“Wards regrets to announce that due to poor sales and low Christmas sales, we are filing Chapter 11 Bankruptcy. We thank you for your continued support and want you to know that we loved offering you the best values throughout the past 128 years.” — Sincerely, David Hogan CEO/President, Wards, Inc.”
That was from a letter posted on Wards’ Web site in 2000.
If you’re like me, reading those words still makes you feel just a crinkle of regret, to think that a 128-year-old company died, one that invented the mail-order catalog and first came up with “satisfaction guaranteed or your money back.” And if you’re like me, you feel that regret even though you didn’t shop at Wards, and if you were to discover tomorrow that there was one right around the corner that they slipped up and forgot to close, you’d decide you ought to go, but probably never would. Same with the Oldsmobile — even if you never owned one and never wanted to, you hate to see it go. Why would that be true?
Brand Passions
It comes down to a simple formula, that a “brand” is not just what you know about a product, but also how you feel about what you know. And sometimes it’s how you feel about what you don’t know — whether you’d like to know more or not.
What got me thinking about brands was talking to a man who’s in the process of saving one — the Ducati motorcycle brand. Michael Lock took over as CEO of Ducati NA three years ago — a Brit selling Italian bikes in America. The group he inherited was losing money, frustrating customers with its service and had just moved from New Jersey to California, dropping key employees along the way. However, Lock was a man with a brand. In fact, he is the only executive I’ve ever talked to who faced this peculiar problem: The brand image was too good.
He told me: “We had an elitist thing going on. We had an incredibly good brand image, but just naught-point-five percent of the market. That’s the wrong end of ‘exclusive.’ Everyone assumed that we were the two-wheel version of Ferrari. Flattering, but …”
A New Image
So Lock had a slippery proposition — to change the image without damaging it. He hit upon this analogy: “We went from being the two-wheel Ferrari to the two-wheel Porsche. A Porsche is attainable. You can reward yourself with a Porsche. And you can use it daily.”
Ducati changed its marketing from highbrow print ads to open houses at dealerships and track days, which gave them a chance to be “less snooty.” Meanwhile, they solved their parts problem, and thus one of the major customer frustrations. In doing so, they doubled sales during the past four years, and erased most of the losses. As Locke put it: “We went from making losses to preventing them.”
I asked Lock if it was hard to hire new employees to come to work on a struggling brand. He said, “It was hard to hire except among those with an emotional weakness for Ducati.” Ah, there’s that word “emotion” again, winking at us, letting us know the power of a brand is not just in marketing. Lock said: “Ducati is a dream for everyone in the industry. It’s a place where you can come in, make a name for yourself, help us raise standards and bring in ideas. It’s a place to become visible.” (He went on to lament the downside of visibility, saying: “I just lost an employee to Google. They offered him double the money.” Google won that battle of the brands.)
As for the pressure of taking on the task of turning around a legendary product, Lock said: “I never forget that what we are doing is not actually that important. Most of the world makes things that people need. We don’t fall into that category. No one needs a Ducati; they want a Ducati. We make exquisite toys.” He added, “Were not in the transportation business; we’re in the entertainment business.”
And there we see the essence of creating/recreating a great brand:
What is it like? (Porsche, not Ferrari.)
How is it different? (Entertainment, not transportation.)
How important is having consumers know the answer to those two questions? It’s life or death … of the brand.
Dale Dauten is the founder of The Innovators’ Lab. His latest book is “(Great) Employees Only: How Gifted Bosses Hire and De-Hire Their Way to Success” .
