Brand Autopsy

Music, Margins, Motives, and Mochas

The July cover story in Fast Company on Starbucks attempt to transform the retail music industry got this former Starbucks marketer thinking …

The article focuses on Starbucks recently implemented new-concept music store where a customer can handcraft a personalized music CD while a Barista handcrafts their grande, non-fat, no foam vanilla latte. Starting with a pilot store in Santa Monica, Starbucks has plans to roll out fully-integrated CD burning café-music stores beginning in August with ten stores in Seattle and a few thereafter in Austin.

The article goes on to reference Theodore Levitt’s “Marketing Myopia” assertion that companies should not narrowly define the business they are in and how Starbucks is clearly not limiting their business to the coffee business, but rather to a lifestyle of comfort, affluence, and convenience.

The crux of the feature story centers around this quote, “This push into music is the start of a daring effort to reinvent one of the world’s best-known brands.”

Having worked for Starbucks from 1994 to 2003, I read this Fast Company article with a somewhat skeptical insider’s eye and left with questions related to music, margins, motives, and mochas.

Why does Starbucks need reinventing?
Same store sales have been in double-digits for nearly two years. Year-to-date, revenue is growing at a robust 28.8%. Starbucks stock is trading at an all-time high. The company has upped its earnings projection for 2004. The brand strength has never been stronger having received accolades and recognition from across the globe.

Are those symptoms of a company that needs reinventing? I think not.

True … Starbucks success could come to a grinding halt. However, given the business performance and brand performance since going public in 1992, Starbucks is well positioned to milk future success for years on end without having to reinvent itself through transformative change.

Will burning music CDs financially reinvent the company?
Profit margins in the espresso business are HUGE!!! Huge as in up to 95% margins. Profit margins in the downloaded music are SLIM!!! Slim as in the wholesale costs for an individual song range from 65 cents to 79 cents and the going download rate for a single tune is around $1 dollar.

Given the slim margins in downloading music, I have my doubts that it’ll financially reinvent Starbucks. I’ll take the margins in mochas over the margins in music any day.

Can Starbucks reinvent itself by financially exploiting a technology adjacency?
Starbucks has garnered tremendous media attention for their wi-fi hot spots. Nearly every article that mentions wi-fi also mentions Starbucks. But, how has wi-fi financially impacted the business at Starbucks? To my knowledge, Starbucks has not released numbers detailing the financial impact wi-fi has had on driving top-line sales.

From my unsubstantiated research, I believe Starbucks has increased their “road warrior” business traveler customer base through wi-fi. Most of the users I’ve seen are business types whose companies pay for the spendy service.

My insider knowledge does know Starbucks benefited greatly from the wi-fi installations as it significantly upgraded their back-of-house technology. Through the wi-fi connection, Starbucks locations now have a two-way high-speed network connection with headquarters. Better yet, all this enhanced technology came at virtually no out-of-pocket expense from Starbucks.

Free wi-fi is fast becoming a cost of doing business for coffeehouses and other "third place" community gathering spots. In Austin, every other coffeehouse, besides Starbucks, offers free wi-fi to their customers. For coffeehouses, there seems to be very little money to be made in wi-fi hot spots. Sure, a customer may linger longer but lingering doesn’t always translate into incremental sales.

Will customers embrace burning CDs at Starbucks and not at home?
I have not used the CD-burning system at the one Starbucks café-music location. However, I’m hard-pressed to believe the technology interface in the download kiosk is easier to use than standard CD read/write technology readily available and used today on a home computer.

The learning curve to download music and burn to a CD with a home computer is not that steep. Because it is so easy to make a CD at home, I struggle to believe that Starbucks can make it any easier for customers.

Then again, making coffee at home is ultra-easy and Starbucks has seemingly made it easier, more convenient, and tastier for customers. But that’s coffee and Starbucks has been in the coffee business since 1971, not the music business.

If Starbucks is busy doing music and entertainment, who is busy doing coffee?
Label me old-school, but with each move Starbucks makes into the entertainment and technology area, the farther they deviate from coffee.

I firmly believe a company “jumps the brand” when they promote their brand over the category. Starbucks used to be about promoting the coffee category. They have and are still transforming the coffee category. But with each step into music and entertainment, Starbucks seems to be more about promoting the Starbucks branded lifestyle experience than promoting the coffee category.

So, if Starbucks is busy doing music and entertainment, who is busy doing coffee? Peets.

