“Of all the things that your company owns, brands are far and away the most important and the toughest. Founders die. Factories burn down. Machinery wears out. Inventories get depleted. Technology becomes obsolete. Brand loyalty is the only sound foundation on which business leaders can build enduring, profitable growth,” says Jim Mullen, founder of Mullen Advertising. So often, business leaders fail to understand this and stick to what they know, which is to continue to withdraw on their brand loyalty oblivious of the dangers that surround them. Many dead brands can teach us a lesson.
There are thousands of brands that have come and gone and hundreds that are the walking dead. Learning from mistakes is always harder than justifying enormous brand successes. Shifting a brand into a new direction is hard, expensive, risky and terrifying. No wonder few brands can do it. The brand graveyard is full of exciting lessons of how indecision, denial, arrogance and fear killed a brand.
Here are six essential survival lessons to keep your brand from ending up dead:
Brand loyalty isn’t what it used to be. There was a day, people who drove a Ford drove Fords their whole lives. Not anymore. Yet mobile phone companies like Apple and Samsung see customers stick with them from phone to phone. The problem is keeping up with customer’s expectations. There is no shortage of new and exciting brands. According to Harvard Business School professor Clayton Christensen, there are over 30,000 new produced launched every year. The choices are endless. With the help of the internet, the world is your oyster. You can quickly compare prices, performance, brand value, and user experiences 24/7, including one-click to buy.
In 2018, NewVoiceMedia’s ‘Serial Switchers’ reported brands lost more than $75 billion due to poor customer service. If the brand experience isn’t highly personalized and relevant, and delivering highly customized experiences online and offline, be afraid. Customers are looking and expecting memorable, multidisciplinary, multisensory brand experiences that touch them along their journey. Brands that fail to embrace the concept that every brand touch-point builds brand loyalty are closer to their demise.
Brands that are desperate to save money start by cutting front-line service or implementing customer-hostile business models; these brands generally don’t last long. Consumer advocate Christopher Elliot identified two such dead brands: US Airways and Blockbuster.
Before US Airways demise (2015), it went through a significant downsizing and outsourced many customer service functions. Customer’s reviews on Skytrax gave them a 4 out of 10, and CustomerService Scoreboard gave them 34 out of 200 possible points with an overall rating of “Terrible.” Blockbuster wasn’t much better with a 38 out of 200 with a similar score.
Innovate or Die
Every brand’s survival mantra must be — innovate or die. Innovation comes in many forms: product changes, new use patterns, production efficiency, service improvements, digital enhancements, new features and benefits, or more environmentally friendly inputs and uses.
No brand should be complacent. The speed of change will continue to exhilarate thanks in part to new technologies such as 5G, Blockchain, Voice technology, Artificial Intelligence, Robotics, 3D printing, Edge Computing, Spatial Computing (Mash-up of augmented, mixed and virtual reality AR, MR, VR), and Quantum Computing.
Brands must always be looking to improve or surpass customer’s ever-evolving expectations. Apple understands this in spades as they launch a new iPhone almost every year. Currently, the rumour is the Apple will be introducing a new 2020 iPhone model this fall, which could be called iPhone 12. How original.
In 2008 Nokia was ranked as one of the most valuable brands in the world. New Yorker writer James Surowieckisays Nokia failed to keep up with the competition in the smartphone game and relied on its past brand strengths. “The high-tech era has taught people to expect constant innovation; when companies fall behind, consumers are quick to punish them.” Nokia was severely punished and is dead when it comes to the mobile phone business.
PWC report that many brands don’t have an emerging technologies strategy at all, and aren’t monitoring them. They also determined that an entirely new business could be constructed using new emerging technologies with less investment than one-quarter of an existing IT maintenance budget. This new brand threat could be up and running in less than a year.
Today, it’s easy to build a brand on innovations and technologies. It’s much harder to sustain a brand on past innovations and successes. Kodak didn’t envision a future without film nor Blockbuster without VHS videos.
There was a day; all a brand had to do was keep the Baby Boomer happy — the most significant consumer base the world has ever seen. If a brand built a loyal Boomer consumer base, it was golden. The problem is that this demographic is getting older by the day, and their consumption pattern is shifting and declining drastically.
Many brands need to re-engineered to meet the expectations of the next significant consumer waves — the Millennials and Generation Z. Many new brand-breaking paradigms are causing considerable disruption like Uber, Airbnb, Amazon and Spotify. Rave Reviews state 78 percent of Millennials say that brands have to work harder to secure their loyalty. How brands guarantee dedication and commitment has changed significantly. Millennials are looking beyond traditional brand value and quality with higher expectations on transparency, sustainability, and innovation. Your brand must always prove itself worthy as Millennials, and Gen Z continuously monitors online reviews, influencers and social media before buying any brand.
I am sure many Millennials and Gen Z have never heard of such dead brands as Napster, Walkman, Palm, Compaq, and Enron.
Trend, Fad or Fiction
Times change, and so does consumer’s needs and wants. Make sure you know when your brand is a fad or just a passing whim.
Remember the Pet Rock? In 1975, Gary Dahl, an advertising executive, conceived and marketed rocks called Pet Rock. In less than a year, he rocked on to sell over 1.5 million Pet Rocks at $4 each. For a fleeting moment, he was a rock star, and then the Pet Rock disappeared forever. This brand was dead before you knew it.
