Cycling commentators like to quip that the individual time trial is a “race of truth”. In other words there’s no place to hide as the man and machine face off against the clock.

The winner of the most recent edition of the Tour de France was decided on the final day in such a race, as Cadel Evans scorched his rivals and took the overall Yellow Jersey with the second best time of the day. Australia’s first overall Tour de France victor was undeniably better on this day – the truth was told.

Building a brand is much like a “race of truth”. Consumers are either for you or against you. And, there are only so many brands that stand out in today’s market evoking emotional response and nearly blind loyalty from their customers.

Starbucks, Apple, Coca-Cola, Facebook are brands that generate passion. Visa, MasterCard and Google register tremendous awareness but don’t necessarily conjure up “passionate” responses. I worked for Visa in the past and can attest to the fact that many consumers don’t understand the brand. I still get questions from friends asking if I can help fix their credit card problems! That of course is a matter between the issuing bank and the cardholder, not the domain of Visa/MasterCard.

Some brands are strong regionally but invisible outside their core market. Grocers Wegmans and Publix come to mind as do coffee chains Dunkin Donuts and Tim Horton’s. Dunkin is apparently embarking on national expansion, so the name may become more familiar across the U.S. soon.

Borders had a brand that was high profile, but became fuzzy. Some say that the lack of focus led to eroding customer loyalty and ultimately, the chain’s demise. You can read one assessment of Border’s failure here. IMHO, I’m not sure Barnes & Noble is doing a much better job in creating a brand that consumers care about – they just happen to be the last chain standing in the book-selling category.

Luxury brands drive customer loyalty through aspirational messaging, exclusivity, and, if backed up with customer experience that reinforces the brand, are sustainable. Nieman Marcus, Coach, Cartier, Tiffany are all brands that speak for themselves.

Some brands equate ubiquity with success. I wore Nike shoes in my early cross country days but my love of the swoosh waned as I saw the logo plastered on everything from golf balls to swim suits. Under Armour adopted the same approach from the starting gate as their logos seems to show up everywhere.

Does brand saturation create confidence or invite a suspicion of quality?

The brands that trigger emotion and sustain it over time seem to be highly focused. NorthFace and Patagonia have created aspirational brands among the outdoor and adventure travel set. I’m just waiting to see which one introduces the Bear Grylls line first!

Ironman has built a brand that oozes passion, commitment, aspiration, desire. Please write me if you know of another organization that sells out nearly every event it operates one year in advance, registering 2,000 people at the exorbitant price of $625, all for the privilege of torturing themselves through a 140.6 mile race.

With the ever expanding presence of the Ironman brand, it runs the same risk as Nike and Under Armour. The ubiquity of brand impressions in the market dilutes the core message to “best” customers and opens the door for competitors. As Ironman attempts to consolidate its hold on the endurance sport market, new race series have sprung up, most notably the HITS series using 6 time winner Dave Scott as spokesperson.

The importance of brand understanding for Loyalty Marketers is that we have to maintain perspective on the power of our brands to engage customers before any incentives are introduced. Every market is competitive and we need to study the range of customer choice in the market and understand the limits of impact for our loyalty strategies.

Organizations should adopt a holistic approach towards building loyalty strategy. Brand understanding is critical to crafting the value proposition that will complement core branding messages and further solidify relationships with our customers.

A few questions about Brands

Why do some brands dominate and others just compete?

Can brand value be created solely on perceived value and word of mouth hype, or is there a prerequisite that the brand promise be walked-out through customer experience?

Does our always-on world that glorifies multi-tasking and accepts information waterboarding as the norm make it easier or more difficult to establish a brand that dominates?

Is there tangible value associated with brands that are established as wholly above and apart from its competitors?

World Triathlon Corporation, Apple, and Nike give us some answers

Racing the Florida Challenge a few weeks ago had me pondering each of these questions. The mere fact that I was standing on the starting line of a long distance triathlon having registered only 2 weeks prior was an answer in itself. There are  four commonly raced distances in the sport and two of them have been branded by World Triathlon Corporation. WTC owns the Ironman brand and created the “70.3″ series renaming races generically referred to as Half-Ironman.