Am I totally against Starbucks entering the music and entertainment business?
No, not at all. I fully support Starbucks enhancing the coffee experience by offering music and entertainment options. However, I am not going to fall victim to the thinking that burning a music CD in Starbucks is a transformative tectonic-plate shift in reinventing the Starbucks brand.

Instead, I see Starbucks offering entertainment options as an enhancement to the Starbucks experience and not as a reinvention of the Starbucks brand.

Whole Foods Market in the Media

June has been a busy month for Whole Foods Market. Besides hitting an all-time high stock price, three major articles have been published profiling different aspects of what makes Whole Foods Market remarkable.

These articles are great examples of how a brand with some positive juju can effectively use PR to tell its story.

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New York Times Sunday Magazine (June 6)
focuses on the business practices/philosophies of WFM
[subscription required]

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Fast Company (July issue)
profiles the unique management style of WFM
[subscription required]

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Wall Street Journal (Wednesday, June 23)
dissects WFM's libertarian influenced health-care plan
[click below to read]

Brand Loyalty Matrimony

All this chatter on lovemarks, loyalty, and brands reminds me of a post Williams+Moore did as guest hosts on the FC Now blog back in December. We titled the post Customer Loyalty Matrimony and we asked these two questions:

Is there a brand you feel so strongly about, from a value relationship and an emotional relationship, you would declare your unconditional loyalty to?

Is there a brand you would marry?

I’ve tweaked our original post slightly to better reflect loyalty to a brand and not to a company. Read below and let us know if there is a brand you would marry. And if so, what “pet name” would you give the brand name you marry?

Brand Loyalty Matrimony Ceremony

We are gathered here today to unite this customer, {insert Customer name}, with this brand, {insert Brand name}, in the bonds of a true reciprocal relationship known as brand loyalty matrimony.

If any competing brand or any customer evangelist can show just cause why these two should not be joined, then let them speak now or forever lose the business opportunity.

{Customer name}, will you take this brand as your partner to engage in commerce with in the holy estate of brand loyalty matrimony? Will you evangelize her, respect her, provide customer feedback to her in good experiences and in bad experiences; forsaking all others, be true to her as long as you both shall live? (I will.)

{Brand name}, will you take this customer as your partner to engage in commerce with in the holy estate of brand loyalty matrimony? Will you respect her, deliver upon all promises to her, be truthful to her and reward her with the highest quality goods or services and the best customer service in good economic times and in bad economic times as long as you both shall live? (I will.)

Please join hands and repeat after me (customer first).

I, {Customer name}, take {Brand name},as my loyal brand of choice to buy from and to evangelize for from this day forward until bankruptcy do us part.

I, {Brand name}, take {Customer name}, as a loyal customer to help them actualize their aspirations and to deliver the greatest value to from this day forward until bankruptcy do us part.

By the authority vested in me from the writings of Kevin Roberts, I pronounce this consumer and this brand to be loyal to one another.

You may now kiss competitors good-bye.

Fast Company’s inaugural Customer Experience Awards

Fast Company needs our help to determine which companies provide the best customer experiences. To find their list of best-in-class companies, Fast Company worked with a panel of customer service and customer experience experts.

(Rumor tells me Brand Examiner Paul is one of their experts. Does that mean Paul was once a pert? I never knew Paul to be a pert. Neverthess, Paul is now an expert. Who know?)

Anyway, click here to learn more about Fast Company's Customer Experience Awards or click here to head straight to the voting booth.

Peace, Lovemarks, and Misunderstanding

I don’t love the term Lovemarks. However, I do love the ideology of Lovemarks. There is a place where few brands earn the right to evolve to by emotionally connecting with consumers to forge loyalty beyond reason. But do brands evolve to become LOVEMARKS?

(For a primer on Lovemarks, click here or get the official word here.)

Maybe my quirkyalone perspective on love is too idealistic for me to “love” Lovemarks as THE term to describe a highly evolved brand.

To me … Love is patient, love is kind. It does not envy, it does not boast, it is not proud. It is not rude, it is not self-seeking, it is not easily angered, it keeps no record of wrongs. Love does not delight in evil, but rejoices with the truth. It always protects, always trusts, always hopes, always perseveres. Love never fails...

