Introducing the CEO, Peter Gibbons

Peter Gibbons sighed-the kind of sigh only losing hundreds of thousands of dollars on ineffective marketing could buy.

"I'm told you can tell me how to fix our marketing," he said leaning back in a sensible wooden chair, designed to speed meetings in the equally sensible conference room. A manila folder, contrasting with the table's mahogany, lay tattered to his left. The insides overflowed the little folder.

"That would be some of your company's marketing materials," I stated. "May I have a look?"

Quickly, spreading the materials on the table, I glanced at no less than five different ad campaigns, two website designs, four brochures, three different company logos. They were good graphic design. But that was all. Each piece lacked the key marketing techniques that make the difference between advertising expense and advertising return on investment. Collectively, nothing more than throwing things against the wall, hoping something would stick.

I smiled gently. "Fix implies your marketing once was working. By looking at your ads, I can tell your marketing has never made money for you or your company."

Through the silence I could see the emotion rising. "I don't get marketing," Peter began. "I've worked hard to build this company. For eight years, every day, every night-I do nothing but think about how to make it better. We work so hard." He spoke with the determination of a prize-fighter.

"We're great at what we do. Our customers love us. But here's the thing. We can't quickly explain our story. We can't break through to the next level."

I nodded, understanding I was meeting yet another CEO determined to crack the marketing puzzle. For twelve years, on an almost weekly basis, I and other Brand Strategists from The James Group had met with CEOs of midsized companies.They were just like Peter, needing marketing answers to get to the next level. These meetings were interesting struggles: brand best practices sparring to overcome marketing bad habits.

Introducing the Sales Moment

"Almost every company fails in their marketing before they even begin. They launch the business. They build the product or develop the service. Then, the next thing they think is: We need a website. We need a brochure. We need some ads. They think tactically instead of strategically. They forget to start with the most important questions: What is the single idea we should own? What is our Sales Moment?

"There are probably a dozen things that can be said of your company's product or service," I began, "but only one makes the sale. This is your Sales Moment. You see, Peter, there is just too much information in the world. Ironic-because the marketplace is primitive. If people can't quickly understand what you stand for, then you won't break through. There is just too much competition. If you tell many ideas, people will gravitate rapidly to the competitor who makes it simpler for them-who communicates one idea. To win, you have to keep it simple.Stay on your Sales Moment so people can instantly see how you fit in their world.

"What is the single idea we should own? What is our Sales Moment? These are strategic questions. Thinking tactically,instead of strategically, leads to all kinds of erratic behavior: the erratic marketing disease known as Let's Try Something Else. You hire different graphic designers for different tactics who usually 'yes' you to death. Or different ad agencies to develop flashy new campaigns. Nothing works like you want it to, so you retreat. Things get difficult. Every six months, someone develops a new idea and you try something else. All the while, wasting precious money and worse, losing time.

"This is cart before the horse marketing. Typically, this fails before it ever begins. How does it fail? One measure: it fails to bring return on investment."

Peter nodded and gave his telling sigh again. "That's what we did and are still doing, for many years now. So how do we get out of that cycle?"

How the Sales Moment Works to Diagnose a Brand Problem

I paused, deciding if the moment was right to reveal my biggest brand secret. "Let's do a thought experiment," I said.

"What do you mean?" Peter asked.

"Let's examine how the mind works. What did you have for breakfast this morning? Did the information come to you in words or pictures?"

In seconds Peter said, "Pictures. I saw a picture of a bagel with cream cheese and coffee. I didn't read the words bagel with cream cheese or coffee."

"Good. What did you wear to work yesterday?"

Peter's eyes moved back and forth. I could tell he was scanning his wardrobe in his mind. "Wow, I honestly don't remember. But I could see my mind scanning in pictures.

Saying, No, it wasn't that shirt. Maybe that one."Peter's mind was sharp and clear. "You're seeing something I gained from many years of meditating. When you slow the mind down and concentrate on how the mind works, you realize you're thinking in pictures. This has important implications for our happiness; and for successful marketing, one implication in particular."

Peter's eyes locked-in, focused to catch the marketing secret."There is a mental image, a little movie that plays in your mind of the outcome you desire before you make any purchasing decision. If the product matches your movie's desire, you go for it. If it doesn't, you don't."

"That's what you meant by the Sales Moment," Peter exclaimed.

"Knowing what pictures in that movie of unmet desires triggered the sale is the ultimate key to Brand Marketing."

"Peter," I said after giving him a minute to chew on the last idea. "I want to talk about your business. What is the single idea that tilts sales in your favor? What is your company's Sales Moment?"

Peter's face went completely blank. He stared at the beige wallpaper with thin blue lines. After a few moments he said simply, "I'm not sure."

"Do all your sales people describe your company the same way?" I asked.

