[coauthored]Co-Authored with Mark Di Somma[/coauthored]
Spend any time at a brand or marketing conference or reading the marketing press these days and what is very clear very quickly is just how fixated people seem to have become with pushing narrowing viewpoints. The digital people just want to talk about digital. The brand valuation people analyze shifts in the worth of brands. The intellectual property people want to talk about protection. And yes, those involved with licensing want to talk about what’s going on in their part of the brand universe.
As agencies and consultancies have developed expertise in these different facets, they have developed methodologies and approaches that systematize their schemata and worldviews, but — and we’ll let you decide whether this is inadvertent or intentional — also drive wedges between the different approaches, to the point where they can feel like either/or decisions.
At one level this focus on specific aspects of the brand spectrum is completely understandable. We’re all too busy on our own stuff and it feels like we have zero time to consider the bigger picture despite our best intentions. The complications and debates of each discipline now run so deep that there is ample fuel for conversation and the promotion of new theories and frameworks, even within micro-fields. What concerns us though is that this silo-ing of marketing functions is causing practitioners to overlook what should be the key priority for all of us. How do we get the different disciplines of brand to talk with each other in more connective ways, so that marketers can form coherent views on how the elements work together to form stronger, more valuable, more exciting and competitive brands?
[subheading]Joining historically disparate disciplines[/subheading]
In the discussions we’ve been having with senior marketing and licensing executives as part of the research for Pete’s book, Expand Grow Thrive: 5 Proven Steps to Turn Good Brands into Global Brands Through the LASSO Method (February 2018), it has been great to hear more and more of them making overt reference to brand DNA, story and experiences as critical consideration elements for licensing decisions. The view that licensing is just about deals and sweating IP assets is slowly giving way to an understanding that brands are as much about how they are emotionally structured and viewed as how they are legally owned, and that unless they are offering consumers consistent stories and aligned experiences across their various touchpoints, they are short-selling the brand. In a recent conversation with Matt Dunn, founder and chief brand officer, Octane5, he shared his company’s “Five Immutable Laws of Licensing” that speak to this evolution:
- Protect your brand;
- Identify and track hidden risks;
- Manage with actionable information;
- Engage the customer(s); and
- Act like a business, not as a department.
What’s still missing for us is a framework for how the historically silo-ed disciplines of brand insights and strategy, brand licensing, brand valuation and brand protection should work together to lift the contribution of the brand to the business.
By connecting the various activities through a lens of “where and how does each activity add value (as a whole and to each other)?,” our hope is that we can promote a more interactive brand ecosystem. Several years ago, Mark created something of a furor at a technology conference when he suggested that the technology and marketing teams needed to do lunch. Today, big data, algorithms and patterning have normalized that relationship to the point where it is becoming mainstream. Our hope is that the same thing can happen across the brand continuum as specialists from across the disciplines understand that they are much more valuable working together than they are squabbling with each for territory, mandate and client access. More closely aligning the disciplines, and perhaps the performance metrics and compensation, would encourage each to think about its relationship with the others rather than pushing for one area at the expense of everyone else.
Here’s how we see the contributions that various disciplines make:
- Brand insights: The environment within which a brand competes: the competitive forces; the market dynamics; consumer priorities; regulatory constraints and opportunities
- Brand strategy: Where a brand is positioned; purpose; values; the brand’s story. Described by some as the “business strategy made visible.”
- Brand protection: The ideas that the brand chooses to hold close as proprietary property
- Brand licensing: How, where and why the brand chooses to extend or expand its presence to help achieve the greatest possible levels of return
- Brand valuation: What the brand is worth to the business.
Two things seem inevitable in such a discussion. By snapshotting how the various components work, we will be criticized by some for over-simplifying the value and contribution of their discipline. And there will be the inevitable protestations that some agencies are doing some or all of what is described already. Neither defense should detract from the key point of emphasis, however. The broader brand community needs to work more closely and more constructively together to help brands explore more effective ways to grow. There are opportunities for individuals and teams at all levels to demonstrate leadership here by asking to include other perspectives.
