How to Successfully Brand or Rebrand a Company

June 11, 2012 1 comment

Q/A with Pega CMO Grant Johnson, appearing on Rieches Baird’s “Branding Business” Radio Show

 

Ray Baird: Obviously you’ve built many successful brands and re-branded many companies over the years. What’s your secret and what can our listeners learn from your experience:

Grant  Johnson: Having done re-branding successfully for nearly two decades, the first key principle is to tightly define the drivers and key objectives.  Are we looking for a brand refresh or brand transformation?  When I arrived at a company named Big Fish, I needed to drive a transformation which included a new company name, logo, positioning, messaging and brand identity.  At FileNet, it was a refresh to build on earlier brand progress and help drive brand differentiation vs. the big guys we were competing against, including IBM, EMC and Oracle.   At Pega, it encompassed creating an entire brand system and architecture.   The company had grown to more than $200 million in sales when I arrived with almost no systematic approach to brand identity, architecture, or brand management.   Pega had a working logo, the symbol for Pegasus the flying horse, so I left that alone. Everything else, including color palette, graphic style,  naming conventions and brand personality, needed to be either created or changed.  We came up with a simple way to help our 2,000 employees relate to our brand personality.   Our four brand key personality attributes leverage our shorted name, PEGA and stand for: Passionate, Engaging, Genuine and Adaptive.  I created a video entitled, “How PEGA are you?” in which employees from different regions discuss how they embody those four brand personality traits, and this helped them become true brand ambassadors.  Together with online brand education and training, this really helped get our employees behind the new brand. When you get brand advocacy to become synonymous with company advocacy, you can really harness the power of your people to build brand momentum.

Ray Baird: What are the biggest challenges companies face when re-branding?

Grant Johnson:  Once you’ve got the first question I mentioned resolved, (the purpose for rebranding), you need to get agreement on how to approach it.  What is the scope?  Over what time and at what cost?  Who will make decisions besides the CMO?  I’ve found that having a simple three-phase process is something my executive peers can easily understand and support, so in my rebranding approach for Pega, I defined Phase 1 as Brand Assessment, Phase 2 as Brand Development and Phase 3 as Brand Execution.   Under each phase I defined what we would do, who would be involved – i.e. customer, partners, board members – how we would report on findings, and a process to make the important decisions. .

A second major challenge is developing consensus on what to change.  This can be somewhat controversial because after the brand assessment, obvious inconsistencies and variance in brand quality and standards will emerge, and sometimes you have to throw out what others have already created.  It’s like saying “your baby is ugly,” so it’s never easy to deliver a change message because after all, most of these decisions are subjective.

The biggest challenge, however, is getting agreement on specific changes.  In past practice, a lot of options that I’ve created around brand identity, personality, and promise were well received.  The hard part was getting agreement on which of the various desirable alternatives to choose.  At Pega, we came up with three alternatives for our brand promise:  “we help you drive continuous business improvement”; “we help you become more customer centric; “we transform the way your business works.” Our customer research and most of my team favored the transformative expression, also the most aspirational. However, many stakeholders thought such a brand promise would over-reach our ability to deliver.  So we landed on helping organizations become more customer centric.  This is working quite well for us, especially since we keep enhancing our product line to better deliver on this promise.

Ray Baird:  How do you manage the areas you don’t control on the brand, e.g. the touch points?

Grant Johnson: That’s a great question and something I’ve dialogued about with many of my CMO peers.  At most companies, B2B or B2C, the CMO doesn’t control all the touch points, such as Web, Storefront, Call Center, Services, Partner or others, which can lead to an inconsistent brand experience at best, and brand dilution at worse.   What works is for marketing, as the chief brand architect, to define what the brand and customer experience should be at each touch point.  That’s not enough, however.  Marketing needs to get feedback, reports and measures in either a systematic or ad hoc manner to determine if the brand vision is being delivered or if refinements or major changes are needed.   In today’s customer-driven world, none of us owns the brand. Our customers do.  The best we can do is shape it.  We can do a better job of shaping if we monitor all touch points, whether 1:1 interaction, via social media, or the Web, so we can continually reinforce what’s working and abandon what’s not.

