Nice Brand Shame About the Business
What comes first, the brand or the business? Not so long ago this would have appeared a rather facile question. Of course a business is created from the spark of an idea, seizing an opportunity, securing resources and all articulated in a manner that satisfies customers while delivering profit.
Once the business gains a reputation, matures and evolves in it's chosen market the name or names associated with that company begin to take on values, personalities, and fundamentally a character of their own. Voila the brand is born and can be developed to further the objectives of the business.
Now, that's a concept we all understand and I'm sure broadly accept but from the late 80's and through the 90's new businesses emerged that started with a brand. Some of the most famous being the Dotcoms or as we now know them Dotbombs. An idea wrapped around a brand and thrust onto the web became possibly one of the best, albeit short lived, things to happen to the advertising industry in many a year. Why? Because a new brand needed feeding and the supply would only come from awareness and awareness meant advertising, and lots of it.
In the US, CEO's of both Amazon and Priceline.com have explained how they would now "do things differently" given their rather expensive experiences of the past decade. As any long serving entertainer will tell you there are very few "overnight stars", success in 99% of cases is borne out of sheer hard work, talent and a good act or in corporate terms a sound business model worked and re-worked to achieve objectives.
So how important is the brand? The answer: It's not as important as the business model that's behind it. As a result Dotcoms failed and continue to fail because of flawed or non-existent business plans.
An example of a potentially flawed brand that continues to grow as a business is Easyjet. David Magliano, Director of Sales & Marketing for the low cost airline is a strong advocate of the business model as outlined at a recent Chartered Institute of Marketing luncheon. There are no pretensions about the business, they offer cheap flights to and from popular locations. To achieve this they have stripped out the overheads weighing down other larger carriers such as British Airways. As an example 94% of their bookings arrive via their website which is ergonomically designed to ensure visitors get what they want rather than a "flash" dance of graphics bells and whistles. Even though they have a PR nightmare in their regular ITV documentary, showing Easyjet "warts and all", the business survives while the brand takes the occasional buffeting.
But a strong brand leading a weak business model cannot survive for long. Who remembers Claims Direct? With a £16 million TV spend the brand very quickly became part of our every day language including a sketch in the pilot episode of BBC's Dead Ringers show. This featured an impression of Russell Crowe in Gladiator. "My name is Maximus Decimus Meridius," began comic Jon Culshaw as Crowe in the opening sketch. "Father to a murdered son, husband to a murdered wife - and that's when I called Claims Direct."
The business model however was flawed. The business floated on the basis of ever-rising volumes and overlooked the risks of reduced claims resulting from the combined threat of new entrants to the market and an insurance industry backlash.
"thinking differently and delivering results"