If I was to ever be in LOVE with a brand ... it would have to be Chipotle. (Yes, the fast casual burrito chain.) Chipotle has forged loyalty beyond reason with me ever since I first experienced it in the fall of 1998. But … I will, on occasion, cheat on my Chipotle “Lovemark” by going to Freebirds, Baja Fresh, or Qdoba. I don’t cheat often mind you … just occasionally.

So, can Chipotle be my "Lovemark" if I sometimes cheat by visiting like-minded competitors?

Luvin’ Lovemarks?

Over at the 800CEOREAD blog this week, a couple bloggers, including myself, are posting reviews of Lovemarks: The Future Beyond Brands.

Below is bite-size chunk of my review ...
What comes after brands? Lovemarks do. So says Kevin Roberts, CEO of Saatchi Saatchi Worldwide and author of the recently published book, Lovemarks: The Future Beyond Brands.

According to Roberts, Lovemarks are brands that have evolved from simply being bigger, brighter, stronger, and cheaper to being a brand that uses mystery, sensuality, and intimacy to emotionally connect with consumers. Apple is a Lovemark while Gateway is a brand. Lexus is a Lovemark but Pontiac is a brand. Container Store? A Lovemark. Storables? A brand. In other words, brands merely fulfill needs while Lovemarks fulfill needs and desires.

Enticed? Click here for my full review.

My HMOs on Lovemarks run thick … so expect to read more Hot Marketing Opinions on Lovemarks this week on Brand Autopsy.

The Soup Peddler – A Case Study in the Art of Being Remarkable

“Something remarkable is worth talking about. Worth noticing. Exceptional. New. Interesting.” (From the Purple Cow by Seth Godin.)

David Ansel, The Soup Peddler, quit his high-tech job in 2001 to not only make homemade soups using seasonal, local, and organic ingredients ... he also delivers his soups to customers in South Austin by bicycle.

Yes, bicycle. Hence the name … The Soup Peddler.

For The Soup Peddler, being remarkable is all about great soup, sustainability, slow food, and peddling fast.

To learn more about The Soup Peddler ...

Read this Christian Science Monitor profile from 10.22.03

Skim this Austin Chronicle article from 6.17.04

Visit The Soup Peddler's website to learn about his soupology

Joe Schmo and “Markets as Conversations”

More and more evidence emerges to support the Cluetrain Manifesto’s contention of “markets as conversations.”

Exhibit Z100000001 … this week’s Business Week article on Blogging With The Boss's Blessing: More companies are helping employees to speak freely -- and bond with customers. (subscription required ... sorry)

Exhibit Z100000002 … the Schmo Blog from Spike TV. Enjoy.

Trading Up Update

Michael Silverstein and Neil Fiske, the authors of Trading Up: The New American Luxury, recently published an update reinforcing their findings that consumers will gladly “trade up” and purchase more expensive goods/services so long as they are of higher-quality and have greater emotional benefits than their less expensive counterparts

To reinforce their findings, the authors have created The New Luxury 15, an index of 15 companies that produce upscale goods in a diverse range of product categories. According to their findings, companies in the New Luxury 15 performed significantly better in delivering Total Shareholder Returns (TSR) versus the S&P 500 from the years 1999 through 2003. The New Luxury 15 delivered a 16% median annual TSR for the five year period versus a 5% median annual TSR for the S&P 500.

Their updated research indicates the Trading Up phenomenon is not limited to the United States. Japan, United Kingdom, Spain, Scandinavia, and most other Northern European countries are also experiencing similar shifts in consumers trading up to new luxury goods.

Throughout this update, Silverstein and Fiske continue to make their case that, “… it is clear consumers around the world are willing to pay a premium for goods they believe deliver better quality and higher performance, along with emotional benefits, than do conventional goods.”

Furthermore, the authors contend, “Consumers today have more discretionary income, more cash, more product knowledge and more sophisticated tastes, and have far more product choice than ever before. We believe that consumers will only grow more discriminating in their purchases. They will trade up and trade down, with great care, in every category of goods."

For the full report, click here.

If you need a Trading Up primer … read Jon Strande’s excellent book summary.

Williams’ Words of Failure

Sure, Paul has given birth to some nifty idioms ... but ... not all his coined terms have worked. I remember the vacant stares and the rampant shoulder-shrugging when Paul was deep into repurposing Star Trek terms into marketing/business language.