Ray Baird: Technology companies bring a complexity to branding and create a plethora of products names, which can be overwhelming to prospective customers.  What’s the best way for B2B companies to have the right philosophy and brand architecture, especially in regards to brand naming?

Grant Johnson:The best way to deal with this is to create a coherent brand architecture that provides structure and consistency to the branding process   A company must first decide if they will adopt and perpetuate a master brand strategy (Lexus), a house of brands (P&G), or an endorsed approach (Microsoft).  Next, brand architecture is a useful metaphor because successful brand building requires some level of hierarchy to define the relationship between the company brand and all the product lines or sub-brands.  One key structural consideration is to not create too many levels in brand architecture.  Most people have difficulty keeping more than two levels in their heads, so it’s best to manage to a more streamlined brand structure.   After all, today’s consumer is more inundated than ever with information and thus their attention level to any piece of information is brief, so you want to make it easier for a customer to identify with and understand your brand.

A second and related issue is product naming.  If you’re P&G and you can afford to spend $100 million to launch a new product or brand, go ahead and create a proprietary name.  If you’re like most companies I’ve worked with, such an investment is inconceivable, so I recommend having either descriptive product names or perhaps suggestive ones.  This also supports brand or product extension goals because customers can more easily relate to an existing frame of reference than a new one.  Simplicity and customer understanding should be the driving force in naming decisions.

Ray Baird: If you had one critical piece of advice for companies going through the rebranding process, what would it be?

Grant Johnson: You should hire an outside branding firm to help.  I’ve done this five times and while I personally have the expertise to figure it all out myself, having senior level, independent and objective branding experts to help you shape, propose and close on brand changes helps enormously.  The way I see it, I can have someone like Ray Baird tell my detracting? peers, “you have to go this way if you really want to stand out from the competition,” or “your ideas won’t work and here’s why.”  If I say that same thing, I might put them on the defensive or disenfranchise them during the critical change process.   To riff on one of my favorite past taglines from American Express, the #1 service brand in the world, don’t go on this journey alone.

A Day in the Life of a CMO

I’ve been meaning to write this blog for nearly a month, however, as I’m sure other CMOs can relate, my days have been consumed by: a must-attend industry conference, a UK trip for a working session with my EU marketing team, striving to increase sales and marketing alignment, meeting my self-imposed and CEO-mandated deliverables, my 90% pre-booked calendar and, last but not least, making final preparations for our annual user conference, PegaWORLD.

Actually, this past month is also fairly typical in many regards. It’s always a continuing balance act  juggling incessant interruptions, fire drills and urgent requests with the ongoing need to drive strategy, planning and execution, not to mention keeping focused on the most important initiatives and also keeping the marketing engine humming.   That means balancing the need to deliver a steadily increasing contribution to the sales pipeline, and ensuring that all deliverables are on time, on strategy, and on budget with the need to improve current systems and processes, without interrupting the flow while improvements are being made. It might feel the same as installing a new boat engine while crossing the Atlantic!  This time crunch also means balancing the relentlessness of every day with the need to spend quality time with my family and recharge my overtaxed batteries.

As you can probably tell by now, CMOs are under constant pressure from customers, shareholders, peers, and of course CEOs to drive consistent, measurable and profitable growth. We are often asked to do more with less. In today’s customer-driven world, consumers are also more demanding than ever. With real-time, social, mobile and Web channels at their immediate disposal, customers will find competitive alternatives if their exact needs aren’t met every time. Today, CMOs have to work smarter than ever before to meet complex customer needs by delivering the right offers, in the right channels, at the right time.

I’ve been meeting with a number of CMOs the past several months and I’ve often asked, “Has it always been this challenging and crazy?”  Most agree that while email and the Internet have increased the pace significantly, the pervasiveness of social media and ubiquity of mobile communications are raising the stakes further on what is required to stay engaged, connected and relevant.   For some, this demanding state of being is understandably overwhelming, but most CMOs I know believe that if you’re up for the challenge, there’s never been a better time to be a CMO.

