Best Buy vs. Brown Cows (Seth Godin-ites Unite)

Credit cards float in a sea of unremarkable sameness. Today, I received an offer from Best Buy. If I opened up a credit line through them (via MasterCard), I would receive $25 in Reward Zone certificates.

This came in a mailer for 10-12% off in the entire store. Really? 10-12%? On the back of the mailer, Best Buy proclaimed this to be the "Summer of Wow."

No matter what Best Buy decides to call summer, I will call it the "Summer of I'm Not Going to Use Your 12% Off Coupon."

Compare their offer to Amazon's. Amazon completely stopped advertising and addressed the biggest issue nagging online bookstore nay-sayers: shipping. They have been offering free shipping on every order over $25 since 2003.

What are the results? According to the headline from their April 24, 2007 press release: Amazon.com Announces First Quarter Sales Surpass $3 Billion, up 32% Year over Year -- Operating Profit Grows 38%.

What's more, Amazon has continued to build customer loyalty by being remarkable, with Amazon Prime.

From the same press release: "Amazon Prime, Amazon.com's first-ever membership program, was introduced in February 2005. For a flat membership fee of $79 per year, Amazon Prime members get unlimited, express two-day shipping for free, with no minimum purchase requirement on over a million eligible items sold by Amazon.com. Members can order as late as 6:30 p.m. ET and still get their order the next day for only $3.99 per item, and they can share the benefits of Amazon Prime with up to four family members living in their household."

While Best Buy may be a fantastic business, offers like these are boring and routine. Do something remarkable! Offer me something that makes me run, nay, sprint to your store (but not really, because I'm going to drive). Best Buy is raking in dough left, right, and center. They are a great business model. But they are boring me.

Give people something to talk about, and talk they will. And buzz (which, coincidentally, is the hot new buzzword) can help grow a brand by leaps and bounds.

"You can't hit what you can't see," said a No Fear T-shirt that my friend wore fifteen or so years ago. Best Buy obviously didn't see me when they offered a pitiful 10% off. So they missed the target. Be remarkable! Stand behind your products!

If Best Buy offered free service plans, that would be remarkable. Would it be profitable? One would have to weigh out the options of initial revenue lost versus positive word of mouth, customer loyalty, and future sales.

Apple offers a remarkable version of Best Buy's Geek Sqaud called the Genius Bar. Apple's consumers can meet with Genius Bar employees for free. These are specially trained employees who work solely at the Genius Bar.

Now that is a remarkable concept.

Read up.

Customer Service Is Exciting Never, As Well

There are few times I notice customer service. When it's bad, I tell everybody. When it's great, I maybe tell two people. Don't bet on customer service to save a boring brand. Staples of a good business–quality, honesty, service, and so forth–are not building blocks. They are MUST HAVES...unremarkable must haves.

If you try to describe your business in ten seconds, do any of those words pop up? If so, you probably have a poorly defined brand. And, what's more, you are inviting yourself to war with competing brands. They, too, can easily try to stand for quality or honesty or service. And, in the end, you both can look forward to a giant price war.

Winning on price is not winning at all. As soon as the deals go up in smoke, the customers do as well. Commodity pricing is for commodity items, like toothpaste and deodorant. Ask yourself, do you really want to be in that type of business?

Further, everybody stands for customer service or quality (or at least they believe that they do, but we know better than to believe the hype that United Airlines or GM throws our way, don't we?)

The only time that customer service is remarkable is when it defies expectations. Think Southwest and their policy to automatically put a missed flight into a no-hassle holding period. The money you spent on that flight is immediately available for future flights. Unexpected! It's a nice touch, but it isn't the CORE of the amazing Southwest brand.

Few companies have ever made the very essence of their brand around service. Allow me to introduce to most: Ed Debevic's.

Ed Debevic's is a chain of restaurants that has struggled over the years. According to Wikipedia: The restaurant is most notable for its wait staff who dance on countertops with fun music playing; sometimes the entire staff will stop and sing along. Each waiter or waitress takes on a character not unlike what you might have seen in a movie or TV show of the past. Occasionally you'll get a Flo-like character who'll rip into you good with the insults but it is all in good fun.

