Building Brand Value From The Inside Out

I used to be sold on Gateway computers.

For years, I used to buy their top-of-the-line products, make sure I had comprehensive warranty coverage, provide positive feedback to employees whenever possible and vehemently defend the company whenever my computer-savvy friends would disparage them.

In short, I was a cash cow for Gateway.

Then began the ordeal that has been the past fourteen months. Around the first of last year, I made a fairly significant purchase of Gateway products - a big, desktop station and sleek laptop for the office and a Media Center for my wife. The Media Center purchase was critical - the snazzy, all-in-one unit was for my wife's use. It seemed perfect: easy-to-use, not a lot of parts, wireless and, best of all, you could watch tv on it while you worked.

Almost immediately, I had problems. The delivery of the desktop system was going to take a while but, somehow, no one in billing had been told that so I started receiving charge statements and demand letters for payment before the system had even arrived at my home. Every time I'd get the problem straightened out, some new third-party collection service would get in on the act and foul everything up. We straightened everything out once I had all the equipment and wrote a check to wipe out the balance (on which they continued charging interest for two months until someone in charge managed to rectify the situation).

Shortly after the snags were worked on concerning the purchase, things started to go wrong with the equipment. First, the desktop station failed on me, literally days after loading the last of my 500+ CD collection onto it. A mild set-back, I was disappointed when I was told I would have to install the new hard drive myself.

Soon after that, the Media Center started to have problems. The monitor started to flicker and the speakers made random pops and groans. A quick trip to the Gateway Country Store seemed to solve the problem, though. Gateway's service policy had come through for me before and did again this time. Their reputation, although bruised in my eyes, was still in tact.

All that was about to change.

I rue the day Gateway decided to close their retail locations. Sure, I understand why - but what most people don't know is that when the Gateway Country Stores closed, I'm convinced a "stupid" virus must have been released inside the company's CRM (customer relationship management) system. Coinciding with that was a decision made by both my laptop and the rouge Media Center that they would work together to test the limits of the lemon law in my state.

It's been nearly a year now and hardly a month goes by when my wife and I haven't made two or three phone calls to Gateway's tech support. The people are great: nice, sincere, well-meaning ... the same qualities I enjoyed in the employees at the Gateway Country Store. But it's the little things (along with my computers' continued misbehavior) that have just about bankrupt my reserve of Gateway Brand Equity.

For example:

1. How can you send a computer in for service and have it arrive back at your home, packed exactly the way you sent it, with no documentation and none of the repairs performed?



2. Why does the automatic receptionist for the tech support line require you to enter the serial number of the equipment you're calling about and then the live operator have to ask for the same serial number when he/she answers the phone?



3. Why does the company give you three or four reference numbers (e.g. invoice number, account number, serial number, incident report number) but when the tech support person looks up each number, they are unable to find a record of your last call?



4. Why do the tech support people ask for your phone number every time you call in - after you've given them the serial number on your computer and they've confirmed your account information?




5. Why don't tech support people call you back when you get disconnected, knowing that if you wind up calling tech support again, you're likely to get someone completely new and have to start all over again?

The list could go on and on, but I won't let it. See, I like the people at Gateway and I know it's not all their fault. The problem is inside. Really inside. Like inside the way they try to meet service customers' expectations and needs.

And that's my point.

If you want to build long-term brand equity, you have to remember that what you say (we call it promise making) is only part of the equation. The tough part is meeting the expectations you've set (that's the part we call promise keeping).

That means taking a closer look at every point where customers interact with your brand - from product development to customer support. And don't just look at your people and how they're trained. Look at the systems they rely on to meet customer expectations and build brand value.

If you do that, you could raise an entire herd of cash cows of your very own.

Later.

This information is (c) 2005, Brand Central Station, all rights reserved. If you are interested in receiving news and analysis directly from BCS, please log onto our website.

Internet v Government - Round 101

This is never going to get easy.

Politicians are trying to face down a signficant problem when it comes to running free and fair elections here in the USA. It's laudable - but their response is predictable and problematic.

To paraphrase the piece that appeared on AdRants today, The Federal Elections Commission is looking into what modifications need to be made to the Bipartisan Campaign Reform Act in order to make sure online advertising in support of candidates are regulated.

