The brandgym blog

Hiscox: the benefits of bravery

I was lucky enough to recently meet Steve Langan who runs the UK business of insurance company Hiscox, and their marketing globally. I have long admired the way this brand had been brave enough to stand out in what is a pretty dull and uniform market overall. Steve shared with me the impressive growth Hiscox has generated over the last few years, in terms of brand awareness, policy count and cost per contact. Here I share some of the insights into how they have created this growth.

Big brand idea: the foundation of the Hiscox success is a differentiated and memorable brand idea: “Extraordinary cover”. Whichever sector they enter, the cover the provide is beyond the norm. There is a nice bit of sausage/product in everything they do. So, in the TV advertising for home cover they are able to make the bold claim “1/2 of the claims we paid last year would not have been covered by a standard policy”.

The brand idea also helps guide and inspire new service development, such as a recent entry into prestige car insurance. This has many innovative features to appeal to owners of high-end cars, including

Super-charged sizzle: Steve and his team have done a super job in creating a distinctive and aspirational visual identity for the brand, using black, white and red as key colours. First, this helps Hiscox stand out from “the sea of blue” of other insurance brands. The identity has an aspirational and professional feel to it. Second, this identity has also been applied consistently over the whole Hiscox mix, from brochures to websites to direct marketing.

Brand-led business: everyone talks about driving the brand into every bit of a business. But this is incredibly hard in a service business like insurance. One of the keys to Hiscox’s success is that in the key UK market Steve is responsible for marketing, but he is also the Managing Director. This has allowed him to drive the brand idea deep and wide, including key areas such as claims handling.

This is a big difference to the situation most marketing directors in service companies find themselves in. In most cases the marketing director has no direct influence over the front-line service delivery, even if this is the most important bit of the brand in a service business. No wonder that most marketing directors end up changing the “image wrapper” of logo and communication, as this is the only area they control.

The power of true internal engagement: the power of the Hiscox brand also works inside the business. This is shown by people now coming to Steve with ideas of how to make the service they deliver truly extraordinary. The challenge now is figuring out which of the many ideas will provide the best return-on-investment.

In today’s tough times the temptation is to be conservative. The success of Hiscox shows that being brave enough to stand out from the crowd is a better way to grow.

RTB = Reason To BUY, not Reason to Believe

The new poster advert from Quantas, the Australian airline, got me thinking about "reasons to believe": those truths about a product or service on which you can build a positioning. Now, as Mr Sausage, I am a big, big fan of brand truth. Its at the very heart of our view that the best brands are built on substance not spin. BUT, the Quantas brand truth in their ad left me cold: "Quantas: The world's most experienced airline." Huh?

Does anyone really care that Quantas are the most experienced airline? What is the inferred benefit from this? We've been flying for a long time, so we are good at it, I guess. It left me cold, and gave me no desire to consider Quantas instead of BA on a future trip to Oz.

The only thing it made me think of was a scene in the movie Rainman. Dustin Hoffman, playing a guy with autism, pisses off his brother, played by Tom Cruise, by insisting that the only airline he will fly is Quantas, because "Quantas never crashed".

So, we should perhaps forget about "reasons to believe", and replace them with "reasons to buy".

Here are some good examples of Reasons to Buy:

- Pantene: Pro-Vitamin B5 => unique ingredient for shinier hair

- Apple iPod (at launch): 1000 songs in your pocket => convenience and portability

- Blockbuster Guarantee: rent the movie you want, or get it free next time => confidence, choice

- Singapore girls: unique on-board experience, a taste of Asia in the air

 BA: the world's favourite airline => be with the best, must have good service-

- Pret a Manger: made fresh on premises every day => will taste better, and have no artificial crap in it.

- Moleskin notebooks: used by famous artists => I'm a creative type. Or like to think I am.

So. The RTB is dead. Long live the RTB.

Attack of the clones

Two interesting examples of brands being attacked by clones in the chilled section of UK supermarkets. Some good insights on how (or how not) to take on an established leader in a growing category.

