Protean White Paper - Experiential Branding

white paper Experiential Branding

L SUMMARY • Why traditional approaches to differentiation won’t work • How to maintain margins in the face of increased competition • View your business in an entirely new light

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aurence Bernstein has been fine tuning the art of converting features, attributes and benefits into dynamic, experiential brands for 20 years. This White Paper discusses the theory and practice of this powerful approach to business strategy.

Relevance, differentiation and maintaining margins

It is not overly simplistic to say that there are two predictive components of strong brands: relevance and differentiation. And again, from a business point of view, it is not overly simplistic to think of a strong brand as one that will support a premium price in the marketplace – where the brand itself adds economic value to the product or service.

Relevance is a big word and has many implications. In the first instance it suggests that the product is something needed, something that will be a solution to a need. In this sense, if the products or services under the brand trustmark do nothing to address or solve specific needs consumers have, or anticipate having, it is likely that the brand itself is not relevant. However, relevance goes further to encompass aspects of affordability (“generally speaking products under this brand’s mark cost more than I can afford, and if I can’t afford their products or services, then the brand is not relevant to me”); accessibility (“if I can’t access the product, physically, when and where I need it, then again it is not relevant”); and higher order relevance interpretations which come from emotional brand attributes such as “for people like me”; “makes me feel accomplished”; “a brand I trust,” etc.

Differentiation determines whether there are meaningful motivational differences

(functional and physical attributes inherent in the product or service itself) and/or meaningful discriminating benefits (emotional and positional factors stemming from the brand image), that make products under this brand marque preferable to equivalent products under another marque.

That said, it is becoming increasingly difficult to maintain exclusive relevance and meaningful differentiation in the marketplace today. Motivational differences are difficult to sustain – for the most part products and services can be replicated either exactly or “exactly enough” to render uniqueness impossible.

Furthermore, the relative ease of entry into most marketplaces means that products and services can not only be duplicated, but also wrapped in a more motivating value proposition (rendering existing differentiating attributes less potent). There are already very few categories in which each segment is not populated by a large variety of competing products that are differentiated from a functional stand point in only the most minute ways (the automobile category being a classic example of this, wherein differentiation is focused on unsubstantial discriminating benefits that, in the end, can be overridden by price). And, where this is not the case yet, it soon will be: in reality, there are very few products that somebody cannot copy (differentiation) and sell for a little less

Aligning beneficial customer experiences with business strategy

(relevance).

Price matters

“... there are very few products that somebody cannot copy and sell for

a

little less”

In spite of what they say, consumer behavior suggests that lower price is a powerful incentive that sooner or later takes precedence over many of the discriminating benefits that brands rely on for differentiation, such as trust, prestige, and other higher level positional attributes. In fact, we have seen how consumers reject traditional discriminating benefits in favour of lower prices, and create positional constructs in which they are intrinsically and extrinsically rewarded for taking the “cheaper copy” option (“savvy shopper,” “independent person not influenced by ‘marketing’,” etc.)

The implications of this understanding is that (in most cases) products are forced into a price fight with challengers; and that this paradigm will remain true as long as the marketing focus remains on the product and its inherent features and attributes (including benefits).

Copy Gucci or Gucci copy: experience matters more

The paradigm can, however, be moved if the discussion extends outside of the product itself and further into the consumer’s broader relationship with the product – in other words, if the discussion revolves around the holistic experience of the product at every direct and indirect touchpoint throughout the purchase‐ownership‐repurchase cycle. By redefining the playing field from that of the product to the larger, more complex field of the product experience, the product itself becomes more multi‐dimensional and hence more difficult and costly for competitors to replicate. In fact, where high levels of customer loyalty are observed, consumers almost always talk in terms of the experience, rather than the product. The experience of high end brands faced by counterfeiters shows clearly that, while a gang in Shanghai can replicate every detail of a Gucci purse, they cannot replicate the experience of owning the real thing: an experience for which sophisticated consumers will gladly pay 20 or 30 times the cost of the counterfeit.

This idea has been activated (with greater and

lesser effectiveness) in the marketing of co‐ created products – services, such as hotels, theme parks or financial services, where the product does not exist until it is consumed by the customer, and where the experience is, in fact, comprised of the totality of factors surrounding the consumption. In these instances, where the experience is consistently different, brands have been able to develop and sustain unassailable positions (Four Seasons Hotels, Disneyworld/land, The Rolling Stones, The United States Marines, etc.)

