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.

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.

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.

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.

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.