Dec 10, 2020 • 21M

Podcast: Lindsay Pedersen, Ironclad Brand Strategy, Part 2

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Two-part interviews with successful CMOs: Their careers and how they got to where they are, and a deep dive into marketing channels for a specific business. Companion to the Marketing BS Newsletter by Edward Nevraumont
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My guest today is Lindsay Pederson, owner and chief strategist of Ironclad Brand Strategy. This is Part 2 of the interview where we dive into how branding actually works to grow a business.

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Edward: This is Marketing BS. This is part two of my interview with Lindsay Pederson. Today, we're going to explore Lindsay’s specialty, branding, and how she applied it to grow businesses. Lindsay, let's start with definitions. What is a brand? It’s not a logo, right?

Lindsay: Yes, that's right. It is not a logo. A brand is the meaning that you stand for, that your company stands for in the mind of your audience. It's that real estate in the brain of your audience, of your customer. That thing that you stand for, it might be something vague, and therefore not a very valuable brand positioning, or it might be something really sharp, and resonant for the customer, which is what makes it a more value creating brand.

Edward: Now, the first brands were really just promises that you wouldn't die from bad canning technique. I think deviled ham, Deviled Underwood is the first brand. How much branding today is just consistency and how much of it is more than that?

Lindsay: I think the fundamentals are the same. I would go back even farther with brands that before we even had a sophisticated, commercial, industrialized market and people shopped at the baker or the butcher and maybe there is another butcher in town, the butcher had a brand. They were particularly good at X, or they specialized in a certain kind of meat, or whatever, that's brand too. They probably didn't call it that, but ultimately brand is a capsule for trust. Some people will define a brand as a relationship between a business and its customer.

If you think of what even is a relationship? It's an accrual of trust where there's good will on both sides. I think that that is really still the same. There's just like differing levels of scale and sophistication today than there was back with that first brand.

Edward: You argue that brands are a sustainable competitive advantage. I think you say the only sustainable competitive advantage. Is that another word for mote as Peter would call it?

Lindsay: That's right. Yes, so I argue that while other competitive advantages will obsolesce, or erode, or be copied, brands never can be copied. If it's a good brand which is one that has good will and high willingness to pay from the customers, then it's not going to be copyable, in the same way that you can't copy a person credibly. Patents expire, real estate first-mover advantage, that will eventually go away. IP eventually can be used by multiple parties. Monopolies get broken up. If you think of all the competitive advantages of the ages, all of them have an Achilles heel which is time, but brand doesn't. If it's well nurtured, it can be the only truly sustainable competitive advantage that you have.

Edward: There are lots of examples, though, of companies that have failed that had powerful brands. Kodak comes to mind immediately, a great powerful brand. I'm not sure what the awareness of Kodak is, but it's probably in the 90s.

Lindsay: It was a killer brand but you're right. In some ways, I think of marriages or relationships where it has to be nurtured. It needs to be kept relevant and Kodak lost its relevance with their customers. It's not like an entitlement that once you have a good brand, it will be your mote forever. It's when that spirit and the letter of that brand guides your decision making and helps you to be brave when technology is changing as is what happened with Kodak. It's not necessarily going to be your competitive advantage forever, but it has the best shot at being. If you nurture it and if you continue to care deeply about the customer that you're serving just like with any relationship.

Edward: We're recording this in October of 2020 and Coke just announced that it's killing the Tab brand.

Lindsay: I know. I'm so nostalgic about this.

Edward: Well, that's the question. If a brand is so valuable and Tab is obviously a well-known product and really, all of these things are just sugar water with a brand on top of it, why kill the brand? Is that brand equity not worth anything?

Lindsay: I haven't talked to anybody at Coke, but I suspect that—there's a little bit of a special case because Coke is a house of brands. It's a branded house of brands and Tab is just one of their dozens, if not hundreds of brands. The way I know at Clorox we had about 85 brands and several of our brands—the complexity of continuing to offer them outweighed the profit that we made. Especially with a physical item like Tab which is water, saccharine, and coloring mixed together. There's a high carrying cost and then there's also a high psychological cost to continuing to have this item even though it has low velocity in store.

