OCTOBER 2004

Survey respondents noted that "retailer partnerships" was by far the #1 "external" asset sub-optimized by most brands. Why is that, and what can be done about it?

Bob Pifke: The major reason it's sub-optimized is because of the retailers. Their capacity for product partnerships is substantially less than what it could be. Perhaps that's intentional because they don't see the payout from it. Or perhaps it's unintentional and there is a lot of low-lying fruit that could be had if they were to take a fresh look at how many resources they dedicate to that kind of activity.

Retailers tend to be very rigid; they have particular things they do, be it in-store displays or particular types of features in their advertising, particular types of co-branded ads, and so forth.  It's always within a very formulized structure and they don't have the time to think beyond that, which is the major reason it's sub-optimized. It's not because of manufacturers or makers of products and services, it's the other side of the equation.

David Nolan: The simple answer is that retailer partnerships are in the discovery phase.  Marketers are just beginning to realize the vast potential that can be realized if you can connect with your consumer in a meaningful way, beyond just the transaction. 

Rewards programs build brand loyalty because they make you feel like you are more than just a credit card receipt.  As marketers expand partnerships with retailers -- and create ways to cement those partnerships -- opportunities to leverage retail as an asset grow exponentially.

Jack Kennard: It takes time and sincerity to build a partnership. It takes a willingness to share assets. At Brown-Forman, for example, one of our most important retailer partnerships is with T.G.I. Fridays. For several years now, since about 1996, our Jack Daniels brand and T.G.I. Fridays have partnered to present Jack Daniels-branded food items, called "Jack Grill" on T.G.I. Fridays' menu.

T.G.I. Fridays initially helped us break down the barriers of access to TV by advertising Jack Grill. What we did for them was lend them the use of our equity in our brand name. This allowed us to get more exposure to consumers in a restricted environment. This allowed them to charge a premium price. Together, it was a good deal.

Partnerships also require a certain sacrifice. We realize that by partnering Jack Daniels with T.G.I. Fridays, we are not going to get T.G.I. Fridays' competitors to run Jack Daniels' grilling items on their menus. So we have to find other ways to work with them. So, there's a great opportunity, but it's not without a willingness to share assets and resources and to make sacrifices.

Stephen O'Shea:  I think the reason "retailers" were cited as the most under-activated asset is that most respondents realize how critical retailers are to the R.O.I of their marketing programs. Retail is where the cash register rings, and because of that it is the ultimate test of a brand's success in the marketplace.

"The problem is that people have been educated to believe that brand building is only about the five P's." -- Jack Kennard, Brown-Forman

So, at the end of the day, the marketer has to be accountable for sales, and that means being accountable for results at retail.  What this means is that brands have to do a better job of integrating retail  -- and a meaningful sales proposition -- into their marketing programs.  When a promotional program or event is held, there must be a link back to retail.  There must be something -- a special offer or some other incentive -- that pushes the consumer to go to the store and complete a transaction. 

Even more important, there must be systems in place to track the results and measure the effectiveness of the program.  Achieving all of that not only requires brands and retailers to work more closely together, it also requires the sales and marketing departments, on the brand side, to communicate more effectively and plan programs that not only achieve brand objectives, but also sales objectives.

"Employees" is cited as the #1 "internal" asset sub-optimized by most brands. Why is that, and what can be done about it?

Kennard:  Boy, I agree with that. There is a faulty assumption made that marketers and salespeople are brand-builders and that the rest of the employees have other functional responsibilities.  First, understand that employee knowledge of brands has to be taught. Employees routinely do not know as much as they'd like to know about the brands their companies sell. The employees should be seen as brand ambassadors, but they can't tell a brand story if they don't know a brand story.

Looking across a portfolio of brands in a major corporation, don't ask employees to understand all the brands; ask them to elect to become champions for one of the brands. Organize a small "battalion" of brand ambassadors for one brand, rather than trying to educate every employee on all brands. Do that through corporate universities, websites, and electronically signing up memberships. 

Then it's incumbent on brand teams to dedicate some resources to the care and feeding of employees, and to treat them as champions -- recognize them, reward them, let them know things other people don't know. Orientation of new employees should be heavily skewed toward what the company makes and why it's good. There is way too much HR in orientation and way too little brand building. They got the hat on backwards.

O'Shea:  I also agree that employees can be huge assets -- in fact in a service business, they are not just an asset they are, in effect, the brand itself. But, regardless of whether the brand is a product or service, most effective brands today recognize that the people within their organizations, at every level, are part of the brand image and identity, or the brand essence, if you will.

Success starts with a company culture that completely aligns what the brand stands for with the employees.   One of the most famous examples of this is probably the Wal-Mart greeter.  You also see it on some of the newer airlines, like JetBlue and Song.   If you've ever been to an Apple store, you'll see how the people who work there truly embody the passion for the product that is almost legendary among Macinstosh users.

