You Want Loyalty?
Get a Brand!
Fidélisation
INFOPRESSE Conference
Centre Mont-Royal, Montreal
10 September 2008
Awareness is NOT
Loyalty!
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Satisfaction is NOT
Loyalty!
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Record loss for GM
General Motors posted a record
loss of $38.7 billion for 2007
DETROIT (AP) – General Motors Corp. said Friday its
losses widened to $15.5 billion in the second quarter as
North American sales plummeted and the company faced
expenses due to labor unrest and its massive
restructuring plan.
The loss of $27.33 per share is the third-worst quarterly
loss in the automaker’s history. In the same period a year
earlier, GM recorded a net profit of $891 million, or $1.56
per share.
Revenue for the April-June period was $38.2 billion, down
$8.5 billion from a year earlier.
Source: General Motors THE ASSOCIATED PRESS
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These are
price-of-entry
items.
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Why?
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Because there is
a big difference
between
Loyalty and Continuity.
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All Airlines Give
Points!
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Delight turns to
Expectation…
and Expectation
turns to Irritation
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Customers are on
to that!
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So much so that
the product isn’t
enough any more!
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Loyalty accrues if
you are perceived
as a brand. . .
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and if you are able
to meet or exceed
expectations consumers
hold for the category.
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To do that
you need to be a
brand!
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NOT a Category
Placeholder.
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Brand Keys Commodity-to-Human
Brand Continuum (U.S.)
Label
Commodity
(aka Stuff)
Category
Placeholder
21st Century
“Brand”
Human Brand
Martha
Stewart
INC International
Donald
Trump
Tiger
Woods
Degree To Which Products & Services Are Imbued With Real (Or Perceived) Emotional Values
None
High
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=
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YOU NEED TO BE A
BRAND!
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How Do We Know?
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We’re Brand Keys
•
The leader in predictive brand equity, loyalty, and engagement research metrics
since 1984; an independent global boutique.
New York
Albuquerque
Los Angeles
Philadelphia
London, England
Sydney, Australia
Tokyo, Japan
•
Brand Keys specializes in brand equity and engagement metrics that accurately
predict future in-market behavior and therefore correlate highly with sales and
profitability.
•
Our predictive brand metrics are grounded in clinical psychology. This distinction
allows us to understand both the emotional and rational factors bonding consumers
to brands.
•
We can accurately measure the impact media/marketing initiatives will have on
future in-market behavior.
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Some of Brand Keys Clients
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Published and Recognized Loyalty
Engagement Experts
Dr. Robert Passikoff
Named a
“2007 ARF Research Innovator”
Amy Shea, EVP,
Recipient of 2008 ARF
“Great Mind” Award in Innovation
Read The ARF’s First Opinion
Research Review On
Brand Keys’ Engagement Method at
www.brandkeys.com
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How Will We Do That?
Brand Equity
Loyalty
= Profitability
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The Brand Keys Methodology
FUSING
Emotional
Rational
Category
Attributes, Benefits
& Values
Psychological
Jungian-based Personification
Questionnaire
Factor Analysis
+
Regression Analysis
+
Causal Path Modeling
Brand Equity Metrics
Expressed as easy-to-read index
numbers and diagnostic bar charts
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Aquetong Capital Advisors:
correlations of 0.83–0.90
Advertising Research
Foundation’s First Opinion
review.
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Real World Validation
The Starbucks Story
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How Do They Buy in the Category?
2007 Ideal Coffee Provider
Customer Expectation Levels
High =
Differentiator
140
Ideal
135
130
122
119
120
113
Low =
Table Stakes
110
Location & Value = 30% Service & Surroundings = Quality & Taste = 23% Variety & Selection = 19%
28%
Percent of Contribution
Highest
Lowest
Loyalty Drivers – Order of Importance
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Percent – Contribution of Individual ABVs
Driver #1: Location & Value (30%)
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2007 Customer Loyalty Engagement Index:
Coffee
Customer Expectation Levels
As customers articulate the
increasing importance of
Service and Surroundings
at the start of ‘07,
Starbucks loses it strength
to Dunkin’ Donuts.
Loyalty Drivers – Order of Importance
Highest
Lowest
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What happened?
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Text of Starbucks Memo
From: Howard Schultz
Sent: Wednesday, February 14, 2007 10:39 AM Pacific Standard Time
Subject: The Commoditization of the Starbucks Experience
As you prepare for the FY 08 strategic planning process, I want to share some of my thoughts with you.
Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000
stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead to the
watering down of the Starbucks experience, and, what some might call the commoditization of our brand.
Many of these decisions were probably right at the time, and on their own merit would not have created the dilution of the
experience; but in this case, the sum is much greater and, unfortunately, much more damaging than the individual pieces. For
example, when we went to automatic espresso machines, we solved a major problem in terms of speed of service and efficiency.
At the same time, we overlooked the fact that we would remove much of the romance and theatre that was in play with the use of
the La Marzocca machines. . . .
March 3, 2007
TALKING BUSINESS
Give Me a Double Shot of Starbucks Nostalgia
By JOE NOCERA . . .
Last week, this Mr. Schultz was on vivid display when an internal memo he wrote to his top executives was leaked to
Starbucksgossip.com. . . . He pointed, for instance, to the company’s decision some years ago to install automatic espresso
machines, which, he wrote, “solved a major problem in terms of speed and service,” but also made buying a cup of Starbucks
coffee a more antiseptic experience. . . .
Robert Passikoff, president of the brand consultant Brand Keys, said that Starbucks had taken its eye off the brand. “In
trying to migrate from a coffee brand to a lifestyle brand, there has been a certain brand dilution.” He agreed that the
“whole European coffeehouse experience” was no longer how people thought about Starbucks, to the company’s detriment.
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2008 Customer Loyalty Engagement Index:
Coffee
Customer Expectation Levels
Service and Surroundings
are most important to
customers at the start of
’08; Starbucks continues to
struggle in the category
they largely shaped.
Loyalty Drivers – Order of Importance
Highest
Lowest
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Coupons
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What Do You Need?
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Strategic Insights
This approach provides predictive answers to these
questions:
How do customers buy the category?
What’s important in the category?
What are customer’s expectations in the category?
How well does your brand meet (or even exceed)
customer expectations?
• What opportunities are available to your brand?
•
•
•
•
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And a grip on
“added-value”
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Convenience
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Percentage of Contribution
How Convenience Contributes to Loyalty
Year
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The Brand Keys Research Metrics Difference
A predictive solution that is both innovative and comprehensive.
Easily integrated into current research efforts.
Anticipate the needs, wants and expectations of audience segments. What are
the true value propositions that will drive behavior? How well is your brand
meeting/exceeding expectations? How are your communications performing
against those expectations?
By using our loyalty metrics, you receive leading-indicators of purchase behavior,
re-purchase, sales and profitability. Anticipate needs; be predictive.
Leading-indicator loyalty metrics provide pre and post measures to demonstrate
Brand Equity ROI, quantifying the impact of marketing initiatives ─ in advance
of spend.
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Thank you for your attention.
Robert Passikoff
President, Brand Keys, Inc.
212-532-6028 x12
robertp@brandkeys.com
www.brandkeys.com