Buyer2Brand

PeopleSoft was a Great Brand

Recently I gave a workshop on branding for small tech businesses at the Entrepreneur Center in San Jose. In my talk I covered a couple case studies of great technology brands, one of which was directly from my own experience.

I represented PeopleSoft from 1994-98 during its hypergrowth heyday while at leading industry PR firm The Horn Group. For those readers new to the market, PeopleSoft was a client/server applications pioneer during the early/mid 90s that helped lead the drive to put more computing power on the Windows desktop. PeopleSoft debuted with human resources software and then expanded into Financials (GL, AP/AR…), Manufacturing, and finally CRM.

From my vantage point on the front lines of the early client/server marketplace, where bigger competitors like Oracle and SAP should have eaten PeopleSoft's lunch, I was able to directly observe the power of a great technology brand to clearly differentiate itself and reap the financial rewards. As with all great brands, PeopleSoft was fully actualized along functional, emotional, and aesthetic dimensions.

Functional: PeopleSoft had a great product. Its powerful, intuitive software made full use of Windows UI and was built from the ground up for client/server. It aligned its corporate mission with a larger trend - to leverage the PC revolution (that had hit consumers only five years earlier) and translate its benefits to the workplace. To compete against formidable enemies, PeopleSoft positioned itself as the alternative. Where SAP was the stiff, hierarchal German software that insisted customers reengineer their businesses to fit its model...PeopleSoft was the flexible, friendly software more easily customizable to the customer's business. Where SAP's implementation approach was an expensive, "Big Bang", multi-year process...PSFT stressed a speedier app-by-app rollout for more rapid return.

The psychographics of the initial human resources buyer matched PeopleSoft's own promoted style - relaxed, non-competititive, and willingly referenceable. HR was a low risk corner of the enterprise for IT to test this new-fangled client/server computing, and gave PeopleSoft a beachhead from which to upsell Finance and Manufacturing later. With a solid account management model, its rabid focus was customer satisfaction. The motto: “Positively Outrageous Customer Service.”

Emotional: PeopleSoft appealed to the user's desire for empowerment. Rather than rely on centralized IT for the information needed to do their jobs, line managers wanted to find out the answers for themselves. PeopleSoft didn't singlehandedly create the “knowledge worker” we know today, but tapped into its customers drive to work smarter. If brand is a reflection of alignment between internal organizational values and customer values, then PeopleSoft had it down.

PeopleSoft's internal culture reflected the laid-back, positive nature of its founder/CEO, Dave Dufflield. His organization was famously flat, light on policy, and hated politics. His employees themselves were empowered with his famous motto, “Don’t ask for permission, ask for forgiveness.” The company handbook said it all, “no bulls**t.”

Aesthetic: PeopleSoft's very name and visual language reflected and re-inforced its initial target market of HR. But it didn't stop there, understanding that every employee and the company's very offices were ambassadors of the brand. The "PeopleSoft Uniform" of khakis and a blue denim shirt (now a cliche in the Valley) were adopted shortly after The Gap signed on as an early customer. Dogs were allowed in PeopleSoft offices long before the dot-coms got all the press. Reception areas and hallways were decorated with large pictures of individual employees posing with their primary hobby or outside interest. A Wall of Fame framed letters from happy customers and users. The whole operation was a warm, inviting, living brand carrying PeopleSoft's mission and vision to the marketplace.

A Great Story. As the PR guy, I pushed this “cult of Dave” more than anyone. The media loved the story. How Dave mortgaged his home to start the company. How Dave answered his own phone and worked from a modest office (despite his shares being worth half a $B at the time). How the employee band was called “The Raving Daves” (Dave purchased their instruments; they played all company meetings). How Dave loved animals and supported the local SPCA. How PeopleSoft actually used its own software (you wouldn’t believe how rare this is). We even once PR’d the fact that the head of PeopleSoft's own HR department was not cutting his hair until the organization went completely paperless!

The Results? Well if anyone argues with me that strong brand equity doesn't translate to financial equity, I cite this case example. PSFT went public in 1992. The company’s CAGR was north of 100% for 5 years in a row, making them the fastest growing business software company in the U.S.  By 1995, PeopleSoft had captured 77% share of the HR software market. That year, the company's market cap was $1.6B with a PE Ratio of 90+ (more than twice Microsoft at the time).

In overall client/server application market share, PeopleSoft was poised to overtake Oracle (which it eventually did). When Duffield handed over the reins to Chris Conway, the original brand eroded. PeopleSoft continued to successfully deposition Oracle as locked into and distracted by its own database business. Oracle had to acquire PSFT (at a 10% premium on its closing value) to finally silence this argument.

Brand Research is not Market Research

One of my favorite online resources for trends, case studies and strategic approaches to branding is Brandchannel - hosted by Interbrand. It isn't just a collection of the firm's own work, but offers a real forum for discussion and third-party perspectives.

This article caught my eye by a guy named Joseph Benson. Joe is a B2B brand strategist whose past clients have included technology and financial services firms, among other industries. He's also the former VP of Brand Strategy at Sapient Corporation. I don't know him personally, but he offers some easily digestible insight on the difference between market research and brand research.

Most marketers understand the power of research to quantify buyer demand for new and existing products. Standard market research surveys are very useful to determine direction in areas like pricing, packaging, technical requirements, and purchase intent. In the IT industry, I've found that technology vendors are great at using customer research to gage customer satisfaction with the product itself (features/functions) as a direct feedback loop to Engineering, but not so great at examining their own organizational performance to the extent it informs the customer's total "brand experience".