The restaurant, originating from Phoenix, AZ in 1984, was a chain that has shriveled up to two locations, both in Illinois. What would have made that chain more successful? Going all the way to the edge (thanks, Seth Godin) and having a restaurant full of surly waiters and waitresses. Dancing waiters and waitresses are OK, but it has been done. An angry wait staff? On purpose? On purpose!

I don't remember if I enjoyed their food, but I did have one of those "Flo-like" waitresses when I went there over ten years ago. And, to this day, I still recommend Ed Debevic's to Chicago-bound friends. Is it for their quality, honesty, or service? No, actually, it's for their lack of service, which, in some weird way, is their service.

Reliable Is Exciting (Not)

I live in Phoenix. Yesterday, July 4th, the dial hit a fancy 120 degrees. Yeah, it's a bit tepid (yes, I'm being vitriolic).

The air conditioning busted on my vehicle a while back. This being the yummy summer, I decided to get it fixed. Since I am newish to the area, I asked a few trusted sources: friends and family. They provided me with a few names and numbers, and off I went, ready to spend big bucks on some very trusted word-of-mouth sources.

The most highly recommended repair shop was Sun Devil Auto. They are a "full-service" or "complete auto care" center. What's more, they have been family owned and operated for 25 years. This not being 1953, I couldn't care less who runs it, a family or a trained seal or a mossy rock. Just fix my truck.

As they looked over my vehicle, I sat in a crude, makeshift waiting area, a swinging arm's length from the counter and the entering/exiting mechanics. The chairs were hard and unforgiving. Strike one.

I wiggled uncomfortably for 45 minutes, reading Seth Godin's inspiring "The Big Moo," listening to Jóhann Jóhannson's equally inspiring album, Dís, on my iPod. Across from me, a middle-aged gentleman clutched to his book, talking to me through my headphones.

"Huh?" I asked him, pulling my headphones from my ears.

"Why are ya in here?" he asked, trying to overcome his obvious boredom with menial conversation.

"Air conditioning, you?"

I forgot what he said. Instead, I decided to do a little impromptu market research.

"Why did you bring your vehicle to Sun Devil Auto?" I asked him.

"Well, they're really reliable. They get the job done."

"Yeah," I waxed, "but reliable is boring. Right now, I want a comfy chair and perhaps a TV on ESPN."

His eyes glazed over. "Yeah, that would be nice."

And then it hit me: reliable is boring. We are no longer in a day and age where 'just doing the job' is enough. To really build a brand, one must stand for something unique in the mind. "Reliable" isn't the word I want from my automotive repair company (but perhaps my parachute company). Sure, I want them to be reliable, but, moreover, I want them to stand for something simply spectacular past that.

After an hour, the customer service rep called me up with my diagnosis. He told me that my repair would cost $1,300 (and then quickly offered me a discount, $1,050), and that my vehicle could be ready in four hours.

I thought. "That seems high. Would you do the labor if I picked up the part myself?"

He turned to a sign on the wall: NO USING CUSTOMER'S PARTS.

Why not? It protects their markup, of course. Consumers are savvy. They see through the smoke and mirrors. Strike two.

Still, at nine in the morning, the temperature had already climbed to 103. I really wanted air conditioning again. "You have a carport service, right? I want to go to the health club just down the street while you work on it."

"No, we don't," he responded, flatly.

"I spoke to someone here two days ago and he said that you did."

"Well, we don't."

Lying to get my business? Strike three.

"Reliable" is a hard word to own in the mind. Nobody would dare take the opposite, calling themselves "unreliable." That is the same reason why brands cannot run on "quality" or "honesty." And what's more, all the "reliable" tags in the world will not scoop your brand from the arms of disaster if your customer service and policies are out of line.

