WolffOlins Blog

Supply outweighs demand. This is the new reality. This is why best practices have become the enemy of any successful brand.

Following best practices in your product, service, marketing communications and overall experience simply achieves one result: commoditization.

Once you become a commodity you leave yourself with a single competitive advantage: price.

Price is a dangerous thing to compete on. Even WalMart has learned that price alone is not enough.

Industries obsessed with best practices have actively commoditized themselves. Just look at the airline industry.

The brands who are successful today are not following best practices, instead they are setting them.

They’ve understood the relationships they want to have, the systems of value they are trying to create and have worked hard to provide unique value in these areas.

Amazon, Uniqlo, Apple, Starbucks, Virgin America. All brands which have created new best practices for others to follow.

It may not be everyone’s place to be a leader, but if your industry is one in which supply outweighs demand then you simply have no other choice.

The challenge is that the consultancies and agencies who service these industries thrive  on the dissemination of best practices. Identifying them and aiding clients in delivering on them is easier and much more profitable than helping clients create something completely new. A situation that is undoubtedly better for the adviser than the advisee.

So the next time someone recommends an industry review of best practices, consider focusing less time and attention on what others are doing already and instead on what you could be doing uniquely.

(Paul Worthington)

@pworthington

Creating a definition of the word brand seems to be both the easiest and perhaps the hardest thing to do. The challenge is not that the existing definitions aren’t correct (or more accurately weren’t correct). The challenge is that the environment in which brands live is inherently Darwinian.

As the environment changes brands must adapt. Once brands have adapted enough then what you get are effectively new species - entities unlike what have gone before and that must now be defined in completely new ways.

This has been a constant process over time, but I think we could now define ourselves as being in the third age of brand.

1. USP

The first age was the product age. The environment was post war baby boom America and the defining factor was the rapid growth of the middle class.

In this age brands were built from functional attributes of the product, which spawned the concept of the Unique Selling Proposition or USP.

The technology that enabled this age of brand was television and the platform was television advertising.

In this age the Creative Director was invented and their role was to find creative ways to communicate this USP to the consuming public at large.

2. ESP

The second age was the marketing age. The environment was one of 1980’s excess and the growing demands of Generation X.

In this age the realization was that functional attributes were not enough. It spawned the concept of the Emotional Selling Proposition or ESP, which was defined through the mechanism of Brand Positioning - the technique of identifying and then owning an emotional territory for the brand.

The technology that enabled this age of brand was the desktop PC and the platform was consumer research.

In this age the Account Planner was invented, and their role was to more deeply understand consumer wants and needs in order to understand which emotions to manipulate for each of the brands audiences.

The second age represented a logical progression from the first. Marketing followed product. The connective tissue was that brand owners retained an information advantage relative to brand consumers. In both these ages an information asymmetry benefited the brand owner at the expense of the brand consumer.

3. XSP

Today we are in the third age, the experience age. The environment is one of unprecedented choice and transparency and the defining factor is a fickle Gen Y audience who demand more from less.

In this age brands must be built around their Experiential Selling Proposition (XSP). Unlike the simplicity of USP’s and ESP’s, the transparency of the third age demands that brands manage complex systems of value - understanding how all of the actions of the brand owner (product/service, societal, environmental, technological, marketing) interrelate to create the experience.

The technology that enables this age is the Internet and the platform is Social Media.

The definitive role that this age will invent is not yet clear, but so far we see Innovation leaders, Engagement leaders, Digital leaders, Social Media leaders and Experience leaders.

The fundamental and exciting shift is that the third age represents a sea change from the other two.

The brand owner no longer benefits from an information asymettry over the consumer. Instead this relationship has been reversed. As such, the old rules and indeed the very definition of how brands must behave in order to succeed has also changed.

The tools of brand positioning and advertising that have held such strength for so many years must now be replaced by both new tools and new rules.

XSP demands integration of product, service, social, environmental and marketing layers. It demands the creation of value across the system of the brand. And fundamentally it is built from a trust that brand owners will have to earn from their consumers on a daily basis.

The implications of this change for many brand advisers are potentially dire. Entire industries optimized for the more effective communication of a brands ESP now find themselves facing a systemic decline in efficacy and indeed value.

This will mean one of two things:

1. Brand advisers will need to focus less effort on how a brand communicates its ESP through marketing communications, instead focusing their efforts on helping brands to innovate across the entire system of the brand in order to generate revenue driving XSP.

2. Brand advisers who choose to remain focused on marketing communications will need to find ways of innovating and re-engineering their business model and offer for a lower value, lower fee world. Seeking structural change to create value both for themselves and the brand owner.

Wolff Olins have chosen to follow the first path: Our focus is increasingly on helping brands create new revenues and new value across the entire system of the experience.

Victors and Spoils on the other hand appears to represents an innovative new model designed to deliver the second.

Whichever model wins, whoever defines the new role(s) that will represent the third age, there is no doubt that this is an incredibly exciting time to play.

We may even get a new definition of what a brand is.

(Paul Worthington)

@pworthington

Today’s article about AOL on Fastcompany.com includes a quote we made about changing AOL’s name. The quote was that changing the name would have been the “lazy consultant” answer. I’d like to explain why in a little more detail.

