marketing

What’s better than a great communication strategy? Conversation.

Originally published as a Special to The Globe and Mail
Wednesday, Mar. 13 2013

Fluevog-porter-shoe-1The other day, I was walking out of the office of an industrial manufacturer and one of its executives looked at my new briefcase and said, “Oh cool, you’re a Fluevog guy”.

That comment really made me think about the dynamic relationships that we form with companies and their brands today. It reinforced how certain, well-developed brands define you as a person to those around you. And, most importantly, it reinforced the fact that this status can and has been achieved by companies – big and small – like Apple, Zipcar or Fluevog.

As an advocate of branding and innovation, and a business practitioner, I try to maintain a measure of brand objectivity. But, for a minute, I’m going to put the shoe on the other foot, literally. I’m going to be the actual zealous consumer and use Fluevog Footwear as an example of a company that has progressively won my appreciation and affinity with innovative branding and wonderful products. (Full disclosure: they have never been a client of mine. I am simply a fan of the brand).

Founded in 1970 in Vancouver as a single, vintage shoe store, Fluevog now has 14 locations across North America and an amazing website where one can find this tongue in cheek corporate philosophy, ‘Moses used tablets, Picasso used paints, God used Moses, Alex G Bell used the telephone and John Fluevog uses shoes. Great minds of the past have used a variety of mediums to communicate their messages – since the beginning of time (or at least John) John has even been using the soles and foot socks of his shoes to communicate with the world.’ Compare this statement of purpose to the mission statements of most companies, and it’s evident that Fluevog has a pretty eclectic audience in mind.

Other than great shoes and briefcases, what compels me about Fluevog is its ability to connect on a whimsical and functional level with its customers. It has replaced a one-way communication strategy with what I’m going to call an open, two-way ‘Conversation Strategy.’ Today, a communication strategy can incorporate online dialogue tools. However, too many of us have simply carried forward the old “tell our story” approach to these new media, and that isn’t good enough.

Just being present on social media platforms isn’t enough to generate buzz and revenues. What Fluevog has managed to do is to use social media to seek out and attract kindred spirits to the brand. In addition to Fluemarket, a site where consumers can buy, sell or swap, Fluevog shoes, the company reaches out to potential designers through Open Source Footwear, where the best ideas are actually made into shoes and the designer given credit.

As a consumer, what distinguishes Fluevog from most companies for me is its passion for making its customers part of the journey. It engages rather than informs. It opens a dialogue instead of a monologue. And perhaps most crucial to Fluevog’s success… it lets its customers participate in and celebrate the creative process. So, not only do I own Fluevog products, I have also taken ownership of the company’s philosophy of making me a part of the conversion.

We may not all be as eclectic as Fluevog or as artistic. We may be a business-to-business manufacturer of industrial widgets versus purveyors of fashion-forward footwear and accessories. But, we all have a unique story to share. Not just about what we make or what we do, but how our business and our philosophies can enrich and engage our customers or our community. Creating a real conversation means connecting in a meaningful way. Not just about our products or the new innovative introductions that our company is bringing to market. That’s just a two dimensional conversation. What can make it 3D is by talking about the things beyond business that inspire us, like articles or books or trends or community events that help us to be better and more relevant people, leaders and managers. Fluevog inspired me by its approach to life in general, not just its shoes. It treats me like a sentient human, not just a paying customer.

Part of the conversion from communication to conversation is the ability to listen. Without the listening part, you can’t expect to know your audience and what inspires it. The days of speaking to our customers have been replaced by speaking with them. Conversation is the new cash. And in today’s era of social business creating an ongoing, engaging conversation is king. I’d like to invite you to be a part of the conversation by letting me know which organization has found a kindred spirit in you. How did the company engage, delight, involve and engage you in its mission?

How far can Apple fall from the tree?

Apple-Brand-Identity

The recent tumble of Apple’s stock raises an interesting question: How far can the price of the stock fall relative to the value of Apple’s most inherent strength, its ability to innovate?

