space2scale

Every company likes to think they have loyal, raving fans, but the obvious truth is that they have to be earned. Check out this article to see how Lego's customer service supports their brand.

And that’s one example of how good brand stewardship enables Lego to market cheap molded ABS plastic at a premium price.  The intellectual property is long gone and there is no one stopping you, me, or Mega Blocks from producing identical bricks and sell them cheaper.  But do you want to show up to a kids’ birthday party and announce to everyone you took the ‘low bid’ on a relatively cheap children’s toy?
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Talking about Lego, check out my friend Greg's awesome kickstarter project Never Built: Los Angeles!  They are building an 11-foot-tall Lego tower using 67,000 Legos.

Last year, for the holidays, I wrote a little holiday poem relating to lessons learned over the past year.  This year, I thought I'd share a neat little editing trick, learned years ago to let you contemplate and project the contribution you truly are to your business and ultimately to the world at large.

Grab a piece of paper and jot down the answers to these 4 questions (one short sentence each):

1.  What do you do?

2.  Why do you do what you do?  (If you answered: to earn money, try again.  If you get misty or giddy, you nailed it.)

3.  Why do you think what you do is important? (Here it is a good idea to express your life philosophy.  You may want to start your answer with:  “I believe" or "I know…”)

4.   What do you want your legacy to be?  (Here you ask what ultimate, big problem do you want to have solved?)

Clients will recognize these questions (even if amended a little bit to work on you personally) as the second step in the brand huddle – right after defining your business opportunities.

OK, got your answers?  Here’s the trick: String your answers together in the following order:

[Answer to #2] and knowing [Answer to #3] I, first name last name [Answer to #1] so/therefore/in order to [Answer to #4]

The paragraph you are about to review is not for public consumption.  It is the core of who you are.  The brand of YOU.  I am hoping that during the most reflective time of the year, this little exercise will bring you some private clarity, joy and peace…and maybe even point toward a new direction closer to your heart.    

You are the best at what you do.  Nobody in your category or line of work can claim superiority.  You're second to none.  Period.  Then why is it so @#$% hard to grow, let alone scale?  Here's why:

Unless your customers are elves fresh off the permafrost, being 'the best' is barely the cost of entry.  Nothing more.

To get noticed, break through and ultimately reach scale, you have to (a) marry being what you are best at with a unique and relevant brand promise – one that either trumps your category or creates a new category altogether; and (b) patiently, yet unflinchingly, deliver on that brand promise, day in and year out.  Only if you do that – and I can help you do just that – will you get a shot at building something great.

The caveat?  It takes time.  Nowhere is it more true than in branding that people overestimate what can be done in one year...only to grossly underestimate what can be done in ten.  The upside?  It makes the journey a lot of fun!

Need an example?  Changing the face of men's health globally can be as simple as growing a moustache if you can muster the persistence, patience and guts to take that stand:

Think it's worth a shot?

Research shows that the United States is the most philanthropic country in the world, by far.  The community chest, that uniquely American drive to share one’s wealth with other less fortunate community members – so all of us get the chance to live healthy and productive lives – is the root cause of our success.  More than that, it is our brand!  Think Carnegie, Rockefeller, Ford, Gates, Kroc, etc.  Now think of a German philanthropist.  I can't either.

During this election season however, the philanthropic differentiator of Brand USA lost some of its luster for me.  Why?  It occurred to me that the ultra affluent who lobby forcefully for lower taxes should, by definition, be our most philanthropic individuals and families – and the torch bearers of our giving culture.  I am talking, of course, about billionaires supporting the republican ticket.**

From what I can tell however, they are not.

Here’s how I came to this conclusion:  I simply compared a list of the election's biggest republican billionaire supporters with the list of billionaires who have signed the Giving Pledge http://givingpledge.org/

Apart from Harold Simmons and Julian Robertson, there is no further overlap between taxation averse billionaires supporting the Romney ticket and philanthropic billionaires joining The Giving Pledge – a campaign thus far joined by 81 of the 400 richest Americans, pledging to give 50% or more of their wealth to charity during their lifetime.

Now I’m no statistician, but when in a total population of just 400 people (The Forbes 400) a group of about 20% (81 people) commits publicly to meaningful philanthropy; and a separate group of about 7% (29 people) spends well over $200MM this election to limit their tax burden; and when only one half of one percent (just 2 out of 400 people) belong to both groups, i.e. committed philanthropists who also support the republican ticket, then the “lower taxes = more philanthropy” argument rings mighty hollow.

