The Apple of J.C. Penny’s Brand

We were going to start today’s blog with a title in the form of a question. Something like, “Would you like a simpler system of price promotions when you go shopping?” or “Wouldn’t it be nice not to have to worry about coupons when you shop?”

We went with another title because the problem was that we couldn’t come up with a question where any rational consumer would have actually said “no.” We mean, come on, who wouldn’t answer “yes” to simpler pricing and not having to clip, save, and carry coupons.

But the reason we were having a problem coming up with a good "bad" question is that those are the questions we don't use, the kind that get you excellent answers to meaningless questions. All asked and collected properly, but not actually reflecting the emotional reality of the marketplace or the expectations of the consumer: a fact that Ron Johnson, the ex-Apple, new-J.C. Penney CEO might want to consider when making plans for the company.

Mr. Johnson announced both some long-term and short-term retail strategies last week. To wit, re-do all the stores, each divided into 100 boutiques. Unfortunately, that will take 4+ years, which is glacial in retail-time. More immediately, however, the company plans to introduce a new logo and move away from nonstop promotions to three kinds of prices:

1. Everyday low prices (like Wal-Mart)

2. Monthly specials (like Sears and Kohl’s)

3. Clearance prices (like, well, every other retailer)

In an interview in The New York Times, Mr. Johnson noted that last year Penney ran 590 unique promotions, but the average customer only visited 4 times. Mr. Johnson was quoted; “So customers ignored us 99% of the time. At some point you, as a brand, look desperate if you have to market that much!”

We certainly would agree. What actually drive engagement and loyalty in the retail category are values that are synonymous with exceptional consumer experience. Unfortunately, J.C. Penney is not actually a brand right now, insofar as consumers define them, which is by how close it comes to meeting their expectations in the category. Yes, it's certainly a name consumers know, but it's not known for anything in particular. J.C. Penney has become a ‘placeholder’, a kind of ACME Department Store of the 21st century where low, lower, lowest pricing has become the price-of-entry, certainly not an emotional differentiator.

Mr. Johnson's previous employer sits at the other end of that continuum. If any brand has understood and capitalized on the emotional aspects of its category, and been able to delight its customers into an engagement frenzy, it's the platinum MBA-case study brand, Apple. There is little doubt that JCP's new CEO has brought with him a deep understanding of that reality, as evidenced by his honest assessment that JCP is being ignored, and not sugar-coating the problem.

We applaud JC Penney's move to borrow from the best. Ron Johnson's greatest challenge may be seeing his new world without abandoning the cultural lens of his old one -- a challenge made easier by an insistence on deeply understanding, and fixing, what really matters.

One might even say, in the world of retail, thinking different.

Share on Facebook

News Flash

A major story in newspapers the morning after President Obama's State of the Union on Tuesday was the "decline" in viewers, according to Nielsen's numbers. The New York Times, for one, reported "it was by far the fewest who have watched President Obama give the address."

Really?

Did you know that sales of ice cream go up in summer months? Sure, you say. But did you also know that urban crime rises in the summer, as well? So, clearly, ice cream causes crime.

If you're nodding because you've heard that one about spurious correlations, that makes us happy. What doesn't cheer us quite so much are news stories that report declining television viewership numbers and offer nothing beyond juxtaposing that "decline" with a list of what station did what Nielsen metric, and then close the article with the highest performer: American Idol, the best rated of the night "among the 18- to 49-year-old viewers favored by most advertisers," says the New York Times.

It may surprise some news media out there to hear that the majority of American men don't wear fedoras to work. And that we no longer use metal tokens on the train systems throughout America. And--this just in--many of those 18-49 years of age get their news on their own timetable on this new fangled invention called the internet. Which means they watched either the entirety of the President's speech, or the highlights, as they made their toaster waffles or rode to work, getting it on their tablets or hand-helds. Meaning there may not be, as these stories infer, less interest in what Mr. Obama has to say than in what happens on American Idol, but far less interest in whether Nielsen gets to take their attendance.

