characterized by 'personal communication,' yet isn't it true that WOM conveyed by anonymous posters at an online chat forum is in fact 'impersonal'?  And although it is true that most WOM is disseminated outside of commercial ties, how then do we describe brand advocacy programs, which involve people spreading positive recommendations because they have been incentivized with free products, gifts, or payment?

WOMMA skirts some of these problems inherent in Silverman's definition by defining WOM more broadly:



Although many pundits use the terms 'WOM" and "buzz" as synonyms, Emmanuel Rosen's (The Anatomy of Buzz Revisited) clarifies:



Who can argue with WOMMA and Rosen?  Successful WOM marketing (WOMM) results in plenty of buzz.  So what is WOMM?  Last week, WOMMA contributor Pat McCarthy provided 'the simplest definition of word of mouth marketing":

 

So now that we know what we're talking about, what are the basic principles underlying successful WOMM?  There are two simple ways to find the answer: (1) by reading my book Connecting With Consumers and (2) by watching this short WOMMA video.

In a nutshell, WOMMA identified 5 basic principles of WOMM:

A nice summary of recent research by Ofcom (an independent regulator and competition authority for the UK communications industries) by UK blogger Colette Burke detailing the growing infatuation of the British for the smartphone, so I republish it verbatim below.  Burke's conclusion is right on regarding the need for companies to respond sooner rather than later by making their websites more mobile-friendly.  And it won't be long before we start hearing how 'mobile' not only refers to smartphones but also tablet PCs.  In fact you just did.  More of my comments following Burke's column.

Friday, 28 October 2011 

Colette Burke - Land Strategies Farming Blog

"A nation addicted to smartphones" is how Ofcom summarises its findings from a recent piece of research, saying that 27% of all adults and almost half of teenagers now own a smartphone (a mobile which connects to the internet). Smartphone owning numbers have exploded in the past year, and are set to rise further as annual sales of smartphones are now higher than those for the standard version.

More internet users connect to the web via their mobile than a laptop (45% versus 38%), and the number is even higher among 16-24 yearold where 71% access the internet via phone.

Smartphone usage is definitely here to stay and businesses are thinking through how they tap into the trend, whether it be for advertising their products, providing information, or directly selling goods online.

At the very least, websites must be simple enough to be quickly accessed. Consumers will rapidly lose patience if they have to wait for information to be downloaded. This means either having a site tailored to mobile usage, which automatically comes up when searched via phone, or having a link redirecting users from the main site to a mobile friendly one. Amazon and Tesco are good examples of a speedy tailored link. Asda’s site take an age to download.

The other option is to provide an app, or application, which sits permanently on the phone for easy access to a specific activity.

Although most usage is still for socialising, downloading music,  gaming, and searching for information,  the IGD reckons that smartphones are starting to change the way groceries are bought online. According to their research, 1 in 10 online shoppers are using smartphones to shop. Ocado claims that 15% of customer checkouts during the first half of the year came via their smartphone app. Tesco has a handy app which allows shoppers to scan the barcode of a product on their phone whereupon it is automatically added to their online shopping basket.

As to future developments, the IGD predicts that tailored apps which build a relationship with individual consumers are the way to go.

The time has probably come to view selling and marketing via the mobile phone as a crucial part of any business plan.  The research finds that 81% of smartphone users never switch them off, even when they go to bed, and that huge numbers are happy to use the phone whilst socialising, at the meal table, and even in the bathroom.

Smartphone usage is now a part of life. Those businesses without a smartphone presence may find themselves competitively disadvantaged. 

-------------------------

It's nice to see a perspective, boosted by fresh data, coming from outside the US for once.  Ofcam's research revealed some additional findings that didn't make it into Burke's installment, especially in terms of socializing.

In the bathroom and at the dinner table

The rapid growth in the use of smartphones – which offer internet access, email and a variety of internet-based applications – is changing the way many of us, particularly teenagers, act in social situations.

The vast majority of smartphone users (81 per cent) have their mobile switched on all of the time, even when they are in bed, with four in ten adults (38 per cent) and teens (40 per cent) admitting using their smartphone after it woke them.

