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Branding Breakthroughs

How to build a name you can literally bank on.

Refreshing the image of a well-established brand name so it stands out can take years, a multi-million-dollar marketing budget and extreme strategizing. Ask Andy Cosslett, CEO of InterContinental Hotels Group. He’s just overseen the rebranding of the group’s Holiday Inn chain. It took seven years, $1 billion and an integrated plan that saw the logo redesigned, hotels upgraded, staff retrained and TV advertising campaigns launched—along with a social media blitz.

Cosslett is counting on the substantial investment to see a long-term pay-off in increased revenues for the 59-year-old brand. That will be gratifying, since he had to persuade the independent hotel owners—who put up the bulk of the money—that there would be a payback from the rebranding.

“Brands have a life cycle,” he says. Indeed, the hotel’s approach to refreshing the brand involved a lot more than, as Cosslett puts it, “selling chocolate.”

A TV campaign developed by agency McCann Erickson relied on commercials with the message “Stay You”—a slogan meant to emphasize that guests don’t have to dress up but can show up as they are.

To extend the message in a more personal way, Cosslett relied on social media. Staffers were encouraged to tweet, and customer testimonials were uploaded to YouTube, supplemented by endorsements on travel industry site TripAdvisor. A fan of social media, Cosslett says, “When you use sites like Facebook or Twitter, the message is authentic.”

These recessionary times call for CEOs to spearhead marketing efforts and manage the customer relationship innovatively. A 2009 study by consultancy Interbrand demonstrated that brand stewards face major challenges as consumers rethink purchasing decisions, opting for less expensive choices and most trusted products—even as marketing budgets are being cut. Jez Frampton, global CEO of Interbrand, says executives who revamp their campaigns to connect with consumers in new ways, rather than just cutting prices, will prosper. What do he and other marketing experts recommend? Social media.

Today, who hasn’t heard of Twitter, Kindle or Zappos? Each has a visionary CEO who built a brand identity and relied on innovative ways to break through. Significantly, each benefited from having a new big idea—the cornerstone priority of a breakthrough—that resonated with customers.

Tony Hsieh, CEO of online shoe seller Zappos.com, relied on superior customer service and tapped into social media to reinforce the message through word-of-mouth exchanges. He sums up his branding effort as ICEE: inspire, connect, entertain and educate.

It’s a strategy well-suited to today’s fast-paced, always-on and interconnected marketing and media environment, with Twitter, Facebook and other peer-to-peer sites supplanting the 30-second television commercial. The days when the chairman of a company—remember Lee Iacocca and his classic revival of Chrysler in the 1980s?—could go on national television to sell the company’s brand coast to coast is long over. Now CEOs need to project their brand’s image on a fragmented media landscape of dozens of stations, publications and online sites, as well as increasingly influential social media outlets.

Most forward-oriented corporations today have Twitter accounts and Facebook groups to help their brands break out of the multi-media clutter. Some CEOs too, like Hsieh, who have learned the tools of social media, have projected their own image, too, to symbolize brand values.

Social media offer CEOs a way to connect to customers on an emotional level in a way that is not “corporate speak,” points out Michael D’Esopo, senior partner at brand consulting firm Lippincott.

Hsieh of Zappos has profited from being one of the pioneering users of social media. His Las Vegas-based company went from startup in 1999 to $1 billion in sales by 2009, and the same year, a $1.2 billion acquisition by Amazon.com—with the CEO spearheading the branding communications.

Starting out, Hsieh initially got customers’ notice by promising quick delivery of online orders, then won their loyalty by surprising them with shorter and shorter wait times. “What we are really is a customer-service company that happens to sell shoes,” Hsieh says of Zappos.

The cool and savvy Hsieh is practically synonymous with the hip and entrepreneurial brand. His Twitter profile has more than 1.7 million followers, who frequently retweet his lines. Zappos gets additional mileage from the 500 or so of its 1,800 employees who also microblog on Twitter.