He looked out the window of the conference room into the hallway trying to picture what he knew of his sales people."No, different sales people say different things."

"And your customers? When they explain who you are to other people, do they say the same thing?" Peter shook his head, no. The confusing clutter of messages only communicated a warning.

"Now step back. Think about what you know about the three levels of branding," I said. "An identifier of goods and services, a promise of customer experience, and at the most powerful, a single idea tilting sales in your favor. When you said you have a brand, because people know your company's name, which level of branding did you mean? Which level is your company at?"

Peter rocked in his chair, reluctant to voice his response."We are only at level one. Neither we nor our target customers know our single idea. They don't know what our promise is.So they don't know what to expect from us. I guess our name only identifies us as the makers of the product. Not much more.And worse, I still can't say what our Sales Moment is."

Peter Gibbons had clearly diagnosed his company's problem.He gazed out the conference room window searching for an answer.

"Your company has a brand problem," I said softly. "It's that simple-nothing more and nothing less. This is the reason you can't quickly explain your company and why you can't break through to the next level. Now that we have agreement on the problem to solve, it's just about using marketing best practices to overcome marketing bad habits."

Peter returned his gaze to my smile. Both of us nodded at the clear diagnosis.

The Hardest Discipline in Marketing

Peter repeated back the process as he wrote it down in his notepad. "Notice, Peter," I cautioned, "I didn't say, choose the name you like best or others like best."

"Oh come on, James," Peter said. "You're telling me I don"t have to like my company name?"

This was a very sensitive issue. I had to give it to him straight. I took my seat again at the table. Inside, I wanted to shake him, so he would remember clearly what I was about to say. "Yes. That's what I'm telling you. The tests are: which is most memorable and which best owns your Sales Moment. Peter, I'm trying to save you from falling into a deadly trap.

"Executives make branding mistakes all the time by rejecting the very idea that could help their company breakthrough the clutter. They reject it with the words, I don't like it. Their ego has entered the discussion, blinding them from best practices. Instead, they are making decisions solely from their limited perspective of what they are comfortable with, cutting themselves off from a whole ocean of potential.Better to make the decision from the customer's perspective.What communicates the Sales Moment to the customer in a memorable way."

Peter nodded. He had seen this occur many times in his career with other companies and perhaps even with his own."I'll tell you plainly. If you're completely comfortable with the new creative for your brand, it's a clue-it's not good enough. It has to create a new mental image and break through the clutter. You have to lean to the side of being slightly disruptive to get people's attention."

Peter shifted in his chair.

"The marketing you're comfortable with created the situation you're in. Why repeat it? So how will you decide what to do, when you're a little uncomfortable with your new brand? Simple: reject something on the basis that it doesn't follow branding best practices, rather than subjective judgments. Why? Best practices give you the best chance of success and are the best predictors of the future. We both have to remember, we're not the customer. After all, how much stuff are you going to buy from your company?"

"Not enough," Peter responded.

"So we can't brand the company for you, me, or your friends using some inside meaning that is only relevant to us. Your customer doesn't share our unique perspective.We can't choose the company color based on what we like.Instead, choose the branding elements of name, logo, tagline,and campaignable image based on what performs. Create an ownable mental image. Whether we like it doesn't really matter.What matters is the brand makes it easy for the customer to understand how it is relevant to them. That will increase sales."

Peter sat quietly for a few moments, sizing up what I had just told him. "Can you give me an example where the naming has been too internally focused?" he asked.

"You mean other than GPL International?" I said smiling.

"Other than my company."

This was an important moment. I could move Peter beyond any habit to hang on to a miserable brand name with the right example. "It happens all the time. Internally focused naming is one of the more common naming mistakes," I began. "A few years back, we rebranded a toy company with exceptionally great products. They had been in business for 18 years and were in over 40 countries. This is a successful company by anyone's standards. They make this mind challenging game, Rush Hour. You try to get a red car out of increasingly more complicated traffic jams. Have you seen it?"

"My little girl isn't old enough for that kind of game yet, but it sounds interesting." Peter said.

"It's kind of a three-dimensional action twist on the traditional slider puzzle. It's sold over 4 million units worldwide. So it's a major hit. They followed it up with other great games like River Crossing and Gordian's Knot."

"So what was the problem?" Peter asked.

"Sales had plateaued. Specialty toy stores were consolidating or going out of business as the big box retailers started to take over. Their distribution channels were shrinking.They weren't sure how to get to the next level. They were diversifying their product line as a possible business solution, but they weren't gaining much traction.

"We assessed the situation as mainly a brand problem.Specifically, they weren't communicating what made them unique and this would be essential to opening new channels of distribution. Back in 1985, they had named the company Binary Arts, as a play on the founders" names, Bill and Andrea. Let me ask you, does Binary Arts sound like a toy company?" Peter shook his head. "It sounds more like a software company. Do they make software?"