Over half (51 per cent) of adults and two thirds (65 per cent) of teenagers say they have used their smartphone while socialising with others, nearly a quarter (23 per cent) of adults and a third (34 per cent) of teenagers have used them during mealtimes and over a fifth (22 per cent) of adult and nearly half (47 per cent) of teenage smartphone users admitted using or answering their handset in the bathroom or toilet.

Teenagers are also more likely to use their smartphone in places they’ve been asked to switch their phone off such as the cinema or library – with 27 per cent admitting doing so, compared with 18 per cent of adults.

So much for the UK.  What about elsewhere?  A global survey carried out last February and March by IDG Global Solutions involving nearly 13,700 participants from 16 countries essentially demonstrated that the UK results are pretty typical.  Although IGS identified differences in terms of preferred smartphone brands and usage by region, it was clear that the popularity of mobile devices is rapidly growing worldwide, and that the traditional cellphone is on its way out, to the product scrapheap that is littered by VCRs, fax machines, and desktop computers.

More than 2/3s of the respondents worldwide claimed to use a smartphone for personal (73%) or business (69%) purposes. Nokia and Apple lead the way in Europe, while Apple, Blackberry, and Samsung the preferred choices in the US.  Moreover, 70% of smartphone users say they browse the Internet regularly and use mobile applications, with general and IT news sites most popular, followed by social networking access.  


As if you don't have enough stats for one day, here are some more 'in a nutshell' global mobile stats from mobilThinking:

Consumer mobile behavior

1) What do consumers use their mobiles for?  Japanese consumers are still more advanced in mobile behavior, using mobile Web, apps and email more, but US or Europeans text and play more games. Most popular mobile destinations are news and information, weather reports, social networking, search and maps.

• In all countries surveyed more consumers used their browser than apps and only a minority will use Web or apps exclusively.

2) US consumers prefer mobile browsers for banking, travel, shopping, local info, news, video, sports and blogs and prefer apps for games, social media, maps and music.

3) Mobile searches have quadrupled in the last year, for many items one in seven searches are now mobile.

• Did you know 71 percent of smartphone users that see TV, press or online ad, do a mobile search - will they find your mobile site or your competitors’?

4) SMS is the king of mobile messaging. 8 trillion text messages will be sent in 2011.But consumers are also embracing mobile email, IM and MMS rapidly.
A2P -application to person SMS e.g. automated alerts from banks, offers from retailers, m-tickets is expected to overtake person to person SMS in 2016.

 • Is your opt-in CRM database part of that revolution?

5) Mobile ad spend worldwide is predicted to be US$3.3 billion in 2011 sky rocketing to $20.6 billion in 2015, driven by search ads and local ads.  In the US over half of U.S. mobile ad spending is local – Japan particularly – continues to dominate global mobile ad spend.

 • With US$1 billion in annual mobile ad revenues Google is the main recipient of mobile ad spend.

6) To what types of mobile marketing do people respond best? In the UK and France opt-in SMS gets the best results, in Germany mobile Web ads get  best results.

I've copied below an excerpt from an interesting article in The New York Times today, penned by John Grossman.  You can read the entire article at this link, but I thought the discussion about Q.R. codes - that is, quick response bar codes, which can be scanned using an iPhone's or Android phone's camera - provided some good insight into how even small businesses can connect with consumers via new technology.  The Q. R. codes rely on an app that translates the code into an advertisement or takes you to a related Web page.  The codes also offer an intriguing channel for getting closer to customers, sharing recipes and coupons, inviting feedback, and so on.  Here's the excerpt:

Nothing is old school about this or a wave of other high-tech customer service initiatives being adopted by a vanguard of small businesses.

In some instances, such as at Zingerman's, a delicatessen, restaurant, mail-order food seller and business seminar host based in Ann Arbor, Mich., the digitally driven service enhancements remain internal and invisible to customers.

For the last dozen years, Zingerman’s has captured customer comments as either code red (complaints) or code green (compliments), but until recently they were captured on paper forms.