Given that Twitter costs nothing more than the time it takes to tweet—or write—140 characters, it has provided a good return on investment. “We use Twitter the same way that you would interact with friends,” says Hsieh, who also makes frequent appearances at social media conferences. He has supplemented his surround- sound media campaign by publishing a book, Delivering Happiness: A Path to Profits, Passion, and Purpose.

CEOs who are unable to leverage social media could end up falling behind, cautions Steve Farnsworth, chief digital strategist at Jolt Social Media in Palo Alto, Calif. “As new media communications evolve, CEOs who fail to grasp and use social media to their brand’s advantage will be replaced by the next generation that will,” he says.

Certainly, having a larger-than-life CEO personality who can become the voice of the brand—like Hsieh, Steve Jobs of Apple and Jeff Bezos of Amazon—is one way to be heard.

But crafting a social media persona is not for every CEO, advises Laura Ries, president of marketing consultancy Ries & Ries in Roswell, Ga. She points out that it made sense for Zappos because the CEO has a vibrant personality that translates well online, and the product category is fun. “Social media work best for smaller, entrepreneurial companies and for younger CEOs,” she concludes.

In today’s fast-moving society, a well-rounded marketing campaign built upon a fresh idea is essential. “You have to put your marketing muscle behind an exciting new idea to become number one in the minds of consumers,” she says. “If you’re a CEO and you’re marketing a brand that is second or third in the market, then you have a problem. You have to figure out a strategy not to be the same thing and a cheaper version of the leader.”

Ries cites the example of Lowe’s home improvement chain gaining market share against No. 1 Home Depot by upgrading its stores with a bright, clean look and training staff to offer superior service.

She also points to Starbucks’ ability to overtake rival West Coast-brand Peet’s Coffee & Tea and become the first expensive coffee shop nationwide by consistently delivering good quality in a consumer-friendly environment with a simple, easily communicated brand name. “Up until then, there was no $3 latte,” she notes. “Starbucks invented that.”

Likewise, the creative genius of Twitter co-founder Jack Dorsey and his instant messaging, microblogging news stream was the key to its taking off like wildfire a few short months after its launch. The story of Twitter hitting the blogging and international business community’s radar at a media and arts festival in Austin, Texas, in 2007 is practically legendary. Bloggers began using Twitter to let their friends know about the best parties to crash. As author Shel Israel recounts in his book, Twitterville: How Businesses Can Thrive in the New Global Neighborhoods, the startup brought 10 of its 12 employees to the show and set up monitors in the convention hall, where passersby could see their tweets about the conference. Twitter came to the conference with 16,000 users and left with more than 60,000, he recalls.

Soon, Twitter became the default option for bloggers; and today it’s replacing email among the Internet intelligentsia. In certain techie circles, the number of followers someone has on Twitter defines their social status more than belonging to a high-profile club in Manhattan.

With its innovative news stream, Twitter gave Facebook, the first social medium to go mainstream, competition. Soon CEO Mark Zuckerberg made sure Facebook too had constantly updating news streams. A pitched battle continues between the two rivals, with Facebook at 400 million users and Twitter at more than 100 million.

Top 10 Most Valuable Global Brands in 2010

Want proof that a brand is one of a company’s most valuable assets and a key contributor to financial performance? A study by Millward Brown Optimor for WPP demonstrates that the stock of its BrandZ top-100 most valuable global brands has outperformed the S&P 500 by more than 30 percent over the past two years. Moreover, the branding consultancy finds that since 2006, these top 100 brands’ shares have gained 18.5 percent, compared with a decline of 11.5 percent for the S&P 500.

The positive performance of the BrandZ top 100 shows that strong brands are resilient even in downturns and can rebound faster, says David Roth, who spearheads the study and is Eastern Hemisphere chief executive of The Store, WPP’s retail group.

Not surprisingly, Google ranked far in the lead for brand value, based on how it has revolutionized search, the popularity of its related products such as Gmail, and its accelerated expansion— a 32 percent compounded annual growth rate since 2006.

Some key takeaways from the study include: Four of the top 10 brands are in the technology category (Google, IBM, Apple and Microsoft), and 13 of the top 100 brands are from emerging markets—a trend that signals the increased importance of developing regions.