Ironman has become the ultimate aspirational brand for people marking off items on their bucket list. North American IM events typically sell out one year ahead of time in a period of 6 hours. I’ve been shut out trying to register online as events sell out on-site. The demand for entry into a tortuous race that offers the privilege of jumping into the ocean or lake with up to 1,400 others to start the race is so high that people now attend events as volunteers to ensure their entry and some are willing to pay well beyond the $550 entry fee by purchasing community entries at prices exceeding $1,000.

The Ironman brand exacts a price premium at all points of contact;  entry, merchandise, venue hotels and restaurants but participants don’t mind because WTC delivers a consistent and fabulous experience during each race weekend.  During my race in Clermont Florida, I had to search for a porta potty before and during the race, the drinks at the aid stations were all at room temp (on a 90 degree day) except for the last stand, and overall execution of sponsor tents, awards, and post game grub were pedestrian at best. Not so at an IM event. Everything is executed with the athlete in mind and all is delivered on a first class basis.

The shelves at Best Buy, Target, and Walmart are stocked with MP3 players, but most consumers walk through the doors looking for an “iPod”. Like Kleenex, Xerox, and FedEx, Apple has been able to establish its product name as the category designator. I’m not entirely sure if kids under the age of 15 understand that the MP3 category has products manufactured by companies other than Apple.

Apple’s brand was built on innovation, creating an irresistible appeal for people who had to have the next new thing. Apple backed up innovation with execution as the products worked and allowed people to interact with music in a way never before possible.  Apple has benefited from price premiums and the ability to maintain standardized pricing across an otherwise discount crazed retail distribution network.

That history represents powerful capital in consumer minds that serves to offset even the recent design challenges for the latest version of iPhone. There’s a limit to how many product snafu’s will be tolerated by consumers, and Apple would be testing limits should the next round of product fail on some wide ranging level.

Nike founded its shoe company on the vison of Bill Bowerman and the cinders of the University of Oregon track. Nike may be the best example of how a brand, once established, can extend beyond it roots to dominate an entire category of related products. I don’t think Bowerman and Phil Knight envisioned having the Nike swoosh emblazoned on golfs balls and swim suits, but it has happened. It wasn’t that long ago when I heard kids say they needed to go “shopping for some Nike’s”.

Nike is widely distributed in retail, heavily discounted at times, and has assumed a role of universal appeal rather than a quality product line that appeals to passionate users. Today the Nike brand may lean a little too often on perceived value, celebrity endorsement, and past achievements while product quality and good function is left wanting.  That’s my opinion as a guy who buys 2-3 pairs of running shoes per year as well as clothing and accessories for the running sport. You might have a different opinion if you patronize their golf or tennis lines.

My brand musings have a purpose. Nike, Apple, and WTC probably care little for my opinion of their well established brands. My purpose is to understand how we can create a dominant brand in our own business. What does it take to make your credit card, your loyalty currency, your marketing agency, or your new product become the name that creates demand and even defines a category?

As you engage in planning for next year, elevating your brand should take priority on the strategic planning map. Before you get distracted with mandatory elements of budgeting and forecasting, remember that the price premiums and customer loyalty that comes from a dominant brand pays lasting dividends.

You have to get to that starting line if you are to finish the race. Get started now.

“While not every business needs a Loyalty Program, every business does need a well planned and executed Customer Strategy.” This is one of the loyalty mantras that I share on Hanifin Loyalty and the statement represents a guiding light on the path to innovation in the next wave of Loyalty Marketing.

For some businesses, building a brand so strong, so magnetic, so powerful is the foundation of its Customer Strategy. Achieving this summit is one of the most challenging tasks in business and, if done successfully, virtually precludes the need for a formal loyalty program, certainly one with points or other promotional currency involved.

The World Triathlon Corporation, owner and organizer of Ironman® and Ironman® 70.3 branded events, has climbed this summit, having turned a quirky and semi-dangerous undertaking in 1978 into a worldwide brand that attracts a brilliant demographic and brings tremendous economic impact to its host communities.