Typical market research studies are not focused on qualitative measures - such as buyer perception, product preference drivers, and the relative success of vendor marketing efforts. Brand research on the other hand aims to understand WHY customers chose the product they did - the true differentiators among competitors as the buyer perceives them - and why they would be willing to pay more for a stronger brand. Brand research is best conducted by the vendor either in one-on-one interviews with its most profitable customers (who cares why the losers bought?!), or when appropriate, in small focus groups. 

So the basics of brand research answer the following questions: Why did your most profitable customers choose you? Who are the market influencers they trust to advise them? What marketing messages resonate most with them? The folks who specialize this stuff are usually domain experts, so they know enough about the market to probe deeper.

According to Benson, brand research is the way to go in the following quick-hit scenarios: when a company (new brand) is first launched into an existing category; when a vendor is exploring if its brand can be extended to a new product type without dilution; and when companies merge and need to merge their brands correctly. Mature organizations use brand research more regularly to steward the brand itself - continually measuring the changing dynamics of customer choice and aligning the organizational behavior of executives and frontline employees behind it. In the final scenario, when a vendor's offerings have become commoditized and the brand diluted, research can find new meaning and relevance with target customers and teach the organization how to revitalize its outdated promise.

Salespeople need to sell your brand

Branding is a marketing thing, right? I mean, what role could salespeople possibly play - especially in selling IT, where the sale is consultative and the purchase decision complex? So goes the prevailing wisdom.

With the coming of the Web 2.0 world, that tired argument has gone out the window. In consumer markets, branding experts talk of turning every employee into a "brand ambassador" - someone who actively promotes and "lives" the brand in every interaction with customers, partners and prospects. Forward-thinking tech vendors are realizing that the sales field (which owns the customer relationship in most cases) needs to play this vital role in building brand equity. Millions of dollars spent on direct mail and PR and keyword buys can't replace a warm body in this vital role.

CIO Today has written a comprehensive article on how to make each salesperson the living embodiment of your brand. A great brand is built by repeated actions. With every interaction, the sales rep provides the personality in front of all your branding efforts - good or bad. Actions speak louder than words, the article asserts, so every communication must be viewed as an opportunity to assert brand image and drive brand loyalty.

First, a vendor needs to understand its unique brand. Assuming that Marketing is doing its job in this regard (and in B2B tech that's a big assumption), sales support then needs to train the sales force to wrap the brand experience around the sales process that is already in place. This training shouldn't focus on the tactical - like enforcing sales presentation design templates. It's strategic sales training that seeks to institutionalize brand message consistency within each step and at every level of the consultative sales process. The key to Brand Selling is instantiating the vendor's core values, history, and operational procedures within the customer relationship itself.

Brand Selling is in fact one of the keys to selling higher inside a customer/prospect organization, the CIO Today article asserts (and I can't tell you how many of my clients over the years have had THAT as an objective!) Brand promises are no longer limited to the functional product/service level, therefore delivering on these promises forges a deeper emotional bond (yes, the "E" word) between vendor and customer based on trust and authenticity (i.e. what makes a great brand). The customer comes to view the vendor's unique mission and philosophy as not just empty words, but as directly helping them achieve return on their investment. To be sure, this strategic selling of "shared outcomes" gets the attention of CIOs.

A vendor salesforce that actually "lives" its differentiated brand personality with each and every customer interaction elevates its game. They infuse customer relationships with a deeper understanding of values shared. Some specific suggestions in the article include:

• Start by polling employees for examples of how your company delivers on its mission statement or unique selling proposition (if brand is unknown). Look for inconsistencies.
• Rewrite case studies and success stories to reinforce how your philosophy and values came to life for the customer's benefit.
• Hold occasional "brand refresher" meetings with customers to reinforce the long-term benefits of partnering with your company.
• Take the time to resolve customer issues in person, as personal attention and face-time breed familiarity, extend contacts across management, and uncover new opportunities.
• A sales force is the ultimate marketing research resource - integral to refreshing the brand and testing its premises - so a regular feedback loop to Marketing is imperative.

The results of stronger brand loyalty with customers is indeed quantifiable - as it sets the stage for successful up- and cross-selling over time.

Intel: State of the Brand

This is the first in a series of posts on the state of the major tech brands.

Tackling Intel first seemed like a logical choice since the company just launched its new brand identity at the Consumer Electronics Show. The news was covered here and here and here amongst hundreds of other places all around the blogosphere.

Essentially, Intel wants to expand beyond its decade-long positioning as the premier provider of individual products such as microprocessors and build equity as a product solutions platform in 4 key markets: enterprise, mobile, digital home, and health. Gone are the wildly successful "Intel Inside" logo (used for 16 years with PC manufacturers) and the dropped 'e' in the company's main logo (37 years old!) The new tagline asserts that Intel helps customers in its target markets "Leap Ahead". The shift will be rolled out with a $2.5B ad blitz - and if this wasn't evidence enough of the end of an era, I just saw a TV spot last night on Intel's new partnership with Apple.

Intel says this rebranding is a natural byproduct of its reorganization around the Centrino (wireless) and future Viiv (entertainment) platforms - bye bye Pentium. Intel's Eric Kim, newly annointed CMO, believes the evolved brand will "establish a stronger emotional connection with our audiences". Go Eric! Very touchy-feely. Seeing as Kim was the guy credited with turning Samsung into a consumer brand powerhouse vs. Sony, I'm not surprised. He says it unifies and simplifies the look and feel of Intel offerings across product lines - always a noble aim in branding.