Another factor making my role more empowering and daunting simultaneously is that with the customers in charge, CMOs have the opportunity to not only be CMOs, but also CCOs, or Chief Customer Officers.  Forrester Research and Paul Hagan in particular, has written about the “rise of the CCO,” and regardless of whether a company appoints someone to such an encompassing role, Forrester notes, “The CMO is uniquely positioned to define how every touch point is a brand experience and should be consistent with other more traditional marketing channels. In order to ensure a superior brand (customer) experience, the evolved CMO should define a synchronized view of the customer.”  I’m spending a lot of time thinking – and often obsessing – about the customer, and I would go further to say you not only need a synchronized view of the customer, you need to synchronize how you serve customers, regardless of the channels they choose – spanning mobile, social, Web, call center, in store or with their unique combination.  To do this successfully, you have to address the customer holistically, understand and synchronize how customer processes work across your organizational silos so you can both improve the customer experience and optimize business outcomes (i.e. increase acquisition, retention and cross selling opportunities).

There’s another snippet of CMO life that I’d like to share, but my CEO just IM’d me, so I’ll have to save it for another day.  Keep focused, and remember to have some fun – we’re in marketing after all!

Categories: CMO, Customer Centricity

Q/A on Social Media with CMO Grant Johnson

This Q/A with Grant Johnson, conducted recently by Drew Neisser, CEO of Renegade, a NYC-based social media and marketing consultancy, also ran here on The Drew Blog.

B2B companies for the most part have been playing catch up to their B2C counterparts in the social media arena. One company that is coming on strong in this area is Pega, a company that helps other companies be more focused on their customers via BPM and CRM software solutions. I was delighted to able to catch up with Grant Johnson, Pega’s CMO as part of the soon to be released Social Media Fitness Study. (BTW, CMO’s can catch up with Grant at The CMO Club Thought Leadership Summit starting April 26th in NYC.)

DN: Large B2C companies significantly outscored large B2B companies in this study. Why do you think this is the case?
While social has proven to have vast benefits for all companies that become adept at it, there’s little doubt that B2C organizations – especially those with millions of customers that come into daily contact with consumers – have more opportunities to show they’ve embraced this. At Pega our target-account approach differs from many other B2C organizations. That’s not to say we’re not embracing social media, because we are, but we’re leveraging it in a far more targeted way than most B2C organizations do based on the size of our audience.

DN: Can you speak to the role social media plays in Pega’s overall marketing mix?
Social has become an integral and formidable medium for us to leverage throughout marketing as we at Pega view it as part of our overall customer-centric market approach. We’re active on Twitter, Facebook, LinkedIn to ensure we’re engaging with our customers appropriately but also so we can continue building our brand awareness. We’ve added another dedicated full time resource to further our social media efforts and we’re confident that this role will continue to increase.

DN: You mentioned that social wasn’t gaining as much traction as you’d like. What are doing to address this?
I’m actually dedicating much more resource as traction is building faster this year.

DN: Is there a hope that if more employees are active in social that this could benefit the whole company?
We are encouraging more people to be involved in our overall social media efforts and we want to make sure the right people are engaged with customers and prospects across the whole client management lifecycle, whether it’s account executives, industry solutions, public relations, as well as ensure they know what’s appropriate and what’s not in this medium.

DN: Lots of companies especially B2B struggle to develop engaging content. Do you think this is category wide problem?
Yes. Many companies have reams of content, but it’s too centered on company promotion vs. customer and prospect engagement, when taking into consideration what stage of the buying cycle they are in (e.g. someone just surfing your Web site for the first time is not ready for a “how to pick a supplier” checklist). Also, we want to make sure we present content in the most digestible way possible. While they’ve no doubt proven useful at many things, 140 characters or 300-word blogs aren’t always the most appropriate way to do this.

Architecting a Superior Customer Experience

Recently I led CMO Roundtable discussions with several CMOs in the Metropolitan D.C. area and Philadelphia to explore their roles in architecting the customer experience. In the Web 2.0 world, customer experience and loyalty have become the key differentiators between leaders and laggards.  While the importance of delivering great experiences for customers is generally understood by most companies, executing well (and consistently) across all customer touch points is a challenge for most.

