The Brand Man Speaks

Consumer darling JetBlue brand suffers due to stranded planes in freak NE snowstorm.

JetBlue apparently faced some major obstacles dealing with the freak October Northeast snow storm this past weekend. In one case in which a plane was stranded on the tarmac at Bradley International in Connecticut for seven hours, it might turn out to be less of the brand's fault and more of the airport.

This past year a Passenger Bill of Rights was passed by Congress to ensure these kinds of incidents where passengers are stuck on planes for ridiculously long hours without food, water or bathrooms would be addressed. The fines the airlines face are as much as nearly $28,000 per passenger for each incident. Hefty to say the least.

Now I am no fan of airline travel these days nor the lack of service most airlines offer a sentiment shared by millions of people around the globe. However, if the latest news is true that Bradley International Airport is mostly at fault, then why should the airlines suffer millions of dollars in fines? What has surfaced includes the JetBlue Pilot's unanswered pleas to the airport to help get passengers off the plane after finding his company could not get the airport to help either. The airport was very slow to react seemingly with little or no emergency preparedness plan in place.

Maybe if the airline turns out NOT to be at fault and it is the fault of the airport and the city and/or state can they all be fined? Could the city and state be subject to lawsuits from passengers? Why not? Airports (run by governments) get fees from airlines to do business so they need to be held accountable, although, as we all know Government, whether local, city, state or Federal seem to not be accountable for much lately.

Until all the facts are known, JetBlue will be taking alot of heat from angry passengers and the media.

Watching out for you everyday.

Eli

 

Bank of America likely to pull a "Netflix": About face based on consumer anger

Looks like Bank of America is learning that you cannot keep pissing off your customers and nickel and diming them and think you can keep them loyal. In a move pundits are calling a "Netflix", B of A is expected to change a recent decision and drop its intent to charge customers for ATM/Debit Card use. Several other banks (who did not get the same flack as B of A) have already dropped the idea.

Companies have to realize in the world we occupy today, information, especially consumer dissatisfaction news spreads like wildfire in minutes not days or weeks. Companies are trying so hard to manipulate social media to generate business and open dialogues with consumers but seem to forget that these same tools can damage and possibly destroy a business easily and quickly.

The bad news is be sure B of A will find another way to levy more fees on its consumers. This is why millions of people are switching to Credit Unions for banking services where fees are low or non-existent and the service is far better and more helpful than at traditional banks.

Watching out for you everyday.

Eli

 

Netflix isn't Doomed.

So says Holman Jenkins Jr. in an opinion piece in the Wall Street Journal today. I do not agree. His conclusion? Despite the huge fall off in subscribers and the costs involved in obtaining more streaming content (of value to subscribers---not just stuff nobody wants to watch) he believes both investors and subscribers will see that no one source will meet their needs because of a fragmented marketplace for at- home entertainment content and that Netflix is still a good value and will survive.

The Netflix premise that took consumers on a "journey" was for a very good price (less than going to the movies) you had a bunch of choices that you could order online delivered right to your door sometimes next day for viewing for as long as you wished. Brand loyalty was built on this premise along with a very identifiable icon, the red Netflix envelope. Streaming was the next order of business but there were many subscribers who wanted both, one or the other, but wanted the choice their way. I am one of the those folks who wanted it his way. Both DVDs and streaming at a fair price. I was a huge fan of Netflix so much so that I bought the stock because I believed the vision and the journey was exciting to many millions of people despite the other options out there and on the horizon.

However, (and I will keep reminding people for some time to come) great companies should not fail to understand that building that brand loyalty is as important (if not more so) than what may appear to be great strategic business modeling to analysts. Many analysts said that Netlfix couldn't maintain the value proposition they had given consumers for much longer and the price increase was a necessity for survival. That may be true. Unfortunately, when a key element of your brand strategy involves price-value you have to be extremely careful when you increase your pricing structure not to go to the point (too quickly) where price elasticity of demand along with sheer shock value hits consumers hard in the face.

Many companies deal with increasing prices all the time as a course of doing business. When you do so in such a way to make the consumer stop in their tracks to say, "wait wow that's a big increase do I still need or want this service?", you are in trouble. If you don't have a very demonstrable plan to show those consumers the value they are getting (as well as if you are smart--adding more value along with the price increase) you are taking a huge risk that likely will alienate your core audience and destroy your business.