Tropicana Smoothies vs. Innocent
Tropicana tried this before, but they're back for a 2nd go at taking their share of the UK smoothie market. Back in 2002 they tried and failed.

And you can see why parent company Pepsi are doing this. Its a fast growing market, and innocent have 70% of the market. The weak second place brand is PJ's, also owned by Pepsi, which will be taken "downmarket" with prices slashed by 30% and the exotic flavours removed.  So, Pepsi are going for a "2 pronged" portfolio to take on innocent.

In Tropicana's favour, the brand is strong in premium chilled juice, so has some good product equity. They have a pretty good "sausage": the strawberry and banana smoothie we tried was lovely. I would say about as good as innocent.

BUT, they have a few big challenges. First, they lack the emotional sizzle of the innocent brand that has been built up over 10 years. Blink and the Tropicana Smoothie pack could be a carton of juice. It has nothing distinctive. Second, their products taste good, but they have no real product plus that they are bringing. They seem to have copied innocent's products. And last but definitely not least, they are pitched at the same price-point: £2.99 for a 1l tetra pack.

Net, not a great value proposition. Where's the added value? It comes down to a straight brand choice between the trust of Tropicana, and the lovely little story that is innocent.

My guess? Tropicana will steal about a 10-15% share, taking mainly from PJ's and own label. PJ's will die, as being taken downmarket means it will be too close to own label. Innocent will come out of it in pretty good shape.

What do you think?

Heinz chilled soup vs. New Covent Garden

Next up is Heinz trying to muscle in on the chilled soup market. This is dominated by New Covent Garden and own label. I like New Covent Garden, and have used them for 10 years or so.

Heinz have launched "Farmers Market" soups.

In their favour, they have a more accessible price point than New Covent Garden: £1.49 for a 600g carton vs. £1.99

BUT, there are issues here again. First, the Farmers' Market story is a bit thin... they've been forced to put on the pack that the ingredients "come from the UK or abroad". Mmm. So, not really like a Farmers Market at all then. Second, Heinz have launched the new concept in chilled, but also in ambient cans. This was probably needed to make the business plan work, as ambient cans in Heinz's core business. But it dilutes the fresh, Farmers Market idea doesn't it? It begs the question that the soup might be a Sunny Delight-style ambient soup stuck in the chiller, rather than a truly fresh one. Third, Heinz have nowhere near the range of Covent Garden, who have a larger core range, and limited edition seasonal concepts.

Net, feels like a cheaper copy of New Covent Garden. The big question is whether 50p a carton is enough to tempt me... but then if I want a cheaper option I already have lots of choices...they're called Tesco, Sainsbury's and Waitrose.

My guess? Heinz will make a very limited impact in chilled soup. They won't get the scale to make the business model work. It'll be too hard. And in 2 years it will be gone. The ambient product will work OK, and help revive this core business for Heinz. And perhaps Heinz will have bought New Covent Garden.

What do you think?

 

How branding can help small firms beat the big boys

I'm really interested in how branding can help solo entrepreneurs or micro-businesses beat the big boys. With advances in technology small firms can now present and market themselves professionally. And people love getting personal service from someone they can trust. This is true in our field, where we and a network of other small, specialised consultancies and agencies collaborate to take on and beat the bigger agencies.

I recently wrote an article on this for a column called "The Entrepreneur's Mind". The link is here, and some of the highlights are given below.

Brand-led Business
Many small firms have a mistaken belief that branding is only about designing a nice logo. Branding fiascos like the furore over the 2012 London Olympic logo only serve to reinforce this impression that branding is restricted to working on the visual surface of a business. To really create growth, branding needs to drive the way the whole business operates, with four main areas to work on: insight, ideas, impact and image:

Insight: branding starts with clearly defining your target market, then understanding in depth their needs and where the competition is failing to fully meet these. Sounds obvious doesn’t it? But many entrepreneurs are so busy managing their business that they don’t always invest time doing this.