For example …

Level Three Diagnostic
In 1999, Paul was leading a TAZO tea promotion which called for coupons to be passed out to Starbucks customers in-store. Problem was … the coupons never arrived. Paul hastily convened a meeting where he demanded a Level Three Diagnostic be run to determine what went wrong. He kept asking Ensign Flannery to run the Level Three Diagnostic. Ensign Flannery (Paul’s words, not mine) was clueless and so was everyone else at the meeting.

Make it So
When leading cross-functional teams, Paul would never use the generally accepted practice of assigning action items. Instead, he would bark out next steps by saying, “Make it So!”

Number One
During this unfortunate phrase phase, Paul would constantly refer to his marketing specialist as ”Number One.” As in … “Number One, check with finance on those service recovery coupon redemption numbers. The reports from the field are that redemptions are not within expected parameters.”

Warp 9.1
To this day, Paul still says, ”Warp 9.1” when asking to fast track a Make it So action item.

Set Your Phasers to Stun
This is my favorite one. When implementing a minor marketing program, one that wasn’t expected to deliver outrageous results, Paul would say, “Team … set your phasers to stun.” Let’s hope Paul no longer uses that one.

Term Coiner for Hire

As a marketer it's important to have a way with words. It's important to be able to communicate meaning clearly - either directly to customers or through an agency on behalf of your customers.

Several years back, as a marketing manager in NYC, I was speaking with a reporter at the NY Times regarding the density of Starbucks Coffee locations in Manhattan. I was describing how in suburban areas, a store supports the neighborhood that lies in blocks surrounding the store. However, in the city, Starbucks may have a store on the ground floor that supports 25+ stories of customers above. I referred to this a VERTICAL NEIGHBORHOOD. I was proud of this term (and still am obviously).

Last week I came up with another good one.

I'm working on a project with the IT team. I was trying to communicate to the project lead to be sure not to skip us as they developed their plan... to make sure they included us. I said to her... "I want to make sure we don't MISS ANY BELT LOOPS as you move forward..."

I'm certain this term will quickly work its way into popular culture and soon appear as a "word of the day" on Word Spy. (You can say you read it here first!)

So, know you have a resource here at Brand Autopsy. If you need any quotable quotes, drop us a note!

Brand Mathematics

At my Puget Sound AMA meeting last week, we had a presenter from the Frank Russell Company, the global investment services firm. He spoke about his brand and some of the challenges of being an investment company based in the non-financial hub of Tacoma, WA. As a finance guy, he joked that it was a company requirement to have some sort of mathematical equation in his presentation. So he shared his marketing math…

AWARENESS x REPUTATION = BRAND

Now, I want to adjust this a little…

AWARENESS x REPUTATION = BRAND RELEVANCE

A nice equation.

AWARENESS - Do people know about your product, service or company? Do they talk about it? Do they tell others? Do they know the great things that you do?

REPUTATION - What do people say about your product, service or company as good or bad? What do customers think? Are they satisfied? Do you deliver on your product, service and brand promise?

Let’s look at this equation from two perspectives at Starbucks Coffee Company.

STARBUCKS COFFEE/ESPRESSO

Awareness - I’ll refer to a common theme “there’s a Starbucks on every corner” - 'nuff said.

Reputation - Starbucks is a destination for coffee and espresso beverages. They make it convenient. They make it the way you want (a la double-short, non-fat, extra-foamy latte with sugar free vanilla syrup). Starbucks has been credited with helping to improve the quality of coffee consumed in North America.

So if you calculated this equation, when it comes to COFFEE/ESPRESSO at Starbucks the BRAND RELEVANCE score would be VERY HIGH.

STARBUCKS COMMUNITY GIVE-BACK

Awareness - Did you know that with nearly every store that Starbucks opens, there is a local long-term charity partnership? Or that the local store manager not only wants to serve the community but strives to be an integral part of it? Early on in the company history, it was considered too self-serving to blow the Starbucks horn and brag about community giving. It's not considered a ‘tactic’ it’s just how to be a responsible business. However, that has left Starbucks with low awareness of this part of the business.

Reputation - Starbucks is known to be everywhere, and is known for coffee. But, despite being a great neighbor, does not have the corresponding reputation. The message of BIG overshadows the message of GOOD.

Therefore, when it comes to COMMUNITY GIVE-BACK, the Starbucks BRAND RELEVANCE score would be LOW.

Since you know your desired total for this brand equation, you can flip the equation around and solve for the missing variable.

What’s your product, brand or service BRAND RELEVANCE score?