In my opinion that is what has happened to Netflix and although I would love to see them fix this mess and get their stock price back up (for me to break even) I just haven't seen or read anything that convinces me that this will occur. I also know that the company's cash flow has been greatly weakened by the greatly devalued stock and huge subscriber base loss over the past few weeks and there is now question if they can survive to pay their current bills, forget acquiring more content.

Lesson: Never underestimate your customers, their emotional connection to your brand or their expectation of your product or service.

Watching out for you everyday.

Eli

 

Why the Print Version of Newspapers needs to exist: Even tech wizard Steve Jobs was a fan. [Second in a series]

Steve Jobs loved newspapers. He was obsessed with how consumers should and would consume news. But he was convinced the printed newspaper would be dead by 2011.

In a recent Wall St Journal article by Gordon Crovitz, Jobs was noted as someone who felt the printed newspaper was once an important tool but felt that the newsprint version of news lost its way, failed to take consumers on a journey (something all great brands must do) and was easily replaced by new media versions of information dissemination. The issue was one of print quality as Jobs was known for being obsessed with excellence especially when it came to the quality of printer matter, especially for his ads. If the ads in print form weren’t glossy and beautiful he wouldn’t use the medium.

 Although Jobs said newspapers would be obsolete by this year, he was to a great extent challenging the newspaper industry, according to Crovitz. Although Jobs is no longer with us, he leaves an important assignment for the news business.  Our lives have changed but newspapers have failed to evolve with us. What the newspaper industry has forgotten is the internet is just a new distribution tool, not a new brand, and the industry needs to better understand the relevance of the print form to consumers better than it does today, ( For example you can be reading the news with a newspaper on a plane without interruption when the flight attendant says TURN OFF ALL electronic devices when preparing to take-off and/or land. A case of print being more convenient than electronic!)

I contend there is something very special about holding and reading a newspaper (or a magazine for that matter). It is a combination of a vehicle of information mixed with the cultural experience of reading through the pages. One thing the glitzy online versions of news (as exampled on the iPad) lack is the tactile sense of going through the news and ads where the eye may pick up on stories (or ads) adjacent to ones you plan to read but would not have done so directly without the adjacency. Personally, I find the online version of news can create a sensory overload and finding the stories you want to read can be challenging in its own right and those you might have not known you want to read are not discovered. Some graphic versions of news online is so glitzy it is actually too hard to read.

Jobs said the quality of the newsprint was a problem. I realize it is expensive to make newspapers look like glossy online presentations of information. However, the lesson, if there is one to be learned, is that the print medium has important value in our culture and the newspaper industry has to figure out how to improve the quality of this distribution channel as well as remind people how meaningful this channel of information dissemination really is.

Watching out for you everyday.

Eli

PS HOT NEWS: Just read that the Newspaper Association of America is launching a new ad campaign that extols the virtue of newspapers with the slogan, "Smart is the new sexy". Now only if the print medium is made a bit more sexy they have a story to tell!

Why Netflix is failing: CEO Hastings doesn't understand branding

In an interview with the New York Times (appearing in the magazine section today), Netflix CEO Reed Hastings proved why Netflix is failing. As is common with most CEOs, he (admittedly) fails to understand what makes a brand in the first place and what makes one successful in the long term.

In the interview, Hastings says describing the major screw up that Neflix has encountered, "I think it was just a mistake in underestimating the depth of emotional attachment to Netflix". You think? Companies try (mostly unsuccessfully) to build emotional attachments with consumers. It's called brand loyalty and a very key ingredient to long term success. Not understanding this concept is a fundamental admission that one does not know how to market a product something CEOs arrogantly won't readily admit since they mostly think branding is an expense not a revenue builder.

Hastings also puts himself in a comparative role to Steve Jobs (hardly) and Jeff Bezos of Amazon saying his mistakes are all short term and CEOs understand the measurement of success is long term. However, and a big however, Jobs and Bezos understood and understand (respectively) how to build great brand loyalty and nuture it. Jobs was the master at it because he had a vision and took consumers on a "journey" which all great brands do. Hastings was on the right track, but missed an important station stop and went way off track to the point he may not be able to get his business back in gear.

I for one would like to see him resign and hire a more marketing savvy CEO to take the reigns and get the brand somewhat back on track by creating a new "journey" for consumers. It is going to take some great creativity and some concessions (to the brands most loyal consumers). Unfortunately, Hastings says he will not resign.