China claimed seven spots in the top 100, with the world’s largest wireless operator and most valuable mobile brand, China Mobile, in the top 10, despite increased competition from two new rivals. Another standout was Chinese search engine Baidu, which ranked second in brand value growth among the top 100—a fact the study attributed to Chinese consumers’ close bond with the brand and its unique search technology in Chinese for the large online market.

Meanwhile, India had its first company appear on the list, ICICI Bank (formerly Industrial Credit and Investment Corp. of India), which became widely known for pioneering ATMs throughout the country.

The study also highlighted a shift in consumer values, placing increasing importance on environmental causes, social responsibility, health benefits, trust and personalization.

These issues, Roth said, have become more pronounced in the aftermath of the recession, which left customers feeling betrayed by financial institutions and government, and dealing with increased stresses in a more complex life. He added that the study reinforced the message that brands seen as familiar and reliable stand the best chance of maintaining and growing their position in these turbulent times.

Of particular note, the personalization trend has become highly relevant for technology brands seeking to stand out. Google scored high, in part because it lets users create their own homepages. Likewise, Apple owes its third-place standing largely to personalization features, like its myriad applications for iPhone users.

The BrandZ top 100 list is based on annual interviews with 1.5 million consumers and professionals in 30 countries about shopping choices, an evaluation of the brand’s strength with customers and earnings contributed by a brand to the company’s overall performance.

As the pace of change picks up and the landscape of choices becomes more cluttered, keeping a brand’s message on target and relevant has becoming increasingly challenging.

Hayes Roth, chief marketing officer of consultancy Landor Associates, points to Special K as an example of a brand that was able to stand out with an imaginative, well-conceived promotion. Special K was repositioned from a classic cereal for healthy and nutritious eating to being a woman’s partner in weight loss, with diet-friendly foods added to the product selections.

Social media helped to get the message out. Along with a personalized Special K diet plan offered on the Special K site, the campaign included a link to a Yahoo group with a message board for quick exchanges, a celebrity blogger who posted weight-loss advice and an online offer to win a pair of designer jeans. The campaign helped the cereal marketers to update its image, but without straying too far from its original healthy-breakfast idea.

In contrast, Internet portal Yahoo is one example of a once-hot, leading brand that lost its way, points out Tim Calkins, clinical professor of marketing at Northwestern University’s Kellogg School of Management. Calkins notes that while Yahoo gained awareness as an innovator and leader, it strayed too far from its base into email and news—areas where it proved difficult to remain distinct. He credits Google for leveraging its brand image across related products, such as Google maps. Says Calkins, “The trick is not to go too far, like Yahoo did, and then be left with the question of what are we?”

Another established brand that has continued to remain top of mind is Amazon. The market’s first online bookseller, for instance, has climbed swiftly up the ranks of the BrandZ top 100 (see sidebar) to No. 15. The jump was based on the successful launch of its Kindle online reading device, an extension that worked because it was strategically close to the origins of Amazon, says David Roth, CEO of WPP’s retail practice, The Store, in Europe, Asia and Africa. In spite of the introduction of products like the Nook from Barnes & Noble, Bezos has been able to reinforce Kindle’s claim to category leadership with the rollout of a second-generation e-reader.

Still, the spring 2010 debut of the ever-so-cool iPad digital device from savvy marketer Apple upped the ante as colorful and jazzy designs wowed consumers, the blogosphere ignited with posts about the new item and lines of buyers formed outside Apple stores.

Amazon responded by lowering the Kindle’s price, undercutting the Nook. But such discounting can instantly make a brand seem less distinctive, says Frampton of Interbrand, hurting any competitive advantage it may have. Instead, he advises that the marketing energy be turned up on figuring out new features that may oneup rivals.

But who could blame marketers faced with competing against the marketing genius of Apple CEO Steve Jobs. Jobs may have been faulted for branding the iPad with a name that suggests sanitary napkins, but nearly all his recent product introductions— all called iSomething—have been stellar successes. Moreover, showman Jobs has become a brand in his own right—every marketer’s dream.

About rebecca a. fannin

Rebecca A. Fannin is the author of Startup Asia and Silicon Dragon.