Trading Places: Brand or Commodity? - Adam Kleinberg

Which are youIn the past decade two massive shifts have reshaped marketing1 For the first time we39re able to measure the effectiveness of our marketing2 Relentless financial superpressure from the turbulent economyThe result is that there has been a relentless focus on measuring ROI in marketing Unfortunately that has led to an unfortunate trendBrands are becoming commoditiesWhat are commodities They are products that have value but are completely undifferentiated Gold Oil Pork bellies Remember Eddie Murphy in Trading Places Old Mortimer was teaching him to trade commoditiesIf we all use the same data to make the same decisions about the same products we lose the differentiation that allows brands to hold a special place in the consumers mind and we miss out on the opportunity to build relationships with our customersThe truth is that not everything fits nicely into a spreadsheet Fifty percent of the things we should be doing for our brands are not predictably quantifiableToday many brands obsessed with the power of digital are solely focusing on activities they can directly tie to revenue generation Of course they should pursue activities that tie back to revenue They should make it their business to get damned good at those activities But to do so at the expense of their brand is a huge mistakeIn former PampampG Global Marketing Officer Jim Stengel39s book Grow a simple chart illustrates the increasing importance of brand value to companiesThe chart shows the quotBrand Contribution of Selected Stengel 50 Brandsquot in 2001 and 2010 What are Stengel 50 Brands They are a list of companies Jim Stengel has put together that have outgrown their competitors by a factor of 3X in the 2000sThey are the brands that bucking the trend toward commoditizationThe chart shows a consistent trend of increasing brand contribution to the overall value of companies over the past decade for these topperforming companiesAccenture went from 19 to 47FedEx went from 17 to 55IBM from 34 to 44Samsung from 12 to 42Starbucks from 26 to 57According to Stengel quotThe trend is unmistakable To me it is an openandshut case If you39re not measuring and managing against a brand ideal you39re consigning your business to the middle of the pack or the side of the roadquotToward commodizationToward the brand equivalent of thisAgain I39m not saying we don39t need to be analytical about our marketing I39m not saying we shouldn39t create programs to drive demand leads revenue and salesBut quotBusiness Intelligencequot cannot be solely a leftbrained affair Brands need to stand for something They need to deliver a great brand experience at every point of contact They need to build relationships with their customersNot because it feels good Because it39s the path to breakaway successStir never shake a spoonful of charisma a jigger of positive energy and a mind as sharp as a freshly plucked lemon and you get close to the cocktail that is Adam Kleinberg Adam is CEO and a founding partner of Traction an advertising agency and innovation consultancy in San Francisco He can be reached at adamtractioncocom Read all Adamamp8217s MediaBizBloggers commentaries at Adam Kleinberg Check us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBlogger The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries amp160amp160

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