Watching out for you everyday.

Eli

Newspapers and their future: From Masters of the Universe to near extinction in less than a decade . [First in a series]

The newsprint version of the newspaper business has cancer but it was preventable and it may be still treatable. It was self-inflicted not caused by changes in the marketplace as the industry asserts. The top players were threatened by the new medium of the internet and instead of turning their fears into a triumph they succumb to them. Why? The newspaper industry’s “Old Guard” didn’t understand it and didn’t make any effort to master it. Instead of embracing the internet quickly they fought it, mismanaged it and forgot a very important element of great branding.

During the late 80s and early 90s I was a branding consultant to the newspaper industry.  Unfortunately, I rarely saw eye to eye with the traditionally minded senior executives of the day. It was at the time the internet was just starting to be recognized as a new force in communications and newspaper companies were trying to figure out how to deal with this game-changing tool. We know today most missed the boat and in an attempt to play catch up ended up using the internet medium poorly or incorrectly. While devoting so much money and energy to the new medium newspaper companies lost sight of reinforcing what made a newspaper in print form special and meaningful accelerating its rapid decline to where we are today.

What fascinated me was how many newspaper companies feared the internet and wanted to approach their re-branding efforts from that point of view. It seemed akin to the time when radio met television and radio broadcasters feared TV would eliminate their medium.

We know today that did not happen. Radio serves a place in both the information and entertainment world as does television. Companies became involved with both businesses and learned to use them for the unique elements each presented instead of trying to have one dominate the other. Radio thrives today along side television as two different mediums that deliver different kinds of experiences successfully to broad audiences.

The same should have been true for the newspaper industry.  Here’s why it wasn’t.

The key is the concept of branding is not often well understood by top executives primarily interested in the bottom line. They see marketing, especially branding efforts, as expenses and not investment spending. In the case of the newspaper industry, brands are not about the delivery systems they use. Newsprint, smart-phones and tablets are distribution channels. Brands are conceptual emotional contextual in nature. In the case of newspapers, the brands are the New York Times, Wall Street Journal, Chicago Tribute all in the information dissemination business and for years the masters at it. Many newspaper companies failed to integrate the internet as a new distribution system reaching new audiences (and eventually current audiences as well). Instead they saw the internet as a new brand and started building from scratch loosing focus on what a brand is.

In my opinion newspapers allowed the internet to become an entity beyond their control when in its infancy they could have become dominate players.

Today the internet offers thousands of new sources of news and information using the unique tools of this delivery system to reach all types of audiences all over the world 24/7. Today newsprint versions of newspapers are disappearing like dinosaurs but this didn’t have to be and just maybe this erosion can be stopped as they serve an important role in the information business and as a part of our way of life. Part of the problem likely lies in the fact the newsprint version of news hasn’t evolved in terms of quality and production values over the decades. It’s been cheapened to save money which has made it less attractive and competitive. The user experience has suffered.

Over the next few weeks I will examine other aspects of the decline of the newspaper business and what options might still be out there for its revival. Great brands weather storms even if they are deadly hurricanes. One aspect I will examine is the user experience with newspapers on the web, smart-phones and tablets. The news is not very good and I will explore why.

Next in the series: What did one of the world’s greatest techies think about newspapers and their future? What can we learn from his vision?

Watching out for you everyday.

Eli

 

 

 

 

Netflix drops idea to separate businesses into two. Qwikster dead!

Just off the presses, very smartly Netflix makes the decision to keep their streaming and DVD by mail businesses the same under one aegis Netflix and drops the new business Qwikster idea.

Chalk up one for branding experts who have been screaming across the web for several weeks since the original decision to create two separate entities that this was one terrifically bad business destroying idea. (I have written on this myself in an earlier post:Netflix)

Now if only Netflix would "fix" a few other of their messes they might get back to the business of entertaining the world with ease!

Watching out for you eveyday.

Eli

What's wrong with the under 35 set? Common courtesies out the window

Normally this blog column focuses on brands, mostly products and services. On occasion I write about individual people as brands. Today, I am compelled to go slightly off-track and write about some of the issues I see with young people (classified here as under 35 years of age).

The issue? A complete lack of common courtesy behavior with their peers and more importantly with older folks like myself.