No one knows exactly how much value investors attribute to a company’s innovative capacity and how much of that is reflected in the stock. Apple’s precipitous decline to $457.19 a share (January 29, 2013), compared to a 52 week high of $705, is more about ‘expectations’ for revenues and profits than the intangible of innovation. In January, expectations remained high despite the fact that Apple executives tried to downplay them. On November 26, 2012, John Dobosz of Forbes cited Marc Gerstein who had Apple as “Sell” and he said, “Apple stocks could slip further.” Now, after a quarterly report in which the numbers were good, just not good enough, the questions have started. Has Apple lost its edge? Will the competition make inroads? Why aren’t new products creating the same buzz? Has the bloom worn off the iPhone?

In the smartphone market, Samsung, who serves more of the lower-end market, has long been in Apple’s rearview mirror even though their phones outsold Apple in 2012, 233 million to 133 million. And Samsung’s fourth-quarter results exceeded expectations with an 89% increase in operating profit and 76% in net profit. Who’s hunting whom?

When it comes to innovation, Samsung’s approach is different than Apple’s. Simone Foxman, business writer for Atlantic Media’s Quartz, reports, “Samsung sees itself as less inventor than innovator. It builds on technologies already in the marketplace and remains open to others.”  That’s what I call ‘simple-adaptive’ innovation in that they develop products incrementally based on what they know rather than focusing on ‘disrupting’ the marketplace with transformational products. That’s Apple’s game.

Both simple-adaptive and focused-disruptive strategies work, and ideally companies want to be good at both. Now, for these two giants, it may be a question of whether Apple can become more incremental while maintaining its Steve Job’s transformational capability and whether Samsung can move beyond incremental and leapfrog into higher-end markets. It will depend a lot on their capacity to innovate. Time will tell. In the meantime, some expectation of their innovative capability will be evident in the stock price.

Innovation is in the DNA of a company and its people, and that doesn’t change with quarterly results. In Apple’s case, it may well intensify their innovative quest for the next game-changer. And when it comes to expectations, I wouldn’t bet on the apple falling too far from the tree that Steve planted.

Epic Brand Fail!

Epic-brand-failure

I read in a recent New York Times article (published October 15, 2012) that a Blackberry user, Rachel Crosby, said she no longer takes out her BlackBerry at parties and conferences, and in meetings she hides it beneath her iPad for fear clients will see it and judge her. “I am ashamed of it,” she said. Ouch! That is so not cool. We know BlackBerry’s troubles over the last four years and its drought of innovation since its supernova days and a market cap of $78 billion (June 2008). Today, it’s at $4.4 billion and the brand is in free-fall.

The connection between a corporation’s value and brand is not covered by standard accounting practices. As Roy Sieben, partner at SB Partners accounting firm explains, “Generally accepted accounting principles do not report the value of internally generated goodwill (as opposed to purchased goodwill) despite the fact that such goodwill can be a significant part of a corporation’s overall value.”

Luckily, there are firms (Interbrand) that measure the value of brands and rank the top 100. The results are a striking reminder to all of us in business of how important brand is to the long-term of the business assets that we are building.

In 2012, guess who was #1? No, not Apple; it was Coke, coming in at a value of $77.8 billion, up 8% from 2011. Apple was a close #2, at $76.8 billion, up 129%. And guess who was down at #93? Blackberry at $3.9 billion, down 39%. Another tech competitor, Microsoft, was #5 at $57.8 billion, down 2%.

Not surprisingly, in this group, there is a general correlation between the company’s market capitalization and brand value. Between January 2011 and November 2012, the up or down change in market cap is mirrored in 2012’s brand value:

Apple: Market cap rose from $296 to $510 billion and brand value jumped 129%
Blackberry: Market cap crashed from $34 to $4.4 billion and brand value fell 39%
Microsoft: Market cap dropped from $238 to $227 billion and brand value fell 2%
Coca-Cola: Market cap rose from $152 to $162 billion and brand value rose 8%

Accountants may not put brand value and innovation on the balance sheet but you can probably get pretty good odds from any savvy investor that a strong brand and continuous innovation are intangible items to be considered “on” the balance sheet. Leaders of the most successful corporations know it.