Word-of-Mouth

The power of brand endorsements

Trust builds brands If some of my readers are into consulting, or any other type of services business, no doubt they are very well aware of the power of recommendations. A former client making a referral about you to a prospect, a powerful recommendation of your skills and achievements on LinkedIn, Klout +K’s that you collect -- any of these can signal trust, an essential element for building good brands. Likewise, if you are an author, the praise given to your new book by other authors or famous people is crucial, and can boost the sales of your book.

The Thank You Economy
The Thank You Economy

Our brain seems to be wired to perceive endorsements, recommendations and word-of-mouth in a very special way.

In particular, before we make a decision to proceed with a high-value project, we seem to give a lot of weight to the recommendations of our trusted friends and partners.

Whether it’s a need for a strategy for your business for the next 3 years, or a new house for your family, you need to be able to trust the people who will be delivering this high-involvement, high-value service.

Celebrity endorsements - the glitz and glamor of branding

The dynamics of building trust have been studied in various fields -- psychology, marketing, and diplomacy, to name a few. In relation to brand strategy, a subject that has been studied particularly well is celebrity endorsements that are used to support launches of new products, or infuse a new life into existing ones. This technique can infuse your product with an instant dose of glamor and glitz, which, in  its turn, leads to higher sales of the product being endorsed.

Face value

Jimmy Wales Wikipedia
Jimmy Wales Wikipedia

These days, celebrity endorsements are omnipresent. Lana del Rey for H&M, George Clooney for Nespresso, or Jimmy Wales for Maurice Lacroix -- it seems that all it takes is to pair up a handsome famous face next to a product in order to make it a market success.

Many companies have used the strategy of celebrity endorsements to build their brands. And I am not only talking about big brands that have enough cash to pay celebrities -- even some startups have chosen celebrity endorsements as a sure way to become known and reach for the stars.

But wait a minute. Why would a person whom we don’t actually know, just because of her celebrity status, be able to grow your product sales only by saying that she uses a certain brand of smart phone, car or lipstick? Do customers really experience immediate trust towards a product, supported by a famous person -- even if they don’t rationally know that much about the celebrity in question?

Forget the rational

And here’s my advice -- when it comes to celebrity endorsements, forget the rational aspects of consumer behavior. Before we continue looking at the dynamics of celebrity endorsements, let’s keep this in mind: ninety-five per cent of our thoughts, emotions, and decisions, including decisions to buy a product endorsed by a celebrity, cannot be referred to as ‘rational’. According to Gerald Zaltman, a marketing professor at Harvard, and author of How Customers Think (( Boston, Harvard Business School Press, 2003 )), most of our decisions take place without our conscious awareness. So, when your customers are looking at your new ad featuring a famous model or Hollywood superstar carrying the bag that you produce, they don’t start analyzing why they find your ad appealing. Something much more powerful takes place in their subconscious minds, so let’s take a look at how this works, from the point of view of neuroscience.

KimCattrall
KimCattrall

Famous faces help sell shoes

In a recent study published by Journal of Economic Psychology, Dutch researcher Mirre Stallen (( Mirre Stallen et al., Celebrities and shoes on the female brain: The neural correlates of product evaluation in the context of fame, Journal of Economic Psychology 31, 2010, 802-811 )) looked into how products appearing next to faces of famous, vs non-famous, women, activated the brains of respondents. During the experiment, twenty-three young Dutch women were exposed to images of shoes accompanied by faces of celebrities, as well as faces of non-famous women. When the images of shoes were paired with famous faces, the areas of the brain responsible for processing emotional stimuli, were more likely to get activated than in cases when shoes were paired with faces of non-celebrities. Also, the brain activity showed that positive feelings about celebrities were easily transferred onto positive feelings towards the shoes shown to respondents.  The young women who participated in the study said that “they'd be more likely to buy the shoes associated with a celebrity's face, as long as the shoes were ones they believed the celebrities didn't already own.” (( Source: Psychology Today ))

Persuasiveness of fame

If celebrity endorsements are not a technique that is relevant to your product, get inspired by the dynamics of this branding strategy anyway. The important point to keep in mind here is that building trust is essential to building strong brands. Find your brand ambassadors, online influencers and trusted business partners, and if you manage to get their appreciation of your work expressed in the public domain -- be it your LinkedIn profile, the cover of your upcoming book, or a referral during a networking event -- their ‘fame’ and status will propel your brand to success.

