June 15, 2023
I heard this term from Penny Lorber recently and it really hit home… History shows that when companies fail to invest in brand development in the early stages, it costs more money, time and energy and causes more friction to “go back” and try to re-install it.
Let me define what I mean (and you know I’m going to share some stories!)
Proun: Brænd dɛt: 1. All your time, energy, efforts and resources are focused on your product (design, manufacturing, GTM strategies & pans) so much so that you forgot to build the foundational elements of your BRAND (positioning, messaging, ethos, values).
2. New executive leadership is appointed to “take the reins” and decides to go in a ‘different direction’
3. Brand is acquired and new owners are wearing the t-shirt that says “Let’s F*ck it Up MY Way this Time!” (note, this is an actual t-shirt!)
Definition 1: Five years after developing a new piece of software, two lawyers run a company generating roughly $10 million in annual revenue. Sales and growth suddenly plateau. Consultants and investors are sought to help re-ignite sales. And the questions start….
How are you different from other offerings in the market?
What makes you special or unique?
Sum up your brand in one word.
And my favorite hat-trick question:
So What? (why is this important)
Who Cares? (show me you KNOW your audience)
And Why you? (back to the ‘special sauce’ definition)
Dumbfounded the lawyers – now leaders – sputter, talk too much, and respond with everything but a clean, crisp polished message.
That’s around the time LOCC gets contacted…. Right when the VC's and PE firms are being shown this ‘little gem of a company’ and start asking questions. (this has literally happened twice in the last 4 months)
Funny how it resonates more when the money guys/gals start asking, eh?
Brand debt: Currently unaddressed and growing.
Lest you think this problem is unique to start-ups or technology – think again.
Definition 2: Unilever installs new North American CEO; a Frenchman. He decides to take Brut, a solid , venerated food/drug/mass retail performer and transform it into a “modern” fragrance for a modern man.
Background: 86% of men’s fragrance purchases in the food/drug/mass channel are made by women for their men. Moving into department or specialty store offerings, it changes and men buy for themselves. This new CEO thought he knew what the brand needed.
Brut was an icon made famous by sports heroes like Joe Namath. The ‘wink and a smile’ ad campaign was changed into “Brut Actif Bleu” featuring young, chiseled models heli-skiing and running along the beach Baywatch style.
Sales tanked. Why?
This new Brut lacked the original’s relevance.
Running counter to a years-long strategy proved disastrous and we were charged with “fixing it.”
How we paid the debt: By returning to the brand’s core.
We hired Troy Aikman, filmed a fun commercial where he was tackled by a girl in a fun pick-up game in the park (her actual name was Marcie Brickhouse – so the articles wrote themselves!)
The company paid a high price to get the brand back on track. But share rose 7% as a result of returning to the brand’s roots and being true its core message.
We settled the brand debt.
Definition 3: Skinny Tan, a runaway self-tanning success in the UK and Australia was set to launch into the US. Founder Louise Ferguson sold a majority stake in the brand to a holding company based on promises that never materialized. Long story short – the premise upon which she built the brand; its loyal following; market differentiation and sales were tossed because the new leadership did not understand it.
The result? The brand became lost in a sea of sameness where it once stood out. Fed up with trying to push water uphill, Louise left. LOCC served that brand, and it was a success story cut short because it was rewritten by people who never understood it.
The brand debt was never paid, and the brand suffered as a result.
Summing up who you are; what you do and why people should care is not an easy task. Yet it is foundational to your company and the infrastructure around which all your marketing should be built. It is fundamental to your ongoing success.
Stories of brands who “forgot who they were” or “never established clear positioning” fill textbooks and new lessons arrive daily in every sector. One of my favorite definitions of “brand” is ‘the space you occupy in your customer’s mind’. If you do not carve out that space – if you fail to take the time to do this at inception, you start accruing a brand debt.
Some brands got it right out of the gate: Ask me about The Hughes Tools & Dye Corporation - a brilliant example of getting it right early. But that is only half the battle – STICKING to your vision is as hard as defining it. This is the job of leadership as well as marketing. Called “being stewards of the brand.”
Call it Brand Debt or Brand Deficit – either way, it reflects a very real scenario that will come back to bite the company in the proverbial butt. No one can say when, though it most often happens at the most inopportune time!
Are you accumulating Brand Debt? Let LOCC help you find a way out of that!
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