Tony Hsieh Talk on Brand Building

This is an excellent talk by Tony Hsieh at Stanford Business School from 2010 which discusses Zappos’ unique approach to marketing and branding.

Key Takeaways from the talk:
-If you visit Las Vegas, Zappos will pick you up from the airport, give you a tour of their headquarters, and drop you off at your hotel afterwards.
-Hsieh learned at Link Exchange that if you hire the wrong people, it can lead to a very poor company culture.
-The goal was to build a brand around providing the very best customer service and customer experience, which is not just limited to shoes.
-Zappos’ philosophy was to take the money that would have been spent on advertising and put it into customer service so the customers do the marketing through word of mouth.
-The number one driver of growth has been repeat customers and word of mouth.
-They focus on how to “Wow” customers with things like surprise overnight delivery.
-Zappos offers a 365 day return policy.
-Zappos puts their phone number on the top of every page of their website.
-The telephone is one of the best branding devices because you have the customers undivided attention for several minutes.
-Zappos doesn’t up sell on the phone and doesn’t use call scripts.
-They don’t try to get the customer off the phone as quickly as possible. The longest customer call was over 8 hours.
-They found that almost every customer calls at least once during their lifetime.
-Company culture is the number one priority of the company.
-Every employee goes through call center training and is on the phone for two weeks.
-50% of employee performance reviews is based on company culture.
-They are willing to hire or fire people based on their ten core values.
-They won’t hire someone who didn’t treat the shuttle driver well.
-Zappos has a monthly newsletter where employees can ask any question.
-Companies from Good to Great have a higher purpose than making money.
-What are you so passionate about that you would choose to do it even if you knew you wouldn’t make any money for 10 years? Do that.

Context is Everything: The Power of Your Tagline Depends Largely on the Surrounding Wordscape

The following article is a guest post by Jim Morris, aka Tagline Jim.

Context is everything.

The larger point I’m about to argue for applies to communication of all sorts, but, since I write taglines for a living, I’m going to make it in relation to taglines. Let me start out by saying . . .

I disdain one-word taglines. I have long contended that such taglines aren’t capable of expressing a whole thought about a brand. The one-word tagline is an intellectually lazy copout for brands that don’t have the courage or discipline to make a fully formed statement relating to their brand. Or it is the result of the brand being dictated to by designers who prefer a one-word taglines because it’s a cleaner design element to work with, never mind what it means or fails to mean.

Consider:

HP
Invent.

It seems like HP wants to stake some claim to invention or creativity or innovation. Or something. But what? What claim, about what, exactly? A tagline doesn’t necessarily need to be clear or precise or comprehensive. In fact, I would argue that it’s better if the line isn’t any of these things. But it does need to say or convey something, to allude in some interesting way to the brand’s differessence. Invent is so broad and vague as to render it meaningless as a tagline.

I have identified 15 national/global brands that have hung their brand hat on one word or another as their tagline over the past couple of decades.

Acura. Advance.
Ally. Straightforward.
Diners Club. Belong.
EDS. Solved.
Hankook Tires. Driven.
HP. Invent.
Monsanto. Imagine.
Nissan. Driven.
United. Rising.
Coca Cola. Enjoy.
Hyundai. Win.
Xfinity. More.
Siemens. Answers.
Power Bar. Push.
Logitec. Enjoy.

No doubt there are others, along with who knows how many regional and local brands that have taken this same ill-advised path.

Two additional thoughts about one-word taglines:

My own brand’s tagline is Long Story Short. In order to tell any story in one word, it would need to be some special kind of word. I’m not saying I never will, but, so far, I’ve never written a one-word tagline (other than when more than one word is crammed together to form a new compound word.)

One of my favorite exhortations, when a client is considering a tagline, is this . . .

Read between the words.

Between the words is where you’ll find the value in many good taglines. Doing this with a one-word tagline is quite a trick. Should I exhort the client to read between the letters?

I could go on about the myriad issues with these taglines, but I must move on to the larger point.

So, if I disdain one-word taglines so much, why is there one for which I have the highest admiration?

(Finally, we get to my point.)

The answer is context. Cultural/historical/advertising/branding context. Or, if you prefer, we could characterize it as the intellectual/emotional/linguistic environment in which the tagline lives. This environment or context changes constantly and the effectiveness of a tagline depends largely on what environment—or context—it is surrounded by.

What is this singular exception that escapes my disdain? It is IBM’s ancient, iconic slogan, Think.

taglines

Of course, many of you are likely unaware of this tagline, because it held sway in the 1920’s, 30’s and into the 40’s, at least. It was created by IBM founder Thomas J. Watson. (I assume the IBM folks named their line of notebook computers, “ThinkPad”, as a homage to the slogan.)