With the addition of the Ironman® 70.3 Series, WTC offers more than 50 events on the calendar each year and has the support of advertising partners including Ford Motor Company, PowerBar, Timex, Gatorade, Janus, and Philadephia Insurance Companies.

Ironman Lake Placid is the oldest of 7 US based events, and I was fortunate to be in town for the 10th anniversary race this past weekend. The compelling nature of the brand was on full display with over 2,500 registered athletes and their friends and families burning off nervous energy by shopping in the Ironman® store and patronizing local businesses.

Consider that the entry fee is $575 and that the average tri-bike sitting in the secured transition area is worth $4,000 (my estimate) and you can see that over $1.4 Million in entry fees alone were collected for the weekend and over $10 Million in two-wheeled treasure was waiting for a ride. Multiply these numbers by the 50+ events per year and you begin to understand the magnitude of the Ironman domain.

Ironman may still be a quirky and puzzling event for outsiders to grasp. Some of my friends have challenged the Ironman passion as nothing more than a mid-life crisis for over 40 types, suggesting that buying a new Corvette would be a heck of a lot easier. Others snipe that triathletes are narcissictic, type-A personalities preening their zero-body fat physiques in high-tech fabrics before the crowds. (OK, you’ve got the Type-A part correct).

Let me dispel some myths. As I volunteered at an aid station on the run course this weekend, I saw every size, shape, age, and ethnic origin of athlete pass me by. I would go so far as to say that, if seen in street clothes, many would never be mistaken for Ironman athletes.

I’ve also found that while some of the younger age brackets are the most competitive (30 -39 for instance), I have also noticed that as one moves up in age group, finish times don’t always increase, i.e. there is much more going on here than just signing up for the t-shirt.

Fred Reichheld, the Godfather of Loyalty Marketing, sketched out a continuum of business benefit resulting from adopting an enterprise approach to loyalty. At the end of the rainbow are price premiums. I would venture to say that Ironman, given the nature of the event and level of entry fee, is effective on all levels of lifecycle marketing, (acquisition, usage, retention, cross-sell) and delivers on price premiums across the board as U.S. based events generally sell out quickly after race day each year.

All the praise aside, there is always room for improvement. There is probably a limit on the number of events that WTC can stage each year in the U.S., and more emphasis on triathlon as a youth sport would help fill the funnel with future athletes. The fee structure could price out aspiring Iron-athletes from participating in the future, and the cost of Ironman branded merchandise is obscene at times, spawning a mild “love-hate” relationship with the brand. For instance, a fellow volunteer (himself a 9:44 IM finisher) commented as he pulled on a dollar-store poncho to thwart a rain shower that it would have been worth $70 if it had the IM logo on board.

There are other iron-distance events on the calendar, but WTC has created brand-swagger and is enjoying the price premiums created with its highly emotional participants. The fact that WTC backs up the current frenzy for its branded events with tremendous athlete experience adds glue that keeps people signing up for more. Even their finish line announcer, Mike Reilly, is part of the experience. Mr. Reilly has been the main announcer at the Ironman® World Championships in Kona since 1989, and it is his unmistakable voice that welcomes athletes to the finish line.

There may be some danger to IM that it becomes an elitist event, but then again, maybe that’s what it is all about. The Ironman® distance triathlon is still acknowledged to be the most challenging one day endurance event on the planet, and “if it was easy, everyone would do it!”

I think it’s safe to say that the same applies to WTC’s Customer Strategy.

Ask anyone who has participated in an IRONMAN about their race day experience and most will vividly remember the swim start. The race brochure uses the innocuous term “mass start” to describe what happens when 1,500 people respond to the starting cannon in unison. A more accurate description of the frenzy that ensues is a “wrestling match in a salt water washing machine”!

How you determine a strategy to start the swim leg of an IRONMAN is no small task. Your performance can cast a spell over the rest of the 140.6 mile race. Needless to say, crafting your plan is critical to your ultimate success.