It's interesting that, while you read a lot of articles about the importance of turning your customers into evangelists for the brand, there has been far less focus on making sure employees play that role.  That is a huge opportunity for competitive advantage.   The solution requires organizations to begin looking at their human resources function -- hiring, training, compensation -- as a marketing function.

Pifke: I don't know if I necessarily agree that employees are sub-optimized.  Right now at VISA we have an internal promotion going on to promote the use of a VISA check card for all types of payment. The basic thought is: how can we expect our cardholders to put all their transactions on their VISA cards if we don't have our own people doing it?

So, we've launched this program. It was a tough sell to me because when you run the numbers it doesn't pay out. There is no way we can increase usage among employees to pay for that kind of a program. So, clearly we're doing it more for the psychological benefits, both in terms of it being a little bit fun to be an employee, as well as talking points.  There will be a certain amount of conversion of people to believers, who weren't believers before.

But I don't know what that will eventually lead to. I'm not sure you can expect that will lead to greater things in the marketplace or greater enhancements to the products and so forth. That's why I don't think employees are under utilized.

"Employees need to understand that they do make a difference every time they come in contact with a customer." -- David Nolan, JPMorganChase

Nolan: A lot of firms don't spend time focusing on their employees as the embodiment of the brand.  The interactions that people have with your brand, and the opinions that are formed over time, depend on favorable impressions.  Your customers have to have total confidence that there will be a solution to whatever their issue might be at any particular time. 

If, as a customer, I know with a degree of certainty that I'm going to get satisfaction from, say, my branch manager at a JPMorganChase branch, that benefit accrues -- interaction by interaction-- to the brand. Through training and consistent communication -- celebration of successes and appropriate feedback on things that don't go so well -- you have to build that dialogue with employees. Employees need to understand that they do make a difference every time they come in contact with a customer, a client or a prospect.

The survey results suggest a hornet's nest of reasons why most brands don't fully activate their assets. Is there a solution?

O'Shea:  Absolutely.  While it's true that there are many reasons brands don't fully activate their assets, if you look at the results of the Reveries survey, the number-one reason given was that certain "assets simply are not evaluated for their marketing potential." That leads directly to perhaps the central challenge of "asset activation," which is that there's often a tendency among brands to pursue the acquisition of new assets before fully exploring the potential of the assets they already have.  Marketers sometimes make the mistake of evaluating an asset in terms of what it is currently returning, instead of the additional return it might be able to generate.

In many ways, it's an issue of quality, not quantity.  For example, you need to take a disciplined approach to selecting a property for sponsorship and then provide the resources that are necessary to activate it.  The idea of buying additional assets to take them out of the marketplace -- just so your competitor can't scoop them up -- dilutes effectiveness and prevents the marketer from maximizing the full potential of an asset. In addition, sometimes a brand takes its logo and simply drops it into a piece of collateral, print advertising or integrates it into its media with a simple tag or the like. That's just an incredibly passive approach that never sets up an opportunity to be successful. You need to be more aggressive than that to build a meaningful association with your brand and get a return on your investment.

Nolan:  To fully optimize what you have means you have to get aligned across the board in both your objectives and processes.  The most frequent breakdowns revolve around insufficient communication.  Understanding what the brand experience is means understanding the totality of the activities that go into supporting it.  It's the experience that counts.

To achieve the best kind of experience you have to train your people, and then you have to follow up.  What are the critical messages?  Have you developed a message program -- using research -- and do you stay on message on the things that are most important to your clients and customers?   You want your employees to recognize that they are an integral part of your success, and that doesn't just translate into good practices and training. It also has to do with compensation and the opportunity to share the full rewards of success.

Pifke: Basically, you start from the top down -- you work on the most important assets with the greatest leverage and the greatest market potential. What really prevents you from going any deeper is resources.

The appetite for activation is greater than the budget or staffing.  Today, more and more, the biggest limitation is staffing -- more so than even the money -- because a lot of good ideas don't really require a lot of money, they just require staff time.  The real issue gets down to the fact that there are always more assets than abilities to exploit them. That's just a fact of life.

Kennard: The problem is that people have been educated to believe -- wrongly -- that brand building is only about product, place, promotion, price and packaging (the 5Ps). You don't have to be overly academic to be suspicious that anything that simple and alliterative and repetitive is probably wrong! You don't need a Ph.D. to be suspicious that there's got to be more to building brands than five words that start with the same letter!

At Brown-Forman, we are dedicated to engaging and organizing the whole organization behind fresh, brand-building strategies. The basic premise is this: in post-modern 21^st century (which includes fragmentation of media, loss of TV as an exclusive, effective media) the methods and tools for successful brand building that have been employed over time must be better understood.

