Archives For Brand Design

People are dissatisfied with banking. A recent study from the Rassmussen Report reveals that American Consumers hold a grudge against banks who they hold responsible for the great recession. Many consumers believe that banks don’t have their best interests at heart. Bank fees are often confusing and hit your checking account when you can least afford them. People feel like idiots when they are hit with a bank fee. Most people, at one time or another, have had a nightmare customer service experience with a large bank. Large banks have some of the lowest customer experience and customer service ratings. People feel powerless to change things. Banks talk about being customer focused but very few of them empathize with the needs of their customers. Banks make money by keeping people confused. 

Like many people, Josh Reich got fed up with his bank after it charged him overdraft fees and he lived through a painful customer service experience. This motivated Reich, a software engineer from Australia, to come up with a better more human way to bank. 

Reich created Simple, an online banking company that was founded in Brooklyn and relocated to Portland, Oregon. Simple offers customers free checking and data analysis of their transactions and spending habits. The company, which began signing up customers in 2012 now has more than 80,000 accounts and has processed transactions worth more than $200 million. Simple does not have retail branches.
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The Simple Bank Brand was developed to help people better control their finances. All employees in the company are unified in support of this common purpose. Their goal is to make banking more human by putting customer service at the core of everything they do. Simple is targeted to people who are dissatisfied with their current banking relationship. A Simple account empowers customers with powerful budgeting and savings tools built right into their account. These tools show customers how much money they have to spend and help people save for specific goals like vacations. Their website and mobile apps are clean, simple and easy to use. Simple gives people tools to help themselves, while still making sure knowledgeable, friendly people are there to help when you need them.

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The company’s biggest challenge is customer acquisition. Despite their current dissatisfaction, it is difficult to get customers to change and leave their current bank. Changing banks is a lot of work.

Would you leave your current bank if a better more human option was available?


 
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Restoration Hardware has repositioned itself to be a luxury lifestyle brand. It has a great story.  The brand was founded by Stephen Gordon in 1980 in Eureka, California. The idea for the company came while Gordon was restoring his Queen Anne style house. He had great difficulty finding period hardware. He recognized a need in the marketplace. The brand was initially about addressing the need for authentic period hardware. The initial store was founded in Gordon’s house in Eureka. Over time, Restoration Hardware expanded product offerings to include 1920s-themed lighting, bathware, curtains and furniture. Fifty percent of the business was novelty type items. The company expanded rapidly and went public in 1998. By 2001 Restoration Hardware was close to bankruptcy. Its stock had gone from $37 a share to $.50. It problems could be blamed on the lack of a focused merchandise assortment. In 2001, Restoration Hardware did not have a clear point of view.

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Gary Friedman, former President of Williams Sonoma, stepped in and over time saved the company. He spent six years remaking the business, slowly and methodically getting rid of the novelty items and bringing in furniture, linens and lighting. He made Restoration Hardware relevant. Restoration Hardware repositioned itself as a retailer of luxury home furnishings. Restoration Hardware’s sofas, chairs, tables, bureaus and other products are largely modern updates of classical designs. Its target market: households with incomes above $200,000 or “aspirational” customers trading up from department stores and other retailers.

The company struggled when the housing bubble burst in 2008. The company was forced to restructure, close stores and went private in 2008. The company lost money from 2008 to 2011. The company went public again in 2012.

This year it announced plans to transform itself from a high-end brand in home furnishings to a luxury lifestyle brand. The brand has evolved to become RH, which is positioned to curate a lifestyle beyond the four walls of home.

Not only is the company branching into “curated” collections of contemporary art, antiques and kitchen ware, it also plans to launch RH Atelier, a luxury brand of apparel, accessories, footwear and jewelry. Key to Restoration Hardware’s ongoing transformation will be the opening of much larger stores called Design Galleries to better showcase all of its products.

Five full-line Design Galleries have opened since 2011 in Los Angeles, Houston, Scottsdale, Ariz., and most recently Boston and Indianapolis. With an average of 21,600 square feet of selling space, they are about three times the size of the company’s legacy stores, not to mention more productive.

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The Boston outlet is the largest at 40,000 square feet. Besides displaying new product categories such as tabletop goods and “objects of curiosity,” the four-story historic building features a wine bar, beer pub, billiard lounge, library, club rooms and conservatory.

One strong point is the brand’s positioning. It’s above mass-market players such as Crate & Barrel, Williams Sonoma and Pottery Barn, but below top-end designer showrooms used by decorators.