Digital is not just an invention. Digital is a life changer. It's has changed the way we get news and entertainment, how we communicate and socialize, and engage with brands. And, by the way, we have data to show exactly how, and how that changes the categories in which brands compete. If you want to know more, than send us a letter, or use your car phone, or, if you've got one of those computer thingys, you can use that, too.

Share on Facebook

How Super is the Super Bowl?

It turns out that not all TV programs are right for all brands –even if it happens to be the Super Bowl. Our 10th annual Super Bowl Engagement Survey shows that when it comes to winning, only half of this year’s Super Bowl XLIV’s advertisers will get real returns on their sizeable investments.

The Super Bowl has long been a showcase of ‘creative’ advertising and ‘big’ audiences. But ultimately all advertising should be judged by how well it performs off the field. Does the ad engage customers, drive positive behavior, sales, and build the brand? Awareness is what you get for your money in a game known as much for the payers as it is for the players, as people go for a nacho run during the game, so as not to miss the ads.

This flattening of the playing field has not been lost on advertisers, who increasingly have moved to create up-front buzz for their ads, knowing their ads will get noticed—along with everyone else’s. Volkswagen is a case in point, trading on the memory of last year’s Super Bowl gem of an ad where a little boy, dressed as Darth Vader, believes he has started a car using the force. This year’s “ad-for-the-ad” treats us to a choir of dogs barking the Star Wars theme, our first clue that the brand will trade heavy on whatever entertainment equity is left from last year’s belly laugh.

It’s easy to understand with all the proliferation of advertising (just in: they are putting ads on bananas) a brand feels it must entertain the audience to even get them to stop. And that’s a fact. No one can respond to a message they don’t see. But on that special Sunday, when attention is given to all, what remains is not what ad made us laugh hardest or brought a tear to our eye, but which ads moved us closer to the brand sending the message. That is a lot harder to do than borrow from a landmark film, a cute kid and puppies.

This year’s Brand Keys Super Bowl Engagement Survey was conducted three weeks before game-day, polling a national sample of 1,500 men and women, 18 to 65 years of age, who indicated that they were going to watch Super Bowl XLVI. The research examined the brands reported in industry publications as Super Bowl advertisers and determined to what degree brand values were affected by the Super Bowl venue. Advertisers are classified as “winners” (+5 brand equity points), “losers” (-5 or more brand equity points), or “tied” (brand values were left unaffected by the Super Bowl setting), with results as follows:

Winners		Losers	Ties
Doritos (+13)		Kia (-5)	Chrysler (-0-)
Hyundai (+12)		Dannon (-6)	Honda (-0-)
Cars.com (+10)		Teleflora (-6)	Bud Light Platinum (-0-)
Audi (+9)		Best Buy (-7)	NBC ‘The Voice’ (-0-)
Coke (+8)		Century 21 (-8)	GM (-0-)
Pepsi (+7)		Budweiser (-9)	Volkswagen (-0-)
GoDaddy.com (+6)
M&Ms (+6)
CareerBuilder (+5)
Skechers (+5)
Toyota (+5)

The Super Bowl Engagement Survey, like the Brand Keys Customer Loyalty Engagement Index predictively measures respondents’ true reactions to brands with the context of the medium. Results correlate highly with consumer behavior, and have been validated as reliable predictors of future brand purchase. Think of it as identifying how the media reinforces – or in some cases even degrades – brand values. A minimum of five brand equity points added to your brand’s absent-of-media-or-advertising score ensures you’re a winner and get a real return on a very expensive investment.

The final score: brand engagement is vastly different from being watched, entertaining folks, or being talked about. A laugh, a sigh, or a tweet aren’t really acceptable returns on an investment this size. And being able to judge that before you sign the check is the real definition of a winner.