Building a loyalty marketing strategy can be equally daunting, especially if you are committed to differentiating your offering from the competition. Judging from the offerings seen in today’s market, sponsors need to spend more time on strategy formation to ensure that they get ahead of the pack.

In the IRONMAN, you’ve got three paths to follow at the beginning of the race. If you are confident in your swim abilities, get out front and stay there. If you are better than average but have some reticence about getting in the middle of the pack, start on one side or the other, taking prevailing currents into account. If you’re not a strong swimmer, hang out on the beach until most people are in the water and avoid unnecessary contact.

Loyalty program strategy, especially in the credit card business, succumbs to one of the two safe options. Offering 1 point per dollar spend along with a rewards catalog of merchandise, travel, and gift cards is like standing on the beach until the competition is fully in the water. It’s safe and with virtually no risk of injury, but you’re not going to win the race.

Strengthening the value proposition with merchant partners and experiential rewards puts you in a better position, similar to a calculated start to the side of the big pack. You might take advantage of the prevailing “current” in today’s market by using a merchant funded program, but unless you have further steps planned, you’ll end up in the middle of the pack.

The strongest swimmers toe the line at the front of the pack and have the confidence that they can establish a lead and maintain it. Yes, they are partially motivated by the fear of being consumed by the pack, but their training has prepared them to start well and finish strong.

Today’s loyalty programs need a strong, differentiating value proposition to break from the pack. New products like Xcelerator can establish the lead, and consistent use of data and program communications will keep you there. Applying a disciplined approach to measurement keeps your finger on the pulse and allows for mid–race adjustments that are essential to success.

Decide where you want to finish the race before you start. If you want to win, seek out new and differentiating products and services in the market and make sure your strategy is durable enough for the long run.

See you at the finish line…….

Ask anyone who has participated in an IRONMAN about their race day experience and most will vividly remember the swim start. The race brochure uses the innocuous term “mass start” to describe what happens when 1,500 people respond to the starting cannon in unison. A more accurate description of the frenzy that ensues is a “wrestling match in a salt water washing machine”!

How you determine a strategy to start the swim leg of an IRONMAN is no small task. Your performance can cast a spell over the rest of the 140.6 mile race. Needless to say, crafting your plan is critical to your ultimate success.

Building a loyalty marketing strategy can be equally daunting, especially if you are committed to differentiating your offering from the competition. Judging from the offerings seen in today’s market, sponsors need to spend more time on strategy formation to ensure that they get ahead of the pack.

In the IRONMAN, you’ve got three paths to follow at the beginning of the race. If you are confident in your swim abilities, get out front and stay there. If you are better than average but have some reticence about getting in the middle of the pack, start on one side or the other, taking prevailing currents into account. If you’re not a strong swimmer, hang out on the beach until most people are in the water and avoid unnecessary contact.

Loyalty program strategy, especially in the credit card business, succumbs to one of the two safe options. Offering 1 point per dollar spend along with a rewards catalog of merchandise, travel, and gift cards is like standing on the beach until the competition is fully in the water. It’s safe and with virtually no risk of injury, but you’re not going to win the race.

Strengthening the value proposition with merchant partners and experiential rewards puts you in a better position, similar to a calculated start to the side of the big pack. You might take advantage of the prevailing “current” in today’s market by using a merchant funded program, but unless you have further steps planned, you’ll end up in the middle of the pack.

The strongest swimmers toe the line at the front of the pack and have the confidence that they can establish a lead and maintain it. Yes, they are partially motivated by the fear of being consumed by the pack, but their training has prepared them to start well and finish strong.

Today’s loyalty programs need a strong, differentiating value proposition to break from the pack. New products like Xcelerator can establish the lead, and consistent use of data and program communications will keep you there. Applying a disciplined approach to measurement keeps your finger on the pulse and allows for mid–race adjustments that are essential to success.

Decide where you want to finish the race before you start. If you want to win, seek out new and differentiating products and services in the market and make sure your strategy is durable enough for the long run.

See you at the finish line…….