Worthy Abstract – 18 Immutable Laws of Corporate Reputation

A few weeks ago I reviewed Ronald Alsop’s 18 Immutable Laws of Corporate Reputation on the 800CEOREAD blog site as well as including it my latest list of Worthy Reads.

For an excellent abstract of the book, visit the Cyber Alert site. William J. Comcowich, pres and ceo of Cyber Alert, succinctly shares Alsop’s key points on establishing a good corporate reputation, maintaining a good reputation, and repairing a damaged corporate reputation. Click here for the abstract.

Thanks to the PR Machine blog for originally posting the link.

White Paper Weekend Reading

Alex Wipperfürth, of Plan B, a San Francisco-based marketing strategy boutique, is finishing a book titled Brand Hijack, which turns a marketing eye towards religious cults to better explain how household brands foster cultish relationship with their most evangelical customers.

However, Douglas Atkins has beaten Wipperfürth to the bookshelves with his with his recently published book, The Culting of Brands: When Customer Become True Believers.

I’m over 100 pages into The Culting of Brands and can honestly tell you to not buy Atkins’ cult brand book. Instead, wait for Wipperfürth’s Brand Hijack book.

Why wait for Wipperfürth’s Brand Hijack book?

Well, the other day I read a Wipperfürth penned white paper, How Cults Seduce and What Marketing Can Learn From Them, and found it to be highly poignant, well organized, and chock-full of keen marketing insights. In sixteen pages, Wipperfürth (damn it's fun to write ‘Wipperfürth’ – try it, I’m sure you’ll agree) accomplishes far more in his white paper than Atkins does in the 100+ pages I’ve read in The Culting of Brands.

Intrigued with Wipperfürth’s (there I go again with ‘Wipperfürth’) marketing mind, I found my way to Plan B’s website and lo and behold … I found more white papers worthy of reading.

The Tricky Business of Launching Brands

Re-Inventing the Creative Development Process

Speed in a Can – A Red Bull case study

Tormented by the Witch – A Blair Witch case study

The Marketing of No Marketing. (While not a white paper, it is a very good article on the rebirth of the Pabst Blue Ribbon beer brand and Wipperfürth’s [hee-hee] Plan B agency played a role in the resurgence of PBR.)

We at Brand Autopsy expect full reports from each of you on your weekend white paper reading.

Radio - on the Brand Autopsy Examining Table

Recently, Mark Ramsey’s Radio Nexus Blog featured my thoughts on how radio stations can adopt some of the marketing lessons I’ve learned at Starbucks and at Whole Foods Market. You can find those entries here and here. Or you can use the handy jump-list below to read my unabridged thoughts.

Un-commoditizing Radio
Marketing lessons radio can learn from Starbucks and Whole Foods

Reuse, Recycle, and Radio
When tried and true radio tactics become tired and trite

Radio Executive Role Play
John Moore assumes the role of radio station exec and outlines his approach

Radio Free Eureka
Free-range thoughts on radio as a free medium

Radio Free Eureka

Mark Ramsey asks:
Radio is free ... how does that alter the challenge in getting new listeners?

Just because one doesn’t have to pay money to listen to a radio station doesn’t make the challenge of getting new listeners any more difficult. The same basic branding rules regarding differentiation apply regardless of how much a product/service costs.

I view radio as being a passion medium, much in the same way magazines are a passion medium. We choose to read magazines based upon our passions, interests and lifestyles. No one forces us to read magazines. This is similar to how we choose to listen to radio stations. And like the crowded radio dial, the typical magazine stand is crowded with hundreds of titles each with a varying degree of uniqueness. For example, People, US Weekly, and Entertainment Weekly all fall in the weekly pop culture/entertainment magazine category and they all compete for essentially the same reader. Yet, each magazine has a distinct and well articulated reason for being and each magazine is successful.

Because the radio dial is crowded, it is imperative that a radio station has a clearly defined and articulated reason for being. To define a station’s reason for being it needs to answer two questions:
(1) What makes this station special?
(2) Why should a listener care?

Once a station has defined its reason for being, it has basically defined its brand. With its brand defined, the station needs to articulate their reason for being in everything they do.

To do this, the entire station employee base from the program director to the overnight DJ to the board operator must become the station’s marketing department. Every decision and conversation they make on behalf of the station must be based up their understanding and appreciation of the station’s brand.

When defining a station’s reason for being, you must not overlook the question of why a listener should care. Your answer to this question must be genuine and be truly relevant to the listener. Listeners today are far too savvy and can quickly see through bogus and patronizing answers.