The world we live in today is more transparent than ever. As a result, changing names has become a much more sensitive topic than it used to be. It will never be the ‘fresh start’ as is often claimed, as the court of online opinion will be swift to point out who you really are, and to ask the question “what have you got to hide?”

AOL is a controversial brand for many reasons. Against this, changing the name would simply have been perceived as a defensive move, a weak position from which to enter life as a newly independent company. Had the name have been changed, the very same people who today say it should be changed, would instead be highlighting the name change as a “desperate move” to break with the past.

AOL are not Altria. They don’t make products that kill people. Their problem isn’t fundamentally that they are hated. Their problem is one of relavence and of perceptions. Their future is as a content brand, not an access brand. That had to be our singular point of focus.

AOL also has a huge strength in that everyone already knows who they are. If you change the name, you introduce the significant cost of building as much awareness all over again - money that instead will be better spent on developing the AOL product experience.

In sticking with AOL, they’re not hiding from anything. They’re stepping into the future with a confident stance, and focusing all of their attention on what really matters - creating amazing content experiences for their users.

(Paul Worthington)

@pworthington

There’s a question that floats around in Wolff Olins from time to time, and that I’m sure happens in other agencies too. Simply put, it’s whether or not we are enough of a ‘safe pair of hands’, and whether we need to do more to demonstrate this safety to potential clients. And while no client wants to make a bad choice in agency (can’t deliver, poor quality product, doesn’t listen to client etc.) the question is actually more dangerous than this.

When we ask ourselves whether or not we’re a safe enough pair of hands, what we are really asking is “should we be more conservative” and much more dangerously “should we be more like our competition”.

I think not, and here is why.

Sir George Bernard Shaw once said “The reasonable man adapts himself to the world; the unreasonable man persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”

You could just as easily swap the word “brand” for the word “man” in that statement.

In perfecting the art of adapting themselves to the world, brands and the agencies that service these brands have found themselves becalmed on the sea of sameness we see around us.

To back up what any consumer already intuitively knows, recent research from Bain & Co. suggests that 80% of CEO’s believe their product to be differentiated, but only 8% of consumers agree. This is a staggering statement of failure.

To succeed in an environment where merely being adequate is not enough, I firmly believe that more brands need to become more unreasonable. Our world is one where taking no risk has become the biggest risk of all.

This means new innovation in products, services and experiences, and new approaches to how brands will present themselves to not only get noticed, but also to change how people think about brands.

So if the question is “are we a safe enough pair of hands” I’d answer by saying “it depends”. If you’re a brand that wants to adapt itself to the world and not take any risks then we’re probably not a very safe pair of hands.

On the other hand, if you’re a more unreasonable brand who intends to take calculated risks in order to drive progress, then I’d like to think we’re the safest pair of hands there is.

(Paul Worthington)

I love this new project from Chase Jarvis. Not only has he published a book of photographs taken around the world with his iPhone (which are quite wonderful in their own right), but he’s also created an iPhone app that allows you to edit and enhance your own photographs and then easily upload them to Facebook, Twitter etc. as well as a new website www.thebestcamera.com

The interconnection of the ecosystem - a book of inspiration, an app you can use to make your own iPhone photographs better and a website where you can post and see other people’s photographs (including which app filters they used to create the effects) is fantastic. I really hope we’ll see more interconnected innovations like this in the future.

If I had an iPhone, I’d first in line. As it is, I’ll just have to be happy ordering the book.

(Paul Worthington)

It was with great interest that I read the current issue of BusinessWeek, and in particular their article on Amazon entitled “Marketing is for Dummies”.

In it, they claim that Amazon refused to contribute to the article because executives there “don’t spend much time on branding.” An interesting statement, yes, but in reality I’d say that Amazon actually spend a tremendous amount of time on branding, just not in the traditional way.

To quote the article: “By investing back in the user experience, you get high loyalty and repeat usage.” To me, this is branding.

As our world changes, the idea of branding is also changing. In an open-source environment where Google, YouTube and indeed Amazon are the first places where people go to check out what brands really offer, then the traditional idea of ‘branding’ through image making (logo’s, identities, advertising campaigns etc) will continue to deliver lower value relative to investments in innovation, platforms and increasing the overall utility offered to the consumer.

In case we needed any more evidence, Amazon demonstrates that this truly is a world where what you do matters much more than what you say.

(Paul Worthington)

Just thought I would upload the image of the new Starbucks ad that Paul was referencing in his latest post.

The tone of voice is surprisingly arrogant - and doesn’t feel very true to the brand (and especially counter to their current trial strategy of NOT branding stores Starbucks and having them take on a more local, around-the-corner-coffee-shop feel).

Maybe it’s a situation of too many agencies in the kitchen each executing their own visions of the Starbucks brand…?

(Marissa Vosper)

Travelling is a natural hazard of doing business, so it was a nice surprise yesterday when my wife presented me with a shiny new Kindle as an early birthday present.