Of course, you may do with your money as you please.  But from a brand perspective, this looks really, really bad.

So, my suggestion to the other 27 billionaires bankrolling the republican campaign (that means you, Messrs. Adelson, Rowling and Koch) is to join Simmons and Robertson, put your money where our brand is and publicly align your wealth with it.  And the easiest way to do this is by joining the Giving Pledge, for starters.

**Disclaimer:  I have no desire to enter into a political discussion regarding the merits of republican, democratic, libertarian, green or other political ideologies.  Heck, I don’t know where I stand most of the time given that I’ve embraced and rejected notions of all.  Just pointing out the misalignment of Brand USA with respect to philanthropy, and suggesting a remedy that will restore its luster.  Who knows, refilling the community chest from all sides of the political spectrum should prove to be a catalyst for a faster recovery, irrespective of who’s running the country. 

There are three little words that virtually guarantee to increase your customer acquisition costs, erode customer loyalty and devalue your brand:

NEW CUSTOMERS ONLY

A “New Customers Only” promotion tells your existing customers that you value them less than people who have not yet given you their business.  It tells your existing customers that they are being underserved, overcharged – or both.  And it encourages your customers to look for a better deal elsewhere.  In short, a “New Customers Only” promotion punishes loyalty.

All of this comes at an enormous expense.  “New Customers Only” promotions reduce your margins, increase your customer service costs, limit your spending to actually differentiate your product/service and ultimately result in the (further) commoditization of your value proposition.

So why do these promotions exist?  They work in the short term.  But in all reality, they are an addiction dating back to the middle of the last century – the high point of mass marketing effectiveness.  Ever since then it has simply been easier and quicker to “buy” new customers than it is to delight existing customers to the degree that they would become and remain loyal -- that is, turn down a better price to continue doing business with you.  Absent that, it’s not loyalty, it's just repeat business.

Unfortunately, in our increasingly transparent digital world, buying customers with the promotion-du-jour is losing its economic attractiveness faster than you can optimize click throughs.

NEW CUSTOMERS EXCLUDED!

My two cents?  Stop the new customer acquisition wars that alienate your good customers, eat your margins and commoditize your business.  Instead, run "New Customers Excluded" promotions.  That is, deliberately look for ways to reward the customers you do have...over and above the customers you don’t.  Do that well, and your existing customers actually become loyal and rave about your business to the new customers you are currently trying to buy.  The best part?  In this hyper-connected world, your loyal customers will do it right away...and for free!

As summer break is upon us, and it is raining report cards all over the land, many of you are talking to your kids about the need for spectacular grades and notable extracurricular activities to attain that elusive goal of a brand name college education.

But what about Stanford’s challenge?  Every year admissions is tasked with putting together an exciting, diverse and ambitious student body, yet all who apply have one thing in common:  Spectacular grades and notable extracurricular activities.

So, who makes the cut?  My daughter excelled in art and wanted to attend a good school to hone her craft.  Among fierce competition, she managed to get into her three top choices, with generous scholarship offers from all.  She chose RISD, the Rhode Island School of Design – arguably the best art school in the world.  Did she have better grades than students who were rejected.  No.  Was her skill level so outstanding that she was a shoo-in?  Not necessarily.  Did she position herself to remarkably stand out from other applicants?  Absolutely.

Employing the same processes I use with my clients we spent essentially a day sorting through her many interests to identify a passion for animal justice.  We then leveraged that by putting together a small but highly focused portfolio around that theme.  In fact, we deliberately eliminated most of her figure drawings, her huge collection of Manga, her portraits (including the one on this page…) and trivialized all kinds of other notable but undifferentiating extracurricular activities like her service at the Huntington Library and Gardens.  If you have worked with me, you know how I do this.

Now there isn’t a college counselor on the planet that will tell your son or daughter: “here is how you leverage your passion for just that one thing (animal justice, skin graft science, crop dusting, whatever…)” because they too are stuck in bland, undifferentiated advice by virtue of the sheer number of students they attempt to serve…and because branding and positioning is work, focused one-on-one work, to do it right.

But I assure you, top-tier colleges are looking for precisely that kind of differentiation...and the rewards of securing for your child said top-tier education cannot be overstated.  So as you look at your child’s academic potential, also develop your child’s brand potential as a unique and remarkable contribution to the incoming freshmen class…and make it easy for Stanford (Harvard, CalTech, Yale, Prineton, RISD, etc.) to say yes.