Radio Executive Role Play

Mark Ramsey asks:
If you ran a radio station, what things might you do to make it stand out?

My first decision as a radio station exec would be to choose my station’s reason for being. As I see it, a station has two options to choose from – Primary Promotion or Format First. Choosing to place a priority on promotion means you decide to supremely focus on helping advertisers achieve their business objective. Focusing on the format first is about creating a radio station that is the market’s music expert or news/talk expert.

Primary Promotion
To succeed in being a promotions-driven radio station, I believe the advertiser’s objective must become the station’s objective. For example, if a car dealership’s objective is to sell 40 new cars during a three-week promotional flight, then the station’s objective is to do everything within its promotional power to help the dealership meet or exceed their 40 car goal.

The measurement of success for my promotionally-minded station would be less about ratings and more about results for the advertisers. Ultimately, I believe advertisers want results more than ratings. Helping advertisers consistently achieve their business objectives will not only help my station retain their promotional spend, it will also serve as a firewall to protect my station for any slack in ratings it may experience.

As a promotions-driven station, I would challenge my Promotions Department with flawlessly executing fun, creative, and effective on-air and off-air promotions. For example, when giving away concert tickets, I would ask listeners not to be the 9th caller to station. Instead, I would drive traffic to a local advertiser’s business and have the lucky listener(s) pick up their free tickets there … at the retailer. For call-in remotes, I’ll insist on crystal clear sound (not the typical static-heavy cell phone gritty sound that other stations find acceptable) and my station would always send a recognizable on-air personality (never an intern).

For local and regional advertisers who lack the financial resources to create great radio creative, we would design dynamic on-air station-driven promotional campaigns that will generate results far better than a cheaply produced radio spot.

In summary, my Promotions Department would develop and implement ideas geared towards helping the advertiser achieve their objective and not geared towards helping the station achieve its self-serving objectives.

Format First
All programming and promotional efforts by my Format First station would strive to cultivate a fanatical listening audience that looks to the station to serve as their “lifestyle and cultural editor.” Listeners would rely upon the station’s expertise, be it music or news/talk, to make them more knowledgeable and more hip to the latest and most noteworthy lifestyle, cultural, and societal happenings going on.

My station would treat its listeners as being curious and discerning and not boring and indifferent. These listeners are influentials and thought-leaders that can make or break new product launches from advertisers. Advertisers seeking to reach an influential audience of buzz-builders will value placing their ad spend on my format first station because of the quality of audience they will reach.

To cultivate a fanatical listening audience, I would empower my station’s audience from being passive listeners to being active participants. My station would engage listeners in a variety of off-air ways from online/offline newsletters to an interactive website/blogsite to special invitation only events. All the content for these interactive communication ideas would be culled from the unique lifestyle and cultural perspective of the station’s format, be it music-focused or news/talk-focused.

My Format First station would be on the leading edge of what influential listeners (i.e. the early majority) are thinking, doing, and buying. Advertisers would value the opportunity, and may even pay a premium, to reach the influential listeners my station would attract.

Reuse, Recycle, and Radio

Mark Ramsey asks:
Based on the stations you know, what is the biggest mistake you see stations make?

The biggest mistake I see radio stations making is rampant RECYCLING. Reduce, reuse, and recycle works great for environmental sustainability but not so great for radio station promotional sustainability.

For radio, the keyword is REDUCE. Reduce recycling and reusing so-called tried and true tactics. The tried and true have become tired and trite. For example …

Why do stations recycle tired and trite monikers like, KISS 106, B 93, and Magic 95? I realize these IDs are mnemonic devices for listeners, especially those with Arbitron diaries. However, stations are missing an opportunity to meaningfully differentiate themselves through their station ID. If you are going to repeat your station ID hundreds of times a day, shouldn’t your ID personify the essence of what makes your station remarkable and not be used merely as a gimmicky mnemonic tool? After all … what does KISS, B, or Magic mean anyway?

Why do stations recycle tired and trite phrases like, 'All Hit. All New.'? This line has been used so often that it carries little or no meaning. Besides, not every song a station plays is a bona fide ‘hit’ and when does ‘new’ become ‘old’? I’ve listened to too many stations where 16 months after a formant change, they still boastfully proclaim being 'All New.'

