Starbucks

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Why does brand positioning matter and what must change?


I believe almost all great brands are built on a foundation of great positioning.

I feel so strongly about positioning that one of the core elements of this blog is a series of brand positioning tips I learned over the years as an eager student of classic brand positioning.

Sometimes great positioning is led by a branding genius such as Scott Bedbury (who helped grow the Nike and Starbucks brands); sometimes a great leader and communicator with a very clear vision (like Steve Jobs at Apple) drives it into the organization; sometimes people stumble on great positioning by pure luck; and more and more often, organizations are developing positioning by collaborating with the communities of people in and around the organization who care most passionately about the brand.

This last way is the ad-free brand way of developing brand positioning.

Why does great positioning matter? In my view, there are four key reasons brands should care about positioning.

1. Great positioning helps people understand the brand

The best brand positioning is always simple and clear. The greatest product or organization in the world won’t be successful if people can’t or don’t bother to comprehend why they should care about it. Your story must be able to break through the clutter.

2. Great positioning helps people value the brand

Getting people to understand the brand is the first step, but no less important is ensuring they value the brand. The best brands stand for things people care about or desire.

3. Great positioning helps people identify with the brand

Once people understand and value the brand, they must also understand how they fit in and how they can engage with the brand. They need to see some of themselves in it.

4. Great brand positioning helps people take ownership over the brand

It may sound like a brand’s worst nightmare to lose control and have the brand community take over. But the most self-actualized brands of the twenty-first century allow the communities of people surrounding them to take some ownership of and responsibility for the brand. Essentially, the brand owners become in command and out of control of the brand.

In 1981, when Jack Trout and Al Ries wrote Positioning: The Battle for Your Mind (the book that really defined the discipline of brand positioning) traditional advertising was still a dominant force. In fact, as you glance through their book, you’ll notice that most of the examples they use to illustrate positioning concepts are classic advertisements or advertising campaigns like the Avis “We’re #2, so we try harder” or the 7-Up “Uncola” campaign.

In the book, Trout and Ries define positioning as follows:

“…positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.”

The Trout and Ries definition is a perfect way to achieve the first three of the four benefits above; it helps people understand, value, and identify with the brand.

Where the Trout and Ries model of positioning is all about what you do to the mind of the prospect, ad-free brands are less interested in creating meaning for a brand in people’s minds and more interested in creating meaning for a brand with the help of people’s minds.

By giving the communities of people who care about a brand some ownership over its future direction, we begin to build relationships based on trust, respect, and a mutual exchange of value.

Where 21st century brands will really shine is by mimicking the open, collaborative, meritocratic model of the open source software movement (and the Internet itself) in their positioning work. In my view, without beginning to engage the communities of people who care about a brand as co-owners, classic brand positioning by itself will continue to be less and less effective as traditional advertising and PR continue to be less and less effective.

The secret? Marrying those classic brand positioning principles to a 21st century way of collaborating with the communities of people who care about a brand. By doing both together, we’ll be able to build stronger, more resilient brands than ever before.

This is the second in a series of posts drawn from The Ad-Free Brand, which is available now.

Howard Schultz of Starbucks: The role of culture in a crisis


This week I was lucky enough to attend the Ernst & Young Strategic Growth Forum in Palm Desert, CA. As you may recall, last year Red Hat Chairman Matthew Szulik was the national Ernst & Young Entrepreneur of the Year, and later this week, he’ll hand over his title to the next entrepreneur in waiting. One of the most exciting things about the Strategic Growth Forum is that it brings together some of the smartest entrepreneurial minds in the world in one place, and this morning, I had an opportunity to hear from one of the best.

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Howard Schultz: Chairmain, CEO, and President of Starbucks

Howard Schultz, Chairman, President, and CEO of Starbucks, who won an Entrepreneur of the Year award in 1993, spoke about his experience leading Starbucks through the economic crisis. As Starbucks began going through hard times, Schultz, who had given up the CEO role in 2001 (while remaining Chariman), decided it was time to take back the CEO responsibilities himself in early 2008.

Why? He was worried that the distinct culture, mission, and values that had brought the company great success were eroding.

According to Schultz, he came back into an operational role because he felt that the way out of crisis was not a simple change in business strategy, but instead– in his words– “love and nurturing.” His key to turning things around was revitalizing the investment in his people, recommitting to the core purpose of the organization and providing employees with hope and inspiration.

He says the transformation of Starbucks since this revitalization has been key to a tremendous amount of new innovation happening inside the company. People have even commented to him that it reminds them of what the early days at Starbucks must have been like.

Schultz took 10,000 of his best people and brought them together in New Orleans in late 2008 for a leadership conference where they spent 50,000 volunteer hours helping communities re-build after Hurricane Katrina. Below is a documentary that was filmed about this event.