Much of this appears to be in response to the use of the Internet as a media to launch attack ads against opposing candidates (as reported in detail on C|Net's News.com). Nobody wants to stand up for the Internet - after all, every candidate has been the victim of an attack or two - but because there is no defense being presented, politicians have only themselves to listen to when it comes to proposing solutions.

And those solutions are, typically, ill-conceived and inadequate. Two factors that proposed remedies seem to ignore are the increasing international interest in US domestic politics and the obiqutous nature of the medium itself. Here's my point:

1. From my conversations with clients and colleagues abroad, one of the things that they don't understand is the apparent narcissism of the American public when it comes to our politics. They can't understand why Americans don't realize how important our elections are to everyone else in the world. In the words of one of my close friends from The Netherlands: "When you elect your President, you're really electing the president of the world - that's why we care."

Of course, from my point of view as one who constantly deals with cross-cultural branding and marketing/communications issues, I see this situation a little differently (and, I hope, objectively). Most Americans don't really understand the role we play in the world and how many of the hopes and dreams of people outside our country depend on our ability to succeed and manage our own business efficiently and peacefully. The political roller-coaster we've been on since the Clinton presidency has caused internal, political extremism inside the US and, more importantly, created substantial doubt in the rest of the world on our own ability to work things out.

I am much more optimistic about our future, but that's a rant for a different blog.

2. The nature of the Internet fosters international discourse, partnership and communication. That much we know. Heck, 80% of the time, I manage international business transactions through Brand Central Station from my home in Davenport, Iowa (that's in America's heartland, for those of you who are a little more geographically-challenged).

This fact may be useful for those of us who want to foster business between cultures and countries. But for the FEC and those people trying to keep a handle on how political speech is used during a Federal Election, it presents a signficant problem.

Don't believe me, look at the proliferation of off-shore, Internet gaming sites that prey on US consumers. It's worth millions (if not billions) of dollars a year. And what can the US government do to regulate it? Not much.

All it would take is for off-shore interests to start interjecting, hosting or sponsoring political attack sites focusing on US elections and the best intentions of the McCain/Feingold Act could be in jeapordy. And before you dismiss the idea that foreign interests would have better sense than to mess with a US Presidential election, check this out.

Although this went mostly unnoticed in the US press, it presents a snapshot of what could be done in a widespread and organized way - with or without advice or urging from political parties inside our own country. It's messy and maybe my concern is a bit premature, but I think it deserves to be discussed.

Let's talk.

Later.

Online Political Ads May Face Regulation

Does Your Brand Follow Your Employees Home After Work?

I like to work. A lot. In fact, I spend more time reading, looking at websites, talking to clients, etc. than I probably should. In management consultant terms, I've let my "work life" bleed over into my "home life." But it's been my choice and I enjoy both immensely.

Unfortunately, that's not the case for most people. Historically, we've been able to keep some kind of separation between the two - maybe we see different people socially than those we see at work. Maybe we have rules about what we can and can't talk about outside of the office. Maybe we hang out with our work-friends, but avoid spending time with the boss.

All of those have been successful strategies in the past, but now thanks to advanced communication, a broadening geographic scope for many businesses and an increasingly demanding and responsive consumer base, one gets the feeling that things are going to change pretty dramatically. And not necessarily for the better.

In fact, I think we've seen the first signs of significant change just in the first month and a half of 2005.

Case 1: Things best left unsaid ...
This article, found on the CNN/Fortune website, is an interesting piece on the impact blogs have had on a number of employees and their relationships with their employers. In these incidences, the employees lost their jobs for revealing information their employer thought was inappropriate.

Was the information important or vital to the business of the employer? You might be able to argue "yes" in a few cases, but not most. Was the information damaging to the employer? I think we could say "at the very least, embarrassing" in almost every case. But "damaging"? It doesn't appear so.

In fact, much of what these bloggers published to the Internet is what they might have told a few close friends over a beer after work; shared with a spouse or family member; or written into a journal or diary. But by posting it to a blog, the author is opening up these "dirty little secrets" to millions of people who don't know or respect the intent or interests of the author.

You have to wonder what people are thinking when they post that kind of information to a blog? Are they expecting to get fired? Do they think they can't get fired?

I believe the easy answer is "yes." In fact, many of these people think their right to be openly critical of their employer is a 1st Amendment Freedom guaranteed by the Bill of Rights. The problem with that, of course, is the first Amendment to the Constitution merely prevents government from intruding on your speech - it says nothing about your employer.