For example, one of the ways of building a brand is sales force organization and compensation.  For most categories, the old notion of product improvement (faster, better, cheaper etc.) is irrelevant. Today's brands have to be experiences. They still have to deliver, but they are less differentiated on performance characteristics than they are on experiential characteristics.

Starbucks, Apple, Nike and Coke come out on top as the brands survey respondents said do the best job of fully activating their assets. What is it about these brands that separate them from the others?

Pifke: First, they place an extreme value on their brand, in terms of what their brand means. They really think about that all the time.  Second, they have a very clear idea of what the brand should represent and they live by it.  Third, they spend a significant amount of money promoting that brand.

"The real issue gets down to the fact that there are always more assets than abilities to exploit them. " -- Bob Pifke, VISA

But it's the combination of the three that's most important.  The other thing is that they are all very creative in how they express their brand -- not just in advertising, but across the board. In the case of Apple, it's clearly obvious they've been incredibly innovative. They're unflinching in their devotion to innovative products that really work well that have a design or some sort of pizzazz.

Nike has been very innovative from a design standpoint, as well as from a technology standpoint. Starbucks has been almost religious about the in-store experience. When you listen to the folks at Starbucks, they care immensely about the consumer experience in the store; to them that is the ultimate expression of their brand.  Coke has more going for it in terms of ubiquity and raw marketing power than the other three.

Kennard:  I believe there are basically ten models and about 35 methods for building brands that include some of the 5 Ps, but they have much more richness. The key thing for brand builders is to understand how their brand was built in the past and then to make choices and identify those as the cornerstones of brand building. We use architectural terminology -- identify the "cornerstones" by which those brands were built.  Then, commit to the cornerstones of the future and write 5-point plans to address and activate their commitments to those cornerstones.

We treat television -- or high levels of investment in advertising -- as a method, but we don't necessary treat it any differently from exceptionally unique package design or highly focused selling and incentives. It's up to brands to choose from a much broader palette or a much broader list of materials to build their brands. And in doing that, if they go through this process in thinking much more holistically, they have much higher odds of fully activating their assets, because they've thought about it.

O'Shea:  They are all great brands and completely deserve to be recognized for their excellence.   Starbucks made its name on creating a superb customer experience, which is a direct result of leveraging a whole range of assets -- its stores, its employees, its products.  They defined and continue to perfect the idea that a cup of coffee isn't just a hot drink, it's part of a lifestyle. They've done such a good job that they really haven't even done much in the way of traditional advertising.  They haven't had to.

I mentioned Apple earlier.  They've also done a great job of turning a piece of computer hardware into an object of passion among its customers.  They simply could not have done that with advertising alone.  It was the result not only of great products, but then extending everything that product stands for into everything they do.  In their case, their number one asset actually is probably Steve Jobs, the ceo, who really centers the brand.

Nike, despite its size, still manages to project a cult-like image  into the marketplace.  They achieve that with a certain subtlety sometimes -- like the Livestrong bracelets, which everyone now knows they designed and has given a real boost to the brand's "cool" quotient.  That's a really brilliant example of asset activation.  Coke, of course, is famous simply for being everywhere -- everything from its delivery trucks to its vending machines to the shape of its bottle is activated as an asset.

Nolan:  Starbucks, of the four mentioned, is a people-driven enterprise. I'm absolutely in awe of how Starbucks has been able to turn all of its team into advocates for an experience that, net-net, is charging you five dollars for a cup of coffee.

Apple, Nike and Coke are different kinds of experiences.  Apple has reinvented itself a couple of times and has been able to stay on the hip side of popular culture.  Its target is well served by that. I don't know how many times Apple has been declared DOA, but Steve Jobs is certainly an unusual man and a smart guy who has also come up with a good product.

Nike, to me, is certainly one of the quintessential examples of building an emotional bond between company and consumer, in kind of a classic brand construct.  Nike has been able to sustain that with imaginative marketing of an inspiring kind of messaging for a product -- a set of products really -- that people are willing to pay a premium for.  As for Coke -- I think it's all about being embedded in the world's DNA.

Which brands do you think do the best job of fully activating their assets and why?

Kennard: Disney has done a great job of fully activating their assets and yet knowing where to stop. For example, Disney won't do an R-rated movie even though they're leaving money on the table. They are a great example of a brand whose name is on the door; they do a great job of activating their assets.   So does Home Depot.

When I go into a Home Depot to purchase an item, that purchase doesn't have to be the sum total of what I leave with.  What's the look and feel of the place?  That doesn't just mean the color scheme -- it also means the people who are working at the store. Do they look approachable? When I check out, does the clerk interact with me, or just pull my goods down the line and say "cash or credit?"