I imagine that partly there's an economic reason, that complexity is expensive with high capital goods like that but also just ultimately the most useful thing about a brand is that having a skew like that weakens focus. If you're focused on the thing that only you can do that your customer really wants and that you're really good at providing, that's what your focus should be. If Tab is detracting from that, from the Coca-Cola Company, then ultimately I can understand. Even though I'm nostalgic about it as an 80s kid, seeing Tab go away makes me sad, I can understand why it was time to let it go.

Edward: Is building a brand really a matter of spending money? Can SoftBank come in, just pick a company, spend tens of millions of dollars and then magically have a brand?

Lindsay: You can buy brand awareness. Again, to define terms here, your brand is what you stand for. The brand is the definition, the heart and soul of why your business deserves to exist. That promise that you deliver. You don't have to be a big company to have a brand. You and I used to have coffee at El Diablo Coffee Company down the street, now rest in peace, because they've had to close because of the pandemic.

Edward: That’s so sad. It was such a good place.

Lindsay: That was a punch in the gut when they closed. They had a brand. They don't have brand awareness. They're a mom and pop, single store business but they have a really clear brand to their customers. Brand awareness is different. Brand awareness is the scale of people who know about your brand. You can have a really vibrant brand with low brand awareness like El Diablo Coffee Company. You can also have a really high awareness of brands, where people don't really know what you stand for. Like AT&T, they might be the largest TV and media buyer still, so they spend hundreds of millions of media dollars a year promoting their brand, very high awareness of the AT&T brand but a really weak brand definition.

Those are two things, yes, you can buy brand awareness but the exercise of deliberately defining what you're going to stand for really exists outside of time and money. Even the mom and pop coffee shop El Diablo has a brand, this is our promise, this is our personality, these are the things that are product truths. Those things are true for any business, whether small or huge. If you have deep pockets, sometimes just like with a lot of things with money. Having a lot of money can cover all sorts of sin. If you have a ton of money like AT&T Wireless, you can spend to get really high brand awareness. That doesn't mean that it's a well-loved brand. It doesn't mean that it was money well spent to generate that awareness. They're really two separate things.

I argue that when you have a precise conscious definition of your brand, it's going to make any awareness building you do more fruitful. It's going to be higher ROI because building awareness of a clear idea is going to be easier and more effective. It’s also going to be easier for the customer to bond with you. It's one thing to be aware of something but to let it in and to let it become part of your consideration set is another step that just generating brand awareness is only going to go so far to achieve.

Edward: Can you quantify that then? You're saying, hey, if you have a better brand definition, you should have higher ROI than marketing spend, than your awareness spend.

Lindsay: Yeah.

Edward: Should you be able to see that you can track things like how much I'm spending or how many impressions I'm getting and whether or not that's translating into awareness, or consideration, or purchases by how strong that brand definition is?

Lindsay: Absolutely, you could. We're starting to get a little bit into the territory between these two which is what's your message, what's the copy, what are the words that you used to express your brand promise. I think I'm getting a little bit more into market research than I should, but you can do a 2-cell test of promise A goes in this cell and promise B goes in this cell and they're both around the same idea but one is precise and one is not.

Edward: Where did you see that impact? Is it in impressions to awareness? Is it awareness to consideration? Is it a consideration to purchase? When you have a precise brand, do all those metrics improve or do some improve better than others?

Lindsay: I love that question. I want to think more about it but—I can think of an example for any part of the funnel where it's beneficial. In fact when I start a brand strategy exercise, I want to learn what part of the funnel is strong right now and what part is weak so that the brand can help where this company really needs it. Oftentimes, especially with a B2B company, the response is we do really well with sales. When I've got a person in front of me and I've got 15 minutes to share a sales deck with them, we do really well. We don't have enough of those people coming to us.