All this is the culmination of a busy 2005 for Intel - a year that saw a new CEO, new CMO, new business structure, new marketing dept. and new ad agency. Whew! It is trying to stem the tide of PC market erosion to AMD that has slowed revenue growth from 13 to 7% and profits from 40 to 5%. In the enterprise market, the move to marketing platforms over products comprises a drive to address business challenges with solutions/combinations of products that drive integrated processes. Intel is poised to launch more new products in 2006 than at any time in its history.

Mike's take: "Intel Inside" was a widely successful "ingredient branding" campaign, but with the commoditization of the PC market, it was time to go. Still, I don't know if the redesigned logo is an improvement - can we just BAN THE SWIRL from all enterprise tech design please??! But we all know a brand is embodied in what a vendor does, not a logo and tag - right?

CEO Craig Otellini is the first non-engineer to run the company. He told BusinessWeek that marketing expertise is the only way Intel can succeed in new markets - by communicating more clearly what the technology can do for customers. What a concept. Obviously, this has made some more technically minded employees uncomfortable. But partners like Apple and Sony seem to be genuinely impressed with the new, more flexible, open, collaborative attitude at Otellini's Intel. Andy Grove is a hard act to follow, but the world has changed. Time will tell if Otellini and Kim have truly reinvented the fifth most recognized brand in the world (according to BusinessWeek) or instead created our market's equivalent of New Coke.

Rebranding is about realignment

I've written on rebranding before, but its a decision-making process that merits more discussion.

Most IT vendors are not "startups", in the strictest definition of the term. Most are small companies that are actively selling and winning first customers, then servicing and supporting those customers while working to improve their product or service. Most have active PR and other outbound marketing initiatives that build awareness and fill the sales pipeline. All assert their positioning in the marketplace relative to competitive alternatives.

In a new book Why Johnny Can't Brand (Portfolio 2005), authors Bill Schley and Carl Nichols explore when and why companies should rebrand. They argue that many companies rebrand prematurely or unnecessarily, shooting good brands in the foot instead of strengthening them. The three most common catalysts for misguided rebranding are: new executives trying to make their mark, the need for instant gratification trumping long term commitment, or organizational malaise/boredom.

To gain a foothold in the market, small to mid-size B2B technology vendors typically "chase the money" - closing business for the sake of the reference and the revenue, thanks to the sales staff's existing relationships. If branding's maxim is "customers create your brand", then what happens if some of these early customers fall outside of the positioned target market? Over the years it typically takes a vendor to attain critical mass, markets are in constant flux. Differentiation can be challenged by new competitors or emerging trends. Since "brand happens" with or without the vendor's active stewardship, the result over time can be a spotty understanding of exactly why customers utilize the product or service. The daily demands of customer growth and pace of market change can outdate, dilute, or distract a brand.

Such ventures are prime candidates for Rebranding - which doesn't always have to mean a complete overhaul. Rebranding can in fact have nothing to do with redesigning visual assets (logo, tagline) and instead focus entirely on operational or internal mindset changes. Rebranding is essentially an exercise in realignment. It is rediscovering the single unifying principle that aligns the organization with its customers. It means listening as those who bought tell you why you are special, why your offer resonates, and why your product is relevant. It is evolution more than revolution, but holds great power to re-energize a company.

If you are considering Rebranding, make sure it's not for one of the reasons Schey and Nichols cite above. A quick brand audit is a great way to get a read on if your brand is truly misaligned, not just fatigued. A reinvigorated brand can deliver more qualified sales leads & stronger customer loyalty, but brand equity needs time, dedication and maintenance to grow. Rebranding should not be undertaken lightly, and management support is a critical success factor.

Myth 1: Branding not important in a considered purchase

The following posts authored to date provide supporting perspective to dispute this claim:

• Branding in a considered purchase
• Salespeople need to sell your brand

Is Branding a means or an end?

I love Fast Company magazine, and they write a fair amount about Branding. But even the business press can misunderstand what it is tech branders do.

In an open essay on marketers' obsession with branding (guilty), the editors strip away the hype around "branding" and call it out for what it really is: common sense business strategy. In other words, "to successfully build a brand...is to communicate your key value proposition to the key customer segment in an integrated and consistent way." Or Business 101. Strong brands result from well-run companies that offer distinct products and services. Weak brands result from weak products, shoddy service, and unmet customer expectations.  All true.  Thanks for the compliment.

But then the editors discredit the very discipline they seemed to praise.  They claim that branding gurus sell their services by framing branding as a tactic, not as a result. By making "to brand" a verb, something that can be done, experts can sell it as a means, not as the end it truly is. Huh?  The editors argue that branding is being sold as snake oil these days as a direct result of the decline of traditional advertising and marketing. Marketers are escaping to "a frontier without explicit measurement". Obviously Fast Company is a bit out of touch. 

My take: if every marketing discipline can be negated and dismissed by arguing a return to Business 101, then why do we need business magazines to explain anything NEW to us? Branding IS measurable via simple, repeatable, and relatively inexpensive tactics like audits and surveys and site analytics.  Not to mention the power of Web 2.0 nirvana to pursue NEW strategies affecting customer loyalty, competitive differentiation, and shareholder value. Come on, give us brand marketers a bit more credit!

Marketing is evolving just like every other business discipline. Just because "traditional" methods are in decline, doesn't mean that branders aren't discovering and leveraging new tools like social networking, word of mouth, experiential marketing, branded entertainment, and a host of other emerging methods to win hearts and minds. If this is snake oil, then I'm a distributor.