This topic spurred a lively dialogue about the expanding role and responsibilities of marketing in an increasingly digital world.  Marketing is now expected to drive more of the customer experience to help support customer acquisition, expansion, loyalty and retention goals.  As one CMO put it:  “I need to prescribe the ideal customer experience at every touch point – Web, call center, product, store, etc. – regardless of reporting structure.  I’m providing guidance on how to drive a better customer experience so our company can optimize every interaction and drive positive word-of-mouth momentum.”  This new dictate applies equally well to B2B and B2C marketers.

Another key takeaway was that companies are striving for greater integration in customer management across functions and systems.   The CMO is naturally one of the primary executives that companies are turning to so they can orchestrate this cross-functional, strategic initiative to enhance customer lifetime value and operational efficiencies across sales, marketing, service and support.   Without appropriate department, process, and systems linkage, execution suffers.

While this approach is new to many companies, there are a number of world-class organizations already leveraging Pega’s software for customer centricity approach in their operations to help drive increased revenues while hiking productivity.  Whether it’s with insurance claims, corporate banking, or resolving healthcare claims, these leading-edge companies are making themselves more agile and successful. They are also rapidly realizing time to value and streamlining operations – with their customers top of mind.

We’ve driven a myriad of business benefits including:

The good news for CMOs is that with proliferation of technologies that support optimizing the customer experience to drive increased loyalty and lifetime value, there’s never been a better time to lead the charge to a better performance with more predictability.   If you are involved in driving the customer experience, I’d love to hear from you.  If you have 5-10 minutes, I invite you to take our survey on architecting a superior customer experience.

The Customer is Truly King – A Look at Why Customer Obsession Needs to be Your Organization’s New Business Imperative

March 2, 2012 1 comment

In their classic book, “The Discipline of Market Leaders,” authors Michael Treacy and Fred Wiersema described three basic “value disciplines” that can create customer value and provide a competitive advantage: operational excellence, product leadership, and customer intimacy.  For a long time since the book’s publication in 1983, many companies successfully adopted a customer intimacy strategy by “continually shaping products and services tailored to specific customer needs.”

But in this Web/mobile/social-driven era of customer empowerment, a customer-focused approach alone is no longer adequate.   Those who don’t agree will find it increasingly harder to survive, never mind thrive.

In their February 1  article in the Financial Times, Kyle McNabb and Suresh Vittal observe that technology-fueled disruption has undermined prior approaches to customer focus:  “Old models of channel and product specific ‘command and control’ just don’t cut it. These anachronistic approaches, in which channel owners can’t see beyond the channel de jour and product owners build from the inside out, don’t set the organisation up for success in a customer-driven world. Customer obsessed marketers (must) rethink business structures, reward methods and organisational design.”

Due to this fundamental change in the balance of power which has shifted irretrievably to the customer, the authors propose that marketing should lead the company shift to becoming customer obsessed.   Marketing has traditionally led cross-functional strategies and tactics around the customer lifecycle, from contact to acquisition to cross-sell and retention.  But leading an organizational shift to customer obsession is a much bigger consideration than who leads the charge; it’s the new business imperative defining what all functions in a company should do about it, both from a philosophical and operational perspective.

Some companies understand the difference between these two perspectives and some don’t.  In his recent book “The Ultimate Question 2.0,” Fred Reichheld provides a wealth of examples of companies which confuse their profit obsession with customer obsession and don’t value the difference, and thus, become obsessed with profits, i.e., adopting “customer unfriendly” business practices to maximize profits (and produce what he calls “bad profits”) that over time can undermine customer loyalty.   By embracing both the philosophical approach (i.e. following the Golden Rule and treating customers how you’d like to be treated), and the operational perspective (i.e. continually adapting  business processes and practices to create and increase net promoters), companies such as American Express, Charles Schwab, Verizon and Farmers Insurance  have become truly customer obsessed and distanced themselves from the competition.  This chasm will only become larger over the next several years.