Reaching_for_the_stars_schmoozy_fox
Reaching_for_the_stars_schmoozy_fox

Zumba sells branded merchandise

I first wrote about Zumba, a funky Latin workout, almost a year ago.  In that post, I talked about the challenges that any services organization can encounter in its attempt to build a funky brand. The main challenge for Zumba, I said, was to ensure that its main customer touch points (places and ways in which people experience the brand) remain consistent. Which seems like a big task given millions of Zumba-like, or Zumba-inspired, courses currently offered around the world by external fitness instructors. Since then, I've taken several Zumba classes myself -- and not only out of my desire to do non-stop funky brand research! :)  I also wanted to ditch the workout, and join the party. ((Zumba's brand slogan)). My personal observation is that many of these classes had very little Latin about them, featuring non-Latin music, and non-Latin dance moves.

In other words, my own Zumba experiences have been patchy, and differed from one place and instructor to another.

Perhaps Zumba management (to learn more about the company, see an article about Zumba's founder Alberto Perlman published by Sprouter)  decided that keeping the brand consistent throughout its customer touch points was a difficult task to carry out.  Perhaps they thought that it would be a good idea to build the brand by selling Zumba merchandise not only online, but also in real life.

IMAG0462In any case, I am not familiar with Zumba's selected strategy, but here are a couple of observations.

I came across Zumba-branded merchandise on the shelves of Di a couple of days ago.  Di is a Belgian chain of shops that sell inexpensive cosmetics and home cleaning products. Di has also been expanding its health and wellness section by adding vitamins, food supplements, and slimming shape-wear.  This section is where I spotted sizable Zumba-branded boxes, sold at retail price of Euro 69.95 per piece (pictured above). They were placed on a shelf underneath a TV screen that featured a demonstration of a Zumba workout, with the message "as seen on TEK TV " ((a Belgian TV store)) running across the screen.

Each box contained 4 Zumba workout DVDs, as well as a set of small weights.  The packaging displayed a TEK TV logo.

What are the implications of this on Zumba's brand?

First of all, the importance of selecting appropriate distribution channels is crucial for building a strong brand.  Even though the idea of selling Zumba-branded merchandise seems  attractive  ((at least on the local market, it could be a way of tapping into existing awareness about the brand name that has been created through workout courses, whether "real" or not))  per se, where it is sold, is of even major importance!

What strikes me as quite inconsistent with what could be a very funky brand, is the association of Zumba with a TV shop.  I don't personally know very many funky brands that have been built through this not-so-funky distribution channel (but if you know, please submit a comment!)

I would question whether TV shops can reach the kinds of customers Zumba needs to be reaching.   I saw lots of professional women "ditching the workout, and joining the party" after office hours. Which means that they probably don't have the time to watch TV shop sales sessions during the day.  I suspect that an additional endorsement of a product by a TV shop means little to them.

Selling Zumba merchandise at a rather unexciting Di (think of it as an equivalent of the UK Boots, but with a somewhat duller product selection) would not be my top choice either.

To conclude, Zumba would be much better off building a funky brand through better selected and more exciting distribution channels.

NOTES

How funky brands can be profitable

D&Gperfume In one of my previous entries, called Funky Brands Defined, I published a list of attributes shared by most Funky Brands™.

An important one is the fact that they are not driven by innovative and creative ideas alone, but are or have the potential to be profitable. This, of course, requires a good deal of  business development and brand building work done.

In today's post, I want to talk about how your brand can benefit and become profitable from mass luxury brand positioning.

Mass luxury (often referred to as affordable luxury or new luxury) brand management essentially combines characteristics of building brands that have the luxury and exclusivity appeal, with techniques that can lead to relatively high sales volumes.

My marketing professor at ESSEC (a Paris-based business school famous for its luxury marketing program) was a former Armani guy. He certainly knew a lot about sustaining those "old luxury" brands like Chanel and Gucci (and Armani, of course). But he was nevertheless fascinated how some innovative companies managed to combine classical Kotler marketing with  the know-how of luxury brand management by building extremely funky brands in the mass luxury segment.

Some of these brands were created completely from scratch (for example, Coach and Victoria's Secret in the US, Agent Provocateur in the UK, and a Dutch brand Marlies Dekkers whose founder spoke in an interview on this blog), and others were born under the umbrella of already existing "true luxury" brands (for instance, Armani Exchange as a modest brother of the brand Giorgio Armani).  Over the past decade or so, many brands were launched to satisfy a desire for a better lifestyle expressed by wealthier middle class eager to splash out on previously unaccessible items.

So, what can you learn from mass luxury brands in order to make your brand profitable? You'll be surprised how many potentially funky start-ups fail just because they are disconnected from their potential customers. So, the most important rule of thumb is that you gotta get to know your consumers, their lifestyles and their desires as much as you can.