Back in those particular olden days, it’s my guess there weren’t a whole lot of one-word taglines out there. Probably not any. It was, at the time, a bold, assumptive, leaderly, radical slogan by dint of its one-wordness. That’s a big reason why it gained so much notice globally and became such an icon. For a huge brand like IBM to brandish a one-word tagline was, in the context of that time, an act of courage.

And that word, Think, took on many layers of meaning pertaining to the IBM brand, largely because so much attention was paid to it over many years, which, in turn, was because it was so unique. It was sort of the Just Do It of its time. In a world of no one-word taglines, the first one is powerful and groundbreaking.

It was, in a sense, a demonstration of its own exhortation, and this made it all the more powerful.

Context.

That was then. This is now (last time I checked). These days, if your brand wants to stake out some tagline territory similar to IBM’s in the 20’s, you need, (in addition to a monster media budget), at least two words—one complete thought.

Like Apple’s Think Different, or AT&T’s Rethink Possible.

In today’s context, due to many factors including “word inflation” and the exampledness of one-word taglines, such lines are almost certainly not going to communicate your brand’s differessence or evoke much of a response or emotion. The only way I think a one-word tagline can be effective these days is if the word itself is unusual, provocative, exotic, intriguing. Which none of the 15 “lines” cited above are.

Here are two additional hints that one-word taglines, in today’s context, are not good. First, you won’t find one (other than IBM’s) on anyone’s list of great taglines. Second, what used to be called a “slogan” is now referred to in the industry as a “tagline.” The former implied a phrase or sentence, not one word. The latter makes that requirement explicit. It’s “tagline”, not tagword.”

Context helps determine the value and impact of all taglines, not just the one-word ones. The more that brands resort to familiar, frequently used tagline structures, terms and phrase, the less power such taglines will have. Tagline fads and trends are one dimension of context that very clearly and directly undermine the effectiveness of the taglines that fall victim to such fads and trends, of which the one-word tagline is but one.

Jim Morris, AKA Tagline Jim, is a freelance advertising copywriter who specializes in creating powerful, evocative taglines. He can be reached at jim@taglinejim.com.

Where Starbucks' Marketing Went Wrong

onward bookIn Howard Schultz’s book Onward, he talks about how Starbucks rebounded from troubling times that included hundreds of store closures and thousands of layoffs, to get back on track to growth and strong profits. Schultz who started out in marketing at Starbucks before buying the company from the original owners and shifting the business strategy to serving beverages, talks a lot about branding and customer experience in the book. Despite his emphasis of maintaining a strong brand however, the never ending expectations of continued growth and poor marketing decisions have led to many mistakes that have hurt the strength of the Starbucks brand.

Automatic Espresso Machines

To increase efficiency and reduce customer wait time, Starbucks switched to automatic espresso machines that resulted in a loss of “romance and theater” that was originally envisioned. Schultz helped to restore the experience by making the process more manual, so that baristas could provide more of a performance for customers.

Breakfast Sandwiches

Schultz was not a fan of the introduction of breakfast sandwiches and was animate about getting breakfast sandwiches out of Starbucks. He talked about the smell of burnt cheese overwhelming the aroma of coffee that killed the brand story of an authentic European coffeehouse. Schultz was able to get rid of breakfast sandwiches temporarily, but decided to bring them back to increase sales per transaction and after the cheese was adjusted.

Licensing Stores
Schultz emphasizes the pressure Starbucks received from Wall Street to continue to grow and this probably led to the licensing of Starbucks as mini-Starbucks in grocery stores. Schultz explains that they decided to not franchise Starbucks stores to maintain consistent quality, but Starbucks’ stores within a store are not much better. Licensed stores are staffed by the licensee’s employees, who often provide substandard service that leads to a customer experience that is inconsistent with real Starbucks stores.

No National Advertising

Traditionally, Starbucks has stayed away from national advertising through major media. Strong brand awareness, word of mouth, and the addictive nature of coffee helped Starbucks get away with not advertising as much as other major brands for several decades. However, their lack of advertising hurt Starbuck’s ability to communicate important differentiators. For example Schultz talks about how Starbucks stresses using only high quality Arabica beans rather than the inferior Robusta beans, however many customers who didn’t know this complained of a burnt taste. Schultz also talks a lot about social responsibility such as providing healthcare for all employees and buying fair trade coffee, but a lot of customers are oblivious to these efforts. Schultz began to change his thinking about advertising and hired BBDO, which has produced some effective national ad campaigns.

Instant Coffee
Schulz talks about how there was great resistance to the idea of instant coffee over concerns that it would hurt the high quality and premium positioning of the Starbucks brand. Despite Schultz’s desire to differentiate Starbucks Via from instant coffee and Starbucks attempts to create a new product category, customers still perceive it as instant coffee.