Positioning vs. Branding

Many of the same tech marketers I have interviewed as part of this blogging project negate the importance of Branding while holding up Positioning as the ultimate strategy for winning minds and markets. This distinction is important to address, as the two disciplines are closely related, if not two sides of the same coin.

Both Positioning and Branding are driven and defined by precise differentiation from competitive alternatives. The difference is in the direction of the communication. A vendor’s positioning is what it says to the market, and its brand is what the market says about the company in reply (and by extension its product or service). The vendor asserts its competitive positioning, executes against this in the market, and then is rewarded or punished with its brand. If the two perspectives contradict, then execution of the positioning has failed and the brand is broken. In the IT world of the complex, considered purchase, listening to what customers really think about you and your offering is of ultimate importance in this symbiotic conversation between Position and Brand.

Positioning is largely an internal consensus exercise. A methodology for getting all company stakeholders marching in the same direction. It is informed by present market conditions and competitive realities, to be sure, but is often unable to predict actual customer application of the technology or changing market conditions. Often target segments and value propositions are dictated by who buys what and why.

Without customers, there can be no brand (no, a logo is not a brand). A startup that has yet to attract its first customers can assert its positioning, but does not yet have a brand. It is talking to itself. It has yet to fulfill promises, built no reputation, and received no grades from the market. At the beginning, Positioning drives everything.

But a few months after a startup celebrates its first live customers, an early brand identity can be researched and formulated. It is at this stage, when company and product brand are one in the same, that brand auditing is easiest and consistent brand building can be instituted within the marketing organization. As the company continues to grow, its internal corporate culture and values emerge to further inform its brand personality. With market success, the distinctions between brand and position come into clearer focus.

Brand in a considered purchase

The insights stated here were gathered as a direct result of a number of primary interviews conducted over the past few months with fairly prominent VP-level technology marketers.

The conventional wisdom sadly holds that Branding is unimportant in the considered purchase world of enterprise IT. Branding has been labeled a "soft" science - because it measures customers' emotional responses to a company or its product. But impulses and aspirations play little part in the IT buying decision, it is argued, where the offer and the product are exceedingly complex. Branding's definition within IT marketing has been effectively marginalized to its tactical design deliverables - logo, tagline, website - or abandoned as a concern of B2C markets alone. "Why waste your time?" one VP advised me, "we're not selling Coca-Cola here."

I've been told by these same brand naysayers that winning customers in the technology market is about building rapport, impressing the right decision makers, being easy to work with, and proving ROI. Well aren't these all brand-building experiences for the customer? Don't the customer's perceptions linger long after the vendor representative has disappeared? The vendor's behavior in the market, not its positioning statements, creates equity over time - and that level of satisfaction is a measurement of the strength of the brand.

Closing those first customers in IT might have more to do with sound strategic selling than with brand, but keeping them loyal, building references, expanding your footprint within accounts, and extending to ancillary markets are all going to be easier with a strong brand behind you. Fierce brand loyalty is much harder than product functionality for competitors to break, copy, or steal.

Brand Happens. A B2B tech vendor's brand is formed and maintained in the marketplace with or without its active participation and influence. The customers control it, and they are already talking to each other. As B2B technology vendors, we’d better start joining the conversation. Current trends such as software commoditization, new SaaS/open source delivery models, Web 2.0, and financial compliance demand a new appreciation for brand-building in our industry. A conscious and enlightened effort toward building stronger B2B technology brand loyalty will directly translate into higher financial valuations for the emerging vendors that pay attention to this "soft science".

Tech CMOs: Marketing gets no respect

Bad news in an end-of-year study released by the CMO Council. Top marketing executives admit that their group’s performance is lacking, which leads to a lack of influence and credibility within the corporate hierarchy. The survey was sent to senior-level marketing executives at IBM, Intel, Xerox, and other high-tech companies.

Of the 400 executives that responded, some depressing findings:

• Only 10% of respondents to the survey said their marketing groups are "highly influential and strategic" within the company
• Less than half said their teams are "well regarded and respected"
• More than 40 percent of marketers polled say their alignment with the company mission falls between "average" and "not well-aligned"
• Top listed area of weakness: customer insight and access (46 percent!)
• In a separate but related data point, I just read in Fast Company that the average CMO tenure among the world's top 100 branded companies is just 23 months, half the life span of their CEOs.

The executive director of the CMO Council said of his study that the problem is that most marketers operate from a rigid tactical orientation rather than with a flexible analytic approach. The answer is to instill processes that measure, analyze, rate and iterate each function and initiative's performance on an ongoing basis. Transform your marketing organization with rigorous disciplines, best practices, and technology-enabled processes that management can respect.

Um, OK. We're all in this together.

Ventana Research on customer satisfaction

Ventana Research is a fast-rising midsized analyst firm specializing in performance management.  In the rapidly consolidating world of industry analyst firms, it's encouraging to see Ventana's growth as an alternative to Gartner and Forrester's dominance.  It does a good job at covering CPM/BPM from the perspectives of IT, supply chain, finance, operations, contact center, BI/data warehousing, and sales/marketing.  A lot of its research notes and articles are still publicly available - also nice while it lasts.

Ventana's Contact Center practice released some startling findings recently on the state of customer satisfaction in our industry.  Of 100 organizations surveyed, 95 percent agreed that improving customer sat is among their company's strategic objectives, but less than 5 percent said they knew what it would take to do it.  This is indeed frightening in an industry that invests 6 times more to gain a new customer than to service a current one, and waits 7 years to turn a net profit from the relationship.

