Fusionbranding: How to Forge Your Brand for the Future [Englisch] [Gebundene Ausgabe]

Wreden writes thatthe post-war world can be divided into three eras. The "Mass Economy," which extended from about 1950-1995, was the golden age of branding. The power of the mass media allowed companies to control information flow and "position" offerings. The increasing power of such mass retailers as Wal-Mart as well as information-sharing through the Internet ushered in the "Customer Economy" around 1995. The next era, projected to begin around 2005, is the "Demand Economy." The Demand Economy will be characterized by three forces - reach, immediacy and personalization. Reach requires that companies be able to reach - and be accessible to - customers around the clock. Immediacy takes responsiveness to the next level. And personalization is required for both communications and offerings.

Why are many brands are failing today and executives growing cynical about their marketing investments? The reason, says Wreden, is because companies are still using mass-economy tactics like "positioning" even though the customer economy has changed branding imperatives. Wreden compares it to "playing golf today with clubs from the 1970s." This results in marketing that both wastes resources and fails to achieve desired results.

Instead of dated market-economy tactics, Wreden suggests "Ten Core FusionBranding Principles" for branding in the customer and demand economies. These include "brands are created by organizations and supply chains, not marketing departments" and "products offer promises. Brands honor commitments."

These core principles are based on the book's three key themes: customer equity, operational excellence and accountability. Customer equity reflects the value of existing customers, operational excellence is everything required to do business on customer terms, and accountability is needed to avoid wasting re sources and ensure responsiveness.

FusionBranding takes on a lot of topics often ignored in branding books, which tend to focus on the creative aspects of advertising. These books look at business-to-consumer branding, even though the bulk of business conducted worldwide is business-to-business. Businesses that sell to other businesses also need to establish a brand, but don't have the budgets used to promote yet another toothpaste or other consumer item. For such businesses, FusionBranding covers the role of supply chains in branding as well as the technologies and processes required for responsive customer service and fulfillment.

Another important topic that's often ignored is pricing. Often, pricing is talked about in terms of a branding advantage - "brands enable higher pricing." But how much higher? What about brands based on value? Is it better to set a high price, with promotions that offer substantial discounts, or a lower price from the beginning. One insightful chapter on pricing discusses how to link pricing to branding while maximizing profitability.

FusionBranding also contains a lot of specific tips for those in the business. PR agencies must start to incorporate competitive intelligence and accommodate a new world where the Internet allows everyone to be a journalist. Advertising agencies must expand capabilities to help channel partners market more effectively.

The last section is especially interesting. It discusses the three main branding challenges of the emerging Demand Economy - dynamic pricing, privacy and change management. It's debatable whether these issues will assume the importance Wreden says they will, but they definitely need to be kept in mind for long-range strategic planning. At any rate, the ideas, perspectives and strategies in FusionBranding can recharge any branding effort for today's - and more important, tomorrow's - markets.

Answers vary from hiring great talent to inspiring innovation to superlative customer service. While all those factors play a vital role in growth, this book argues that the key force in propelling start-ups from bedrooms to boardrooms is customer equity.

According to Wreden, customer equity is "the value that a customer brings to an organization in terms of sales, profits and intangibles, like referral sales, over the lifetime of a relationship." Customer equity is built on the premise that existing customers are much more valuable than new customers.

Everyone knows that existing customers are most valuable, yet few firms follow through with actions. About 80%-90% of sales and marketing budgets are devoted to customer acquisition, not retention. According to the consulting firm Bain & Co., fewer than 20% of firms track retention.

FusionBranding argues that focusing a business on customer equity pays multiple dividends. First, it increases branding and other accountability by, for example, pinpointing whether marketing campaigns are generating short-term sales without creating long-term customer value. Customer equity also focuses an organization on retention, especially if sales and other compensation are tied to that benchmark. Loyal customers lead to word-of-mouth, the most effective form of branding. Finally, and most important, loyal customers are more profitable. FusionBranding cites well-publicized studies that indicate that a retention increase of only 5% results in a lifetime profit increase of 95%.

Branding is important even for small firms. But too many firms see branding only from the perspective of advertising and public relations. (As an advertising and PR agency executive, I run into this perspective all the time.) While ads and PR are absolutely essential to branding in the mass economy, Wreden believes they are less important in today's customer economy. Because customers - not companies - define brands today, he argues that better branding and other paybacks come from emphasizing customer equity, accountability and operational excellence running from the supply chain to the customer.

Accountability starts with benchmarks that are clearly measureable, not intangibles like "creativity," "awareness" or even satisfaction. The most crucial benchmark is customer equity, but other benchmarks can include responsiveness, percent of revenue from new products and even employee retention. Benchmarks must also be from the customer's perspective. This is part of what Wreden calls "doing business on customer terms." In short, it's not about the ad featuring my company and my products but about the relationship my company fosters with you.

Wreden believes the coming demand economy will spark another wave in branding. Then, the emphasis will be on immediacy, reach and personalization. Immediacy places an even premium on responsiveness. Companies will be able to reach customers through a variety of media, but have to be prepared for customers to reach them at all times, and have to be prepared for accuracy and completeness during each contact. Almost all products will be personalized in the demand economy.

Interestingly, he also examines the challenges of the demand economy, such as dynamic pricing. Unlike other marketing books, which dismiss pricing with a standardized comment about "brands enable premium pricing," FusionBranding devotes attention to pricing techniques and their relationship to customer value. Dynamic pricing, where prices change in real-time according to supply and demand, will present a lot of challenges to businesses seeking to understand all their process costs as well as current market conditions.

Most branding books have little relevance to small businesses, especially those involved in selling to other businesses, because the authors focus on large consumer firms with big budgets. But Wreden has purposely oriented his book toward the practicalities of business, such as ensuring an effective distribution channel and incorporating the right technologies. At almost 400 pages, FusionBranding is not a quick read, but it is most definitely a worthwhile one for any small business that wants to be a bigger business which means everyone.