Where Starbucks’ Marketing Went Right

My Starbucks Idea

My Starbucks Idea allows people to submit their suggestions to Starbucks and ideas are voted on by the community. Listening to customers through the My Starbucks Idea community has led to helpful insights and some ideas that were implemented to improve the customer experience.

A Concise Guide For Effective Branding: Branding Basics for Small Business

Branding Basics for Small Business by Maria Ross is a really good book on the important concepts of branding and will probably not get as much attention as it deserves because the title sounds like a text book. This book provides a good guide that outlines exactly how a small business can develop a strong brand. The ideas are also applicable to larger organizations and this is a good refresher for marketing professionals to remind them about what makes a strong brand. Ross presents a lot of great examples and case studies such as Honest Tea and Dry Soda in the “Brand at Work” features.

Here are some ideas that I really liked from the book:

Why Does Your Company Exist?

Part of creating a strong brand is understanding why your company exists in the first place. Besides just making money, many successful companies have a strong mission that drives what they do on a day-to-day basis and provides employees with a purpose for coming to work. Maria suggests Marty Neumeier’s advice to ‘Write the obituary of your business in 25 years and outline what you did that was great and why the world is a better place because your company existed.’ For example, Virgin Airlines exists to “make flying fun again” and this provides a guide for everything that they do.

Make Your Brand Simple

Maria writes “If you can’t boil your single greatest asset down to one thing no one else can say, you need to put more thought into your positioning, your product mix, or the audience you serve.” Unfortunately, many brands are too complicated and can’t be boiled down to one idea. For example, what is a Chevy? Maria asks “What is the one thing that sets you apart”. If you can identify that one thing, it can really set you apart from a crowd of similar offerings.

Integrate Brand Into Everything

Maria writes “A brand is exactly two things: It’s the promise your offering makes to people, and the cloths that promise is dressed in.” To deliver on your brand promise, your branding can not stop in your marketing department. Maria suggests that marketing work together with HR so that the company attracta employees that “truly live that brand inside and out”. I think that a rude employee cancels out the very best advertising and not delivering on the promise of your marketing messages will result in a disappointed ex-customer.

There are many more great marketing quotes from the book that I may tweet at some point, but in the meantime checkout the book Branding Basics for Small Business.

The McDonaldization of Starbucks

starbucks mcdonaldsI once jokingly made the comment, “Starbucks is going to become the McDonald’s of coffee”. I don’t think that is too far from the truth now based on recent events. Starbucks recently started promoting “value meals”, a breakfast sandwich and a small latte for $3.95. They also started selling the instant coffee packets called Via for 3 for about $3. This may be part of a strategy to grow sales in response to the economic recession, but at what point does it become commoditization of the brand? You can now get a cup of coffee for less than a dollar, if you buy the Via instant coffee and mix it yourself. Has Starbucks lost sight of their vision to bring the experience of a Italian coffee house to the masses, and sacrificed it to maximize sales? I would argue that Starbucks has been on this path for some time, ever since they replaced hand ground coffee with automatic espresso machines and started with the drive-throughs which made their service more convenient but took away from the experience. That was the turning point where it because less about the Star and more about Bucks. However when you focus too strongly on the bottom line and not enough on customer experience, the brand starts to die and you start looking more like a commodity.

Has Starbucks become a value brand like a WalMart or a McDonald’s? This may not be such a bad strategy when you consider the millions of Americans who have become accustomed (or addicted) to picking up a cup of coffee at the drive through on the way to work. Having a prepared cup of coffee every morning has become more of a need than a want. Starbucks will probably have tons of customers who need their services for many years to come. But, when you sacrifice the quality associated with your brand by becoming ubiquitous or selling your product in a powdered form, you open yourself up to be easily substituted. Is Starbucks that much better than the corner espresso stand where the barista still knows your name? If a Starbucks clone, such as a Caribou Coffee or a Tully’s is convenient, will people still go the extra mile to have Starbucks?  One of the major problems with a value focus, rather than a brand focus, is that $4 dollar coffee is rarely a value. Now it’s McDonald’s that is trying to be different from Starbucks with a recent billboard that read “4 Bucks is Dumb”.

Photo by Robert Couse Baker

How Apple is Outmaneuvering PCs in Brand Warfare

Apple’s Mac vs PC ads seems to be moving the needle on perceptions of the PC as evidenced by their significant growth in market share. 

An article in Computer World states “According to Gartner Inc.’s preliminary estimates, Apple sold 1.64 million machines during the period, a 29% increase year-to-year over the same period in 2007, to put it in third place behind Dell Inc. and Hewlett-Packard Co. For the quarter, Apple accounted for 9.5% of all the machines sold in the U.S, up from 8.1% a year ago and 8.5% last quarter.” 

Let’s look at how Apple has been able to execute a strategy that effectively attacks the competition. 

