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The rules of branding

James Montier is an economist and global equity strategist at Dresdner Kleinwort Wasserstein, a German-owned investment bank. According to an article at Fast Company,  Montier claims that analysts shouldn’t bother meeting with top management at the companies they cover since analysts only ask questions that encourage the answers they want to hear.

Montier may be considered a financial heretic, but he’s a genius at creating a brand.  Early in his career, he became intrigued by the role of human emotions in markets.  He theorized that prices were moved as much by psychological factors as by earnings reports, a view that can only be labeled contrarian.

In a world where "great instincts" or  knowing which direction the markets are heading is viewed as the Holy Grail…. Montier has developed a following, despite the fact that he does not play by the rules of the game.

"Montier has a substantial following because he focuses on things that are fundamentally different from the rest of the stuff I get in my inbox," says Curt Custard, head of asset allocation at Schroders in London, one of Montier’s clients. "He is next to useless when it comes to telling me what the markets are going to do. But he has been incredibly helpful in leading us through self-critical examination of what drives our internal decision making at Schroders."

Talk about creating a Unique Selling Proposition…. Montier doesn’t say, "I know what’s going to happen."  Instead he says,

Every fund manager who comes to one of my presentations takes a 20-question test that convinces them they suffer exactly the same biases as everyone else. People respond to that in one of two ways: The first is to say, "Now I understand it, I’m smarter than everyone else, so I can outthink everyone else." No, you can’t! You’ve just failed behavioral economics 101, which explains that we are all overconfident in our abilities. The other response is, "Okay, I understand my biases. Now help me develop processes to spot where they are most likely to occur, and minimize the scale of these biases."

He also touts the message that wealth does not equal happiness.  But that’s yet another contrarian view in a world where bonuses are spent buying Ferraris and island get aways.

Montier may be a pioneer in behavior economics, but he’s following the hard and fast rules of successful branding.  He’s carefully carved a niche and has the full attention of those within that niche. 

Branding

It wasn’t all that long ago that the term "branding" was used to describe scarring an animal to denote ownership.  Now, it’s the buzz word of choice in marketing circles.

Branding is, in essence, marketing or advertising messages that work at conveying what your business does to the casual observer. The thinking goes that if you effectively  "brand" your messages, that consumers will be better able to recognize your ads as belonging to you and will then be more likely to do business with you.

That’s right, the reason people aren’t responding to your ads is they don’t know they’re yours!  Once you make them all look and sound alike, then customers will magically line up to do business with you!

SERIOUSLY!  Do you think I could make this stuff up?

Let me "de-mystify" the branding process for those of you who wish to be enlightened.

Branding is not something you choose to do either to or for your business.  It’s something that your CUSTOMERS do to your business.  Just as the unsuspecting calf is branded by searing metal pressed into it’s flesh, so goes the process of your business branding by your customers.

The branding is a process that begins deep within your company.  It is the process through which you imprint what it is your company is about upon the minds of your target audience and audiences return the message with a red hot poker.

Because branding is an ongoing activity, it occurs constantly.  Every interaction between your business and your customer (or potential customer) is building your brand, whether you like it or not.   With that perspective on branding, it’s easy to see that the task at hand is to control your customer’s perceptions of your company as much as is possible.

With this perspective, you may suddenly realize that the surely angst ridden teen who is running your cash register after school is helping to building your brand. Nancy, in accounts receivable is also building your brand as are your technicians who go out into the field. 

Every time someone you employ has contact with other people, they are in fact helping to build your brand. If this doesn’t frighten you, the business owner, then nothing will.

The "experts" want you to believe that branding is something you can buy.  Can you blame them?  It’s much easier to say, "Run your ads here and be sure to use use the right colors and font faces in those ads, and that is branding." Isn’t that much easier than it is to look beyond the ads and stare down the barrel at the business behind the ads.

Advertisements are simply invitations to your business. Invitations to strangers asking them to do business with you.  Implementing a methodical identity program (a.k.a. branding program) will allow you to determine exactly how you want to portray your company or product to the outside world.  However, what happens once those customers do business with you will, in the end, determine your company’s "brand."

In the end, your brand is merely the way you are perceived by your customers.  Branding is merely identifying the image you want to portray to outsiders.  Your goal should be to make certain that brand accurately reflects what your business does.  Once you’ve done that, then you can determine what promises you should make for your business to deliver.

Of course advertising plays a part in branding.  After all, you wouldn’t send out engraved invitations to the hog roast at Uncle Larry’s trailer over Memorial Day.  Likewise, an invitation to a black tie event probably would bear little similarity to the event described above.  An essential part of branding is knowing WHAT KIND of party you’re throwing…. but keep in mind that how you treat the guests (a.k.a. customers) when they get there plays an even bigger role in the branding process.

Second Life Branding Boo Boos

BL Ochman in his What’s Next Blog writes about Big Brands in Second Life Attracting Few - If Any - Visitors.

Besides the sale of YouTube, nothing’s been hyped more this year than companies, from IBM to Starwood Hotels to ad agencies and PR firms, opening in Second Life. Visit them and you’re likely to find yourself alone, or maybe find one or two other people there. The biggest problem: everyone’s jumping in because everyone’s jumping in. They’re often not bothering to visit Second Life first, let alone learn the culture.

The second biggest problem: you have to download software to enter the metaverse and big corporations generally won’t allow anything downloaded on their servers. And once you do download it, the software is clunky, slow, and hard for newbies to grasp.

There’s nothing worse than jumping onto a band wagon without recognizing the unwritten laws that govern the community.  Whether it’s Myspace or Second Life, it’s best to join the culture and learn the unwritten rules before you begin trying to harness the marketing possibilities.

Way back in the 1990’s, the Listserv ruled the internet.  A listserv allowed you to submit a question or something that you want to share to the listserv. Your submission would then be distributed, via email,  to all of the other people on that list.  Clumsy marketing wannabes would sign up for a Listserv and begin marketing in earnest to the subscribers.  These messages were greeted with the same enthusiasm then as spam messages that arrive in your email box are greeted today. 

Imagine, walking into a party and finding dozens of people engaged in lively conversation.  You walk up to a promising group and interupt the conversation with your sales pitch.  While it rarely happens in real life, I’m sure it’s not hard to imagine your reaction to such an intrusion; you’d ignore the interloper and return to your conversation.

Well, Listserv has gone the way of the BBS, the laws of human interaction still remain intact.  Before entering the alternate reality known as Second Life, companies must first learn the culture and discover the unwritten laws of this alternate universe.  Learning the lay of the land is always best before entering a new world.  While the 2 million plus members of Second Life community may very well be ripe for the picking, if you break the unwritten rules, you’ll find your efforts failing miserably.