The future is Brand – It’s a Trust thing.

Posted on November 16, 2011

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Having finished another product strategy meeting with a large IT software company I am spurred to reflect on the core underlying value proposition that much of the debate was blindly flailing around and not quiet pinning down.

Brand – The organisational or product Identity, the interaction with and use benefit off which in the eyes of the consumer fosters Trust. Some earlier thoughts on Trust – Trust in Digital Life Theme for 2011.

Brand and market Trust are floating to the top of the corporate asset pile, as challenging intangible assets off balance sheet. The deployment of which is going see the rise or fall of many organisations in the IT marketplace as they head inextricably closer to their individual event horizon with Cloud Computing.

IT ecosystem engaged Companies have an opportunity today, even the big behemoths that have not shown the agility of their more nimble SME counterparts should be looking to Cloud Computing as a way of breaking the mould and capitalising on their Brand value.

For ISV (Independent Software Vendor) product companies the focus tends to be on how to engage services and for service companies it is how they can become the next generation CSV’s (Cloud Software Vendors).

This is not without foundation as many traditional IT software products with niche market dominance are being challenged by new start-ups ‘Born in the Cloud’. The only warning these traditional companies get is when their annual support and maintenance contracts don’t get renewed! Then it is too late.

The traditional Trust that companies have developed with their customers is going through transition with Cloud computing. Some customers simply do not see their traditional suppliers as Cloud Companies and therefore are not even engaging them in a cloud discussion. As such they will be out shopping with new Cloud ready organisations. Others swill allow the traditional trust to drive new Cloud offering from these vendors, but they will be less tolerant of failure. As such new world Cloud Trust has to be seen as re-investment for organisations and the starting point is TALK TO YOUR CUSTOMERS about your plans. DO NOT cut and paste Cloud across your websites and marketing material, the market awareness is developing fast as to what real Cloud means, this is a short term win with a high risk factor medium to long term on your Brand Credibility.

History has some interesting lessons to share….

Coca-Cola is always heralded as THE Uber Global brand. I would dispute this. It is a one trick pony that has established singular dominance in a niche fizzy drinks sector. Virgin on the other hand is the antithesis, having shown a truly mercurial ability to transmute its consumer loyalties across multiple vertical market sectors the speed of which the success has come can only come down to Brand awareness.

Brand value and consumer trust in a brand does not come easy or cheap. There are few short-cuts to replace the years of investment developing product quality and or service delivery, establishing a track record of consistently exceeding the consumers’ expectation. The sadness is this can all be thrown away in an instant.

The king of the Brand Crash was and he still holds the crown I would suspect – Gerald Irving Ratner. He administered the preverbal Head Shot to his Ratner Brand of Jewellery stores with the truth!

The £500m question was "How can you sell this for such a low price?" The Ratner answers:

· "because it’s total crap."

· "cheaper than an M&S prawn sandwich but probably wouldn’t last as long."

Over £500m was wiped off The Ratner Groups value almost overnight.

What was this saying? Apart from a suicidal honest Chairman, it was demonstrating how the Ratner Brand had the confidence of its market despite the reality of its product’s.

Then we have what I call the identity egotists’. New Chairman or CEO’s who come into organisations and feel obliged to apply their ‘mark’ on the company. What better way (or not) to do this but to re-brand!

Failures abound across both the private and public sectors include:

· UK Royal Mail – Consignia. Who in their right mind throws out a Royal association with a brand that is simplicity in declaring purpose as mail delivery? The national outcry and pride in the Royal Mail brand was instrumental in returning this to order.

· British Airways – The removal of the National Flag from the tail of their planes and replacing it with obscure art. Again did anyone thing how symbolic the National Flag was to the very visual identity of this airline? It too Richard Branson declaration to adopt the flag instead on Virgin Planes for BA to re-adopt the flag.

Less disastrous brand assassinations include

· Scottish Telecom > THUS. Despite the up swell of customer objections, THUS remains, and has resigned the company to a Global Nomad orphaned from the international credibility of the Scottish Brand.

Read on for the Top 10 Brand disasters of 2010 (yes just in one year!)

· BP – Losses $20billion. Largely due to its handling of the oil disaster.

· Dell – Losses $7billion. Illegal market activities with Intel.

· Goldman Sachs – Losses $6Billion. Compensation practices and questionable trading activities.

· Sony – Losses $5Billion. Lost its leading edge in video game market to Microsoft & Nintendo.

· Adobe – Loses $3billion. Lack of agility in response to challenges to its Flash technology.

Etc…..

The main culprits here are the Brand and marketing agencies who on the face of the above are looking no further than their own betterment. But then I have never known such a fickle industry that ebb’s and flows with the prevailing mood. Or maybe that is what they are meant to do and we as business leaders should be demonstrating clarity by saying NO and not treating them as the definitive on our brands.

After a brand dies, what remain are a name and the memories in consumers’ minds, and in many case I suspect a somewhat shocked group of shareholders!

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