What's Next - Strong Brands Can Raise Your "Good" Cholesterol Levels?

An article in the Tuesday, November 28, 2006 edition of the Wall Street Journal titled "This Is Your Brain on a Strong Brand: MRI's Show Even Insurers Can Excite" caught my attention. The subject of the article was a presentation at the annual conference of the Radiological Society of North America.

It seems that a study performed at the Ludwig-Maximilians University in Munich indicates that there is a possibility that strong brands trigger strong activity in the portions of the human brain associated with "positive emotions, self-identification, and rewards." Now, before we all get excited that this provides biological grounding for business-to-business companies to jump on the branding bandwagon, there are several subsidiary, notable points:

1. The population of study participants was very small - only 20 people;
2. Only two brand categories were tested - automobiles and insurance; and
3. The study did not indicate that the stimuli activated the decision-making part of the brain.

The use of brands has been part of the consumer/retail marketing communication toolbox for decades. Past postings in this blog have commented on the migration of branding into the business-to-business marketplace, as well as the impact branding can have on growth in not only revenue but also enterprise value. What I found intriguing about this article, and the underlying medical research, is the use of scientific methodlogies to attempt to explain a domain of business that, until now, seemed to always show up as "soft" and "existential" in my conversations with CEO's and mid-market business leaders.

Chinese Manufacturing: Same Wounds, New Salt

You can’t be in manufacturing in the U.S. today without having a China strategy. That goes for companies of all sizes: from the largest multinationals to the smallest contract suppliers. There's no shortage of variations on the “China strategy” theme. Some establish alliances with Chinese manufacturers. Others maintain relationships with Chinese-based manufacturers or agents. The bigger players set up their own operations there. The common thread? Every domestic manufacturer we’ve come across in the last decade has been adversely impacted by price-based competition from China. The smart ones long ago began inventing ways to remake their businesses to stay competitive.

Anyone with an interest in the Chinese manufacturing juggernaut must read the cover story in the November 27th issue of Business Week: “Secrets, Lies and Sweatshops: How Chinese suppliers hide the truth from U.S. companies."

While the article is hardly surprising—it confirms what U.S. manufacturers and other observers have been saying for years about exactly how China is able to keep its labor costs so low—it does offer new anecdotal and numerical data on Chinese labor practices. One example:

Based on Chinese government figures, the average manufacturing wage in China is $.64 an hour, according to the U.S. Bureau of Labor Statistics and demographer Judith Banister of Javelin Investments, a consulting firm in Beijing. That rate assumes a 40-hour work week. In fact, 60- to 100-hour weeks are common in China, meaning that the real manufacturing wage is far less. Based on his own calculations from plant inspections, the veteran compliance manager estimates that employees at garment, electronics, and other export factories typically work more than 80 hours a week and make only $.42 an hour.

From a marketing standpoint, it’s intriguing to consider how findings like this could give new weight to “buy American” campaigns in the domestic B-to-B sector.

But as American consumers, we do love our dirt-cheap household goods and the big box retailers that sell them. With supply chains organized around feeding the insatiable appetites of consumers here and overseas, few U.S. purchasers have the financial power to pay more for American-made products and components. In this climate, it's more critical than ever for U.S. manufacturers to have a compelling story about why they merit a premium price.

Hmmmm....sounds to me like a strong case for building a strong B-to-B brand.

More on Corporate Blogging, B to B Style (or not)

Interesting piece in B-to-B magazine on the rise of internal blogging in major corporations. The numbers quoted by author Paul Gillin are telling. According to Gillin, IBM has "more than 300 internal blogs," while about 100 Procter & Gamble employees are actively blogging inside the firewall. Gillin advises B to B marketers to "pay attention to this trend" because of the role internal blogs can play in helping companies efficiently build internal communications and knowledge centers.

The real rub may be how long it will take B to B companies to finally embrace corporate-sponsored, public blogging. To be fair, this isn't another slam-dunk case of B to B lagging heinously behind consumer-focused companies. It's not as if there's universal acceptance of the concept on the consumer side either, as Information Week noted last month.

My read is that the more a consumer company or product impacts people's "lifestyles," the more sense it makes to use corporate blogging to build relationships with the audience. Think Vespa, which hosts blogs written by evangelical owners on its own web site, or Tivo, which has staffers write and moderate a corporate blog aimed at current and prospective users.

Both of these products have inspired fanaticism among their owners. Corporate blogging lets a company tap into that reserve of good will, and thereby further deepen its relationship with the consumer. A pretty sound business case for blogging, I'd say.

Most B to B companies simply don't create similar levels of devotion. As such, blogging in B to B is much more about sharing knowledge than revelling in warm feelings about the experience of X product or Y company. In the tech sector, corporate blogs present a low-cost, high-value method of exchanging knowledge with the company's user base. B to B tech companies like Sun Microsystems blog like their lives depend on it. (Go here to see the directory of Sun's public-facing employee blogs.)