The jury is still out whether the company can make a go of all of its ambitious undertakings. However recent results have been very positive. In the last quarter same store sales increased 26% and earnings jumped 48%. Its stock price has more than doubled since its IPO last year.

Have you shopped at a Restoration Hardware Store?

Michael Kors is one of the hottest fashion brands in the world. It is an overnight sensation that has been 30 years in the making. Persistence pays off. Michael Kors was founded in 1981. Michael Kors has become a  strong global lifestyle brand with a broad appeal. The brand’s products have a “jet-set” aesthetic that is both stylish and sporty. Michael Kors sells affordable luxury. The affordable luxury segment has bounced back strong in 2013. The company sells accessories, footwear and apparel in upscale department stores and its own stores. Michael Kors is the “it” brand in this segment of the market. Michael Kors has surpassed Coach as the number one luxury fashion brand.

Success in the fashion industry is often fleeting. However Michael Kors is currently enjoying fame and success. The brand has done a great job connecting with the American fashion consumer. The brand has excelled because it has stayed focused on the market’s sweet spot — people with money who aren’t rich yet. Michael Kors has a strong understanding of the consumer he is designing for.

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Michael Kors has generated a strong buzz in the market. Kors was a judge on “Project Runway” since it first aired in 2004. The exposure has been very important for the brand. It has built brand awareness with young fashion consumers. When Project Runway started in 2004, the Michael Kors Brand had brand awareness that was under 20%. Today over 70% of Americans are aware of the brand.

Michael Kors is also one of the fastest growing stocks in 2013. The stock price is up over 50% year this year. The brand went public in 2011. It had already surpassed Ralph Lauren in market value. The company has delivered impressive earnings growth the last few quarters and a recent pullback to its 50 day moving average may represent a buying opportunity for aggressive investors. Strong brands that understand their target audience continue to be a good investment.

It will be interesting to see if Michael Kors can continue its rapid growth. It is difficult to maintain that competitive edge. The key will be designing relevant products that meet the lifestyle needs of his target consumer and continuing to market in innovative ways. There is always a market for great design. In the short-term, I wouldn’t bet against Michael Kors.

Do you think the Michael Kors Brand can continue its explosive growth?

We are in the middle of the second running boom in the United States. The National Sporting Goods Association reports that sales of running/jogging shoes increased 23% percent in 2012 when compared to 2011. Running represents about a third of the overall sneaker market. Serious runners purchase on average three pair of running shoes a year. The running industry continues thrive despite a sluggish economy.

Participation in running has seen a steady increase in recent years. Running participation (ran at least 6+ days/yr) was up nearly 4% overall in the last year. Adventure running has experienced explosive growth. Events such as Tough Mudder have increased in popularity. Adventure running grew 34% last year. Marathon entries have more than doubled over the past 20 years. More and more women are taking up running. I see it in the size of our local high school’s girls cross-country team. Women accounted for 8.6 million finishers in road races in 2012 compared to 6.8 million men.

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The running shoe market is highly competitive. The top running shoe brands are ASICS, Brooks, Nike, Saucony, New Balance and Mizuno. Brooks has experienced impressive sales and market share growth in recent years. This was fueled by a shift in marketing strategy. For years, Brooks had tried to be a total athletic company like Nike, selling football cleats and a wide variety of sports apparel. Their athlete roster included Dan Marino, James Worthy and Jimmy Connors. They tried to compete with Nike at their own game. That turned out to be a losing proposition.

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About ten years ago, Brooks Sports under the leadership of CEO Jim Weber made a strategic decision to focus on performance running shoes and gear. Brooks eliminated football, basketball and tennis products. Distribution was focused on top running and specialty retailers. This has proven to be a winning strategy.

Many marketers mistakenly believe that more products sold to a broad target audience is the key to growth. Brand Strategist and Author Al Ries in his book “Focus” outlined the premise that long-lasting success depends on focusing on core products and resisting the temptation to diversify. Brooks has successfully executed a focused strategy.

Brooks has developed a simple slogan: “Run Happy.” which defines the brands connection with employees and runners Employees at Brooks live and breathe “Run Happy”, through expression of brand values:

  • Serve People 
  • Lead Thought
  • Play As a Team
  • Compete Every Day
  • Have Integrity 
  • Have Fun
  • Be Active. 

What is your favorite brand of running shoes?

Many business people confuse marketing and branding. Most people don’t understand what a brand is. Many people think that branding is a logo or a logo design. Design is essential but design is not a brand. Some people think that you can whip up a brand overnight and build awareness instantly.

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For me branding is simply about “Keeping Your Promises”. Brand’s like Zappos and Apple are known for delivering a great experience for consumers. Great brands consistently deliver on their promise. Great brands tell stories that are focused on why.