As a result, employees who talk bad about their boss or co-workers run the risk of getting canned. That risk goes up substantially when the talking is done in front of literally millions of people (online) and in a form that can be easily shared and sent to the employer.

Honestly, why does some of this need to be shared in a weblog to begin with? Isn't a little discretion called for here?

Clearly these employees are not thinking about the possible ramifications their "inside glimpse" might pose to the brand for which they work. Consumers aren't so good at discerning between the sardonic wit and the whistleblower when it comes to brands they may find remotely appealing or tentatively suspect. Bloggers need to keep in mind the first rule of disclosure: "Assume everything you say will be used against you."

That seems to go double for your brand.

Case 2 ... Where there's smoke, there's unemployment.
Plenty of businesses have smoke-free environments, no smoking policies, Employee Assistance programs covering smoking, etc. But, as this article from WXYZ TV/Detroit points out, smoker's addictive habits count at home as well as at work.

Under Michigan law, it looks like a practical argument can be made that these firings were legal. But looking on a broader sense, it may be that this ruling signals a signficant change in the influence employers have in the "off hours" lives of their employees.

All in the name of brand value, no doubt.

I've spoken plenty of times about the whole new level of intimacy the new marketing paradigm brings to the brand/consumer relationship. Well those rules of intimacy change in the employer/employee relationship as well.

As expectations of product performance go beyond features and benefits and start focusing on brand value, there are several things employees need to do - constantly - to maintain brand value. How smoking fits into that mix remains to be seen, but we don't doubt it will play a rule at some time, either in this Michigan case or some other time down the road.

How employees and employers figure out the new responsibilities of living the corporate brand's values at work and at home remain to be seen.

And it should be quite interesting to watch.

Later.

Once Again About the "Timesheet" Thing

I can't tell you how many times as an agency president, I used to bang on in staff meetings about the importance of documenting your time and keeping accurate timesheets. We weren't a law firm, I'd explain, but if we don't get accurate timesheets from people, there's no way we could really know what it takes to do a job and that hurt our ability to estimate jobs accurately, fairly and (most of all) profitably.

Four weeks would go by and we'd have reams of unbilled (and unbillable) WIP (work-in-process) sitting on account managers' desks. My CFO would begin to sweat uncontrollably and I'd start pacing the halls. Eventually, we'd have another staff meeting and I'd cue up another "timesheet" lecture.

Believe it or not, we actually got to be pretty good about timesheets. All I had to do was tie year-end bonuses to them and the problem was (almost) instantly solved.

Imagine my surprise then when I read about the latest lawsuit involving WPP Group's Ogilvy & Mather, the Office of National Drug Control Policy (ONDCP) and - what else - timesheets. This is the mother of all timesheet disputes. ONDCP has filed an 11-count indictment against O&M and two of their senior managers accusing them of making false billing claims.

Today's online version of Ad Age reported that experts testified on Wednesday, saying O&M's timesheets and vouchers were "sloppy" and were either incorrectly filled out or missing altogether. "There were an excessive amount of timesheets that were scribbled on ... (and) there were also uses of correction fluid and correction tape," said Wesley Mandler, an accountant hired to audit the $700 million media advertising contract and supporting documents.

The prosecution is expected to continue making their case that O&M intentionally inflated the number of hours spent on the ONDCP account in order to "close an anticipated revenue shortfall on the account."

What's that mean?

In all likelihood, it means that in order for O&M to justify the commission they were taking on media and other related expenses, they had to "pad" timesheets to generate enough hours to warrant the fee. Those of us on the inside of the business know this happens - more often than we like to admit. And, typically, it's the result of gross income generated by mark-ups and commissions that can't be directly traced back to "billable" activities and services provided by the agency.

The root cause of this fraud is the same reason timesheets are so important and why agency personnel need to understand the essential value an agency brings to the client in the first place.

Commissions and mark-ups are a historical legacy for ad agencies and other marketing companies. They existed to compensate agencies for representing the services or products of a third party to a client. In fact, in the early days of the ad agency business, agencies used to purchase ad space from magazines in advance and then re-sell the space to clients at a "gross" rate that included their profit margin. The margin was essential because the agency didn't always sell all the space and would pay for unused space with retained revenues left over from other sales efforts.