"No," I responded. "That was the thing. Our customer interviews revealed that they were regarded as the best in the industry for reating three-dimensional, hands-on, mind challenging games that everyone loved to play. They were simply the best in the world at mind challenging games, so the name had to come out of that. We renamed the company, ThinkFun, with the tagline, Everybody Plays™.

"What do you think? Are you more interested in buying ThinkFun for your little girl or Binary Arts?"

"No question," Peter responded instantly. "ThinkFun sounds more like a toy company that's making fun, educational games my little girl would like and my wife would approve of. So that one."

"You just described the Sales Moment perfectly, Peter." I said, pleased again he was wielding the Sales Moment so well."ThinkFun is an example of Functional naming expressing the key product feature they wanted to own."

"So what happened?" he asked.

"Together, we reintroduced the brand at the 100th Anniversary of Toy Fair. Bill Ritchie and Andrea Barthello were successful at convincing Barnes & Noble CEO, Steve Riggio that he had smart customers that matched their smart product.In 2004, Steve Riggio launched several strategic initiatives including putting a ThinkFun Center in nearly every Barnes & Noble in the country."

"I bet they were thrilled."

"Sure. But here's the thing. Bill and Andrea had the courage to change. They accurately assessed that market conditions were different and they would have to do something new to stand out. They deserve their success. Sometimes making a change is the hardest thing to do."

"Do you like all the names or brands you create?" Peter asked, turning an earlier question to me.

"That's not even one of the tests, is it?" I trailed off, looking out the conference room window, hoping... hoping he had caught a vital principle in creating brands.

"Most of the time, you're not the target customer," Peter said with a hint of conviction. "Better to rely on best practices." "Good. Very good."

"I'm going to have to chew on that one for a while."

"We all do." I said.

The Four Types of Advertising Campaigns that Build Brand and Drive Sales

"In the history of the world, there have been only four types of advertising campaigns that both build brands and drive sales." As I spoke, I wrote on the white board: 1) THE WORD HOOK, 2) THE CHARACTER HOOK, 3) THE REPEATABLE THEME, 4) THE CONSISTENT LAYOUT. Peter wrote them in his note pad as well, waiting for further explanation.

"Without exception, the most popular and most successful advertising campaigns have used one or more of these techniques, making them well-tested best practices in creating ad campaigns. So why is this so important to you?"

"According to your logic," Peter answered. "If my company is not using best practices we're less likely to succeed," Peter said.

"Exactly. That's how I knew when we first sat down, that your marketing never made money for you or your company.

I looked at your website, your ads, and your brochures. I didn't see one of these campaign types. Instantly, I knew that your marketing wasn't working."

"Is that what it was? Why are you so certain these campaign types make a such a difference?" Peter asked.

"Let me explain how each campaign type works. Then, I want you to ask me that again. It's an important question."

I pointed to THE WORD HOOK on the board. "The Word Hook is a repeatable catch phrase from ad to ad. A good example of the Word Hook is Verizon's Can you hear me now? Or Mastercard's Priceless campaign. You know... an evening out with friends... having the best story..."

"Priceless." Peter said. "Sure everyone knows that."

"Who's your cell phone carrier?" I asked.

"Verizon," Peter responded.

"How come?

"I didn't really think about. I guess, I didn't want to have any dropped calls. I wanted to be able to call from anywhere."

"You just described the Sales Moment, didn't you?"

"Yeah. I guess I did." A flash of excitement came over his face. "That's what their ads were too. When they started, they had that kid in a dark blue jacket walking all over testing his phone, saying, Can you hear me now? Hell, I say that when I'm on the cell. Verizon knew exactly what I wanted."

"That's why it worked. Verizon boiled the Sales Moment down to that one Word Hook we all say and became the nation's number one wireless carrier."

"That's good." Peter said, still visibly excited. "Very smart."

"Another classic Word Hook would be the Absolut Campaign. For example, Absolut Manhattan featuring an arial view of Central Park in the shape of a bottle. Absolut Golden Gate featuring the archway of the Golden Gate Bridge in the same distinctive shape."

"Sure. Those ads are brilliant."

"Consider this Peter. Since 1980, when that campaign was conceived, over 1,500 Absolut ads have used that Word Hook.In 1999, Absolut commanded an amazing 58% market share for vodka-an alcohol that is defined as colorless, tasteless, and odorless. Wouldn't you like to command 58% of the market?"

"Who wouldn't?"

"The Word Hook is like the chorus of a good pop song.They're catchy. Maybe, even insidious. Everybody knows how to play along.ventually, it becomes so well known, achieves such marketing greatness, it can even serve as a joke."

"Like the What's up guys."

"Sure. Think even further back to 1984. In the middle of a televised debate, Walter Mondale totally disses Gary Hart by saying "When I hear your new ideas I'm reminded of that ad, Where's the beef? The audience roared.