Stop for a moment doing this tedious market segmentation based on geographical location, age and gender. This stuff tells you nothing about your consumer's deep emotional needs and desires. Unless you've understood what emotional connections they can make with the products you sell, you'll be wasting your time.

Besides that, keep in mind the following factors which, in my view, may trigger consumers' interest in purchasing your funky mass luxury goods or services:

  • The lifestyle factor: Whereas splashing out on a single Gucci outfit is an extremely rare occasion for most people, and buying a Lamborghini is simply out of the question, a sizable market out there still wants to have a luxurious lifestyle. "Luxurious" can mean different things for different customers, and the trick is to find your loyal segment for whom your product will be a luxury. The right combination of such items as furniture, consumer electronics, food and drink, beauty products and fashion can do wonders and make our lifestyles luxurious and enjoyable. Not every item in your customer's home has to be of super funky design and great quality, but make sure your brand can end up on your customers shelves!
  • The self-worth factor: people appreciate goods and services that can contribute to their enjoyment of life (e.g. high quality perfumed candles, a meal at a gastronomic restaurant, or a visit to a spa) and feeling of self-worth. Do you know what contributes to the feeling of self-worth within your customer segment? If not, the first step towards making profits is to find that out fast and act on it.
  • The funky factor: people like standing out from the crowd, and making a statement about who they are. They often express themselves through the clothes they wear, or items they use (computers, phones, cars).  If your customers have created emotional connections with the products you sell, and even made them part of their personal brand, you've for sure kept the funky factor in mind successfully! Again, if you know how the attributes of your brand can enhance the funky factor of your customers, you've certainly moved forward towards a beefed up bottom line.

Mass luxury is the most profitable segment of many markets because attractive margins can be combined with sales volume. But the challenge is, mass luxury brands do not sell themselves . They are driven by hard-to-define factors like fashion, word-of-mouth, and constantly evolving preferences of your customers. If you've managed to apply a rigorous framework to identify these factors, and closely monitor them, you'll certainly be on the path towards making sizable profits and building funky brands.

Finally, a good article on the subject that I can recommend is "Luxury for the Masses" by Michael J. Silverstein and Neil Fiske, published in Harvard Business Review in April 2003. Have fun learning the tricks of the funky brand trade!

Zumba fitness

Zumba Image source: http://www.zumba.com

I've recently caught a glimpse of Zumba on TV, and the funky Latin workout caught my attention. And not only because I myself like to move to the steamy Latin tunes. I've heard about Zumba from some friends here and there, so I was curious to dig a bit more into the concept, and analyze the brand.

So, what's Zumba really?  Is it something you do to get fit, lose weight, or just have fun? To get a better idea what it looks like, have a look at this video I found on YouTube:

It's a bit of a mix of various Latin dance styles – there's some salsa, merengue, samba and something else I can't quite determine. It also looks like fun. But is Zumba just a kind of fitness program you can follow at your local gym, or is it also a profitable business? Importantly, does its business model support the brand and its values? Here are some branding clues SCHMOOZY FOX is happy to share with you.

What exactly is the product?

The core “product” of Zumba is its fitness workout. It is actually a “service” rather than something tangible you buy at a shop. You go to your local gym, move around, dance and sweat for an hour to funky Latin tunes. What you get as a customer is an experience, fun and positive emotions. Most probably, you'll burn some calories along the way. In terms of tangible products, there is some Zumba-branded merchandise available on the site, such as DVDs, music, umbrellas, T-shirts etc. Not too exciting, but not too bad either.

What's the business model?

Well, that's a good question. I did some googling around to find out more, but all I can do is simply assume that Zumba sells licences to designated fitness instructors around the world. Or maybe, cash flows come simply from the fees instructors pay to Zumba for the obligatory qualification courses. Whatever the current business model, SCHMOOZY FOX could come up with at least several more ways of how to create and capture more value for Zumba!

As far as instructor training, it's not clear from the site if an instructor has to follow all of the offered 8 levels or only one. For instance, in Belgium, there are several basic level workshops available for the price of 325$ per two days, and no previous Zumba experience is needed. I wonder if you actually have to be a dance or fitness teacher to start with, or can I also take that 2-day course and start teaching Zumba next week? I suggest that Zumba.com sheds some more light on this point, in order to make things more clear for potential instructors.

Who are Zumba's customers?