It’s true that within this construct, there are already well-established relationships that do work well together. Brand insights and brand strategy experts need to work closely together and frequently do so to great effect. Equally, brand protection and brand licensing have a traditional relationship. However, these two disciplines are often ignored and segregated from the rest of the marketing team. Moreover, the brand licensing group needs to be seen as the expert in brand extension and expansion, but often is not even consulted in this decision. Brand valuation is an outlier to many, but shouldn’t be — because, if brands are valuable, and the purpose of brand strategy and brand licensing is to grow the value of a brand, then it makes sense that money should be an integral part of the planning for, and extension of, every significant brand.
[subheading]Still Unanswered for Us[/subheading]
We’ve previously examined the need for brand strategy and brand licensing teams to work more closely together to develop brands that extend and expand in integrated ways. The role of brand protection in this discussion seems to us to need to focus increasingly on what brands need to own in order to succeed, and what they should be ceding to others or developing via open source. Shaping the criteria for that discussion around the ability to grow, for example, is quite different than boxing it into risk minimization. Equally, while brand valuation often appears to outsiders as a scorecard function, there could and should be closer discussions around how brand growth and brand equity are better monitored, and the levels of investment required to achieve the returns that senior teams want — in other words, framing brands as active and strategized market makers for companies.
Any or all of this requires those involved to agree on an integrated approach that allows the disciplines to talk seamlessly to each other and embrace each other’s priorities. The outcome would be a set of blueprints for clients that dovetail from what is known to what is owned, what is planned to where and how the brand can be extended, and that is wrapped in a valuation model that seamlessly explains what is happening to the worth of the brand along the way. One of the correlations that both of us would like to see a lot more of, in our licensing and strategy practices, for example, is the connection between consumer attitude and market value. That connection is stated as a factor by brand valuation firms in their methodologies but remains opaque to the rest of us.
[subheading]What Happened at Rubbermaid[/subheading]
A small example in our book touches on where this could lead. When Pete worked at Newell Rubbermaid, market research revealed that the Rubbermaid brand had consumer permission to expand into a plethora of categories. The internal criteria stipulated that “as long as the products were made of plastic or rubber and were used in and around the home” the brand could be expanded. However, market research revealed that the brand did not have a competitive advantage in “all things made of rubber and plastic.” The company had confused its interests and priorities as a manufacturer and licensor with those of consumers, and as a result it was looking to expand into areas that made sense to Rubbermaid but lacked the distinctiveness needed to cut through competitively.
Pete worked with the Rubbermaid brand council to redefine the Rubbermaid brand pyramid and positioning, honing in on the brand’s core equities of “storage and organization.” Doing so not only enabled the brand to play to its real strengths, it also enabled the brand to own an idea that was valued by consumers, that made sense from a strategic and licensing point of view because it tightly integrated with the brand’s DNA, and that enabled Rubbermaid to profitably expand its presence out into new markets.
The redefinition of Rubbermaid’s positioning helped strengthen the connection with its customers and enabled the company to grow, but doing so in a way that resonated with the brand image. Pete was able to do this after years of experience and by having expertise of licensing brands; however, to some, the task can feel daunting. Having a firm understanding of where the company currently sits and what goals the company is trying to achieve can be viewed as the oil of a fine-tuned machine. This understanding of the brand enables each distinct team member to do his or her part in helping achieve the company’s overall goal.
Pete and Mark have developed a model that makes the task of figuring out which move a company needs to make (in order to meet their objectives) clear and understandable. The model is called The LASSO Model, which Pete explains in detail in Expand Grow Thrive. This easy to use method makes figuring out the company’s next step simple and exciting.