Mega-corp Honeywell sponsors employee-written blogs that support the company's recruitment objectives. Three employees in disparate roles post entries aimed at helping recruits "gain a deeper level of understanding to the culture, people, work and environment of Honeywell" (Honeywell's grammar, not mine!).

On the whole, though, most B to B companies continue to watch from a safe distance. There's wisdom in that prudence, as I've noted before. But sitting on the sidelines until legal and others concerns dissipate isn't sound strategy. By validating or invalidating the business case for corporate blogging now, companies can gain an advantage on competitors and position themselves to reap the business benefits of blogging sooner.

Think Like A High-Profile CEO When Watching The Bottom Line

Media coverage of some of the nation’s leading CEOs recently was analyzed by Factivia, a part of Dow Jones Reuters Business Interactive. GM’s Rick Wagoner received the most coverage, but more importantly the media portrayed him as a leader associated with turnaround and leadership.

For someone like me, who counsels CEOs on the value of effective communication in creating positive corporate outcomes, the study revealed much more.

• Think about the value of a CEO’s time and what it would cost to re-communicate what’s already been said. Depending on what you read, CEOs indicate communication accounts for upwards of 40 percent of their time. Or worse, if the communication was not received accurately initially, which led to costly missteps, how would that impact the bottom line? In the case of the media, if a CEO is not communicating messages on strategy, costly misrepresentation and confusion often are the result. Employees, investors, analysts and other key stakeholders act and react to what they see or don’t see in the media.

• Regardless of a CEO’s profile, every company leader functions in an environment covered by media who can influence perception. For those CEOs of smaller companies who believe no media coverage is good media coverage, remember this: media coverage can work to the advantage as well as the disadvantage of your company. Therefore, not engaging the media can stymie the growth of your company as much as harmful, negative coverage.
  

• The higher the profile, the more a CEO pays attention to perceptions. Fortuity does not lead to consistent messaging in media coverage. Preparation for media interviews with a clear purpose in mind leads to consistent coverage and perceptions.
  

• CEOs of every magnitude can learn a lot from watching the best and the brightest. Many CEOs frequently study their high-profile counterparts, but it’s my sense they don’t realize these superstar CEOs work diligently at becoming excellent communicators.

So, You’re No Longer Who They Think You Are?

Bear with me; this posting has to do with branding, marketing, and corporate communications.

Recently, our principal owner, Mary Scheibel, attended a community meeting in Milwaukee’s inner city. The purpose of this meeting, which was organized and attended by the Mayor of Milwaukee, was to stimulate candid discussion and the interchange of ideas concerning the impact of poverty on the community. In attendance were residents, community leaders, politicians, and business executives. After a raucous open forum following a presentation by Mayor Barrett, the attendees were divided into small groups comprised of a representative sample of the attendees at large. One of the statements made by a participant in Mary’s group has started a thinking exercise for me.

This individual was a man, in his early-to-mid-thirties, and, at best, under-employed. He didn’t complain about his plight; he actually was very philosophical about it. In looking back at how he came to be in his current situation, he admits that he made mistakes. He got in trouble in many ways, and even spent some time in jail. He can see the error of and accepts the responsibility for the poor decisions that he made earlier in his life. And, he can appreciate why companies may hold this against him when he applies for jobs that, if he could get them, would provide the path to a better life for him and his family.

But, he asked a question that is at the heart of my thinking exercise – “Why can’t businesses understand that I am no longer the person who made those stupid decisions and did those bad things? I’ve grown up, matured, and am a much different human being today. Why can’t anyone give me and others like me a second chance?”

When I think about this gentleman’s situation from our profession’s perspective, I see that companies and organizations confront similar situations every day – remember Enron, Worldcom, Adelphia, Health South and Tyco? How do companies who have become notorious because of corporate missteps regain trust with and create a willingness to transact by the marketplace? How do they communicate that they are no longer the company that made those stupid decisions and did those bad things? One of the above companies—Tyco—has been working for the last several years on restoring its reputation, and has come a long way. Strategic, brand-based, and integrated corporate communications have played a critical role in this transformation. I am biased, I admit, but I can see how Scheibel Halaska is well-equipped to assist companies to solve these problems.

But, as both an employer and a human being, I still am haunted by the aforementioned man’s question. I don’t have the space to write, and you don’t have the time to read, all the thinking that this man’s question has triggered for me. Right now, I think he makes a very valid point. Maybe, just maybe, we as business people, who are confronting a skilled-labor shortage, are part of our own problem. Maybe, just maybe, we are handcuffing ourselves by dealing with a changed social and economic environment using employment philosophies and practices that were appropriate for a different time and place.

I am hoping that there are some who read this who will be willing to help me to deepen my thinking.

Gotta Keep The Half-Pipe

I admit it. I have a thing for FedEx. As a business person, I value knowing I can always trust them to keep their delivery commitments. As a guest lecturer on B to B branding to MBA students and college seniors, I appreciate having at my fingertips a slam-dunk example of B to B marketing done well.