Ventana wonders whether this is a problem of culture, a failure of efficiency and effectiveness, broken business processes, or poor information management.

The firm concludes the last problem is the root cause, but I think it's cultural.  Even if most IT companies could attain the nirvana of "a single view of the customer", the industry would still suffer from an assembly-line approach to managing customers.  Customers are processed and passed off departmentally from Marketing (the lead) to Sales (the close) to Service (the project) to Support (the headache) in an approach that is TOO process-oriented and not PEOPLE-oriented.  Ventana calls out the industry's "structural inability to relate to customers" - where support staffs are left to recover the relationship (or ultimately kill it).

So how does this all relate to Brand?  Ventana explains that customer sat levels are determined by ALL of the customer's interactions with a vendor organization, and are damaged by broken promises.  These leave emotional responses like frustration and disillusionment.  If strong brands are promises kept and positive experiences delivered, then an institutional focus on brand-building would foster a culture where customer satisfaction was of paramount importance.

Experiential Marketing relevant for B2B

Customer loyalty is equal to the collection of positive experiences which produce positive customer emotions. The more positive experiences customers have, the stronger their loyalty and therefore the stronger the brand. But don’t take my word for it. CMO Magazine has written a great article on how more B2B companies are using experiential marketing and includes 4 great case studies – including IBM.

Consumer brand builders like Starbucks and other retailers have been thinking about customer experience for more than a decade. But the approach of most B2B marketers to connecting with customers is still stuck in Powerpoint mode. The experiential marketing trend holds promise in helping transform our industry's marketing from a product orientation to more of a client orientation.

Come to find out that IBM has a guy with the title of "program director of brand experience design". He argues that business clients are not emotionally inured, and bring to any decision the same mix of human qualities usually attributed solely to consumers – and consumer marketing. What a concept.

Don’t think that just because your technology product or service is complicated and your messages very specific that your company can’t improve its user experiences, CMO explains. Examples the article cites include how to “sex up” experiences most of us already control and execute – such as call center scripts and product roadshows.

Here's a summary of the article's guidelines for a memorable customer experience:

• Make sure the information or entertainment imparted is truly relevant to the customer, not just to you
• Involve a rank of influencers are the client company - not just the buyer - for a more collegial, communal experience
• Make sure it’s delivered clearly in a limited time frame that respects busy schedules
• Leave plenty of time for conversation and interaction. Keep it high level and strategic to create a more consultative experience.
• Find ways to delay introducing your technology into the experience, and then showcase only what it enables for end users
• Avoid talking about your industry and competitors

Finally, the experiential marketing experience created doesn’t have to be an expensive, full-day exercise that demands customer immersion in some fictional world of your creation. How about sprucing up that lobby of yours to make it more warm and inviting?

Remember the cardinal rules of customer-driven brands (i.e. ALL brands):
Every experience communicates Brand. The customer experience is the Brand.

Myth 2: Branding is expensive

The following posts authored to date provide supporting perspective to dispute this claim:

• Microsoft Exec on Dot-com Hangover
• Experiential Marketing Relevant for B2B

Microsoft exec on Dot-com hangover

As part of my primary research study into the current state of B2B tech branding, I talked with Doug Free of Microsoft. Doug heads PR in Silicon Valley for the company, making sure that Bill G. and Steve B. and Ray O. are visible and connected whenever they visit our corner of the world. He was my client back in the 1996-97 timeframe when he headed marketing at an early web collaboration software company. His experience with branding goes deeper than logos and taglines, as he helped launched the GO Network for Disney when he worked at Infoseek.

Doug believes as I do that our industry is still suffering from "dot-com hangover". The conventional wisdom holds that branding is expensive because it necessitates a big budget to make a big splash. During the Boom, branding as a strategic marketing practice went out the window, and the term became synonymous with lavish launch parties at The Tech Museum and full-page ads in The Industry Standard. Good branding = high burn rate. There simply wasn't enough time - or even the need, it was widely believed - to steadily build one's reputation with customers over time when the IPO horizon for most startups was under a year.

Branding professionals must share some of the blame for this cheapening of our art during this period, as many of us were all too happy to collect high fees for actually planning the parties and placing the ads! Yet in doing so, we did B2B IT companies a disservice, missed an opportunity to soundly educate an industry, and are still suffering the fallout.

As Doug rightly points out, many tech marketers first real experience with branding was spending the "funny money" of the Boom, and he cited an example from his own experience. He recalled that one of his employers during the period wanted to run a major ad campaign to reach only a handful of key targeted investors. High-touch, low cost alternatives would have better driven the financing round but were rejected outright. Of course it was silly behavior in hindsight, Doug explains, but everyone thought - and was told by "the experts" at the time - that big spend was the way to build big brand. But every branding pro worth his/her salt knows that attention/awareness/buzz are the fringe benefits of a strong brand, not the goals themselves.

In all, Doug remains pretty discouraged with IT marketing professionals use of the term "branding" with vendor management teams. He thinks C-level understanding of the practice today extends merely to tactical design deliverables or is locked inexorably into the concerns of B2C markets. He asks what is easier: to educate an entire industry or change our language to fit the market? Doug was not completely pessimistic, however, and sees a lot of opportunity for branding to impact service-oriented B2B markets where Web 2.0, SaaS, and LAMP stack delivery models are coalescing.