Home Depot thinks of everything -- from the way their working environment looks to what their employees are called and what they wear. They are thinking through all of their assets.

"The marketer has to be accountable for sales, and that means being accountable for results at retail. " -- Stephen O'Shea

Nolan: The financial service category is one that has really turned its attention to the brand experience in the last four or five years.  You see and hear discussion of "brand" at a high level in our organization, which means that as part of our communications program there is a heavy emphasis on, and commitment to, understanding client need and being driven to provide a superb solution to client and customer needs.

JPMorganChase is recognized as one of the leading brands in the financial services category.  We think that there's room to grow in that.  We think we can make a stronger connection with our clients and customers, both on the institutional and on the retail side.  As we go forward, you will see a refreshment of our brands.  We are making a really strong effort to strengthen the emotional bonds with our potential clients and customers.

Another brand that does a good job is Wegman's Food Markets. Wegman's is an awesome place to shop.  In that experience, Wegman's employees fit the bill of being approachable, understanding and committed to satisfying customer needs.   The store is designed to introduce you to foods that may not seem obvious to you.

O'Shea:  A number of respondents to the Reveries survey mentioned American Express, and I would agree with that.  This is a brand that used to spend the lion's share of its marketing budget on advertising, but over recent years has cut back on its advertising and put more into special events and other activities that really do a more effective job of building the brand's image and also making sure that consumers see it as a relevant part of their lifestyle. 

Procter & Gamble and Kraft also came up, in terms of their leadership in activating retail through co-marketing.  Again, this is so important for the simple reason that retail is where the cash register rings. If accountability is the endgame, it is hard to think of an asset that is more worthy of activating than retail stores.

When it comes to media partnerships, Cingular Wireless really scored in a media partnership with CBS, in which fans of Survivor: All Stars could vote via text message to award a million dollars to their favorite Survivor contestant. Not only did the novelty of this promotion generate incredible incremental publicity both for the show and Cingular, but it also extended the partnership in new ways by allowing fans to purchase Survivor logos, graphics, photos and ring-tones by downloading them directly to their wireless handsets.

Pifke: VISA is one of the best!  For example, with the Olympics, we implemented more programs tied to our sponsorship than any other sponsor in the world by multiple. We passed a thousand approvals a few months ago, just on the Olympics. So, when we bring in a partner, such as the Olympics, the NFL or NASCAR, we really work very hard to exploit the opportunities.   We get pass-through rights that allow us to do programs with our members (our banks) as well as our merchants.  That's an important part of our partnership marketing -- to make sure we have the ability to utilize the assets in all of our distribution channels.

One final point: Media assets are very under-utilized.  I saw an analysis recently done by OMD, which is our BBDO media buying service, showing how in lots of categories there has been a definite shift away from television into more broad-based, and in some cases, unusual media.  What I found fascinating was that one of the companies was an automaker that still has the exact same media mix it had ten years ago, and that recently had some profitability and general marketing problems.

To me, it's an outstanding example of how if you don't change with change you're going to get left behind. So this whole shift to using alternative media and using more of the web and trying to get commercials embedded in programming -- and a lot of the things that are the talk of the town these days -- really are necessities. These are not just optional things to do if you want to stay on top; you really have to do these things.



Jack Kennard, as Senior Vice President, Director of Global Marketing Services for Brown-Forman Beverages, is responsible for global marketing services, including global media planning and buying for the spirits, wine and Lenox brands owned or marketed by Brown-Forman, and directs Brown-Forman activities in consumer research, brand licensing and movie placement.   Prior to joining Brown-Forman, Jack was with the Del Monte division of R.J. Reynolds Industries, and began his career with Kraft/General Foods.

David Nolan is Senior Vice President of J.P. Morgan Chase & Company.  He is responsible for global advertising, brand management, event sponsorships and broadcast services, and has held a variety of communications roles over the past 14 years.  Prior to joining Chase, David spent 20 years as a broadcast journalist.  

Bob Pifke is Senior Vice President, Marketing Services, of Visa U.S.A., with responsibility for national Visa promotions; marketing communication programs to Visa member financial institutions, merchants, and consumers; marketing consulting to Visa members; and Visa’s database marketing products and services. Previously, he was Vice President, General Manager of Ogilvy & Mather Direct/Houston, and Vice President, Management Supervisor at Ogilvy & Mather Advertising/Houston. He started his career with Frankel & Company/Chicago.

Stephen O'Shea is Chief Executive Officer of The Concept Studio, a Westport, Connecticut-based promotional marketing agency that activates assets for clients including Cingular Wireless, ABC TV, Disney Kids and ABC TV’s Enhanced TV.