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.

Ever since man has been on earth, we’ve been running. In the beginning, our motivation was the need for food, shelter, and survival. By the mid-twentieth century, pursuit of fitness through sweaty activities had become the domain of oddballs. Given the outlaw nature of adult fitness only 50 years ago, the origins of the 70’s running boom are remarkable.

Bill Bowerman, the one-of-a-kind University of Oregon Track & Field Coach, is most well known as the guy who shaped Steve Prefontaine’s front-running style into record breaking performances, and for having a hand in the founding of Nike. Few know that his chance trip to New Zealand in 1962 would lead to the jogging craze that swept America in the early 70’s.

Ask most people about running and they have an opinion – usually resolute and often diametrically opposed. The phenomena is so pervasive that New Balance has adopted it as the theme of its “Love and Hate” advertising campaign. Since I’ve logged about 35 years of pavement pounding, I can attest to man’s Cybill-like relationship with the sport. Some days the endorphins kick in and feet seem to float across the pavement. Other days, it just plain hurts.

In my experience, the most reliable anesthesia to dull running agony is to think. Allowing my mind to wander may have contributed to slower race times, but that’s another story. Through it all I’ve found that a good long run will clear the mind, spawn new ideas, and root out the solution for the problem of the day.

Soldiering through a 10K run the other day, I pondered the many ways in which independent retailers strive to breed loyalty and combat big box merchants. Punch cards and cash back discounts are the most common tactics used today. Listening to one merchant talk about his program recently, I realized that it was purely tactical, without strategic foundation, and absent specific objectives except for the hope that “more sales” would result.

As the ten kilometers that add up to the 6.2 mile run passed by, I assembled a list of ten questions that every retailer should ask when seeking to improve repeat purchase behavior and increase customer loyalty. The answers can be blended with a bit of “secret sauce” in order to give their Customer Strategy new meaning.

The 10 K’s of Retail Loyalty:

1. Who do you really think is your competition?
2. What does your Brand stand for?
3. How are you identifying customers today?
4. What are you doing with any data collected?
5. What are the objectives of your marketing efforts?
6. Are your offers coordinated to meet these objectives?
7. How are you communicating with customers?
8. How do you measure results?
9. Are employees trained to understand and promote the program?
10. What are you going to do next?

Marketing resources are scarce and, in a tough economy, every penny counts. Working through these ten questions will lead to a simple, yet effective strategy that any independent retailer can employ to improve their business.

It’s no sweat!

Bill Hanifin