Why do stations recycle tired and trite programming like, “Smash it or Trash it?” or “Top Five at Five”? Relying on such recycled programming ideas will only make it more difficult to become uncommonly good.

Un-commoditizing Radio

Mark Ramsey asks:
"You’ve worked in marketing at Starbucks and now at Whole Foods, what do you think radio stations can learn from these companies that can make them more effective at impacting and appealing to the audience?"

Radio stations can learn how Starbucks Coffee (SBUX) and Whole Foods Market (WFM) transcended commoditization to become meaningfully unique. I view radio as being a commoditized experience. From station-to-station, parity among radio broadcasters is prevalent. They all air the same promotions, play the same commercials, and run roughly the same programming style. For the most part, very little differentiation exists between radio stations despite the myriad formats. Radio has become a commoditized experience.

Starbucks Coffee and Whole Foods Market have transcended commoditization, SBUX with coffee and WFM with groceries, by following these Four Commoditization-Busting Rules.

1. Make the Common Uncommon
2. Stand for Something, Not for Everything
3. Be Mission-Bound
4. Everything Matters

(1) Making the Common Uncommon. WFM took the common grocery shopping experience and made it uncommon by focusing supremely on natural and organic groceries that not only taste good, but also makes one feel good. SBUX elevated the common cup of coffee and made it uncommon by focusing on higher-quality beans and a higher-quality experience.

Radio stations have the same opportunity to make the common radio listening experience uncommon by not following preordained rules that say the only way you can give-a-way concert tickets is to the 10th caller. Or, that all station IDs must be over-produced, sugar-sweet, and harmony-heavy. Being uncommonly good at the common means breaking a few rules in the process … doing so will help radio stations become meaningfully unique.

(2) Standing for Something, Not for Everything. WFM stands for a natural and organic approach to food, they do not stand for overly-processed, mass-produced goods that conventional grocers stand for. In fact, WFM has a well-defined “Quality Standards” checklist that all products must pass before going on the shelf. If a product contains anything artificial from sweeteners to preservatives, it doesn’t go on the shelves at WFM. These dogmatic “Quality Standards” not only define what makes WFM remarkable, it also safeguards them from encroaching competition because other grocers cannot stomach the idea of sacrificing the many for the few.

To differentiate itself from like-minded competitors, a radio station could develop and dogmatically follow their own meaningful “Quality Standards.”

(3) Being Mission-Bound. Transcending commoditization requires more than having a mission statement, you have to live a mission. WFM and SBUX are both mission-bound companies. For WFM, the mission is about changing the way the world eats. And for SBUX, the mission is about getting folks to enjoy a more rewarding and inspiring coffee experience.

Radio stations need to go beyond having a mission statement to actually living a mission. How many radio station seek to positively change the lives of its listeners?

(4) Everything Matters. Starbucks and Whole Foods Market are experiential brands that strive to be interesting in order to get customers interested. For retail brands that rely on delivering great in-store experiences, everything matters because every act is an act of communication with customers. From the way the Jonagold apples are displayed to the array of artisan cheeses offered to how store employees engage customers – every act at WFM matters.

Same can be said for radio stations. Every song, every commercial, every listener request, every on-air personality, every remote, every bumper sticker – every communication about your station matters. Everything matters.

Blog Club

Today a peer in my local American Marketing Association mentioned getting a good list of books to use as suggestions for the marketing book club.

I thought "what about a marketing blog club?" Instead of picking a book and reading it as a group, choose a few blog sites, read them and discuss as a group. (And if they wanted, they could still drink wine).

While books are great, their content becomes firm once it’s printed. But a blog site can address the same topics and continue to grow and evolve. What’s even better, you can interact with the authors of the site as well as other readers.

View the Brand Autopsy Blog Log on the ABOUT ME page of our site to see some of the blog sites we visit.

Light Loyalists Create More Powerful Word-of-Mouth

In a to-be-published Harvard Business School Case Study, the folks at BzzAgent are looking into how a company should go about creating word-of-mouth (WOM) and how best to track the impact WOM can have on sales.

Their study is focusing on "incremental WOM over and above what may have existed independent of the program.” (I suppose this “incremental WOM” is an actual BzzAgent campaign layered on top of whatever WOM may be already organically happening in the marketplace.)

The early findings indicate something counter-intuitive to generally accepted marketing thought. Most marketers, including myself, would argue that the most loyal customers make for a better customer to generate WOM. And that these “heavy loyalists” wield more WOM influence than any other customer base a company may have.