Not only experiences are experiences The power of experience can be extended outside of co‐created experiential services to manufactured products, as demonstrated by Saturn Motor Cars that achieved iconic brand status by presenting, not a different kind of car, but a different kind of car company, which

Getting it straight

Experiential branding is not experiential marketing Experiential marketing is one of the tools in the experiential branding tool kit.

Experiential marketing acknowledges that in an age where commercial messaging is ubiqui‐ tous, consumers nevertheless can choose when and where they will interact with your brand — directly or indirectly (via messaging).

More and more customers are saying they do not want to “hear’ or “see” your message, but they want to “experience” your message. And if the experience of your message triggers the experience of your product or service...then, and only then, can you start talking about an integrated brand.

Experiential branding is different from branding experiences Companies have been branding experiences for years, and this is the foundation of the techniques for experiential branding. How‐ ever, experiential branding goes further, taking the learning from branding experiences and applying it to consumer goods, retailers, auto‐ motive, and, of course, all co‐created and transactional categories.

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“Features, attributes and benefits can no longer sustain brands”

translated to a different kind of ownership experience. Saturn owners, believing at a deep level that all cars are pretty much the same (providing they are not lemons), bought into an experience that was uniquely relevant and (on many levels) beneficially differentiated.

This could be sustained competitively because the multi dimensional complexity of the experience acted as a powerful barrier to entry for would be competitors in the segment.

What Saturn proved was that by defining the differentiating attribute not as a “feature” or “benefit” but rather as an experience, it becomes more difficult for competitors to replicate and more difficult to under‐price.

The factors on which value is measured become more complex and subjective, making it easier for consumers to maintain loyalty and making the brand more sticky and resistant to price plays in the marketplace. This proved so strong that Saturn was able to add a “no haggle” pricing attribute to the Saturn experience – a structure that no other car manufacturer has been able to replicate.1

Laurence Bernstein is the founder and managing partner of Pro‐ tean Strategies/The Bay Charles Consulting Group Limited. He has been a leading proponent of the “new order of differentiation” and has written and lectured on the subject of experiential brand‐ ing in Canada, the US and China.

Laurence honed his advertising and marketing skills over the course of twenty‐something years working in senior positions at Saatchi and Saatchi Advertising, Chiat Day Advertising and Y&R. His extensive brushes with reality come from working in sales and marketing for Westin Hotels , running the Canadian Restaurant Association and running nightclubs in Toronto.

Mr. Bernstein attended Cornell University and the University of the Witwatersrand in his native South Africa. He currently lives in Toronto with his long term partner.

Easier than you think

While it took an entirely new company to make the case in the automotive sector in the late 1980’s, it is in fact no harder to adopt this approach than it is to undertake any other kind of brand repositioning exercise.

Historically repositioning brands and their products and services is accomplished by formulating one or another version of the classic positioning model: Target – who is the brand meant to attract (for whom does it make product or services Frame of reference – what is the category (and hence competitive landscape) in which the brand competes Relevant beneficial differentiator – the most motivating benefit resulting from a unique set of attributes. This itself is an evolution from

the original USP (unique selling proposition) which was based on finding relevant and dif‐ ferentiated product features, and applying them to the brand.

Viewing this model highlights the fallibility of the approach in the current competitive climate. Either the differentiating benefit is delivered through functional attributes (in which case it can be copied) or through positional (higher level) attributes (in which case it stands to lose economic relevance as lower priced clones enter the marketplace).

On the other hand, if the model is changed to reflect the “relevant differentiated experience (RDE)”, the paradigm changes. Now the differentiation is delivered as a result of multiple events over time, each one evaluated

1

The fact that General Motors attempted to reposition Saturn in 2006 and subsequently dropped the brand, speaks to the success of the branding exercise: the differentiating experience worked with laser-like precision on the specific target and became an iconic brand for them. Unfortunately, the brand’s relevance was limited to the pre-determined market segment, which, it turned out, was not large enough to support an entire car company. GM found that the brand essence was so deeply imbedded in the consumer’s minds that they could not expand the position to a broader target.

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“... change the model to reflect the relevant differentiated experience”

on a very personal level by the customer, and each one having within it the possibility of real differentiation (and a greater likelihood of achieving exclusive relevance at some point in the continuum of experience).