[subheading]A Framework for Integrated Brand Expansion[/subheading]
Earlier this year, we laid out a framework for an integrated approach that we believe could see more parties, better involved, in the development of a brand’s growth agenda. We’ve now expanded that framework to take in more of the points raised above:
- What makes your brand intrinsically competitive? Every brand needs, first and foremost, to answer a need, preferably a pain point. What does your brand own in the minds of consumers that gives it growth potential? Why will it prosper, and how will it form a worldview that gives the brand a powerful sense of purpose and a robust identity (in the broader sense of that word) that aligns with the business’s strategic plans?
- How much do you want the brand to be worth? It’s surprising how seldom this question gets asked by marketers and those building brands, and yet it’s critical because it not only defines the value of the brand for the business, but also frames the level of investment that the business is prepared to make in the brand. You can define brand worth in a range of ways of course — by revenue, by margin, by percentage of total market share or by book value. The important thing is that you have a number that defines success and that forms the basis for what you bankroll.
- On the basis of what critical assets? What are the key ideas that you need to own (and therefore be able to defend) if you are to achieve your plans? What IP and protection will you build into your products, for example, that enables them to be less susceptible to counterfeiting? What allowance have you made for including the contributions of others in your new product development, and how will you define what you simply incorporate and what you decide to charge for? How will you value those owned assets in terms of the returns you expect from them, and will that contribution be transparent to decision makers so that they can judge asset effectiveness?
- Over how many sectors? It’s important to have an overview of the potential stretch of the brand. How do consumers see you — as a brand that owns an idea, or one that occupies a specific sector? What do they value you for, and how elastic is that? In other words, what mandate do you have to extend or expand, or do you even have one? With traditional licensing deals, for example, so many brands think about expanding on an offer by offer basis rather than consciously planning where the next brand interaction sector might be from the “big picture” down. Our view is that successful brands know how they will expand, where and with whom, and have supporting research for doing so. They also need to be aware of the contribution to overall worth that they wish to derive from each sector they participate in. So they need to consider not just the financial returns but also what expansion might mean for overall brand presence and value. In other words, they need to be able to strategize top-down and bottom-up. Critically, they should define “trip points” in terms of reach and revenue in their strategy that decide when they should consider casting their net wider, or deeper.
- Across how many countries? If your brand is ranged across multiple countries or regions, are you doing this to grow the brand you have, or as part of a broader expansion strategy? It’s vital that you plot where you will expand market participation and in what order. This should be led by market appetite, but you should also factor in potential market size, uptake rates, the success paths of others in each market, the levels of competition in the sectors you are looking to expand into, and of course whether you will be able to achieve benchmarked levels of margin as you go.
- Over what period of time? It’s important to know the timeframes within which you want to achieve growth. Are you using SMART — Specific, Measureable, Achievable, Relevant, Time-oriented — objectives to achieve your goals? Again, while that may seem obvious, a lot of brands don’t think through the implications of that in terms of forward planning, resourcing and particularly runways. The key determinant here will be market demand. How quickly will you need to expand in order to fulfill consumer interest, and what dependencies will you put around extending into a particular market?
- Using what resources? Where will the growth come from? After determining where to play, you need to determine how you will win. This requires you to take a look at your internal capabilities and priorities. What part of the expansion can you do and have the capacity to do? Based on this you will need to assess what parts need to come from external resources. This could include sourcing, where you will do the marketing and sales, acquisition where a new company will be integrated in to take on this role or via licensing where you can leverage the competencies and bandwidth of third parties to execute those parts that complement what your team is going to do.
Many brands ask many of these questions now, of course. What they don’t do, we believe, is ask them in a manner that cross-references the learnings and that encourages experts to work with them in coordinated ways to arrive at answers together. By developing an overall plan of what their (expanded) brand looks like, and a strategy for how, where and when that will roll out and with what packets of investment, our hope is that senior marketers, and the leadership teams they report to, will be much better positioned to empower their team members to work together, to judge every opportunity on its merits, and better able to connect opportunities within the context of achieving their overall goals for brand worth.