Are we what we own? The Power of Brands.
“The boots you’re wearing. The bag you’re carrying. The bottle of soda you’re drinking from. Brands are all around us. Our preferences and tastes are emitted through the different brands we choose, whether subconsciously or not, and define who we are. Some brands can span demography and geography and appeal to a mass audience and others cater to more niche markets. Yet, regardless of their form (Beyonce, Coca Cola, Louis Vuitton, Harvard Business School) and their reach (local, regional, global), or even their status (premium or not), brands are ultimately harvested in the minds of consumers.
If brands are proxies for the viability of a company, the longevity of that company will depend on the strength of its brand and level of authentic engagement with its core consumer. So how does a brand achieve such a sticky status and remain relevant amidst a sea of evolving consumer demands and a dynamic and ever changing market? What drives our buying behavior and makes us a loyal but discerning consumer of a company? And how do these companies capture and retain our attention in a crowded marketplace?
We’re in a moment of time dictated by digital media. Facebook and Twitter have replaced some of the more traditional promotional vehicles used by companies to espouse their brand identity. These social media sites have undoubtedly emerged and cemented their position as primary brand authors and cultural gatekeepers. So how can a company effectively utilize these platforms (where they have less control over the time and space and ultimate message conveyed) to promote positive brand awareness?
These were some of the themes discussed and debated at the 2010 HBS Marketing & CPG Conference held on November 7th. Members from the HBS and broader Boston community engaged in roundtables, panels, and workshops with several of the leading thinkers in the marketing and brand management field. Amongst a robust stable of conference speakers, brand representatives from American Express, Converse, Procter & Gamble, Nike, Unilever, Pepsi, and Google (just to name a few) were dedicated to answering and providing their perspectives on a broad strata of tough marketing topics: creating strong brand loyalty on a limited budget, developing emotional connections, benefits of cause marketing, and focusing on innovation and engagement through digital media. The takeaway for me seemed to be that great companies with great brands are able to place an emphasis on developing a distinct narrative from consumer research and then develop a corporate strategy and socially embedded business model that adheres to the company’s DNA. yet how replicable is this recipe?
To better understand how a successful company has positioned itself to achieve such brand prowess and alignment, I interviewed John Hayes, Chief Marketing Officer of American Express.
John Hayes is Chief Marketing Officer of American Express, a company who remains committed to trust, service and relationships with its customers today, as it has been since 1850.
For the past 16 years, John has led American Express’s global marketing efforts, helping shape both the company and its brand. He has been the force behind the business strategies that have resulted in iconic campaigns such as “”My life. My card.”” and leading edge marketing programs such as Members Project, empowering the American Express community of members in new ways to make a difference in the world we live in.
Additionally, under John’s leadership American Express has created over 200 new product launches, including the coveted Centurion black card, Blue, and more recently ZYNC from American Express.
John is responsible for keeping pace with consumers as they reinvent their lives. He believes that the key challenge for brands today isn’t customer awareness – its customer engagement – and that truly engaging with customers requires constant innovation, a commitment to two-way communication, and an unshakeable belief in leadership that drives change.
The brand is the most valuable asset for any company. How do you design and communicate that image to your core demographic which actually is a broad audience that spans age, gender, ethnicity and income level?
I think you have to start by identifying how different consumers relate to you. There are certain commonalities that all people have regardless of their income level or age. Everyone wants to be served well, everyone wants to feel respected. These aren’t just traits of someone who has money or someone who has an education. It’s the basic human condition. So the more your brand is centered on a message that everyone can value then the greater the opportunity you have as a company to do business on a robust and meaningful level. Trust and service are two standards that everyone is looking for, regardless of what demography they fit into, and these core principles constitute the hallmark of how we do business at American Express.
Brands are identity markers for a lot of people, we are what we have. How have your consumers’ tastes and preferences for the American Express brand evolved?
The global nature of the customers we do business with has a direct impact on how their tastes evolve. We have a very sophisticated customer base. These are people who have seen and been enveloped in various cultures in their personal and professional lives. This broad view affects their perspective on how business transactions and relationships grow and develop. For Amex, regardless of the strata of our product base, it’s always about a customer that has a thorough understanding and refined taste of what they want. Ours is a very personal business. Our “”My life, my card”” and “”Do you know me”” slogans relay our core belief that it is about that unique, individual relationship our customer has with his or her American Express card and how we can better customize our product offering to serve those needs. As much as our company is a brand defined by trust and service, we are ultimately defined by people – our users and customers have been incredible in defining who we are. And as they change their attitudes and ways of doing business in a global economy, we have made it our business to really listen and to understand how we can position ourselves to better serve them.
Has the downturn in the economic environment in recent years hindered your brand?
I think this economic disturbance is not short lived and I think we’re going to see some longer term implications, but I don’t think it has diminished people’s desire for quality; people’s desire for real value. We’re seeing tremendous demand for our products across categories. What’s interesting is that we’re seeing that our customers are willing to pay a premium in some categories because our product acts as a real differentiator for them and they want that. And in other categories, they’re not willing to pay more because the benefit derived can be attained in one of our other products in a more cost-effective and convenient way. So it’s a personal tradeoff, and that process and personal analysis will continue to take place in both good economic times and bad. Our job is to provide a consistent level of excellent, customized service at the end of the day and broker a solid relationship with our customer in those variable times.
Your brand has a clear informational role, i.e. the core functional, direct, rational benefit that your credit card provides. How does American Express add value beyond that core purpose and play on the more augmented emotional side of what it means to own that card?
