From Quaker Oats to Chick-fil-A: Brand Relevance in the Network Economy
A hundred years ago, John Stewart, chairman of Quaker Oats, said, "If this business were to be split up, I would be glad to take the brands, trademarks and goodwill and you could have all the bricks and mortar - and I would fare better than you."
Stewart was a visionary in those early days of mass communication, an industrialist who knew that investing in an intangible brand could bring immeasurable returns.
Today, brand strategists preach Stewart’s gospel, and even hard-boiled CFOs get the message.
But there’s a problem: brands don’t work like that anymore, because we’re no longer operating in an industrial economy with top-down media. We’ve entered a network economy with fluid media.
The rules have changed
Too many brand strategists compete like it’s still John Stewart's world. They live by a century-old rule that says brands become more valuable with direct investment in their identities and messaging.
The network economy demands a new rule: Brands are dependent systems. The more interconnected the system, the more valuable the brand.
If you live by the old rule, you are wasting resources by solving the wrong problems. Consider the typical rebranding assignment. It starts with hiring an agency, who provides the following:
- Research to find a new brand 'truth'.
- A differentiation strategy built on this truth, even when nothing is that different.
- A new tagline.
- A segmentation study to narrow the target.
- A communications plan, integrating paid, owned, and earned media.
If the company and the agency do this well, everyone keeps their jobs. There might even be bonuses. Everyone will speak in reverent tones about how they reconnected the brand to modern culture.
But too often, rebranding is rehashing communications. Differentiation often is a cipher, a tagline is not strategy, and segmentation gets obsolete by the day in lieu of modern data analytics.
Trouble Is Brewing
A smart competitor is out there who could blow past this rebranded company when they’re not looking. They seek a bigger idea than just a rebranding campaign.
They would do things differently. They won’t jump to rebranding. They’ll start with a problem, such as, 'How do we keep Amazon from making us irrelevant?' They’ll hire a consultant - not an old-school consultant, but a creative agency with a consulting practice, one intent on building long-term relationships beyond the AOR model.
This consultant rejects the Quaker Oats world and will take a different approach to understanding how a brand works. For them a brand is a network of systems - product, workforce, customer experience, design, and communications systems comprise it.
A brand idea - such as Target’s 'design for all' - provides an ideology that makes the brand system greater than the sum of its parts. It’s not a positioning strategy and it’s not a tagline.
They will show how a network brand becomes valuable. The message to their client will go something like this:
“Your brand lives in a network world, where everything is connected. These five big systems - and your brand idea - constitute your network. The more those systems connect, the more value comes into your brand. We’ll find a brand idea that brings all of it together, and we’ll show how these systems unite to create high value for you and your customers.”
They’ll point out that the great brands do this all the time. They look at everything as opportunity and invest accordingly.
Here’s an example, a brand that’s very serious about chicken sandwiches:
- Chicken is a cause for them (the brand idea).
- So they make a very tasty sandwich (product).
- They train polite teenagers to make and sell the stuff (workforce).
- They bring trays directly to customers (experience).
- They have a distinct name and logo, and their stores are easy-to-find beacons (design).
- And for the last 25 years they’ve run a legendary ad campaign (communications).
They’re Chick-fil-a, modern network brand.
It’s like getting to Carnegie Hall: practice
Chick-fil-a could stick with a great product and good advertising and spend a lot less money on the rest. But they don’t - they work on everything. And they get a 20% premium on their sandwich versus McDonald’s, and their store volume is 4x that of KFC.
The modern economy has turned brands into dependent systems. A brand is no longer an image with a reputation that stands alone. Consumers, who command what the world thinks, make sure of that.
Serious brand builders are obsessed with problems, solutions, networked systems, and creating value. They don’t just rebrand. They don’t start with a campaign. They transform.
They’ll quote the Quaker Oats guy to convince their CFOs to invest in their brands.
But they don’t live in that world. They’re inventing a new one.
David Gutting is SVP/director of intelligence at Barkley