From a brand (as opposed to product or service) point of view, the idea of experience can easily refer to a consistent difference experienced over a broad range of products or services. The brand value‐add can be delivered more overtly and consistently, precisely because it is a way of doing something rather than the thing itself. In other words, the manufacturer can achieve differentiation and support margins over a large number of different and varied products because the experiential brand promise can be consistent.

When benefits don’t benefit any more

For instance, in the case of an automobile, if the traditional differentiating benefit was something along the lines of “feeling of freedom delivered through power,” the focus of the marketing effort will be on power, an attribute that can easily be copied and delivered for less; and the context of the communications may be “freedom,” which would be neither ownable nor differentiating in the long run.

Supposing, however, the differentiating experience of the vehicle is “freedom”, then the manufacturer has an infinite number of ways of delivering the experience inside and outside the product — wherever and how‐ ever, in fact, freedom can be experienced, and linked to the brand. An idea factory could generate a hundred ways in which to wrap the various touchpoints (pre, during and post purchase) which would all deliver the feeling of freedom: a less structured web site, freedom rallies at which customers are free to drive the vehicle wherever they want; added value incentives based on freedom themes; and many more substantive and contextual activities amplifying the sense of freedom that the vehicle promises.

While no single activity might be unique, the sum of the activities (which translate into the single cohesive experience) is unique, and

generally evaluated as such by the market‐ place (providing, of course, they all single mindedly support the RDE).

It is important to understand the difference between “freedom” (in this example) as a “higher order benefit” and “freedom” as an experience. In the first instance the promise is singular, inert and directed toward fulfilling a need or desire; it stems from an insight (consumers need to feel free). In the second instance, the case where “freedom” is a holistic experience, the promise is dynamic, malleable and entirely subjective; in this case it stems from an understanding of how con‐ sumers relate to the product over the entire consumption life‐cycle relative to who they are, how they live, what they believe about the brand/product/category and what they stand for.

Standing still is still standing still

The trick to this new model is to understand the actual, dynamic experience from the consumer’s point of view. This requires a shift from a focus on “insight” into a focus on empathetic understanding. An insight is a static observation converted into an operative conclusion or judgment. It is an articulated snapshot of attitudes, opinions, beliefs and values. Because experience is a fluid, existential process, wherein the individual’s response to any event becomes part of the event and part of a larger evaluative process, a more fluid understanding is required.

Experiences are co‐created, in the sense that the marketer is only defining the inputs and giving clues to the take‐away. Fundamentally the understanding lies in the realization that the individual is engaged in the experience, and forms judgments more in tune with who he or she is or becomes, at any given moment of contact.

Empathetic understanding can be found at the nexus of the consumer’s extrinsic understanding of, and relationship with, the world around them (in the context of the brand); and their subconscious mechanisms for evaluating and forming judgments (not only in the context of the brand but also in that of their world in the broadest sense), which we refer to as a the “intrinsic” Page 4

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understanding.

Development and articulation of the relevant differentiated brand experience, requires both extrinsic and intrinsic research methodologies.

Extrinsic methodologies, in this context, derive from research approaches that are themselves experiential ‐‐ such as ethnographic, in‐home, observational methodologies, etc. In other words, research that transcends observation and brings the researcher subjectively into the experience.

Intrinsic methodologies offer a window into the psychological make‐up of the consumer.

Most often this can be accomplished using modern psychologically based techniques (such as Inner Directives™ Jungian approach) and isolating typological traits that differenti‐ ate one class of consumer from another. Iden‐ tifying the typology of the desired consumer class and comparing it to those of other classes, builds the foundation on which to place the extrinsic understandings, which in turn allows the relevant and sustainably differ‐ entiated experience to crystallize.

Experience the future by experiential branding

A combination of intrinsic and extrinsic re‐ search approaches will provide the dynamic understanding of how the product, brand or category integrates into the consumer’s life in a dynamic sense which crystallizes a clear un‐ derstanding of the brand experience. With this information as the strategic foundation, mar‐ keters can develop executional strategies to ensure consistent delivery at all high impact direct and indirect brand touchpoints.

Protean Strategies is a Toronto based management consulting firm specializing in developing brand strategies and providing a full range of consumer research services. Since its inception in 1997, the firm has provided breakthrough strategies for leading Canadian and US brands, including General Motors, Fairmont Hotels, Canadian Tourism Commission, American Express, Dell Canada, Energizer Batteries, Unilever , Procter and Gamble, Allstate Insurance and advertising agency partners in Toronto, Calgary, New York City, Chicago , London, Amsterdam, Frankfurt and Shanghai.

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