Storing comments digitally makes it much easier to analyze them, said Maggie Bayless, managing partner of ZingTrain, the business seminar division.

“We can now sort by types of complaints, customer name or period of time,” Ms. Bayless said. “For example, as we go into the holidays, it’s possible to pull the data for the holiday season a year ago and see what problems we were having and identify: What do we need to remind people to watch for this year?”

By contrast, the highly visible brand of high-tech customer service offered by Culinary Twist is activated by so-called Q.R. codes on its product labels. Short for Quick Response, these bar code cousins, when photographed by an app-enabled smartphone, offer a wealth of service opportunities.

Potential buyers can view a recipe, say, for pork ribs in Baja sauce when they are steps from the meat counter. Soon, Ms. Milos said, they will be able to call up on their hand-held devices a discount coupon that can be scanned at checkout. And with help from OpinionLab’s back-shop capabilities, Ms. Milos can also receive recipe suggestions, insights or even notification of a problem at a particular store — be it a missing favorite or filthy display shelves.

She expects more of the kind of helpful feedback received in an early store demo that led to a relabeling of the Bora Bora sauce.

“We had so many people say they didn’t know what tamarind was, or dates, that we decided to take those words out of the subscript and change it to more about the flavor and how the product was used,” Ms. Milos said. “It now says ‘Sweet Spice Grilling Sauce.’ That’s another piece to the Q.R. code and serving the customer — just listening to them.”

The Q.R. code enhancements to the labels cost about 15 cents a bottle. Rand Nickerson, OpinionLab’s chief executive, puts additional costs for his company’s services at pennies per consumer comment.

“It’s not true anymore that only the Procter & Gambles of the world can afford to do this,” he said. “You don’t have to run a wave of $100,000 focus groups across the country to learn things anymore. The most successful companies in the future, I believe, will be those who become progressively more and more customer-driven.”

Well, not really a brief history of advertising, but a quick glance at some insights into the advertising process that I gleaned while working on my next book, The Psychological Foundations of Marketing (Routledge, due 2012).  According to research, each successive generation since the 'silent generation' (those who came of age during WWII and the Great Depression) through the 'millennial generation" (those born after 1985), when asked "what makes your generation unique" says "smarter".  We have the Internet, so we must be smarter!  But check out these early quotes on advertising - they're pretty well known in the advertising profession:

I couldn't resist - this published verbatim from The Borowitz Report, 9 February 2010.  It's dated, but for some reason, it just seems more and more relevant.  As I continue to bump into people poking at that little rectangular box in their hands as I walk the streets of Paris, I can't help thinking that those people are in that little box and not in Paris at all.  Maybe's there's something to the PhoneBook concept afterall.  Or better yet, to quote from Trainspotting, 'choose life.'

By the way, if you like the PhoneBook installment, check out Borowitz's current posting on the US Republicans' plan to replace Social Security with Groupon.

----------------------------------------------------------------------------------------------

A new social network is about to alter the playing field of the social media world, and it’s called PhoneBook.

According to its creators, who invented the network in their dorm room at Berkeley, PhoneBook is the game-changer that will leave Facebook, Twitter and even the much anticipated Google Buzz in a cloud of dust.

“With PhoneBook, you have a book that has a list of all your friends in the city, plus everyone else who lives there,” says Danny Fruber, one of PhoneBook’s creators.

“When you want to chat with a friend, you look them up in PhoneBook, and find their unique PhoneBook number,” Fruber explains.  “Then you enter that number into your phone and it connects you directly to them.”

Another breakout utility of PhoneBook allows the user to arrange face-to-face meetings with his or her friends at restaurants, bars, and other “places,” as Fruber calls them.

“You will be sitting right across from your friend and seeing them in 3-D,” he said.  “It’s like Skype, only without the headset.”

PhoneBook will enable friends to play many games as well, such as charades, cards, and a game Fruber believes will be a breakout: Farm.

“In Farm, you have an actual farm where you raise real crops and livestock,” he says.  “It’s hard work, but it’s more fun than Mafia, where you actually get killed.”