Share on Facebook

Faster Food Via Home Delivery

It’s no secret that many Americans could benefit from losing a few pounds. OK, more than a few. Over two-thirds of adult Americans are considered overweight. Kids’ body-mass ratios are totally out of whack, and that’s not such a good thing.

Independent studies have shown a link between obesity and proximity and consumption of fast foods. Easy access means consumers also have easier access to oversized portions, which encourages consuming more calories than a body burns through via exercise. That’s what the medical data shows.

This thought came to mind as we were aggregating some data of our own; the 2012 Customer Loyalty Engagement Index. That’s our annual study – this will be its 16th year – where 50,000+ consumers tell us about what drives loyalty and engagement in the categories in which they participate. This year we’re looking at 80 categories, including Airlines, Beer, Social Networks, Insurance, Electronic Tablets, OTC Pain Relief Tablets, Clicks and Bricks Retailers, and Major League Sports. We also look at the Quick Serve Restaurant category, aka, “Fast Food,” and, sorry, we won’t have the rankings of brands in that category for a couple of week yet.

But I can tell you now that the emotional and rational factors that form the category drivers that identify how consumers view, compare, and buy – the critical word in that phrase being “buy” – in this category have, once again, shifted. Which is the reason for the introductory discourse about weight and overeating and ease of access to fast food. Because this year, the category driver that relates to Healthy Choice and Quality Food in the Fast Food arena has shifted into the #1 spot. Turns out consumers also hold the highest expectations for this driver. So it’s a kind of important driver. Location and Access (of and to Fast Food joints) is least most important. Just saying.

Anyway, this all came together when we read that Burger King is testing a scheme to give customers even easier access to their fast food: Home delivery! They’ve been testing delivery service at restaurants in Washington, DC and are planning to expand the program to more locations over the next few weeks, offering hot and fresh food delivery (via a new thermal packaging technology) anywhere within a 10-minute drive radius for an $8-10 minimum order – all for just a $2 delivery fee. Of course, with this kind of access, you won’t be afforded the opportunity to walk off any of the meal’s calories going to and from the restaurant. Walking to your front door doesn’t count.

Is this the wave of the future? Well, McDonald’s has a business-only delivery service they offer out a few of their restaurants in New York City. Wendy’s doesn’t currently offer any kind of delivery service at all.

What we can tell you has been independently validated. All brands, no matter what the category, that understand what really drives their categories are always able to better deliver against what truly drives loyalty and engagement in their categories. They’re also able to better deliver against ever-increasing customer expectations.

And brands that do that can always count on a fat bottom line. Which is a really good thing.

Share on Facebook

Lost in Digital Space

It seems not a day passes without some news somewhere about the world of digital, especially when it comes to brands. The news report usually starts with words like “a recent survey of digital users found…” Well, you get the point. Those who “participate in the space,” as marketers say, are being asked to account for what they are doing. And who they are, so that maybe brands can figure out how to talk to them, or why they use this or that, and on and on.

The problem with these strategies—and it’s a big one, we’re afraid—is what’s missing. It fails to answer how digital truly connects to how the category itself works. In short, it fails to give guidance to brands on how to be strategic in the digital space, not simply participate.

Simply knowing what digital platforms people are using does not tell a brand how that platform can best be leveraged for the brand. For that, the platform must be linked to the emotional and rational aspects that drive consumer engagement with the category itself. Because every category is different. And it also must be understood exactly how high digital involvement changes the way a consumer looks at the category, because that too is different.

Digital usage studies have remained in a silo, separate from how consumers engage with and choose among category brands. And that approach is far too limited.

To answer these questions and more, we are debuting the Digital Platform Engagement Index — the DPEI — the first-ever addition to our annual Customer Loyalty Engagement Index, now in its 16th year.

This unique approach to understanding what’s behind consumers’ engagement with digital platforms — in over 80 categories — will be available in the next few weeks. In the meantime, if you’d like to actually hear more about it, we invite you to listen to an actual case study from our “What Happened?” series. Or feel free to contact Leigh Benatar at leighb@brandkeys.com for information about our pre-release packages.