Myth 3: a Company creates its Brand

The following posts authored to date provide supporting perspective to dispute this claim:

• Branding for M&A vs. IPO
• Your Customer controls your Brand
• Brand in a considered purchase

Myth 4: Branding is not measurable

The following posts authored to date provide supporting perspective to dispute this claim:

• Branding for M&A vs. IPO

Myth 5: Branding not as important as Positioning

The following posts authored to date provide supporting perspective to dispute this claim:

• Tech PR Veteran on Branding
• Positioning vs. Branding

Top Myths of B2B Technology Branding

Currently (as of this posting date), Influential Strategies - meaning the author of this blog - is asserting...

5 Top B2B Technology Branding Myths:

1. Branding is unimportant in a considered purchase.
2. Branding is expensive.
3. A Company creates its Brand.
4. Branding is not measurable.
5. Branding is not as important as Positioning.

Isolate this category for an updated list of posts debunking each Myth.

Tech PR Veteran on Branding

Ed Niehaus and I sat down recently as part of my ongoing primary research exploring the current state of B2B tech branding.  Ed is an industry veteran who headed one of the top technology PR firms from the early 90s through the Internet boom - Niehaus Ryan Wong.  NRW launched Yahoo, Verisign, Apple's iMac, Veritas, and 3 Pixar movies.  The agency was one of the unfortunate casualties of the dot-bust, but luckily its founder lives on as a VC at Cypress Ventures. 

It's no secret that public relations is often the first program in the marketing mix that technology startups choose to outsource.  PR can be among the earliest third parties to influence how a new company positions itself in the marketplace.  PR becomes the first line of marcom offense in getting a vendor noticed and talked about.  Some may argue that PR firms and practitioners enjoy an undue share of influence over how and which new technologies and personalities move our industry.

My former employer The Horn Group was in friendly competition with NRW, so I've had nothing but respect for Ed.  He is one of the best at his craft.  He recognized early on that the firm's strong reputation engendered a unique opportunity to offer new clients a value-added service on Branding, hence trumping the leading advertising/interactive agencies at the time.  Ed believes brand is definitely a CEO-level discussion, one of the most strategic decisions, and so he wanted PR to have a seat at the table.  Now Ed is no fan of advertising - not even the inexpensive kind - and it's fair criticism to say NRW's service neglected the aesthetic design element in branding (it had no visual deliverables).  Still, Ed was out in front in recognizing the powerful role of PR in building tech brands.

Reflecting both enterprise and consumer tech experience, Ed recommends talking about brand with management of B2B companies in terms of the the vendor's reputation.  This approach would help the discipline mature and hold it to the same litmus test as all marketing spend these days.  Namely, does the activity drive either awareness or sales?  Buzz or share? 

According to Ed, brand comprises not just the positioning of the venture (i.e. product solving target customer pain better than competition), but its values and vision as well.  Brand is not the identity package itself, but elements reflect the entire "affective domain" of the company - its deeper sensory appeal to the buyer.  This is also impacted by buzz in the market, which is created by (surprise!) PR.

Finally, Ed had a parting piece of advice for most startups: stop expending 90% of your communications effort solving internal struggles, and only 10% talking to the outside world!  Could the solution he's implying be "hire a good PR firm", I wonder?

Entrepreneur article on Rebranding

This month's Entrepreneur Magazine has an excellent column on Rebranding by John Williams. 

John's major points are:

1. Don't confuse rebranding - which is a comprehensive, frequently expensive change of strategic direction for a company - with the simple need to update your look.  A simple refresh of design elements or slight naming alteration, which may be all that is required, is not the definition of rebranding. 

2. Rebranding should only be undertaken based on a proven need to alter course (e.g. new market, new trend, new product direction).  Given changing market conditions, it may even be crucial.  Rebranding should be based on sound strategy supported by facts related to sales and profits, not driven by organizational fatigue.  Ideally, everything should be changed at once.  For B2B companies, this starts with all sales tools and the website.

3. Be prepared to lose some customers.  The more dramatic the change of strategic course, the more customers will probably become alienated and abandon your product or service.  No worries, as long as you embody and deliver on your new brand promise to the new target audience(s).  Branding is about using mindshare to win marketshare.

John is an eloquent torchbearer for my mantra that Brand = solid differentiation.  In his words, "you simply can't be all things to all people".   He believes as I do that Brand Happens.  "Branding isn't an option today -- (it's) either by default or design." 

He offers one final piece of advice of particular interest to tech vendors: changing the name of the business to the name of the product is rarely advisable.  It is usually self-limiting and stymies the organization's ability to pace marketplace evolution.

Branding for M&A vs. IPO

I recently interviewed Christine Hinton from VantagePoint Venture Partners as part of my ongoing primary research study on the state of B2B tech branding.  Christine is VP Marketing at the firm, which is a leading multi-stage investor in the tech and healthcare markets.  In her position, she actively advises the boards of VPVP's portfolio companies on marketing strategy, and previously headed the West Coast tech practice of leading PR firm The Weber Group (now Weber Shandwick).

Christine is a seasoned pro with some interesting things to say about branding for startups.  She thinks that engineers, the folks who typically run early tech companies, often have the wrong idea about brand.  First, they think that it's something that's wholly created by the company itself (i.e. not by the market/customers in response to the company's offering).  Second, they think that a good brand is defined simply as the vendor with the best "buzz".  Basically her advice to CEOs is "you can't buy it, you need to deliver it."