My unnatural affection for FedEx goes back to the legendary tag line that started it all: When it absolutely positively has to be there overnight. Verbosity notwithstanding, that tag line accomplished just about everything you could want from a tag line and brand position. It demanded that all audiences think about the company and its offer in a specific way. It loudly and proudly announced the niche position (overnight delivery) FedEx sought to own. It was instantly memorable. And, it earned big bonus points by repositioning the competition. For years, it was hard to look at UPS, DHL and the rest without seeing them as somehow inadequate. Sure, they did deliveries. But FedEx's campaign pegged UPS in particular as the "3-4 days by ground" guys. At least in my mind.

It's a few tag lines later, now, and UPS has undoubtedly narrowed the communications gap with its "Brown" campaign. DHL has also made a nice comeback by finding a place to play between #'s 1 and 2.

Today, FedEx is parked on Relax, it's FedEx. As a B to B marketing geek, I continue to love the clarity of their communications. The quality of their creative product. And the fact that you don't have to be a B to B marketing geek to love their work.

Plus, you always know it's FedEx. Can you say that about most spots? How about the ones that run in the Super Bowl? Can you name the sponsor who brings us the spots with the chimps running amok in the office? (Hint: it's NOT, as so many people think, an ad for Monster.com).

Today, Fed Ex’s TV spots continue to slay me. They're funny as hell. There's always a clear message (lately, about improved office productivity). And like Office Space, Broadway Danny Rose, This is Spinal Tap, Elvis Costello's Imperial Bedroom album or just about any Seinfeld episode from the middle years, you find something new and great with each subsequent viewing.

But hey, enough of my yapping. Check out the current array of FedEx spots on their web site. And while you're at it, put a push pin in China. Worky work, busy bee.

Smash Mouth Interviews: Should You Attack Journalists?

National Public Radio’s Morning Edition recently broadcast comments from President George W’s chief strategist Karl Rove and embattled Pennsylvania Senator Rick Santorum. Below you can read about the good, the bad and the ugly parts of the six-minute segment. This is a great opportunity for learning as you prepare for your next media interview.

Listen carefully. Rove attacks NPR’s Robert Siegel out of the gate. Generally a major mistake toward getting a fair shake during the interview and for ongoing reporting and relationships with the media. But, in this instance, I’d say a savvy move. Savvy from the perspective that Rove needed to ensure listeners immediately recognized Siegel did not see the same polls as Rove, thereby diminishing Siegel’s credibility and argument that Republicans are in danger of losing one or both branches of the legislature during the interim elections Nov. 7. Another reason for the distinction of savvy versus stupid: Rove is not running for re-election.

The piece then shifts to Sen. Santorum (R-PA) after a brief comment from his opponent. The Keystone State senator picks a fight with interviewer Steve Inskeep when he asks “Is that a shock to you...Is that a shock to you? I’m asking you a question.”

Not a wise move in this case. Santorum is in a close race. Some consider his senate seat the most vulnerable in the Republican stable.

Santorum did show some wisdom, however, surrounding an exchange with Inskeep on Iraq. The exchange follows.

Inskeep: “So you’re saying we need to adapt, that things are going poorly, that things are getting worse….”

Santorum: “I don’t think I said either of those words. What I see is….”

Santorum goes on to clarify his position and what he actually said versus what words Inskeep attempted to put in Santorum’s mouth. In a live broadcast interview, always clarify immediately when an interviewer paraphrases your words in a way that is out of context. The immediate response closely ties accurate information to misinformation. Immediacy also ensures your comments are part of the broadcast. Interviews end abruptly at times, leaving you without the opportunity to respond.

Taped broadcast interviews and print media interviews also require clear concise messaging and delivery to ensure you are not taken out of context. Editing plays into these interviews. When editing is involved, you won’t know what part of the interview is selected for broadcast or print as you do with a live interview broadcast in its entirety. Staying on message is crucial to all interviews, but especially when editing leaves you vulnerable to interpretation. (See my June 12 blog entry entitled “Who’s to Blame for Misquotes…You or Them?” Scroll down through the June blog archives.)

Somewhat Shameless Reciprocal Promotion

Turns out Inside B to B Marketing was the subject of a recent post on Rick Short's B2B Marcom Blog.

Rick is a business-to-business marcom blogger we've been reading for a while. Director of marketing communications for Indium Corporation and a 22-year veteran of the marcom game, Rick provides consistently well-grounded commentary on the issues, challenges, do's and don'ts of business-to-business marketing.

As a practitioner, teacher and student of B to B marketing, I've found Rick's posts on the recent e coli crisis (bagged spinach, anyone?) to be particularly insightful. That kind of analysis is par for the course in Rick's blog, hence my repeat visits over the past half year or so.

If you're serious about B to B marketing, Rick Short's blog definitely merits a bookmark in your browser. (We've added a permanent link to Rick's blog in our menu on the right.)

So what's next? May I suggest a business-to-business practitioners' summit where we all decide, once and for all, whether it's "B to B" or "B2B?"