We feel the time has come to really answer the question for brands of what to do with digital. Watch this space, as they say, for more as we continue to insist that the easy questions are usually not the ones really worth answering.

Share on Facebook

A Not-So-Wonderful Kodak Moment

They’ve been called “an iconic photographic film pioneer.” And a “legendary American photography company.” And the “image of film-based photography.” Unfortunately, what Kodak can’t be called is a 21st century digital image brand.

By all rights, the 131-year old company isn’t really much of a brand anymore. Not if you expect a “brand” to stand for something meaningful and differentiating in the mind of consumers. Oh, and filing for Chapter 11 bankruptcy protection doesn’t count. Which is what Eastman Kodak is preparing to do in case it can’t sell its digital patents to raise capital.

Yes, you read that right, “digital patents.” Kodak invented the digital camera nearly 40 years ago. OK, it was as big as a toaster and only operated in black and white, but it was digital. Talk about a Kodak moment! But back then Kodak didn’t bother to capitalize on their innovation. Why should they, they probably thought? In 1976 they had a 90% share of the US film market, so they relied on film and photographs and photographic developing, and digital be damned!

By the time the film business went into sharp decline about 10 years back, they found themselves playing catch-up with brands who had capitalized upon – and were believably identified with – digital. And imaging – not photographs.

Going back to “brand” for a moment, if you really think about what the Kodak brand (when it was a brand) stood for, it was not the taking of pictures, not the point-and-shoot cameras, but the capturing of a moment in time via processing – film to negatives, negatives to pictures, pictures to mantelpieces and memories. And we loved them for that.

But then along came digital cameras and phones with camera and jpegs, and analogue photography became a piece of nostalgia and a sign of simpler times. But “nostalgia” turned into something “old-fashioned,” and soon old-fashioned became unfashionable. Digital became more state-of-the-art, and by then Kodak couldn’t get consumer to believe that they could successfully play in that arena, no matter how many patents they had.

BTW, none of this is 20:20 brand hindsight. All one needed to do was accurately measure consumer expectations and have a finger on the pulse on what was driving the imaging category and all would have come into sharp focus.

Both digitally and financially.

Share on Facebook

Strategy Does Not Always Equal Results

Churchill said, “However beautiful the strategy, you should occasionally look at the results,” and it seems like good advice, particularly when every shop seems to have a method they talk up.

But very few stop, look back, and question actual marketplace results to see if they were victorious in executing the identified strategies. Because when it comes to creating brand strategies, there’s only one question that really needs a satisfactory answer: What happened? “The research predicted something and then... what happened?”

As 2011 ended Brand Keys followed Mr. Churchill’s advice and examined how closely what we said during the year in our blog, The Keyhole, actually matched market results.

We invite you to listen to What Happened? Successful Strategies, Marketing Misdeeds, and the Brands That Loved Them, this year’s collection of 15 recordings – true stories that are a look back at our blogs on categories from social networking to smart phones, banks to beer, and brands from Ford to Facebook, and Purina to Pizza Hut, and see if what we said would happen, did happen.

Ben Franklin said, "Well done is better than well said.” Or as brands might suggest to their research providers and strategy consultants, “Don't talk the talk if you can't walk the walk.”

Because research ‘talk’ that matches up with what actually happens in the marketplace is always a real victory for a brand.

Share on Facebook

Super Insights and Sales

At a time when the economy has been less than sterling there’s some good news in the sports arena, at least. Apparently Super Bowl advertising spots are in tremendous demand, with NBC selling out all their commercial airtime for the February 5th Indianapolis-based game. Even with average 30-second commercial spots going for $3.5-4 million.