As part of understanding brands and brand building, one has to also understand human behavior as it impacts consumer decision making. A significant change I see between baby-boomers and their children and grandchildren is how they handle day to day interactions with other people.

These young people who increasingly socialize not in person but through online social media seem to have lost the understanding (and the art form) of how to deal with people one on one. It is so common for a younger person to make commitments (professional and personal) and break them or not live up to them as it is for them to use texting as their main form of communications.

I am astounded how often I personally experience this and how often corporate managers complain about their younger employees. They expect the world to be given to them but seem to also think failing to live up to a responsibility or an agreement as "no big deal". Making an appointment and not showing is not something a baby-boomer would do without (generally) contacting someone in advance to explain why the appointment would be missed. Or, in a extreme case, follow up immediately afterward to explain. Young people very often do neither. They expect their elders to respond to them quickly give them immediate feedback and answers but they see no reason to do the same in return.

For a group facing lives that likely for the first time since World War II will not be better than their parents, they are contributing in my opinion to this situation beyond just the economics of the world. A lack of reliability and dependabilty does not bode well for anyone in a world where jobs are increasingly harder to find and keep. It is no surprise that many employers would now rather hire retired "older" people than younger ones because of this behavioral situation.

I am not sure what has caused such a notable change in behavior but one thing I am sure is this seems to be another example of the decline of society as we know it.

Watching out for you everyday.

Eli

Apple iPhone4s...ugh. Some nice upgrades but overall a let down and disappointment for many brand loyalists

Apple failed today to excite brand loyalists with its humdrum launch of another iPhone, the iPhone 4S, not the iP5 most had been hoping for. It adds some cool features that are certainly upgrades and notable improvements, however, I believe it won't be enough for the rush of customers that came with the initial launch and that of the iPhone 4. I for one after reading the details on a notable tech blog updated live during the news conference, no longer feel any rush to get the new phone. First of all it will look exactly the same, so the "look what I just got" factor is zip.

Apple's stock dropped rapidly today as well as a result of broad disappointment. Whether it's the loss of Steve Jobs or the lack of excitement from the brand AND new management together, I sense most tech reporters thought the news was a yawn vs. what they had expected and hoped for.

Is this a sign that Apple has lost its midas touch? Maybe all goods things need to come to an end sooner or later or at least become more "normal" and "average" like most products made by American companies.

Watching out for everyday

Eli

Apple ready to introduce iPhone 5: Analysts weary it won't be sexy enough to stimulate strong sales. Why they are wrong

Apple is getting ready under new CEO Cook to launch its iPhone 5 (Can't we just now call it "i5"?). The planned introduction to the media is October 5th.

One of the most interesting things I have been reading about the latest introduction is not about the improvements and upgrades coming with this new version, but the insistence voiced by many business analysts that this version will not be exciting and sexy enough to generate huge sales. The thought is that you can only update and redesign such a small package so much before you get to the point where it is impossible to make noticeable changes meaningful to consumers to upgrade from older phones.

What I believe is missing in this conversation is the fact that Apple brand loyalists (the kind of brand loyalists other companies would die for) have another driver in their pockets. Owning the latest Apple device has become a badge of honor to many (of us---yes including me). Half the excitement is having the next new Apple iPhone shortly after it is launched. Apple loyalists are opinion leaders and first adopter types (in marketing speak). They crave new toys and greatly need to be first in line.

Normally this isn't a huge number of people as concerns most consumer products. With Apple it is different. Different in a way that no other company I know has been able to duplicate. Large numbers of people will still wait in line or curry favor to get a new iPhone within hours or days of the release. It has become almost a right of passage to wait in line to get a new one and Apple has carefully orchestrated this phenomena because they truly understand their customer down to the fact that they do not actively talk to consumers about what they want next in a new generation iPhone.

This brand has built a relationship with consumers that is about the journey and brand loyalists believe in the mantra that Apple knows best and will bring them features and benefits and excitement they haven't even thought about. This is a key strategy that separates Apple brand fanatics from other brand loyalists who take a greater stake in communicating their demands to a given company. (This is not to say that many Apple consumers do not share their feelings, believe me they do, however, they are more likely to be ok with Apple decisions than they are with decisions made by other consumer products companies).

The Apple brand still tops the list of best companies in the past few decades and it remains at the top because it truly leads and innovates and excites like no other company.

Watching out for you everyday

Eli