***As a side note, "reliable" is the word owned by Toyota. But they don't just stop there. The Toyota brand is far bigger than simply "reliable." And the "reliable" claim is furthered by the apparent unreliability of GM and Ford. What's more, the Tundra, for example, is the biggest pickup on the road, plus it's reliable. That's a great place to be.***

Why is the waiting room not enjoyable for waiting? Why can't I bring in my own parts? Why was I mislead?

Not only did they lose my business, but they have made sure that I will not go there in the foreseeable future. And my word-of-mouth will not be positive.

Sun Devil Auto, by standing for everything automotive, stands for nothing automotive. They are a brand built by old school standards and I would not find it unbelievable if they were toppled by narrowly focused companies. The problem, of course, is that most automotive repair shops stand for anything and everything. In the battle of weak brands, a weak brand will win. (Ref: Diet Coke.)

But then, as I left Sun Devil Auto, I decided to go to Jiffy Lube. Jiffy Lube was in the same parking lot (how convenient), so I figured "why not?" I was greeted by someone immediately. My vehicle was pulled in the garage, the front seats were vacuumed, windows cleaned, and the air filter and tires were checked. This was all "just part of their service." I was not charged for these little extras, and it was these little extras that made the entire experience worthwhile.

In less than five minutes, I was called outside and my options were explained to me. The customer service rep also let me know what they had found while giving my vehicle a basic once-over (good air pressure, good air filter–thanks, guys). I selected my oil, and my vehicle was done in less than ten minutes.

In, out, done.

Jiffy Lube does one thing, and they do it well. Darn well. Sun Devil Auto does everything, and they may do it well, but I'll never know.

Stand for something and succeed, stand for everything and you will inevitably stand for nothing, opening yourself up to attacks from narrowly focused competitors who will eat your lunch (and perhaps your dinner, as well).

Buzzwords + Nicknames

The more a brand means to a someone, the more likely they are to create pseudo-names for it. It's the same reason why we give our friends nicknames. I call my brother "Bruf," my friend Daryl is "Dak," and my friend Victor is "Pangit." And my Apple MacBook Pro is a mactop. I am one of the originators of the word. It has also been noted on Urban Dictionary.

Buzzwords from a branding firm? Yep.

I did find a little gem whilst I was poking around Urban Dictionary:

iPerbole
i•per•bo•le
noun
The hype surrounding any product Apple unveils.

"Claims that the iPhone will change the world are all part of the iPerbole surrounding the cultish company."

To paraphrase LCD Soundsystem: Apple, I love you, but you're bringing me down.

Google vs. Yahoo

Susan L. Decker became president of Yahoo! in early May. Her target: Google. Can Yahoo! out-Google Google? No. Yahoo! lost their focus years ago, and Google was all too happy to snatch it up.

According to a July 1, 2007 article titled "Can She Turn Yahoo Into, Well, Google," in the New York Times:

By many measures, Yahoo remains one of the most successful companies on the Internet. It attracts nearly 500 million visitors around the world every month to its Web sites, where it offers a plethora of content and services, from news, sports, financial information and entertainment to e-mail, photo-sharing and online communities. And it is one of the largest sellers of Internet advertising, which it places both on its Web portal and on other high-traffic online destinations like eBay, Comcast.com and hundreds of newspaper Web sites. Last year, it earned $751 million in profits, on sales of $6.4 billion.

Yet over the last 18 months, Yahoo has suffered its biggest slump since the collapse of the dot-com bubble. The company has been eclipsed by the phenomenal rise of Google, which handily beat Yahoo in the most lucrative business on the Internet: search and search advertising. As a result, Google now makes far more money in one quarter than Yahoo does in a year, and Google’s market value of $162.8 billion is more than four times that of Yahoo, which stands at $36.5 billion. As Yahoo races to close that gap, its bread-and-butter business — the sale of banners and other graphical ads — is showing signs of weakness amid growing competition from MySpace, Facebook and countless other sites.

Analysts, meanwhile, say that Yahoo, a company with 12,000 employees, has grown bureaucratic and slow, causing it to miss out on some of the hottest Internet trends, like social networking. They say it has also missed out on some of the smartest potential acquisitions, including YouTube, which was bought by Google, and Facebook, which Yahoo once considered buying. Now Facebook says it is not for sale, and even if it were, the price would likely be far higher than the $900 million or so that Yahoo offered last summer.