Getting this sort of insight doesn’t need to be expensive, and can often be free. The creators of fresh, fast Italian food chain Fresh Italy got valuable knowledge by interviewing customers outside Pret stores. They figured out that most people wanted a main course, dessert and drink for under a fiver, which helped inform their meal-deal pricing.

Ideas: the next step is defining how a company positions its product or service in the marketplace. What are the two to three key ‘benefits the business will deliver, by solving a customer’s problem, or making their life better? And what are the ‘truths’ about the business that will make customers believe these claims.

Take Pimlico Plumbers as an example. It has positioned itself as ‘The posh plumbers’, offering highly reliable, 24 hour service at a premium price. Its supporting brand truths are highly qualified staff and the fact that the company is trusted by famous celebrities.

Impact: the heart of branding, or what I call the ‘sausage’, is using the brand idea to differentiate each part of your product or service. When Robert Stephenson started computer repair firm the Geek Squad, now entering the UK with Carphone Warehouse, he broke down his service experience into tiny steps. He then came up with ways of improving each step of the process, such as ensuring repair people arrived five minutes early, wiped their feet and spoke normal language, not techno-speak.

Image: The final stage is creating awareness of the business and trying to be famous for something. Having a well defined target audience and clear brand idea will help focus a company’s communication efforts and so make them more effective. By raising its profile, a small company can become a ‘thought leader’ in this chosen area of expertise.

New online tools such as the blog you are reading have also created new, cost effective ways for small firms to polish up their communication act and present themselves professionally.

Branding is potentially a great way for small firms to take on the big boys and beat them, but only if it’s based on substance, not spin.

Design to differentiate - WTS? and JKR 3

This 3rd in a series of 5 posts powered by JKR looks at how packaging can be a strong weapon in the battle to stand out on shelf versus own label copy-cats.

Andy Knowles of JKR highlights a dangerous trap that many brands fall into: focusing pack design on category codes, not what is unique to your brand. This leads to your brand disappearing in a sea of similarity on the shelf. And this is a bad idea, when you recall that in the first of the series that your brand needs to be 1 in 1000 alternatives that gets picked off the shelf each time a shopper makes a product choice. You're also making it easier for own label brands to do what they love to do: stealing your clothes, cutting the price and knicking your consumers.

To be that 1 in 1000, and make it harder for own label to clone you, it helps to identify and amplify the visual "essence" of your brand: a single minded, powerful visual device that allows consumers to "lock-on" to your product like a heat-seeking missile. This takes courage, as it means stripping away the multitude of secondary messages that gets stuck on packaging these days so you can focus on a single-minded big design idea.

A great example of a brand that JKR helped to take this approach is John West, who sell tinned salmon and tune. They started out with a pack that looked very much like its own label competitors, with nothing distinctive to help it stand out. The new design featured an "wave" device with a jumping salmon, which helped both differentiation and communication of product credentials. It also helps the brand's range look like a true product family.

The new packaging was launched in conjunction with one of my all-time favourite TV commercials, featuring a John West man fighting with a bear for the very best fish. It is a perfect example of telling a product story in an entertaining way, blending product sausage, or salmon in this case, with emotional sizzle.

Like all the brand examples in this series, the new packaging had a positive impact on sales, helping drive growth of 16% and stretching the gap with the number 2 brand considerably.

Lots of little things make innocent different

In my last post I looked at how to fight back against the own label bully boys, leading with a product punch. One of the key ways to do this was creating differentiation through 100's of little things. I suggested doing a 5 minute brain bank on one of your favourite brands, listing the little things that add up to a big difference.