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Tom Sawyer Part 2: where can your company pitch in?


A few weeks ago I wrote a post called Tom Sawyer, whitewashing fences, and building communities online, where I outlined one of the biggest mistakes I see companies make when figuring out their community strategy– they expect a mythical “community” will paint their fence for them. But not everyone is Tom Sawyer.

tomsawyerIf your community strategy starts with the question, “how can I make the community work for me?” you may still find success if there are a bunch of people out there willing to paint your fence for free, but you definitely are not taking advantage of all of the benefits you can get from participating in communities.

One of the most often used examples of customer/community-driven innovation (perhaps because it is simple to understand) is the My Starbucks Idea site. This is a place where customers can tell Starbucks what they want, people vote on each others’ ideas, and Starbucks takes the best ideas and uses them to make their products, services, and experience better.

A recent example of a service that was launched through the site is a mini Starbucks drink card that can fit on your key chain. Sweet. It looks like they’ve had at least 5-10 innovations like this that have come from customer ideas, maybe more. And Starbucks is not alone– many companies have built similar sites, as has The White House. You’ve seen them.

But this approach is still simple Tom Sawyer-style community-building. People just helping Starbucks paint their fence for free. So why is it working for Starbucks? Because there are people out there willing to spend their time and energy helping Starbucks make their products, services, and experience better. Not every brand can command this sort of attention and loyalty. Most can’t, in fact.

My view? I do think these sort of public idea generation efforts are smart 21st century thinking when they work. But why stop there?

I get excited when I see big companies focused not only on what they take from the table, but what they bring to the table. I love to see companies that aren’t afraid to be humble members of communities, rather than building the community around themselves.

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Brands are like sponges, people


On Twitter yesterday, my friend Chris Blizzard mentioned to someone that I often say “brands are like sponges.” When I saw this, I realized that a) I haven’t said this in a while and b) I should say it more often because it is a freakin’ awesome way to think about brands. So I’m saying it again right now. Right here.

A brand is like a sponge. Except it is probably dirtier than this one.

A brand is like a sponge. Except it is probably dirtier than this one.

It’s actually not my line. I got it from the Scott Bedbury book A New Brand World (one of the top ten books behind Dark Matter Matters). Near the beginning of the book, Scott, who is one of the masterminds behind the good ol’ days of the Nike brand in the 80s and the Starbucks brand in the 90s, provides one of my favorite definitions of what a brand is:

A brand is the sum of the good, the bad, the ugly, and the off strategy. It is defined by your best product as well as your worst product. It is defined by award-winning advertising as well as by the god-awful ads that somehow slipped through the cracks, got approved, and, not surprisingly, sank into oblivion. It is defined by the accomplishments of your best employee– the shining star in the company who can do no wrong– as well as by the mishaps of the worst hire that you ever made. It is also defined by your receptionist and the music your customers are subjected to when they are placed on hold. For every grand and finely worded public statement by the CEO, the brand is also defined by derisory consumer comments overheard in the hallway or in a chat room on the Internet. Brands are sponges for content, for images, for fleeting feelings. They become psychological concepts held in the minds of the public, where they may stay forever. As such, you can’t entirely control a brand. At best you can only guide and influence it.

Those last two lines have stuck in my mind since I first read them. First, the idea that a brand is a sponge, soaking up everything, both good and bad. And second, that you cannot control a brand, you can only guide and influence it.

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Brand positioning tip #2: the competitive frame of reference


In Brand Positioning Tip #1, we covered 2 of the 4 key elements of successful brand positioning done the way Dr. Kevin Keller taught me: points of parity and points of difference. Today, I’d like to highlight the third key element of good brand positioning– understanding your competitive frame of reference.

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Competitive frame of reference is a fancy way of saying “the market you compete in.”

This sounds pretty simple, huh? It can be… If you run a furniture store, your competitive frame of reference would probably be the furniture market. If you run a tattoo parlor, your competitive frame of reference would probably be the tattoo market.

Those are pretty cut and dry cases. But have you ever stopped and wondered to yourself, “exactly what market am I competing in?” and realized that you are really competing in a market that is not initially obvious? Or that you are actually competing in multiple markets? If either of these situations are true, you may discover you need to create points of parity and points of difference for each market where you compete.

Here is an common example of a less-than-obvious competitive frame of reference.

What market do you think Starbucks is in? The coffee market? Maybe. In the coffee market, Starbucks competes with grocery stores, fast food restaurants, other coffee shops, and home brewers. Tough market… they aren’t competitive in the coffee market on price, there are probably options that (arguably) taste better, maybe have shorter lines. It’s hard to believe that Starbucks would have grown as big as they are by simply competing in the existing coffee market.

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Hey, I Wrote a Book!

The Ad-Free Brand: Secrets to Building Successful Brands in a Digital World

Available now in print and electronic versions.

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