At the Forrester Customer Experience Forum last June, Jim Bush, EVP of World Service at American Express, delivered a keynote titled “A Relationship-driven Approach to Service” where he talked about how when he took over World Service he drove the company’s transformation of customer service into a customer-obsessed organization delivering extraordinary customer service, from a traditional call center previously focused on reducing average handling time and cutting costs.   To accomplish this goal, American Express adopted a holistic approach of “serving relationships, not transactions”.  There was both a philosophical shift to regarding customer service as a source of competitive advantage rather than being a cost center: “each moment of truth” or customer interaction became an opportunity to compete and improve service delivery.  Mr. Bush also flipped the traditional approach of 70% of a reps’ training on technical content to 70% dedicated to customer handling training, and the results have been extraordinary. Between 2006 and 2011, his group more than doubled their net promoter score, delivered a 20-25% increase in card member spend, lowered attrition by six-fold, and, despite not focusing on reducing expenses, decreased service costs by 10%.  Those achievements are even more impressive when you consider the size and scale of American Express – which boasted $25.6 Billion in revenue for FY 2010.

In his October 3, 2011 research note, “CMOs Must Lead The Customer-Obsessed Revolution,” Forrester analyst Chris Stutzman writes that in “the age of the customer, empowered customers are disrupting traditional sources of competitive advantage.”  In order to thrive in this new era, companies must abandon the outdated customer approach where “workgroups focus solely on their view of the customer to develop silo-based strategies” and replace with a customer obsessed approach where “the customer’s needs permeate the company’s culture and operations facilitating the sharing of customer insights across the enterprise to develop cross-discipline strategy.”  It’s clear that the most successful companies today, and in the future, will fully embrace the philosophy and practice of customer obsession. They are not satisfied by merely focusing on the customer, but relentlessly adapting their customer engagement strategies, investment priorities, business processes and policies to ensure that they create more net promoters and engender fewer detractors.   Before Web 2.0 and the power of social media and mobile channel proliferation, traditional customer focus approaches may have worked.  But today, any company that fails to adapt their business process to serve the customer specifically how they demand to be served will likely suffer the consequences.  The smart companies have figured this out and are busy creating competitive distance.

Meanwhile, those in denial of this new customer reality are falling behind faster than they can run the numbers. By the time they realize just how bad things are, their customers will have already defected in droves.

Memo to Super Bowl Advertisers: It’s Time to Draw up Some New Plays

February 7, 2012 Leave a comment

Good communications succeed by connecting with the audience. Whether you’re talking about a business-to-consumer organization or an enterprise software company, it became clear that not all ad agencies and their clients subscribe to this mandate as I watched wide range of ads airing during the Super Bowl on Sunday.

While the game kept viewers on the edge of their seats up until the very end when the New York Giants won, the same cannot be said about most of the commercials. Far too often, it felt like advertisers were trying to do too much just to be different and forgot that you also need to connect to consumers and get them to actually want to do something about your ad, not just be entertained. In most cases, they dropped the ball more than some Patriots receivers!

Sure, there were a handful of exceptions – including the Coca Cola polar bears, Clint Eastwood’s heartfelt monologue in a lengthy Chrysler commercial, a dog bribing his owner with Doritos to keep mum about a missing cat, and Ferris Bueller skipping work to drive around a new Honda CRV.  But I am no closer to buying briefs donning David Beckham’s name now than I was before the game. I won’t be downloading TaxACT anytime soon, and I won’t be visiting GoDaddy.com in the foreseeable future (nor should I expect the entire female population to, either).

Considering advertisers paid $3.5 million for 30 seconds in front of 111 million or more viewers, I can understand the need to stand out, and let’s face it, sometimes missteps draw as much attention here too. But what exactly determines success for these ads?

One measure I use as a barometer for effective communications, especially advertisements of this nature, is whether they are both relevant and distinct.  In such high profile, expensive to produce spots, a lot of the commercials will be distinct, demonstrating creativity, edginess and inspiring the sense of seeing it for first time.  But as we saw too often, it’s much harder to be relevant.  You need to push forward a clear, concise message to viewers who are paying just as much attention to their buffalo wings and beer. And you have to make it actionable.  In other words, make them want to go out and shop for your car, beverage or snack food.  Or at least spark a desire to find out more your product or services – not just a colorful ad – when they are considering the category of product you represent. It’s on this very front that brands fall short far too often.