Firstly, Apple actually attacks the category they are in, since an Apple computer is technically a personal computer. Apple has positioned themselves as being so different than other PCs that they should be in their own separate category. When Apple attacks their competition, they attack the whole category which is quite rare in marketing. Usually we see the smaller brands singling out the leader and attacking them, but not one brand positioning themselves against the whole category. I can only think of one other example of this, in which 7-Up successfully differentiated themselves against the other carbonated soft drinks by proclaiming themselves the “Uncola”. Additionally, Apple attacks the PC in a humorous way, often making fun of the PC’s vulnerabilities to viruses, the difficulty of use, and so on. The audience views these ads very favorably, while they are associating a lot of negative attributes to the public perception of PCs. Recently when Microsoft tried to counter the attacks by showing various people saying they are a PC, Apple responded by directly attacking Microsoft’s disappointing Vista.  

This is classic brand warfare and Apple’s superior marketing strategy is key to its growth in sales. While it would be difficult to duplicate the campaign’s success, there are valuable lessons that marketers can learn from Apple’s success. Instead of directly attacking a specific brand, attack whole category to differentiate your brand from the rest of the category. When attacking others, do so in a light-hearted way, as it can preserve a favorable image while still undermining your competition. But when a competitor fires a counter shot, respond immediately with equal or greater force. 

Image Source Joi

Warner Bros Disappoints Millions of Customers

In a move that is not getting nearly enough bad publicity, Warner Brothers completely betrayed fans of the Harry Potter movie series. The sixth installment of one of the largest movie franchise of all time was delayed from its original theater release in November until July of 2009, a delay of 8 months! The problem I have with the move is that days before the announcement, they released the first teaser trailer of the movie which gave a November release date. The reasons given by WB for the delay, according to the podcast Mugglecast, are due to the unexpected success of The Dark Knight and the writers strike. Ultimately it came down to putting profits in front of customers.

While this move will not likely hurt ticket sales, it reflects badly on Warner Brothers. There are even passionate fans who have started a movement to boycott the films. Over 43,000 people have signed a petition at Petitionspot.com to have the release date moved back to November. This is not the first time Warner Brothers has made questionable marketing decisions. They have been known to attack the very fansites of their most passionate customers who are promoting their movies. To not keep their promise to customers is one of the worst marketing crimes a company can commit. Warner Bros. is certainly not a company that puts customers first and deserves a whole lot of rotten tomatoes.

How to Kill a Brand: A Case Study on Starbucks

Be Ubiquitious

Once a brand becomes too ubiquitious it loses a lot of its value. Starbucks density has been well chronicled in the media and even the Simpsons. The tradeoff with being everywhere is the loss of scarcity. A premium brand can not be everywhere because it becomes ordinary. That’s when it becomes a commodity and is no longer worth the premium price. The thing that made Starbucks different was the experience, but that is exactly what they sacrificed when they tried to multiply it a thousand times. You can not have the authentic European coffee house experience when you build a thousand cookie cutter stores.

Hire a Villian CEO

Howard Shultz just became one of the most hated public figures in the city of Seattle. Shultz bought his home town’s NBA team and then sold it to investors from Oklahoma when the city would not make renovations he wanted to the team’s arena. Now the Sonics who have been in Seattle for 41 years are moving to Oklahoma and thousands of passionate fans have been turned into brand terroists, which is the opposite of brand evangelists. Not what you want in the city where Starbucks is headquartered.

Listen to the Stock Analysts

If Starbucks would have listened to their customers rather than the stock analysts they wouldn’t have sacrificed the European coffee house experience to keep up with growth forecasts. They added greasy breakfast sandwiches, crowded the “third space” with coffee machines and merchandise, and rushed to open new stores to grow profits, while sacrificing the level of service.

Can the Starbucks brand be saved? Closing stores is a good start. Closing Starbucks in grocery stores that are not even staffed by Starbucks employees would be another good move. If Starbucks is really serious about the dilution of the brand they should close drive-throughs. My prediction is that Starbucks will survive, but their price premium strategy will become increasingly ineffective and they will be forced to evolve into the McDonalds of coffee.

Cool Blog Branding


Even though blogs are a great way to communicate with your customers and gain an online presence, most companies still don’t have a blog. Executives may be afraid that they can be criticized internally for not playing it safe or they may be resistant to changing their marketing practices that have always worked in the past.

One good example of a company that is not afraid to experiment is Dry Soda. Dry Soda’s brand strategy is to stay true to the lifestyle of their core customers. Their core customer shops at Target, buys groceries at Whole Foods and uses a Mac. In other words, they care about design and what is cool. So someone at Dry Soda had the brilliant idea to create a blog to highlight products that the marketing team felt were cool and represented the lifestyle of their customers. Dry Recommends is an example of marketing that adds value rather than random interrupting people. As a result, Dry Soda gains credibility because visitors view them as experts on what is cool and associate them with being cool.