Loyalty Truth

A few questions about Brands

Why do some brands dominate and others just compete?

Can brand value be created solely on perceived value and word of mouth hype, or is there a prerequisite that the brand promise be walked-out through customer experience?

Does our always-on world that glorifies multi-tasking and accepts information waterboarding as the norm make it easier or more difficult to establish a brand that dominates?

Is there tangible value associated with brands that are established as wholly above and apart from its competitors?

World Triathlon Corporation, Apple, and Nike give us some answers

Racing the Florida Challenge a few weeks ago had me pondering each of these questions. The mere fact that I was standing on the starting line of a long distance triathlon having registered only 2 weeks prior was an answer in itself. There are  four commonly raced distances in the sport and two of them have been branded by World Triathlon Corporation. WTC owns the Ironman brand and created the “70.3” series renaming races generically referred to as Half-Ironman.

Ironman has become the ultimate aspirational brand for people marking off items on their bucket list. North American IM events typically sell out one year ahead of time in a period of 6 hours. I’ve been shut out trying to register online as events sell out on-site. The demand for entry into a tortuous race that offers the privilege of jumping into the ocean or lake with up to 1,400 others to start the race is so high that people now attend events as volunteers to ensure their entry and some are willing to pay well beyond the $550 entry fee by purchasing community entries at prices exceeding $1,000.

The Ironman brand exacts a price premium at all points of contact;  entry, merchandise, venue hotels and restaurants but participants don’t mind because WTC delivers a consistent and fabulous experience during each race weekend.  During my race in Clermont Florida, I had to search for a porta potty before and during the race, the drinks at the aid stations were all at room temp (on a 90 degree day) except for the last stand, and overall execution of sponsor tents, awards, and post game grub were pedestrian at best. Not so at an IM event. Everything is executed with the athlete in mind and all is delivered on a first class basis.

The shelves at Best Buy, Target, and Walmart are stocked with MP3 players, but most consumers walk through the doors looking for an “iPod”. Like Kleenex, Xerox, and FedEx, Apple has been able to establish its product name as the category designator. I’m not entirely sure if kids under the age of 15 understand that the MP3 category has products manufactured by companies other than Apple.

Apple’s brand was built on innovation, creating an irresistible appeal for people who had to have the next new thing. Apple backed up innovation with execution as the products worked and allowed people to interact with music in a way never before possible.  Apple has benefited from price premiums and the ability to maintain standardized pricing across an otherwise discount crazed retail distribution network.

That history represents powerful capital in consumer minds that serves to offset even the recent design challenges for the latest version of iPhone. There’s a limit to how many product snafu’s will be tolerated by consumers, and Apple would be testing limits should the next round of product fail on some wide ranging level.

Nike founded its shoe company on the vison of Bill Bowerman and the cinders of the University of Oregon track. Nike may be the best example of how a brand, once established, can extend beyond it roots to dominate an entire category of related products. I don’t think Bowerman and Phil Knight envisioned having the Nike swoosh emblazoned on golfs balls and swim suits, but it has happened. It wasn’t that long ago when I heard kids say they needed to go “shopping for some Nike’s”.

Nike is widely distributed in retail, heavily discounted at times, and has assumed a role of universal appeal rather than a quality product line that appeals to passionate users. Today the Nike brand may lean a little too often on perceived value, celebrity endorsement, and past achievements while product quality and good function is left wanting.  That’s my opinion as a guy who buys 2-3 pairs of running shoes per year as well as clothing and accessories for the running sport. You might have a different opinion if you patronize their golf or tennis lines.

My brand musings have a purpose. Nike, Apple, and WTC probably care little for my opinion of their well established brands. My purpose is to understand how we can create a dominant brand in our own business. What does it take to make your credit card, your loyalty currency, your marketing agency, or your new product become the name that creates demand and even defines a category?

As you engage in planning for next year, elevating your brand should take priority on the strategic planning map. Before you get distracted with mandatory elements of budgeting and forecasting, remember that the price premiums and customer loyalty that comes from a dominant brand pays lasting dividends.

You have to get to that starting line if you are to finish the race. Get started now.