Last week, the first part of a four-part interview series with Al Ries was released. This week we continue with part two.
For those of you who might not have read part one and may not be totally familiar with Al Ries, Al is an international marketing expert and author of 12 books on marketing, advertising and PR (The 22-Immutable Laws of Marketing, Positioning, The 22-Immutable Laws of Branding, Marketing Warfare, The Fall of Advertising & The Rise of PR, War in the Boardroom, among others). He’s also a renowned public speaker and consultant to many of the mega brands and corporations.
So get ready for more of Al’s nuggets of marketing wisdom and insight. If you wish to read parts one or three, click on the following links:
Marsha Friedman: Every business person obviously wants to have success. Their long term goals are to be very profitable and growing. However, when the doors need to stay open now, it’s hard to worry about 2 to 5 years from now. What are some of the things one needs to be aware of so that good decisions are made that will support all of their goals?
Al Ries:Short term needs and long term goals can sometimes conflict, and the most important advice I can give in this situation is don’t forget your focus. When it comes to focus, one needs to narrow it, not widen it. My company, Ries & Ries, works with clients all the time looking for ways to narrow their focus and get them out of offering too much stuff. However, many businesses aren’t keen on the idea, because when one narrows their focus they have to drop some product. So what happens in the short term? When you drop a product or service, you’re going to lose some business initially. Who wants to do that? To the average business owner, the thought is “Wait a second, we can’t do that!”
I’ll give you an example. My company was doing some consulting for Burger King. Now, Burger King has twelve hamburgers on their menu. We said to them, “That’s too confusing. Let’s reduce it.” Their reply was, “Oh! We can’t do that.” You see, they know the percentage of sales each one of those 12 products brings in, right? So they think, “If we make it five products, it means we’re going to lose 3.7% of the business.” They look at the numbers and what will happen in the short term, but they don’t look at the long term implication. The implication is when you simplify your product line, you make it easier for consumers to know what you’re selling and you’ll sell more, but not necessarily in the short term.
So “focus” is a long-term concept that can eliminate the short term issues, but you need to start for it to work.
The result of focus is the more you focus the stronger your brand becomes, because you can stand for something. For example, what’s a Chevrolet? I know what a Chevrolet is: it’s a large or small, cheap or expensive, car or truck. If somebody says to you, “I bought a Chevrolet,” not much was said. Did he or she buy a ZR1 for $105,000 or a sub-compact for $13,000? There’s a big difference there. So to say, “I bought a Chevrolet” is saying nothing, because the brand doesn’t stand for anything!
Many, many, many brands today do not stand for anything, because they’re into everything. If you’re into everything, the brand can’t possibly stand for a single thing. Yet what’s the trend in business today? Expand the brand. Why? Because it makes sense! “Well, we want to grow,” they say. “So if you expand the product lineup, you’re going to grow.” That’s logical. But it doesn’t work and that’s the most important thing about marketing. Every single principle of marketing is not necessarily logical and it makes it a very difficult discipline to learn, because almost everything you should be doing doesn’t necessarily make sense, if you look at it from the obvious point of view.
Marsha Friedman: I agree. In the focus section of your book, you also talk about the importance of focusing on one word, phrase or benefit.
Al Ries: Yes and that is where it becomes more important in the long term. Look at brands that have become very, very successful. Invariably they stand for something. Rolex stands for “expensive watch.” My company used to do some telephone interviews and we’d say, “Okay, we’re going to say a brand name and you tell us the first word that comes to your mind.” The highest score ever was Rolex and the word was “expensive.” From a management standpoint you might think that’s not a good word. Let me tell you, that’s a POWERFUL word! That’s what makes the Rolex brand. People buy a Rolex BECAUSE it’s expensive.
Marsha Friedman: You’re correct, it’s a status symbol.
Al Ries: That’s why they don’t buy a Rolex in spite of being expensive, they buy it to show off their success. If Rolex were to sell $1,000 watches, after a while, the brand would be destroyed because it’s not what the brand stands for. It stands for expensive watch in the same sense that Starbucks stands for expensive coffee.
Before Starbucks, if you asked somebody, “What’s a brand name of expensive coffee?” They wouldn’t know. That’s opportunity and yet if you’d have told somebody years ago, “Hey, let’s launch a chain of expensive coffee.” people would ask, “Why would you want to do that?” I mean, who wants to spend more money on coffee? Nobody!
Marsha Friedman: Let me ask you this, Al, and I preface my question by saying I totally agree with the focus concept. But what would you say about companies like, Home Depot? Home Depot’s focus is “Home Improvement,” but they have thousands of brands and products. So how does that work?
Al Ries: Well, to make my point, let’s take Wal-Mart for example. Wal-Mart has more than 150,000 products. But you see, once again, the Wal-Mart brand is built on one word. What is the word? It’s the word, “cheap.” If people want something cheap, they go to Wal-Mart. Now that doesn’t appeal to everybody, does it? No. But “cheap” is a very, very powerful brand provided you’re perceived as the cheapest. K-Mart went bankrupt. Why? Because they tried to emulate Wal-Mart’s strategy, but the consumer saw Wal-Mart as the first cheap store and therefore they own the word “cheap.” Now Target was smart. They said, “Hey, we can’t own ‘cheap’ because Wal-Mart owns it, so we’ll go a little upscale.” There’s a cliché about Target; they’re called Targét (pronounced TAR-ZHAY). Oprah Winfrey said Target was Cheap Chic. It’s a little better design and Target has done well; K-Mart has not.
The same goes for Home Depot. Home Depot was the first home improvement store. Whatever that meant, but to the average person it meant that if you have a project to do, you could go to Home Depot and get everything you need to complete the project (lumber, faucets, nails… you name it). Home Depot is a little like Wal-Mart. They not only sell you the whole package, but they sell it at a very good price. So in a sense, Home Depot is the Wal-Mart for men. For doing projects on Saturdays you go to Home Depot.
Marsha Friedman: So then, if a company says, “Okay, we’ve got a brilliant idea and we know that this is a money-maker. We want to release it.” How would you suggest they release it if you’re saying stay focused on what you have, don’t widen your focus, don’t lose your focus and don’t water down your brand? How would they do it?
Al Ries: Let’s look at Crest. Crest, the first cavity fighting toothpaste on the market. What is Crest today? Well it’s a mouthwash, white strips, electronic toothbrushes, etc; it’s all sorts of stuff. In my opinion, I don’t think that works as well as if they had separate brands for each of these categories. A separate brand for mouthwash, a separate brand for white strips (the teeth whitening stuff) and so forth. But the tendency on the part of many companies, and it’s because it makes sense to them from an economic standpoint, they think, “If we have one brand name and all these products are under one brand name umbrella, we’ll save money on advertising.” It is better to start a new brand and not mess with the established one.
~~~~~~~~~~ End Part 2 ~~~~~~~~~~~~~~
Once again, Al’s insights are very enlightening. I hope you found them enlightening as well. Next week we’ll continue where we left off with part 3. I can’t wait, it only gets better.