We have a really good close rate, a really good conversion rate, but we don't get enough people coming into the pipeline. If awareness is the problem, then the goal of the brand should be taking somebody who's unaware to aware, what's going to heighten our ability to do that singularity, make it very easy cognitively for a person to understand what you are. Really simple is what helps to go from unaware to aware. The reason is the person doesn’t have a relationship with you yet. They're not going to give you a lot of their time and energy to try to understand what you are. You're going to do that with three or four words. Singularity is the most important thing with awareness.

Consideration, it's usually more, okay I got the big idea that made me aware of it but now I don't believe you. You have to make me believe that you're going to deliver on that promise. The messaging should focus more on the reasons to believe. Let's take Volvo, so the promise is safety. The reason to believe in safety is, okay, we invented the five-point seat belt, we crash test. Those things then become the most salient part of the brand message at the consideration stage. Purchase, if people are leaving at purchase then it's often more like are you making it easy for them to purchase a yes? Is the price value right? All of those are manifestations of the brand.

Edward: How much of branding then is the differentiation and just being different than the other competitors in your space?

Lindsay: It’s everything. It's the whole point. Your brand is to basically distill what is your most potent differentiator. That's what brand is. That's the point of all of this. If you come up with a brand that maybe is a neat idea but it's not differentiated, then it's not going to create economic value for your business. What makes a brand value creating is that it’s differentiating. Absolutely, it has to be.

Edward: There must be brands that are better in certain categories, like Harley Davidson kind of owns tough guy image for motorcycles. Maybe I've been getting too much Harley Davidson propaganda, but it feels like that is the right brand if you're going to sell motorcycles and anyone else who enters the motorcycle space now to choose something different or just be the lesser version of Harley Davidson.

Lindsay: Yeah. I don't know Harley Davidson’s share in their category, but I would guess that they dominate.

Edward: They're a leader.

Lindsay: They're the market leader. Taking a step back here, one of the first decisions that you make when you're defining your brand is if I look at my customers, my sweet spot customers, the people who I really want to be our customers, if they're not buying us, what are they doing instead? I don't just mean direct competitors. In the case of Harley Davidson, it might be walking, it might be riding a bike, it might be driving, it might be owning a car, it might be renting a car. Harley Davidson, as the category leader, what they need to differentiate against is not other direct competitors but substitutes. That's why the Harley Davidson positioning is all about kind of the badass spirit of being a Harley Davidson owner as opposed to the size of their engine versus other motorbikes.

They make fun of car owners. In their headquarters, they have parking spots for their employees, most of their employees do ride Harley Davidsons but then in the distant parking lot, like the boonies parking lot, they have spots for cars. They're trying to push off against cars, not other motorbikes. It's still about differentiation. It’s just that the frame of reference is larger when you're the category owner.

Edward: Why do people hire you, Lindsay? What's the pain point that causes them to bring you on board?

Lindsay: Yeah. Usually, the CEO and the CMO, depending on the company, what I often hear at the beginning of an engagement is we are vague about what we stand for and therefore it makes it hard for us to have effective marketing but it also makes it hard for us to do other things. We're a little bit of throwing spaghetti against the wall when it comes to what our new products should be. When we recruit employees, we don't know what to tell them about our values and our culture. There's sort of like a pain of lack of focus. The desire for the brand strategy is to be a north star that solves that pain. The most readily available and probably the most immediately put into place outcomes are marketing.

The brand is everything that the customer experiences of your business which is not just marketing. That's why it's so important that it's coming from not merely a marketing activity but really a full business activity.

Edward: What are the key things that matter now? If I'm going to try to fix this build or my brand at the beginning, what should I be spending my time on? What matters most? What things can I ignore because there's a million things I could be doing.

Lindsay: You mean like different aspects of building a brand?