"But here's the real punch line. Over twenty years later,you're more likely to remember Wendy's Where's the beef? than Gary Hart or Walter Mondale."

"True. Very true." Peter smiled.

Introducing the Marketing Officer, Jason Matthews

"O.K. James, I'll make you a deal again," said Peter.If I like what I hear in Step Two, I'll let you tell me about Step Three."

"Fair enough. But before I explain how to roll out the brand consistently, I have an idea."

"What's that?"

"I noticed a really tall man in a purple dress shirt earlier.Actually, he's walked by the conference room a number of times, looking very interested in what we are doing in here. I suspect that's your Director of Marketing."

"Yes. That would be Jason. I wanted the two of us to meet to give you the freedom to speak freely."

"I understand. What the company's brand stands for and looks like is the responsibility of the CEO. Without question, you have to be involved with all brand decisions. If it's all right with you, I would like to have your Director of Marketing join in on this discussion. If we're going to work together in the future, we'll be working primarily with your Director of Marketing to roll out and maintain the brand. So, it's best to create consensus from the beginning about what should be done."

"Makes sense," Peter responded. "I'll bring Jason in. You can bring him up to speed on our conversation. It will give me a chance to check my emails and make a few calls."

Jason towered over me in size. He had the distinguished look of a seasoned executive with the easy charm of an accomplished sales manager. He made polite conversation inquiring into how long The James Group had been around, the size of our shop, who our biggest clients were, and what industries we had prior experience in. But as soon as Peter excused himself from the conference room, he asked his real question: "What brings you in today?"

How I wish I could tell each Director of Marketing they have nothing to fear from The James Group. We aren't after their jobs. Far from it: there has to be someone in each company who is the day-to-day brand enforcer-keeping the company on brand with all its business decisions. In the absence of a formal Director of Marketing, either it's the CEO's job to evangelize the brand, or they empower someone with that additional responsibility. Many times, both CEO and the Director of Marketing serve the purpose. Every company needs an internal brand ambassador to make the brand real each day.What percentage of our clients have had Marketing Directors? I honestly couldn't say. The Perfection of Marketing worked perfectly in either case. It was always a collaborative process,leveraging the internal expertise within a company, joining it with our own. Our mutual success couldn't have come otherwise, without agency and client working closely together.

"I'm here as a potential resource for you to help with your brand," I responded. "Peter brought me in. I wanted us all to speak together as you two ultimately make the decision about what should be done with your brand."

Jason relaxed a bit and we had a quick conversation about the process Peter and I had discussed in Step One. Though fluent with the marketing techniques we were recommending, Jason conceded that he had been unable to convince Peter to address serious weaknesses in the company's brand. Jason felt hampered by a limited marketing budget and the lack of strategic creative support. He was trying to do the best he could within the parameters he had been given permission to operate.

Introducing the CFO, Kavita Bharati

Kavita Bharati, the company's CFO, had an easy mannerabout her. She gave no indication of whether she was pleased to be brought into this discussion about marketing or considered it an intrusion on her day. She smiled gently.The abundance of silver streams flowing in her hair spoke to her experience and balanced approach. Looking at the CEO, Vice-President of Marketing, and CFO sitting together in the room, they presented a perfect reflection of The Perfection of Marketing steps.

"It's striking to have each of you here today for this conversation about your company's brand. Each of you symbolizes a crucial step in The Perfection of Marketing process. Peter, you as CEO are Step One: you are responsible for what your brand stands for. Jason, you as the Head of Marketing are Step Two: you are primarily responsible for consistently communicating the brand. Kavita, Peter wanted you to join us today, because you are Step Three: you make certain the company understands the value of its customer and is spending less to acquire them than their lifetime value."

"So in plainspeak," Peter said. "I'm the carrot, Jason is promoting the carrot, and Kavita is counting the carrots."

"That's good," I responded.

"More carrots is good," Kavita quipped.

"So now," I began, "Let's talk about Step Three: Return on Investment Marketing. The purpose of marketing is to make more money. We can all agree on that, yes?" Each one nodded around the table.

"If the purpose is clear, why do so few people understand how to calculate marketing return on investment?" I asked."What I'm going to share with you now is an essential and efficient method for properly allocating marketing budgets. The first thing to understand for return on investment marketing is the lifetime value of a customer. This is your magic number.Everyone working on the sales and marketing of your company needs to know your magic number. All your management needs to know this number. You can't do return on investment marketing unless you know this magic number-what your customer is worth. You do this by running a net present value equation.

"O.K., brace yourselves," I said. "This is the moment they warned you about in high school-when algebra will save your life," borrowing a line from Val Kilmer in Red Planet. On the board, I wrote out the net present value equation needed to determine what a customer is worth. "It looks scary at first, but you probably know the answers to what these variables represent. We just have to fill them out."