So good for NBC, but the real question is when all is said and done, what did the companies really get? Advertisers can prove they got the time they paid for, and an exceptionally large audience, but in terms of real-world accountability – even with links, tweets, and digital tie-ins – from an ad POV they get no proof that an expensive buy like that actually did anything for them; will the audience will remember it, or think well of the advertised brand - let alone buy the product! They won’t know if their efforts engaged the target audience. Entertainment and exposure is one thing. Engagement and sales another.

So to remedy that, as we do every year, we’re fielding the 2012 Super Bowl Media Survey. Like our Customer Loyalty Index, it’s created to tease out respondents’ true behaviors. The process quantifies the brand equity increase (or decrease) that results from advertising on any event – n this case, the Super Bowl – and reports the “return” or “loss” gained from the advertising effort. The survey results correlate highly with respondents’ true attitudinal and behavioral patterns – and are reliable predictors of future behavior toward the advertised brand. Basically it answers the question: Is my marketing exercise going to engage consumers or will I just be burning money?!

Televised events like the Super Bowl – aka “Branded Entertainment” – have long been used to showcase “creative” advertising. But ultimately all TV spots - no matter how terrifically creative – are judged by how well they engage customers, drive sales, and build the advertiser's brand.

The good news for NBC is that there are spots available during the pre-game show and there’s even a waiting list of advertisers in case one brand or another decides not to advertise. The better news for advertisers is they can measure effects before they write a check.

And at a time when everyone’s being pressed for greater strategic and monetary accountability, we think that’s what’s really super!

Share on Facebook

Resolute About Resolutions

Will 2012 be the end of everything we know and love? Or will it be the dawning of the Age of Aquarius? These are timely questions because December 21, 2012 is the day that time is scheduled to end. At least according to the Mayans.

The ancient civilization of Mayans lived in Mesoamerica since 2,600 BC and had an extremely complicated and accurate method of keeping track of time based on three separate calendars. The most important one accounts for the “Long Count.” That’s the enumeration of the period from the beginning of time until the end of it. Really. The end of time. And on December 21st 2012, the Long Count expires. Point zero. Time will be up for the Universe. No more tomorrows. Literally, the end.

And even though New Year resolutions are supposed to go in one year and out the other, there are still 352 days until the end of days. So given the countdown, here, courtesy of the 2012 Brand Keys Customer Loyalty Engagement Index, is a list of the top-5 resolutions consumers have made for what remains of 2012:


1. Spend More Time with Family & Friends: More than 50% vowed to appreciate loved ones and spend more time with them.

2. Get Finances in Order and Get Out of Debt: This resolution used to be lower on people’s lists, but not surprisingly, as money was a big source of anxiety last year, 47% of Americans polled resolved to get a handle on their finances.



3. Lose Weight (and Exercise More): Over two-thirds of adult Americans are considered overweight, so it’s not surprising to find that 42% of them made a resolution to lose weight and exercise more regularly.


4. Quit Smoking: Smokers usually try about 4 times before quitting for good, 
but more over-the-counter therapies than ever provide easy access to proven quit-smoking aids, and 34% are resolved to try them out.


5. Getting Organized: Whether closet or desk, everyone can benefit from reorganizing stuff. Einstein said, “Out of clutter, find simplicity,” and 27% of consumers are taking this advice.

Other popular resolutions include learning new skills, volunteering, drinking less, and enjoying life more. Nearly 40% of people who make resolutions are still successful after six months – or, if you are keeping count – 179 days from today. It’s a good sign that people can successfully change their behavior, and a good lesson for brands too.



As a new year is the quintessential time for both personal and professional planning, we’d like to suggest you add one more resolution to your list: Divest yourself of legacy measures and invest in real loyalty and engagement metrics.

They’re consumer-driven, digitally-disposed, and measure the direction and velocity of values and expectations 12 to 18 months – or 534 days on the Mayan calendar – ahead of traditional research methodologies, which is important.

Because if history has proven anything it’s that brands that don’t have a fix on real and predictive measures of categories, expectations, and engagement will really find their days numbered. All best wishes for 2012.

Share on Facebook