We had a lengthy discussion about the decision to brand on the company or the product.  Christine contends that in early stage companies there is no such decision to be made, that essentially the vendor and its offering are one in the same.  As a VC firm, VantagePoint's advice differs depending on whether the company is headed for ultimate liquidity via acquisition vs. IPO.  In today's market - where the consolidation is the rule of the day and less than 10 tech IPOs occurred in all of 2005 - the choice is clear.  Startups on an M&A track should brand on the uniques of the product/technology and the strength of the engineering team.  On the IPO track, branding the company, which is essentially the "product" sold to Wall Street, becomes paramount.  For better or worse in today's climate, where most companies can only hope for acquisition, Christine thinks some CEOs think, "why bother with branding?"

Given these distinctions, a discussion of the concept of Brand Equity is enlightening.  According to Wikipedia, Brand Equity is a measure of the total value of the brand to the brand owner, and reflects the success of its branding with target audiences in the marketplace. Measurement can be both quantitative (i.e. comparative pricing) and qualitative (i.e. brand loyalty). Successfully branded products or services typically command higher prices, and strongly branded companies can command higher market valuations - whatever the liquid event.  So re: the issues discussed with Christine, it's a wash.  Strong brands demand and command a premium with target audiences.

Brand (n.); Branding (v.)

This is a silly little post ...
...but I think it's important to make a distinction between these words, as they are not interchangeable, and yet are so subject to swapping around by marketing people.
(definition language below liberally borrowed from Wikipedia...)

Brand (n.) a brand is the symbolic embodiment of all the information connected with a product or service. It encompasses the set of expectations associated with a product or service which typically arise in the minds of "people" (consumers, buyers, or other target audiences). A brand typically includes a name ("brand name"), logo, and other visual elements such as images, fonts, color schemes, or symbols. In other contexts, the term "brand" may be used where the legal term trademark is more appropriate.

Branding (v.) The art of creating and maintaining a brand. Marketers seek to develop or align the expectations comprising the target audience's brand experience through branding activities. Branding carries the "promise" to the marketplace that a product or service has a certain quality or characteristic which make it special or unique (i.e. differentiated). Whatever the mix of programs, branding techniques should be consistent and complementary when well executed. (also see "brand management")

Now if we can only get all our fellow PR, VC, design and web marketing colleagues to use these terms more carefully!

PR Pros on Top Tech Brands

I've spent most of my career on the PR side of technology, working on the agency side for firms such as Fleishman-Hillard and The Horn Group, and being the client while running  in-house marcom at startups.  So I enjoy a fairly large network of fellow PR practitioners. 

As part of my primary research project into the state of B2B technology branding, I decided to poll my network for their votes on "the Strongest B2B Technology Brands".  Note that I didn't ask for "the Best Brands" (a more subjective measure, imho).  The survey was conducted over email in October and the results, while far from scientific, do provide a useful data point on which vendors are succeeding and which are not in the minds of our industry's "buzz merchants".

Here's the definition of Brand that I included with the survey to spark the opinions of respondents:
A brand is a customer’s gut feeling about a product, service, or company (good or bad).  Brands are more about emotional resonance than rational thought. Good brands are a promise fulfilled and values shared – they are perceived as authentic, reliable, delightful, and trustworthy.  A brand is not a logo, an identity system, a product, or a strategy.

if you are a PR pro, your Top 3 votes are still welcome!

After 69 votes cast, here are the results:

20.3%  Oracle
14.5%  IBM
13.0%  Cisco
10.1%  Microsoft
7.2%    HP
5.8%    Intel
29.0%  Other (<5%)
100%

Mike’s Analysis:

• Oracle is no doubt a strong enterprise IT brand, and due to its aggressive stance in the industry of late, is arguably the strongest today.  The "Big O" (as a friend of mine who works there calls them!) captured the lead early in the polling and never dipped below 20%.
• No argument on IBM either, and it's the best example in our industry of a reinvented brand (consider where they were 10 years ago).  IBM has tons of brand equity (i.e. their brand is worth a lot of $$), but lacks a singular promise and an emotional essence beyond “stability”.  At this point they’re like Coca-Cola, they’re just there.
• Personally, I find Microsoft a curious choice as its lack of a direct selling model and dominance in B2C weaken it as a true B2B choice - but its high regard in the SMB market obviously places it third.
• Cisco was a strong brand, now weakened and a bit lost, although I hear they are on the rebound.  HP is weak/lost too, obviously.
• Intel’s weak showing is surprising.  Sun’s is not.  I was most surprised that SAP did not crack the Top 5.
• If you are reading this asking, "where are Dell, Apple, Google, eBay etc.?", you obviously aren't reading carefully enough!

My votes for the Top 3? 
Probably Oracle, Salesforce, and MySQL. 
All three companies share assertive, vocal leadership and a singular mission.  Respectively: Oracle is "total victory" (embodied by recent acquisitions and its Fusion initiative), Salesforce is "no more software" (cast as adoption of the SaaS delivery model), and MySQL is "affordable data management" (one catalyst of the open source LAMP revolution).

Geoff Moore on Innovation

Industry guru Geoffrey Moore, author of the tech marketing bible Crossing the Chasm and now a partner at Mohr Davidow, recently spoke at the Commonwealth Club in San Francisco.  His speech on the nature of innovation was powered by new theories advanced in his upcoming 5th tome, Dealing with Darwin (due from Porfolio Hardcover in January 06).

A disclosure: I directly represented Geoff in launching his second book, Inside the Tornado, while employed by tech PR firm The Horn Group.  Geoff is always an entertaining speaker - very laid back and folksy - and once again he did not disappoint in his theories or insights. 