Famous actor, filmmaker, author, and former politician and professional bodybuilder Arnold Schwarzenegger was captivated by a convoy of military Humvees driving down a highway in 1989. Immediately, he had to have one. We know from history that Arnold always gets what he wants. AM General worked with General Motors to supply a civilian version called the famous Hummer. It was a great success as other affluent “Arnolds” stepped forward to have the privileged to feel the power of a tank stuck in traffic gridlock. Sales peaked in 2006, and the last Hummer H3 rolled off the line on May 24, 2010. High gas prices and the ever-increasing pressures by the environmental movement made the Hummer brand symbol unpalatable as a gas guzzler. Eventually, even Arnold sold his seven Hummers for a reported $950,000 to conform with other Californians. The Hummer brand was dead.
Remember Segway? The cool two-wheeled motorized self-balancing stand-up personal vehicle that allowed you to travel standing. Was this another Pet Rock? The problem was the Segway was expensive ($5,000), massive (over 100 pounds) and potentially dangerous. It wasn’t big enough to navigate the road with cars and wasn’t small enough to travel safely on the sidewalk. Amazon’s Jeff Bezos was quoted in the book Code Name Ginger stating, “I think this plan is dead on arrival.” The inventor Dean Kamen (nicknamed Ginger) was planning to sell half a million of these in a year. According to Forbes, they sold just 30,000 Segways in six years. As people continue to embrace a healthier lifestyle with more exercising like walking, the Segway looks like the laziest mode of transportation ever. Jeff Bezos was right; the Segway brand is dead.
Guts to Change
If you see your brand failing and the market changing, what do you do? Do you tinker with your business model that has been working for decades or, in some cases, centuries? Do you alienate your loyal customers by changing too much, too quickly?
Kodak and Blackberry are great examples of trying to stay in the past while trying to meet the future at the same time. Unfortunately, they both failed. Allen Adamson, Chairman of North America Landor Associates, explains that Kodak “failed to seize the day in terms of moving away from the existing cash cow to figure out how to live and fight the future.” Today, Blackberry is still trying to reinvent itself to find its vision. Meanwhile, all of its customers have replaced their “crackberry” with an iPhone or Samsung smartphone. Like Nokia, the Blackberry smartphone is dead.
Remember the Friday or Saturday evening trip to Blockbusters to rent a new movie release? The writing was on the wall as cable companies, internet providers, and Netflix offered seamless video streaming at home. But, Blockbusters stayed the course except for extending their late fees charging, which they accumulated over $800 million — something I don’t miss paying.
Many other brands (Circuit City, Future Shop, Olympus, Barnes & Noble, Borders, H&M, Taxis and retail stores, to name a few) face significant disruption from new technologies and digital innovations. Unless they embrace drastic changes, if they can, their destiny doesn’t look bright.
Bad Business Models
The fastest way for a brand to achieve death is not having a sound business model to ensure sustainable profits. The airline industry is notorious for building a new airline brand, then watching them fall from the sky (in some cases literally). Severin Borenstein, an economist at the Haas School of Business at U.C. Berkeley, says, “The industry in aggregate has lost about $60 billion over the 32 years since 1978. The biggest mistake they seem to make is not making money.”
Wikipedia has a list of defunct airlines by country. I counted over 430 USA airline brands, and over 105 Canadian airline brands no longer taking off. Remember, Eureka Aero, Mohawk Airlines, Zip, Greyhound Air, Roots Air or Pride Air? TWA, owned by Howard Hughes and Pan Am were the first airlines to fly around the world. They pioneered many innovations such as jumbo jets, computerized reservation systems, in-flight meals and much more. Sadly, they are both dead brands.
The automotive industry has a similar story, but theirs are less about the business model and more about production and quality issues, and costs. Check out the defunct USA auto list. The list is very long!
Do you remember the dot.com bubble? The stock markets went crazy with new internet companies that promised to change the world, with high valuations and no profits. At the time, losing money was a symbol of success. By October 2002, the Nasdaq stock market index had lost 78 percent of its value from the peak. By mid-2003, trillions of dollars on wealth vanished, and thousands of dot.com brands like Pets.com, GeoCites.com, TheGlobe.com, InfoSpace.com, LastMinute.com, Altavista.com, Kozmo.com, Boo.com, all disappeared. The lesson is you need a sustainable business model. Currently, its the weed brands that are learning this fact.
Today, many retail brands are heading into the same direction with colossal debt, poor customer service and no digital strategy. Too many dead brands.
Survive or Die
Andy Grove, the former CEO of Intel, who made the company a microprocessor behemoth, wrote the book, Only the Paranoid Survive: How to Identify and Exploit the Crisis Points that Challenge Every Business. Written over 20 years ago, it is still very relevant to the concept of “inflection points.”
An inflection point is a point where you know that the industry in which your business operates in, has changed so profoundly that you can either change your business entirely as well or get killed by your competitors. The inflection could be a change in competition, a change in regulatory issues, a change in consumer habits, and a change in technology. He believed in taking action, doing something about it, staying ahead of times and winning at all costs even if it meant changing even his company’s core areas of business. “Most companies don’t die because they are wrong; most die because they don’t commit themselves,” says Grove. “They fritter away their valuable resources while attempting to make a decision. The greatest danger is in standing still.”
Death isn’t inevitable. There are many successful brands well over a hundred years. Some brands that came back from the dead and are flourishing today are Lego, Marvel comic books, Old Spice, Apple, Nintendo and Volkswagen.
In this new world of disruptive technologies and innovations, no brand is safe. Changes are being launched at lightning speed, copied overnight, and improved continuously by the hour. If you freeze in indecision or blink, your brand could be dead before you know it. Today the Coronavirus’s impact is still unknown, but brands must be on high-alert as customer’s consumption patterns and preferences shift. Be ready to respond and fight to survive. There are already too many dead brands.