Wireless connecting is great, I'm lovin' it.  Everything is getting smarter - computers, tablets, phones, cars, refrigerators.  Which isn't to suggest that people are getting any smarter.  Case in point: the e-cigarette.  Pioneered by Blu, electronic cigarettes release a nicotine-laden vapor instead of smoke, and the packs are equipped with sensor devices that emit and receive radio signals that let users know that other e-smokers are nearby.  When an e-smoker gets within 15 meters of another e-smoker, the packs vibrate and flash a blue light.  The packs, which sell for about US$60-$80 for five reusable e-cigarettes, can be set up to exchange information about their owners that can be downloaded onto PCs, like contact information on social networking sites, smoking history, IQ score, favorite Lady Gaga song, whatever.  Even better, the packs vibrate to inform their owners that they are near a retail outlet that sells Blu cigarettes, so that they can blow more of their hard-earned American greenbacks.  Blu researchers have not yet perfected the pack to cough along with the vibration, and I'm not holding my breath.

There you have it, social smoking for the social networking era.  According to Blu founder, Jason Healy, "You'll meet more people than ever, just because of the wow factor."  As in 'Wow, you look so cool puffing on a fake cigarette and blowing out blue vapor!"  The key advantage, and I don't deny it:  they allow users to avoid smoking bans in public places because they release water vapor instead of smoke.  And supposedly they have practically no ill health effects, although the jury is still out on that claim.

Later versions of the e-cigarette promise the possibility of tethering the device to a smartphone through an app, allowing for more real-time communication, and there are plans to develop a monitoring system so that the packs will report back to e-smokers (and perhaps their doctors) about how much they are smoking.

If you want to see a Blu e-cigarette in action, check out Matt's You Tube video.

I don't know, try as I might, I just can't identify with Matt.  Is this the typical e-smoker profile: young, impressionable, male, and a marketer's wet dream: "I got sucked into marketing...look at this [package], how beautiful it is"?

I can understand how a product like this might be appealing to those trying to kick the real thing, but I just don't get the social connection element.  And apparently I'm not the only one.  Forrester analyst Charles S. Golvin, who has studied connected devices, such as Nintendo's new hand-held 3DS gaming devices that communicate with each other when brought into close proximity, believes that the Blu idea reveals how digital connections can get ahead of the reasons for connecting:

The way that groups of affinity are conferred just by physical proximity makes a bit of sense.  If someone walks by with a Nintendo, great, I share a common interest.  The fact that I walk by a smoker?  Seems like a weak link."

Adam Alfandary, a 24-year-old tech start-up employee also was skeptical about the e-cigarette, suggesting that the reason he lights up the real thing in the first place had to do with its social aspects. Mr. Alfandary scoffed at the idea that a cigarette device would do the social connecting for him: "I think that's the dumbest thing I've ever heard in my life.  And I'm saying that in full acknowledgment that smoking is one of the dumbest things I can do." 

I think e-cigarettes are just the beginning.  Imagine the possibilities - e-ankle bracelets, so that people under house arrest can connect with other people under house arrest.  Dominique Strauss-Kahn would never be bored again!  And what about e-umbilical cords, so that newborn babies can connect with other newborns sharing their birthday?  The possibilities are endless.

Source:  Joshua Brustein, The New York Times, 10 May 2011.

Thanks to my ESCP student, Jalita Aspelin, who is Assistant Product Manager at Agence France-Presse (check out her New Trends website) for this link to a video promotion for Google mobile ads:  http://www.youtube.com/watch?v=CjUcq_E4I-s&feature=player_embedded

As is typically the case with these sorts of pithy videos on social media and new technologies, the video is replete with phantom percentages, source and method unidentified.  Nonetheless, the basic points of the video can't be denied - smartphones are indeed serving to make consumers smarter shoppers and are facilitating the shopping process, usurping many of the functions of traditional media and computers.  Is it just me, or does it seem that in the near future, the desktop computer is going to look as much as an antique as the typewriter?