Counter-intuitive to this thinking are the early results from the study.

The most powerful incremental WOM may come from those less-loyal to the firm.

The idea behind this is that those most loyal to the firm – those that visited the firm very often before the program began – had probably already told everybody – both strong and weak ties – in their social network about the firm and its products.

Moreover, it is likely that those in the same social network as these loyal customers are themselves also loyal (or at least existing) customers. Thus, the increase in the WOM created by the program has little effect on these networks.

On the other hand, however, the networks informed by the less-loyal customers are far less likely to have heard about the firm. Thus, the incremental WOM from them is powerful.

An important implication of this is that programs with the objective to increase WOM should not be focused on the core of loyal users. In some sense, they have already (or will already) do that work for the firm. On the contrary, it is the less loyal customers that can and should be affected to a larger extent.

Okay … I have been out-spoken about the BzzAgent process of artificially seeding word-of-mouth. However, given this information, I am warming to the idea of how a BzzAgent campaign, targeted to light-loyalists and not to heavy-loyalists, can be a worthy addition to a marketing program.

Maybe … just maybe … the BzzAgent artificial seeding process can help turn the less loyal (and seemingly less vocal) into more vocal evangelists for a product or service. There are many ways to engage the less loyal customer into becoming a more vocal evangelist and the BzzAgent way may be a viable option to do just that.

I’m looking forward to the release of the full study. For now, we have only the two-page summary posted on the BzzAgent blog to go by.

iPod: the ‘i’ stands for …

An anonymous scribbler in NYC defaced a row of iPod posters and in the process expressed his interpretation of the Apple ad campaign as a commentary on being alone and not being cool.

Click here for the Village Voice article and images.

A Latte to Learn

It's funny. I remember Krispy Kreme, like White Castle, as a place in the south where you could go to for a 24-hour snack. A clean, 'blue collar' place - not a chichi vogue place to go. It was functional. You wanted a donut; they were hot and fresh (and delicious). I specifically remember a big piece of their business was selling wholesale to school groups for fundraisers - cheerleaders would sell donuts to raise money for new uniforms or for bus trips to the state championship.

Krispy Kreme's rise to popularity has been interesting to me. I lived in NYC when the first KK opened. It was so popular it was as if New Yorker's invented KK themselves.

So while this fresh new start has been interesting to experience... it seems they're getting stale already.

Now I'm going to share one experience, at one location, at one moment in time (but still)...

I went to KK this weekend for a donut and coffee... Instead of a drip coffee, I thought I'd check out their espresso. After all, I understand that they've added that to their mix to be more competitive in the espresso market. I ordered their latte with their original Kreme flavoring... Evidently they offer four kinds of milk - nonfat/skim, 2%, whole milk and their original Kreme flavored milk.

After I place my order, the woman on the register asked a gal on the production line something about my drink. They asked another gal to help. She went to the espresso machine and was flipping through some pages – to find a recipe and/or instructions on how to make my drink.

The register gal returned and said that "We can’t make it right now because the girl who makes the espresso wasn’t there." Wow. No one else has been trained to make espresso beverages? (In Seattle?)

Of course, it was neat seeing the production thru the window… and I got a free donut. But, should they stick at what they're good at? Great donuts and fresh coffee?

Why Work?

“Why Work?" ... a recruiting campaign initiated by IBM in the late 90s.

The recruiting campaign sought to match people’s passions to the work at IBM. By asking “Why Work?” recruiters were in effect asking prospective employees what their passions were, what they wanted their colleagues to be like. They wanted to think about what made work important to them. In (Keith) Yamashita’s words, the campaign “played not to the lowest common denominator, but the highest shared common purpose.” (source: Wordcraft, pg 211.)

Highest shared common purpose ... now that's a powerful idea. An idea that will play in my mind for years to come.

Turn on, tune in, and drop by the Radio Marketing Nexus blog

Mark Ramsey, from Mercury Radio Research, provides radio executives with a valuable service that begins with strategic audience research and extends to marketing/branding consultation. His blog, Radio Marketing Nexus, is a worthy read for marketers in any field.

Recently … Mark asked me to share some of the marketing lessons learned from my time at Whole Foods Market and Starbucks Coffee.

This week, Mark will be posting my HMOs (hot marketing opinions) on the hot button radio questions he asked. Part One is posted and Part Two will be posted Wednesday-ish.