There are two main kinds of customers in this case: those who will take classes, and those who'll teach them. As regards course participants, I wouldn't be dwelling only on such criteria commonly used in marketing as age and gender, and where they live. SCHMOOZY FOX would also focus on the deep emotions that trigger potential customers' decision to sign up for a Zum'ba course. Is it a desire to lose some weight? Become more sexy? Meet a potential date? Have fun? Build self-confidence? These are some of the questions Zumba should keep in mind to get a better idea about its customers. For now, its targeting seems a bit more fuzzy rather than funky.

In order to reach instructors, Zumba should be doing a different kind of analysis. After all, instructors' reasons for teaching Zumba are totally different. Here, emotions play a certain role, but incentives and rewards are equally important. Zumba should build a community around the instructors, and preferably give them access to some perks: use your imagination here, there are plenty of great opportunities available!

Importantly, customer touch points (I explained what they are in my article about Abercrombie and Fitch) should be thought through in relation to both groups of customers. The funky web site alone (actually, it's only the home pages that looks good, whereas national sites are pretty weak) will not do the job of maintaining the brand, and the biggest challenge for Zumba is to ensure that the quality of courses, instructors and spaces where courses are held, is consistent.

Orchestrating so many elements around the world (Zumba courses are offered on a global level) certainly requires a lot of dedication and consistency, but if this huge effort pays off, a true funky brand is born! Consistency of services is by the way one of the biggest challenges for any service brands, and only few get it right, on very rare occasions!

How is Zumba being promoted?

The most obvious channels that drive the buzz around the Zumba brand are its  web site, and coverage in the world's leading health, beauty and fitness magazines. I would imagine that a lot of the marketing is also word-of-mouth driven.  In addition to these channels, Zumba has partnered with The Kellogg Company to participate in a joint health and fitness initiative targeted to the US Hispanic market at some point, but this was an initiative undertaken only in the US. The name of this initiative was Zumbando con Kellogg's.

Something that Zumba could consider to build a brand would be celebrity endorsement by a Latin star – a dancer, fitness instructor, actress – plenty of opportunities here. Remember how strongly aerobics is associated with Jane Fonda? That's definitely something to consider in the Zumba case.

Apart from that, just like any respectable service brand (I am being a bit sarcastic here, as there aren't that many of those around!), Zumba should keep in mind that “point of sale promotions” (the actual fitness rooms where classes take place) as well as  instructors themselves shouldlive the brand, breathe the brand, and promote it. Just look at a very large selection of amateur Zumba videos on YouTube: each of them has a totally different look and feel with the only common factor being Latin music! More consistency is required!

From would-be-funky to truly funky

Building brands for services companies is surely one of the most challenging activities to engage in, as this requires so many elements to be in harmony at all times.  But if you manage to get it right, you can reach unbelievably good results. If Zumba wants to move from being would-be-funky to a truly funky brand, there are so many things it should still work on! In addition to the suggestions above, it should also know its competitors, position itself very differently from them, and get those brand core values sorted out in a more of a … Zumba way.

To learn about further developments of the brand, please read Zumba sells branded merchandise.

Funky brand pick of the week: Gaggia coffee machines

gaggiaredI heard about Gaggia espresso coffee machines for the first time about three years ago, when I was sipping my morning coffee in Florence and thinking how beautiful  Cupola del Brunelleschi looked in the sun. The sunshine and smiles of people passing by created a wonderful spring atmosphere in Florence. On top of that, the coffee I was drinking was superb. I had a chat with the owner of the coffee shop, telling him how much I'd like to have the same coffee at home, and he revealed his big secret to me: apart from buying the best coffee beans, you gotta make your coffee in Gaggia machines. Naturally, he had one of those in his pasticceria as well.

Although I do try to buy best quality coffee, I never bought myself a Gaggia. The question is not really the price – although automatic machines can cost up to 1000 Euros, you can get a traditional one for around 200 Euros. The thing is, I simply forgot about Gaggia, and nobody had reminded me about it after that trip to Florence, until a friend of mine proudly demonstrated a new shiny Gaggia in her kitchen the other day. She bought it following her friend's recommendation.

With little cash spent on advertising, Gaggia relies mainly on word-of-mouth marketing to support sales of its coffee machines. This includes word-of-mouth on the web: Gaggia is recommended and reviewed on a large number of coffee-related Internet forums. Consumer-generated Gaggia YouTube videos and related blog posts are abundant. A social media paradise for a marketer!

The question is, of course, whether Gaggia is doing anything with this buzz. If the company wants to stay on top of competition and sustain the strong brand, it should consider capturing value. Luckily, there are definitely many ways to do this.