For example, Jet Blue had what appeared to be a fairly low cost to produce ad about a new employee being squeezed into a cubicle with two others and expected to actually get to work.  Everyone who flies could relate to the concept and so its relevance score for me was 100.

Sure, I may remember some of the awful ads for a while because they were distinct.  But I’ll do something about the ads that were also relevant to me.  Fortunately, my job at Pega is not causing a lot of sleepless nights, but if it were, I’d be sure to check out careerbuilder.com, whose monkey themed ads stood out again and showed they understand what’s on the minds of dissatisfied job seekers everywhere.

It’s Time to Make Marketing Dollars Work Smarter

January 18, 2012 1 comment

As we embark on another year with an uncertain and fragile economy looming, one thing is certain: most marketers are wasting money.  In the Web 2.0 world, and given the measurability of all things digital, at least it’s not as bad as the old lament:  “I know half of my money is wasted; I just don’t know which half.”  Nevertheless, many heads of marketing, especially at companies with broad product portfolios, are suffering from being far too egalitarian in how they allocate budgets by treating all budget centers and customer or prospect opportunities more or less equally.

But all customers are not created equal. Your best customers buy more of your products, are more loyal, less price sensitive and willing to recommend you more often to others.  So why are we not dramatically tipping the balance to the “20” in the “80/20” rule that can not only generate more revenue per invested dollar, but also more profit?

The main reason is the curse of entitlements and how established businesses generally approach the budgeting process by assuming that the prior year’s budget is the baseline – wherein each department or budget manager is entitled to some increase over the previous year.   This old-fashioned type of thinking typically leads to incremental vs. extraordinary improvement, and reinforces a “business as usual” vs. a “break from the pack” mentality, not only in terms of how budgets are allocated, but also regarding what market share gains are actually possible.   Geoffrey Moore addresses this level of stasis in his new book, “Escape Velocity: Free Your Company’s Future from the Pull of the Past”.  He says: “When organizations begin their strategic planning effort by circulating last year’s operating plan, they reinforce the inertial properties of the resources as currently allocated.”  To break away from the pack, Moore argues, companies need to be laser-focused on what they invest in and concentrate the maximum resources on strategies and investments that can create separation from the competition.

If one accepts the notion that all investments will not have the same impact and return, it’s not a big leap to realize that all customers and prospects should not receive equal shares of a budget.  The target segments and existing customers that have the highest revenue and profit potential should receive a disproportionately larger share of the marketing budget. One of the more important contributions to this type of non-traditional thinking is V. Kumar’s book, “Managing Customers for Profit”.  The quote from David Aaker on the back cover sums up Kumar’s approach best: “This book shows how a focus on Customer Lifetime Value (CLV) can change management toward long-term results by providing a fresh perspective on customer targeting, retention, and loyalty…it shows you the way toward strategic customer thinking.”

One of the key concepts that Kumar brings to light is how to transition from a product centric to a customer centric approach to marketing.  Rather than “peanut butter” the marketing budget across products equally, Kumar demonstrates how to target customers with higher profit potential and how to manage and reward existing customers based on profitability.   Kumar’s approach is also more holistic than many traditional methods that merely focus on lead generation and customer acquisition, in that he views customer value across a continuum, or lifecycle, prescribing a range of tactics for marketing resource allocation to optimize acquisition, growth and retention of a company’s most valued customers.

So, what’s this mean to you? If you haven’t already established your 2012 marketing budget and parsed out the allocations in a traditional fashion, where everyone gets their fair share approach, then consider a more radical or zero-based budgeting approach that can foster greater marketing efficiency and increased revenues and profitability.  If you are already locked in to the old way of doing things, who says it’s too late to shake thing up a little?  Marketers need to be agents of change, and there’s no better time to drive change than in the New Year.