The Darwin book deals with the nature of innovation, and how established companies can continue to evolve and thrive.  Innovation is back as a buzzword in enterprise tech, only today (as with everything) it must be tied to hard dollar ROI.  In his speech Geoff identified 4 Innovation Drivers.  An examination of these reveals a valuable lesson for tech marketers about what is at the foundation of a solid brand:

Differentiation.  Focusing on outpacing competitors is the best innovation driver.  This is the prize that creates customer value, and delivers the highest dollar return.  Coincidentally, daring to be different also at the center of the best and strongest brands.

Neutralization.  This innovation driver focuses on catching up to competitors, on maintaining parity in the market.  It is necessary to remain competitive, and does return some hard dollar value, but a vendor will never dominate a market by simply pacing the rest of the pack.

Waste.  Geoff said it's amazing the number of vendor examples he can think of where the innovation project was driven by none of the above reasons, and therefore was a complete waste of time, effort, and expense!

Productivity. This is innovation driven by a need to increase the efficiency and effectiveness of internal systems and processes.  A smart strategy, when executed well, actually saves money, and therefore returns measurable value.

Hearing this, I was compelled to assert a 5th possible Innovation Driver: Brand.  This is where a company's innovation efforts are aimed directly at improving its reputation with customers.  These projects and initiatives would seek to deliver customers the most consistently delightful experience with each and every interaction.  imho, Brand Innovation would not just be a B2C market concern.

Mike's definition of Brand

Since I began this blog by comparing talking about brand to discussions of the Great Almighty, it's only fair that I impart to you, in the interest of full disclosure from the start, my own personal religion. 

I decided to begin my mission evangelizing branding over 2 years ago, while attending Sandhill Group's Software 2004 conference.  The tone of the conference that March, with the enterprise IT industry still emerging from the downturn of 2001-03, was sullen and introspective.  Why were our sales still so flat?  Why did our industry suck at marketing? Why did our customers hate us?  I added to these laments one of my own: Why does my industry not respect branding?

In the course of my ongoing primary research on the state of branding in the B2B tech world, I've discussed the Brand Diety with many fellow IT marketing professionals.  I've heard brand gurus from the B2C world evangelize their unique dogma, and seen way too many powerpoints about the future of our religion as a whole.  Some descriptions include: "Brand is a personality."  "Brand is a promise."  "Brand is your DNA."  So what's the definition that fits our industry best? 

Brand is What Your Customers Say About You.

Simply put, your brand is the grade you receive from customers, prospects, investors and the marketplace at large on your ability to fulfill the need you promised to address.  Did you make the pain you targeted indeed go away?  Do you always deliver as advertised?  Is your reputation one to be trusted? 

A vendor cannot buy its brand.  It's not a website or an ad campaign or a press release.  It's created over time by a company's consistent behavior in the marketplace, by how the company sets expectations and then exceeds or disappoints.  The vendor asserts its competitive positioning, executes against this in the market, and then is rewarded or punished by the brand it receives in reply.  Customers define your brand, with or without your help.  In this way, brand is about perception...and reality. 

Brand Happens.  So B2B technology vendors better start joining the conversation.

Your Customer controls your Brand

Forrester Research recently held its 2005 Consumer Forum.  Although the thrust of the agenda addressed how to reach the teaming masses on the Internet, the present market's realities sure sound like they have a lot of relevance to B2B tech marketers as well.  Forrester has always been the best of the major IT research firms at straddling the B2C and B2B worlds with an integrated perspective.  The main takeaway of this year's meeting can be boiled down to this: "Customers are in control."  There were 4 major themes:

1. Your customers aren't listening anymore.
   We live is a skeptical age.  Trust is down.  Company and brand messages are ignored.  There is simply too much noise out there.  Customers are listening to each other, not you.  They are talking, so you must listen instead.  They are newly empowered, so engage them on their terms.  Listen, respond, and learn from the messages they send each other about your products and your brand.
2. Innovation should come from your customers.
   There are many flavors of innovation (design, process, product, etc.), but they all should share a common source.  Whatever the initiative, innovation drives should reflect how customers use your product or service, how they communicate with each other about you, and what they want your brand to mean.
3. Harness the power of social computing.
   Web 2.0 is all about collaborative networks.  Engage your customers with blogging, RSS, podcasting, social networking, and other next-gen marketing tools.  Any forum that promotes viral marketing and word of mouth is better received by buyers and customers alike than a top-down, dictatorial approach.
4. Open source ain't just an engineering term.
   Open source development is all about taking an outside-in approach to the product evolution process.  But this business model is beginning to impact traditional B2B marketing processes as well.  Internal process improvement initiatives (service, support, etc.) should strive to receive as much information as possible from the outside and incorporate findings into design and implementation.  Forrester asserted that insights from secondary research studies trump traditional primary research methods in uncovering perceptions of your brand in the marketplace today.

Talking about Brand is like talking about God

It has been said that talking about brand is like talking about God.  Everyone has their own definition and beliefs.  Still, I've taken on a new professional mission - to evangelize the power of brand to transform the way my industry sells enterprise technology and satisfies customers.

To understand the current perception of branding and its value for the B2B IT industry, I have undertaken an ongoing qualitative research study, interviewing some of the leading technology marketing minds on their branding dogma.  In this blog, we'll examine and discuss findings from this project.

Buyer2Brand will strive never to be preachy in its tone, but instead present the beliefs and opinions of minds greater than my own, relate insights on the news with links to point of origin, and analyze emerging trends and best practices as asserted by sources we trust in common.

If you are a senior-level technology marketer, and would like to be interviewed, please drop me a line.