When a company loses their focus, they open themselves up to be attacked from all angles. It is better to be strong in one area than weak across many.

Al Ries said, "Successful generals study the battleground and look for that one bold stroke that is least expected by the enemy. Finding one is difficult. Finding more than one is usually impossible."

As long as Google does not lose their focus, they will remain on top. And poor Mrs. Decker may be given a hardy heave-ho by investors and the board, both of whom have unrealistic expectations.

The lesson is clear, here: find one thing and focus all of your efforts on it. Be a specialist. Be narrow. Turn away customers and clients who don't fit your bill. In the short term, you may lose a few battles. In the long run, you are setting yourself up to win the war.

Read the article here.

Browser Wars = Brand Wars

VS.

In its early days, internet browsing was a painful, bland experience. Many of us can remember (and feel like dinosaurs doing so) pay-by-the-minute pricing plans and that wretched screech as your 28.8 modem murdered—er, connected to—your phone line.

And in the beginning, there was WorldWideWeb, and it was good. Actually, it wasn’t all that great. In the coming years, WorldWideWeb became the de facto standard. Mosaic was developed by NCSA, becoming first in the category of World Wide Web browsers.

According to Mosaic's Wikipedia entry, “Marc Andreessen, the leader of the team that developed Mosaic, left NCSA and, with Jim Clark, one of the founders of Silicon Graphics, Inc. (SGI), and four other former students and staff of the University of Illinois, started Mosaic Communications Corporation. Mosaic Communications eventually became Netscape Communications Corporation, producing Netscape Navigator.”

In its glory, circa 1996, Netscape Navigator was the browser of choice for nearly 80% of all internet users.

Rival Spyglass licensed the technology and trademarks from NCSA for producing their own web browser.

In 1995, Bill Gates was quoted as saying that using the internet for personal reasons was a passing fad. Obviously, he has since recanted such a belief. In 1996, Microsoft bought Spyglass, and soon thereafter released Internet Explorer.

According to Wikipedia:

“By the end of the decade, Netscape's web browser had unquestionably lost its former dominance on the Windows platform. Even on other platforms it was threatened, both by the gradual rise of open source browsers and by the August 1997 agreement that resulted in an investment of $150,000,000 by Microsoft in Apple, which included a requirement that Apple switch the default browser in new installations of Mac OS from Netscape to Internet Explorer.

“Of greatest significance, though, was Microsoft's massive and ultimately successful campaign to get ISPs and PC vendors to distribute Internet Explorer to their customers instead of Netscape. This was helped in part by Microsoft's investment in making IE brandable, such that it was a quick operation to create a customized version of IE. Also, web developers increasingly used proprietary, browser-specific extensions in the web pages they wrote. Both Microsoft and Netscape were guilty of this behavior, having added substantial proprietary HTML tags of their own into their browsers, the result of which was that users were forced to choose between two competing, almost entirely incompatible web browsers.”

Microsoft force-fed America its version of the internet. But IE has never been a moneymaker for Microsoft. In all reality, it has been a huge drain on Microsoft’s bank account. Said John C. Dvorak of PC Magazine, “If you were to put together a comprehensive profit-and-loss statement for IE, there would be a zero in the profits column and billions in the losses column—billions.”

What is it costing Microsoft to keep their number one position? What does it truly benefit them?

Microsoft stands for the operating system category, not the web browser category. They are wasting time and effort by the truckload in order to keep their product in front of its competitors.

A poorly branded product may attain short-term success, but in the long run, it is the narrowly focused brand that wins. Netscape failed largely because they lacked quality. But also because Microsoft bullied their way (at a magnanimous loss) into the web browser category. Very few companies are forced to deal with a competitor who will sacrifice their own resources, taking losses in the billions, to try and dominate a category.

The truth of the matter is this: no matter how much quality exists in Microsoft's Internet Explorer, is doomed in the web browser category.