Edward: That's right. I talk to companies all the time, maybe they're not building a brand, they have a brand, at least they have a brand name and they're doing some stuff and they're just trying to figure out like where they spend time when there's a million things on their list. If they're going to spend time doing 2-3 things to improve their brand, what should those two or three things be? A lot of times, just trying to change the names is where they go to first. I'm pretty sure it’s not the right answer.

Lindsay: I mean naming is really, really difficult for a lot of reasons. Particularly in this mature internet, in the age of the internet where the desired domain is already taken, naming is so difficult. On the other hand, I do think it's worth getting your name right because it's so unforgiving. Once you have a name and you’ve built equity with your customers in that name, it's painful to change it and sometimes you do have to change it. It's better, I think, to get really clear about, this again goes back to, what do you want to stand for, in a word, like a single idea. A word or two or three, not like a multi clause sentence.

What do you want to stand for, and your name, and your logo, and your tagline and all of your visual identity? Let all of those work together, and your product, all of those work together to express your brand. Don't pin it on just one thing. If you have a name and you don't love it but it's otherwise not problematic, consider the fact that you also have other real estate that you can use to convey your brand, so you've got your tagline. I actually think this is probably the most under-utilized part of brand identity. There's a lot of focus on naming and naming is really hard. In a lot of senses, you don't have much control over it because you probably inherited the name or you couldn't get the name that you wanted, but the tagline can make up for a weakness in a name.

The problem is in order to define your tagline, you have to do your brand strategy to know what’s the thing that you’re going to message is. My first recommendation is define your brand. It doesn't mean you have to hire a consultant to do it. You can do this yourself. What it really takes is some humility and empathy, take a step back. What are we really here to do? What's the nature of the pain our customer is in that we’re here to solve? What's that like? What is the promise that we want to be known for and that we can deliver again and again to accrue that trust?

When you do that kind of heavy lifting of defining your brand strategy, it's actually not that hard to develop your tagline, or to choose a logo, or to choose your colors. Those things are not heavy lifting when you've done the upfront work of defining your north star. I think that probably the biggest mistake here—I get a lot of the angst of I don't like our logo, but step back here. The customer probably doesn't care that much about your logo if they love everything else about your business. Have you defined for your customer? Have you made it really easy for your customer to see what you offer them by sealing a promise.

Instead of do I like my logo, instead ask the question: does my logo express the promise that I want it to express? Is it true to who we are? To take out some of the subjectivity here, it doesn't have to be that hard. When there's a massive undertaking to redesign a logo, I often get nervous because I wonder if it's covering up something else. We are too nervous about making a singular brand promise so we're going to have a really pretty logo with a really big agency that's going to do it for us. I'm a fan of a really awesome logo, but just like if you're building a house without a foundation, make sure that the bones are there first before a huge investment in something like visual design or logo.

Edward: Lindsay, thank you so much for being here today. Before you go, tell me about your quake book. What books have you read that's really changed the way you think about the world?

Lindsay: Yes. It's been such a joy to talk to you, Ed. Thanks for having me on your podcast. The book that really changed the way that I work is called Deep Work by Cal Newport. I alluded to this earlier with my digital minimalism, which is another book that he wrote by the way, but the idea is that we as humans, our most scarce resource is our attention and right now especially when there's so much competing for our attention, you have to really protect your cognitive time. Instead of getting to brass tacks here, what he advocates and what I’ve really started to do is block out the most quality time of your day for thinking. For me, it's the first two hours of the day, and don't let there be low cognitive tasks creep into that.

Instead of going about your day and squeezing the strategic cognitive work into the margins, do the opposite. Plan it so the most midi-important thing happens when you're most on and really push out things like replying to emails, to the less cognitively valuable time of your day. That's Deep Work, and also I think that it allows you—it's a productivity tool in a way, but it also is a joy tool because it helps you to enjoy what you're doing more and not feel so rushed all the time.

Edward: Lindsay, that's great. Thank you so much for being here today.

Lindsay: Thanks for having me, Ed.