Tag Archives: branding

Building a Brand In a Recession

The recent recession saw sales of condoms, guns and burglar alarms soar. This is because, when fear enters our mind in terms of losing our job or of not being able to pay bills, we focus on two of our most basic drives: fear and sex.

The key to selling and building a brand during financial crises, therefore, is simple: manage fear. Understand how it works and how it affects purchasing behaviour. This advice on brand-building during a recession comes from Martin Lindstrom, ex-advertising agency executive, author of Buyology, and one of TIME‘s 100 Most Influential People in the World, 2009.

First, there’s always good news in bad times. A standard approach in this situation is to address consumers’ problems. And people always have problems. The fact is we rarely know what we want, but we have no trouble pointing out our difficulties. For example, no one knew they wanted an airbag, but everyone agreed they wanted safer cars.

It’s therefore important to ask yourself what sort of problems are consumers facing during this economic recession? There are many. […] Convert problems into assets for your brand.

Second, add a practical dimension to an irrational decision. No matter how much money you may have in the bank, or how secure your employment may be, it’s now fashionable to save your money and buy everything at a discount. What can a brand owner do? Particularly in light of the fact that a discounted brand typically takes seven years to recover!

The answer is simple. Add a practical dimension to the equation. […]

Third, you have to systematically remove fear. Hyundai did it. And a stream of new banks are doing it. Both have succeeded in identifying why consumers are reluctant to spend. Once this is understood, then you can harness it and build a better product by addressing the fear and finding a way to eliminate it. Your sales may be down. But do you know why? People are certainly buying less, and explanations like, “Well, there’s a recession going on out there,” are not helpful. What’s important is to understand the fundamental role of fear, and then turn it around to strengthen your brand. Some of the world’s most enduring grocery brands were built on the back of the Great Depression. Each one turned the threat into an opportunity.

Narratives for Selling Premium Goods: The Grey Goose Story

People want to pay more in order to own luxury goods, but you need to give them a reason to do so. That excuse? A compelling story.

One man that subscribed to this idea was Sydney Frank, as is evident from the strategy he developed for Grey Goose: the ‘superpremium’ vodka that Barcardi bought for $2 billion in cash in what became the largest ever single brand sale.

In a 2005 New York article published shortly before his death, you can read all about Sydney Frank’s marketing/branding strategy and the compeling story of Grey Goose vodka. This excerpt follows Frank’s decision to have Grey Goose distilled in France:

But why France? Doesn’t vodka come from Russia, or perhaps, in a pinch, Scandinavia? “People are always looking for something new,” says Frank. It’s all about brand differentiation. If you’re going to charge twice as much for a vodka, you need to give people a reason.

“Nietzsche explains that human beings are looking for the ‘why’ in their lives, […] we refer to this ‘why’ as ‘the Great Story.’ The Great Story must be enticing, memorable, easily repeatable, and about what you want your brand to be about.”

For Grey Goose, the brand was about unrivaled quality. Grey Goose’s Great Story hinged on the following key points: It comes from France, where all the best luxury products come from. It’s not another rough-hewn Russian vodka—it’s a masterpiece crafted by French vodka artisans.

It uses water from pristine French springs, filtered through Champagne limestone.

It’s got a distinctive, carefully designed bottle, with smoked glass and a silhouette of flying geese. It looks fantastic up behind the bar, the way it catches the light […] It sure looks expensive.

It was shipped in wood crates, like a fine wine, not in cardboard boxes like Joe Schmo’s vodka. This catches the bartender’s eye and reinforces the aura of quality. Never forget the influence of the bartender. […]

And now the most important piece of the story—the twist that brings it all together: Grey Goose costs way more than other vodkas. Waaaaaaay more. So it must be the best.

This description of Grey Goose’s Great Story perfectly captures the essence of the article.

Facebook’s ‘Like’ and Conspicuous Consumption

Wondering why we freely and often make our tastes public (specifically, our brand preferences through Facebook’s ‘Like’ mechanism), Nicolas Baumard discusses how we purchase goods to display our good taste:

In a way, Facebook can be seen as a handy device to send a lot of very precise signals about your opinion and your values! (The average user becomes a fan of four pages every month, according to Facebook). Note that this theory of marketing is just a form of honest signal theory, advocated previously by Veblen in social sciences and Zahavi in evolutionary biology. The difference is that, instead of being focused on the display of wealth, this bourdieusian explanation is interested by other qualities that also need to be adverstised by individuals such as intelligence, social connections, moral disposition, etc.

To conclude, people may buy razors advertised by Beckham not because they think that these razors made Beckham successful or because they trust Beckham is such matters but because buying a razor linked to Beckham convey a certain message about their distinction.

I feel that the ‘Like’ functionality is an expense-less method of conspicuous consumption: signalling your likes and brand preferences without having to actually purchase anything (we are saying “I aspire to be the type of person who likes x, y, z” or maybe more accurately “I want you to think I’m the type of person who likes x, y, z”).

I particularly like the introductory section on how Facebook’s ‘Like’ functionality has doubled brand integration on the site, compared to the old ‘Become a fan’ method. It has apparently reduced the mental barriers (lowered the “threshold”, they say) for users to signal their brand preferences, making sharing easier. And that last bit is key for Facebook.

via The Browser

Resources for Community Building

Richard Millington—online community builder for the UNHCR and one of Seth Godin’s 2008 interns—has compiled over 100 of his best posts from the previous two years.

There’s a wealth of valuable information at FeverBee and this list is a great introduction to the topic of community building. A few of the twelve categories Millington has used in organising his posts:

  • Pre-Launch and Strategy
  • Building An Online Community Website
  • Increasing Participation
  • Measurement/ROI
  • Monetizing

The Transformative Power of a Narrative

Can a narrative attached to an everyday object increase its objective value? That was the question posed by Rob Walker (author of The New York Times‘ Consumed column) and Joshua Glenn (author of Taking Things Seriously) when they started the Significant Objects Project—an experiment designed to test whether a series of stories created about an object will increase its selling price.

After buying 100 “unremarkable” objects with an average price of just under $1.29 each, the two advertised them for sale alongside narratives created by volunteers. They then sold for a total of $3,612.51—more than 28 times their original price.

Dan Ariely of Predictably Irrational discusses the project and its findings:

The results may seem surprising, but this is actually something we see all the time. It’s the basic idea behind the endowment effect, the theory that once we own something, its value increases in our eyes. […] But ownership isn’t the only way to endow an object or service with meaning. You can also create value by investing time and effort into something (hence why we cherish those scraggly scarves we knit ourselves) or by knowing that someone else has (gifts fall under this category).

And then there’s the power of stories: spend a fantastic weekend somewhere, and no matter what you bring back […] you’ll value it immensely, simply because of its associations. This explains the findings of the Significant Objects Project, and also how other things like branding works.