As long as they pump money into a losing brand, they will suffer losses, the likes of which the average company could not weather. But Microsoft is not your average company–they are Big Brother Part II.

IBM could not be all things to all people. And nor can Microsoft.

Antitrust lawsuits are needless. People are self-regulating. In a free enterprise society, no product will ever achieve a 100% market share. It's time for the people's champion.

Enter: the contender–Mozilla…

Home Depot vs. Focus

The Home Depot–the playground for a man's man. They are the leader in the category of "home improvement warehouse." Approximately 18% of the $700 billion annual market is shared between Home Depot and category number two, Lowe's.

But there is trouble in paradise. On January 2, 2007, then-CEO Robert Nardelli (dubbed "America's Most Overpaid CEO") was given the heave-ho to the tune of $210 million. This came after he had eroded the company's strong focus, giving rival Lowe's a foothold to gain on Home Depot.

The problem was, according to branding experts, one of focus. Nardelli stretched the company into areas which it did not dominate. He had a vision to expand the core, extend the business, and expand the market. To that, I say, "what?"

Aggressively, he purchased some 25 wholesale suppliers for $6 billion. That just doesn't make sense. What does a home improvement warehouse know about running a wholesale supplier?

When Nardelli took the helm at Home Depot, sales were 2.4 times that of Lowe's. Upon his corporate demise, sales were only up 1.9 times. That is unacceptable. Leaders lead. The gap between the number one and number two brands in a category should not shrink.

Al Ries, the world's foremost branding authority, wrote in Ad Age, "Why did Home Depot fail to keep pace with its smaller rival? I believe it’s because the chain violated one of the fundamental laws of marketing. The law of focus."

The Law of Focus states: the most powerful concept in marketing (or branding) is owning a word in the prospect's mind. Crest owns cavities. FedEx owns overnight. Lexus owns luxury. Sometimes one word won't do. In those cases, two words will also suffice. Domino's owns home delivery. Home Depot owns home improvement.

(Still, it is easier–and far better–to own one word than two. We are already inundated with bright ads, chirping cell phones, and overtime work shifts. The less clutter a brand offers, the more likely it will be remembered.)

If, then, Home Depot owns home improvement, why would they extend their brand into the wholesale supplier category? What does a home improvement warehouse know about wholesale supplying?

In the movie City Slickers, Jack Palance asks Billy Crystal, "Do you know what the secret to life is?"

Crystal responds, "No, what?"

"One thing, just one thing. You stick to that and everything else don't mean sh*t."

"That's great, but what's the one thing?"

"That's what you've got to figure out."

Home Depot has begun to realize the error of their ways. On June 19, 2007, they sold their supply company, HD Supply, for a pretty $10.3 billion dollars. Home Depot's board also approved a $22.5 billion share repurchase.

It appears that Home Depot is refocusing their business on their core strength. According to the Washington Post, "The struggling retailer now plans to focus on improving its stores to keep up with its high-performing rival, Lowe's."

What once made Home Depot great was its unparalleled customer service. “Mr. Nardelli moved to cut back on higher-paid full-time employees with experience as plumbers or handymen,” reported The Wall Street Journal, “and to rely more on part-time workers with less experience answering home-improvement questions from customers.”

A narrow focus can often times mean taking a hit in the short term. Home Depot is already planning to shell out $2 billion to improve its customer service, which will be done by putting more experts in stores and enhancing inventory.

Home Depot is no stranger to a wandering focus. In 1991, they developed Expo Design Center. This is a high-priced kitchen and bath-based store. Today there are only 34 stores in existence. In 1995, they introduced Home Depot CrossRoads. These stores tried to function as a tractor-and-tire hub for rural areas. In 1999, they rolled out Villager's Hardware, a me-too retailer that tried to go up against Ace and True Value.

A company should not look to extend their brand, they should look to deepen its penetration. Home Depot should focus on how it can take a greater share of the category, one, and two, make the $700 billion annual category even bigger. Being the leader, they will get the heftiest chunk of that expansion.