Here's my 5 minute worth's on innocent, not quite 100, but a pretty good list:
1. the great products, which win in blind test
2. the constant effort to upgrade and improve the recipes
3. the range of flavours, including my fave, strawberry and banana
4. the seasonal special versions, like New Year Detox
5. adding functional "superfood" fruits
6. ethical sourcing
7. the distinctive little "angel" on the pack
8. Dan's brilliant and ever-changing pack copy that makes you smile: a mini magazine on a pack
9. the fact they started by distributing in delis and upmarket grocery stores
10. giving 10% of profits to the innocent charitable Foundation
11. sampling at the innocent live events like this year's Village fete
12. taking the live event out into communities, with local village fetes
13. the innocent grass vans, which get the brand noticed
14. having more than 100 highly motivated people working for you who all love the brand
15. feeling you know something about the people who run the company, and their story
16. the new tetra-packs
17. the innocent for kids range
18. putting effort into merchandising the product well
19. the "Supergran" promotion to raise money for charities at Xmas, with wooly hats for innocent smoothies knitted by grannies
20. not from concentrate (unlike leading competitor, Pepsi-owned PJs)
21. sticking to the same visual identity (unlike PJs which has changed 3 times in as many years
22. having a real banana phone you can actually call
23. having leaders like Richard who don't just talk about the values, they live them
24. Delivering left-over product near the sell-by date to consumers for free, rather than chucking it way
25. innocent blog where they ask for views and debate about issues, such as selling in McDonald's
26. sticking to the core of tasty little drinks, and avoiding the temptation to stretch (so far!)
27. being famous for fruit (careful with Juicy Water boys)
28. hiring fruit specialists, who focus on knowing certain fruits in detail
29. making their pack as environmentally friendly as possible
30. the lovely innocent pin board
31. Finding loads of ways to be nice to their people, which in turn creates great products

Would be cool if people could add their own in the comments section. Or do 'em on your blog and link back to here?

Do you really respect your competition?

I posted back in September about the launch of Drench, a new lifestyle water that aimed to target the yoof market. My concerns at the time were i) it was trying too hard to be cool, when what young people want are iconic brands with real status, ii) it lacked a real product-based point of difference.

Well, if recent reports are anything to go by (Marketing, 9 May 2007) it has not exactly given Volvic (£215 million in sales) and Evian (£140 million in sales) much to worry about, as it has achieved sales of only £1.4 million (Source: Euromonitor). Parent company Britvic are re-launching it with £2.4 million of support. At least they are improving the pack to make it easier to grip, and adding a sports cap. But, it still leaves you asking "Where's the sausage?"!

This story got me thinking about how so often companies don't respect the competition enough. Its a form of "brand ego trip", where they are too focused on what the market can do for them, rather than what they can do for the market. Sure, water is a big and growing market. But where is the substance and real product differentiation that earns the right to step into the ring with brands like Evian and Volvic, that have  a product story to tell? And this is not just about having what it takes to start the fight with the big boys. You have to be ready for a long-term competition which is costly, as Britvic are finding out. I also posted recently on innocent's ambition for water, and raised the same questions.

My prediction? Drench won't be here in a year's time.

Execution is king

I've always been a big believer that great execution is at least half if not more of what creates differentiation. That's why I love this quote from SeenCreative, that I found on Oliver's blog:

Ideas are a dime a dozen, execution is the key. Rarely is your idea going to be a completely original one; and if it is a good one, be sure that someone else is probably thinking the same thing. But you differentiate through execution. And really, execution is the hard part. Being able to execute an idea is vital to a business, and if your business is made up of people that do more walking than talking, than you are on the right track.

Some specific ways you can use execution to differentiate:
1. Be FIRST: get to market and own the space before someone else. This is what Dowe Egberts did with the Senseo coffee system in Holland. 40% of Dutch homes now have one.
2. OWN the idea: its one thing claim an idea. Its something else to own this space. In the UK Andrex owns the idea of soft, strong toilet tissue, and P&G's Charmin found it just too tough to take them on. P&G recently put the brand up for sale.
3. Do it with a TWIST: everyone airline wants to offer great customer service, but Virgin do it in a distinctive way