There are two things I would say. First of all, there is a very strong sense of belonging to American Express. The emotional quotient about our product and our brand is that people are emotionally invested and they demonstrate that brand loyalty through card usage because they feel they have ownership of the company, and they do. And that is something we, internally as a corporation, should be in awe of. Second, listening has been a way for us to authentically engage with our consumers and to deliver that critical emotional value. Listening is a way for us to recognize people, and American Express has always been a brand about recognition. Recognizing who you are is what our service is all about. And we view it as a multi-pronged service; our consumers are comprised of users of our credit cards as well as the different service vendors, our merchants. For us, it’s about creating a mutually beneficial ecosystem amongst those different players. The added value doesn’t impact our margins, but it makes an enormous impact on both the functional and emotional side of customer satisfaction. And that’s our goal, we continuously strive to reassess and optimize the quality of service we provide to both parties, those who use our card and those who accept it, by creating that reinforcing virtuous cycle through listening and understanding our customer needs.
How does American Express build a web of associations in the mind of consumers? How is that brand knowledge built and cultivated?
What’s really important for us is that we consider both our card members and our merchants as our customers. And our job at American Express is to really empower their success. Brand knowledge is built and harvested from mutual wins and repetitive usage of our product, which all starts from first being aware of our card, liking it and preferring it, and then using it repetitively. So, for example, if you’re a small business merchant we’re there to try to help you find those customers that you need and want your products. If you’re a card member we help you find those goods and services most critical for you depending on your specific tastes and preferences. We never compromise on the consumer and aim to find those mutual “”win-win”” situations for both parties – the merchant and the card user. We can’t serve one at the expense of the other because they’re both our customers. So what do we do? We are tasked with finding that common ground where we can capture additional value for both sides and efficiently and effectively drive business. Both parties should see the real tangible benefit to having interfaced via our service with each other. If that doesn’t take place we haven’t done our job.
What has been the toughest challenge you’ve encountered as CMO?
In marketing you’re dealing with a very quantifiable science. You can read and measure the results of an initiative you undertake. So on one side you need to have the skills and capabilities and understanding of the science and frameworks. On the other side is the art aspect. The art of marketing requires a different set of skills and the ability to help, serve, and convince those who are not in the field of art to appreciate your product. I think great companies have a clear understanding of not only what they produce and how they do things in the marketplace, but also the “”why”” associated with their company. I think the great and enduring brands exist for very serious reasons. At American Express, we really do believe that it is noble to serve. We really do. And that “”why”” of who we are is really important. The tricky part is reconciling the concrete with the more intangible value of brand equity. Our business plan has to be in line with who we believe we are; our brand identity. So the greatest challenge, which for me is a fun challenge, is understanding that our biggest intangible asset is our brand and developing ways to authentically embed that “”why”” component into our business model. Another critical aspect with regards to fulfilling that vision is having full alignment with the CEO. You have to have the sponsorship of your CEO who says “”This is important. I believe this too and you have my full support.””
How has the marketing landscape changed since previous years with the onset of social media and more forms of instant media?
The most fundamental change is that these newer forms of promotional vehicles require listening on our end. Listening requires that we not only hear people and digest what they say but also when we decide to reposition our products, if that’s the best response, the newer product or service offering shows an understanding that we’ve really listened. The internet, social media, and the digital space all give us that chance to demonstrate that we’re closely listening. They have also provided companies with much shorter work cycles. It used to be that you would drop mail, wait six or eight weeks, and then say “”Did it work?”” Now, companies can promote or advertise a product or event and in a few hours, can see if it worked, and assess its effectiveness. For example, we sold out a Bon Jovi concert for card members in just a couple of hours with a single tweet. We saw the results immediately – a traditional two or four month process had been condensed to hours. Things are moving so much faster and you have to move at a similar if not faster pace or someone else is going to eat your lunch. The onset of social media mechanisms which speed up work cycles also means that companies need to experiment more, even if that entails making a few minor mistakes. Your brand is the character of your company, and what consumers look for are signals to your character. How you respond when you do make those mistakes and your reactions in moments of crises will determine how your brand and company is ultimately judged.
Where do you see the credit card marketing industry heading? How do you sustain a loyal customer base?
We’re at a point of reinvention in the payment and services industry. And to that end we are taking an aggressive look at how we can better utilize the changing technology and social media platforms to service our customer needs. How are people buying online? What are they seeking in a credit card provider? What ancillary benefits or further customization do they want? How are they compartmentalizing their wallets? Knowing what is staying the same and what is changing is really the roadmap to continuing to build our company. Everybody knows the idea of American Express. The question is what does it take to do it? That secret sauce, so to speak, is in our ingrained processes, our people, the training, the DNA of who we are. What I think is so important is how we define our positioning and business. We don’t think of ourselves as in the credit card business. We are in the lifestyle and services business. Obviously payment devices and the transactional portion are an important and critical part of what we do, but it’s not who we are. What we do is help our customers– merchants or card members — with whatever job it is that they need to get done. And at times the services we provide have a loose connection or absolutely nothing to do with credit cards. A great story that we have is about one of our customers, a woman on a cruise who was reading The Prince of Tides, a book she had gotten from the ship’s library. She gets to the end and realizes that the last twelve pages have been torn out. So who does she call? She calls us. American Express. And our service person says, “”Okay, can you get me the fax number for the ship and I’ll send those pages to you.”” The service provider wasn’t told what to do, she just acted instinctively knowing that we’re in the business of providing services catered to the different, unique needs of our diverse clients. People see us as a lifestyle services business. It’s our brand. It’s who we are.
Shruti is an EC student from section E. She is a member of the Harbus Board of Directors.”