It really is much better than I expected, and Amazon are clearly taking a page out of Apple’s book in terms of both the industrial design and the packaging (although shipping through USPS, with “Kindle” emblazoned across the box doesn’t make much sense - the first one they sent was stolen)

Anyway, I immediately proceeded to download the Economist, and what a nice surprise at how readable and how easy the whole process is.

Clearly this is an innovation that makes sense for the Amazon brand - taking their core of books and moving them firmly into the 21st century.

Is the Kindle perfect? No, absolutely not. I couldn’t help wanting to get online with it, and when reading articles on the New York Times, I really wanted to be able to Tweet the one’s I liked straight from the page.

Ah well, perhaps in the next firmware update.

Until then, I’ll be getting on a plane to Japan tomorrow about 20lb’s lighter than I otherwise would be.

(Paul Worthington)

I just read Clay Shirky’s book – Here Comes Everybody. In it he makes a great point that being ‘professional’ brings with it an inherent bias and unwillingness to see change.

He quotes the example of professional journalists missing the racist comments by former leader of the House Trent Lott, which eventually led to his resignation. For these journalists, it didn’t fit within their existing structures and concepts of ‘newsworthiness’.

Instead it was ‘amateur’ bloggers who picked up on the comment and sparked furious debate about what he’d said, and then an investigation into what he’d said in the past.

I couldn’t help but think about this in the context of marketing and brand building. For years marketers and their agencies have defined themselves as ‘communications professionals’ and yet the mechanics of communications, much like the mechanics of journalism, are changing radically and permanently.

If we lock ourselves into the idea of being in a communications profession, I think we risk massively underestimating both the pace and nature of change in the world around us.

In a world where image no longer defines reality, but instead reality is increasingly driving image, anyone thinking of themselves simply as a communications professional risks being left behind.

Instead, I think we need to open our minds and begin thinking of ourselves as brand amateurs, where brand is a system of mechanisms – experience, innovation, culture, communication, conversation, creativity etc.

Rather than being locked into a single mechanical construct, this frees us to focus more on pursuing a business vision – through whichever means is most important, and irrespective of whether it is about communication or not.

(Paul Worthington)

So Starbucks have opened a new non-Starbucks themed coffee shop in Seattle. Their claim is that they’ll eventually have only three of them.

It’s pretty interesting that much of the Twitter traffic on this has been of the “Starbucks brand is so tarnished they have to change it” variety, which if you’re not a fan of their coffee is probably pretty tempting.

However, there are two more interesting thoughts. The first, as suggested by Seattlest is that this is going to be a lab where they can test ideas fast and without danger to the core brand. This may well be the case as using market facing labs in locations close to your headquarters is a tried and proven trick. Just ask Bank of America.

However, there may be something else going on here.

When large corporations look at markets they are often looking for the mass proposition. The proposition that will fit the largest number of people, encouraging scale economies and scale growth.

The challenge is that to be “good enough” for a large enough group of people means that you have to compromise on creating a “special enough” experience for a specific group of people. This is possibly why Budweiser has almost no flavor - because it is designed to be “good enough” for as many people as possible, and hence the product cannot be special for any one group.

Starbucks appears to a great example of this in action - as it has grown, it has worn away the edges of specialness in the experience in order to appeal “just enough” to a broad group of people.

Unfortunately for them, this has now brought them dangerously close to the McDonald’s of this world, who’ve begun to eat their lunch.

How to respond?

Well, changing the core Starbucks proposition would be both costly and perhaps a little dangerous (as you’d be messing with the familiar), so adding a new niche proposition or perhaps even propositions may well be a smart move in the search for growth.

This allows them to keep the Starbucks franchise robust and add new experiences to reignite the innovation/growth engine. While it is easy to decry their initial pilot as being derivative, not everywhere has the robust coffee culture of Capitol Hill in Seattle. What may appear old hat there, could well be quite unique elsewhere.

Which, of course, raises interesting questions about the future of innovation for mass brands. As the Internet has very explicitly shown us, mass is really a collection of smaller niches - where the individual consumers within these niches now have tremendous power to self-identify and organize themselves.

As mass players max-out on their potential, they have to look elsewhere for growth. This suggests we may well see more innovation of the kind that Starbucks has done here and not less - where mass brands look for ways to stretch from their core into more specific niches.

The trillian dollar question will be whether mass brands can embrace the specialness which is a defining characteristic of a niche brand, or whether they will need to create whole new brands to do it. So far we’ve seen examples of three different approaches:

In the extend the brand and try to make it feel special camp, we have Pepsi Natural, which appears to be a very contradictory marriage of brand and proposition. Particularly when we consider established niche competitors in this area such as GUS soda.

Starbucks (as shown in the image above) have chosen a different brand, but with the modifier of a more subtle “inspired by Starbucks” endorsement.

Finally, in the create a new brand in order to be special camp we have Sunglass Hut, who chose to completely seperate their Ilori brand in order to create a completely different experience to drive growth.

It’s not clear right now that any one approach will fit everyone, but I’m tempted to think that the more mass - and hence the least special - the experience of the core brand, the more difficult it will be to stretch it into a specific niche.

(Paul Worthington)

Photograph borrowed from Seattlest