As clients have become more sophisticated, they've taken more and more of the responsibilities formerly held by agencies and moved them in-house. As a result, the traditional mark-ups and commissions on third party services (like media or printing, etc.) have become harder and harder to justify. But ad agencies and PR firms are slow to change - a hard reality in a business that drives change in their clients - and rather than re-thinking the rationale for these service fees, some firms have taken to "justifying" them by providing timesheets that match hours spent on a client's behalf with the income generated through these alternative methods.

It's a big shell game and clients know it.

When the president of a small agency tells me that all she does to price a television spot is double the quote of the production company, I know that agency doesn't have a clue what it really takes to produce the spot (or service their account, I'll bet). When the manager of a PR firm tells me they charge 24% compounded interest on overdue accounts and build it into their revenue forecasts for the year, I know they have problems that go way beyond accounts receivable aging.

If agencies kept accurate records of all the time spent by all their people during the course of the year, they could see why some clients should pay a larger commission on media purchases or higher mark-ups on outside purchases than others. Some clients need more attention, are slower to pay their bills, are inconsistent in their relationships, etc. But other clients are great pay, fair minded and easy to serve. These are usually the more profitable clients, no matter what the total revenue generated by the account.

Timesheets and accurate record keeping are essential to knowing where you stand. Courage, honesty and transparency are the keys to getting clients on board with a fair compensation program for your company.

Later.

This information is (c) 2005, Brand Central Station, all rights reserved. If you are interested in receiving news and analysis directly from BCS, please log onto our website.

The Super Bowl and self-indulgence

It's Super Bowl Sunday and the game is over. Now come days of evaluation, Monday-morning quarterbacking, tough questions and cliche answers. We'll hear all about it on the morning talk shows and entire magazines will be dedicated to what happened today.

And I'm not even talking about football.

I'm talking about where the real money gets spent. Advertising.

In fact, those of us in the advertising industry have it worse than the chronic sports fans out there. At least they had a fake college football championship to argue over and some legitimate NFL playoffs to watch in January. Those of us in the advertising industry roll right into the Super Bowl season as soon as the figures come out on holiday retail traffic.

It's positively pathetic. The first Super Bowl related news stories broke as early as November 30, 2004. And the drumbeat just keeps getting louder until the day of the big game. But why do we put so much importance on this event?

You have to understand the history of the Super Bowl to really appreciate it, I suppose. The Super Bowl is an interesting cultural phenomenon because for the first thirty or so years, it wasn't really that fun to watch. The games were generally boring and the outcomes fairly easy to predict. As a result, we had to rely on something else to keep us entertained. After all, it was cold outside and this was our last, official glimpse of the "true" national pastime until next fall.

Then Apple Computer, Ridley Scott and Chiat/Day changed it all. They introduced a new concept to us in a way that had tongues wagging for weeks. 1984 presented the Macintosh computer to us in a dramatic, arresting presentation that literally stopped conversations about the non-game going on that evening. From that point forward, the bar kept getting raised. The ads were fun to watch (none as interesting as the Apple spot, but still enjoyable) and the games remained boring.

This went on for ten to fifteen years - that's nearly a lifetime in advertising years - and was assumed (at least by our industry) to be the way things were meant to be. Then, all of a sudden, the NFL had the audacity to put teams into the Super Bowl that actually played a game worth watching. Tonight's game was one of them.

Imagine the nerve of these people. Just who do they think they are? Interrupting the flow of the ads with their petty game playing during the breaks. I just don't get it.

Truth be told, I'm glad the game is there. The ads on the Super Bowl have been pretty dreadful the last few years. This year, the hyperbole has been the worst I can remember. We've even had advertisers who have tried to gain the spotlight by not running ads in the Super Bowl (Budweiser's Janet Jackson ad comes to mind as well as the sophomoric attempt by Miller Beer to pick yet another fight with A-B).

As for the ads that ran in the game, I personally enjoyed the Ameriquest spots (but I'm a little twisted), the Budweiser Clydesdale spots and some of the Cadillac work. Most of the spots were pretty average or below average. And the spots for Go Daddy, Subway and Lays made me wince with their badness. Leonard Pinth-Garnell would have been very please. They were truly bad.

Let's get past this nonsense and on with the business of making ads.

Later.

This information is (c) 2005, Brand Central Station, all rights reserved. If you are interested in receiving news and analysis directly from BCS, please log onto our website.