Branding is delivering on a differentiated promise to a consumer. No matter what you are doing, you are always branding your business. Branding is the perception, thoughts and emotions of your consumers.

Branding is a strategic asset, and shouldn’t be viewed as an expense. Marketing is an expense.

Branding is long-term. When we are clear about a brand building strategy we can direct the marketing tools. Without a proper brand building strategy, the marketing is a tactic in search of a strategy.

Marketing is focused on achieving short-term goals. Marketing usually services one main overall function, to sell.

The Brand is how people remember you, how they feel about you.  Emotions and memory are key components to the brand. Marketing then takes that brand and forms communication that takes advantage of that brand to send out a message.

The great thing about a Brand is that it can be constructed and formed to create that unique memory and feeling you wish to appeal to your specific target.  By clearly defining things like purpose, core values and personality you can create a brand positioning to use as a guide for effective marketing strategies.

Marketing communications not based on a well-defined brand send a message that is not differentiated. A great brand deserves a creative marketing strategy to best take advantage of that unique positioning.

Marketing is a “push” action, and branding is more “pull.”

A Brand is an experience, a story.

Which brands provide the best customer experience?

America has a strong love affair with the hamburger. Half the country reports eating a burger at least once a week. 90% of people eat at least one burger a month. Hamburgers are among the biggest and most competitive food markets in the United States. In 2012, the “Better Burger” market grew by over 20%.

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Smashburger is an American chain of fast casual burgers restaurants that originated in Denver, Colorado in 2007. The company was founded by Tom Ryan. The name Smashburger refers to the process by which its 1/4-pound, 1/3-pound and 1/2-pound burgers are made. It begins with a ball of raw Angus Beef, which a grill cook “smashes” with a handheld steel mold on to a butter-brushed grill for ten seconds, giving the patty a caramelized sear to lock in the juices. Every burger is made fresh to order. Smashburger offers unconventional toppings including avocado, fried eggs and garlic mushrooms. The typical meal at Smashburger costs $10-$12, $2-$4 more than a meal at McDonald’s.

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Every market has specialized burgers created for and sold only in that market. In the D.C. market, for example, there’s the Capital Burger, which isn’t made with lettuce but baby arugula. It’s also has grilled onion, aged Swiss cheese, applewood-smoked bacon, tomatoes and mayo and is served on a brioche bun. Or, there’s the Brooklyn Burger which is topped with grilled pastrami and served on a pretzel bun with yellow mustard. Smashburger also sells sweet potato fries, chili cheese fries, and the house-specialty Smashfries, which come tossed with rosemary, olive oil and garlic.

Smashburger has experienced rapid growth. It is estimated that Smashburger will end the year with over 250 locations. Their goal is to build 400 new units over the next six years. When Smashburger opened its first unit in 2007, the better burger category was just starting to take off. Six years later Smashburger is an industry leader. Forbes magazine ranked Smashburger as America’s most promising company. Smashburger has also made the Inc 500/5000 list an exclusive ranking of the fastest growing private companies for three consecutive years.

Smashburger marketing has relied heavily on social media and generating word of mouth. Smashburger focuses heavily on events, such as when it offered a free sandwich to anyone with “burger” or “berger” in their name on National Cheeseburger day, he said. Each time it enters a new market, it contacts social media trend-setters like restaurant bloggers and “mommy” bloggers who influence where consumers eat. Then, before the restaurant opens its door, it invites the bloggers in — as a group — to demonstrate how the food is prepared.

The other key differentiator is the in-store environment and customer experience. The stores have a cool look. The food is brought to the table, so consumers  don’t have to stand around and wait. The burgers are served in a stainless-steel wire basket with a real knife and fork not plastic.

Have you eaten at a Smashburger location?

“Better Burger” is one of the fastest growing segments in the fast food restaurant market. Five Guys has grown rapidly and now has over 1,000 locations, In-and Out Burger has close to 300 locations on the West Coast and Smashburger has over 200 locations. “Better Burgers” account for an estimated one-third of fast food burger sales. “Better Burger” restaurants provide upscale fast food that beats the chains on food quality and customer experience at reasonable prices.

On a recent trip to Connecticut, I had the opportunity to visit a Shake Shack restaurant, a growing burger chain headquartered in New York. I had read about Shake Shack and was interested to visit one of their 23 locations. Shake Shack is a modern-day burger stand that serves Black Angus Burgers, Vienna All-Beef Chicago Style Hot Dogs, and custard made from premium ice cream. They also serve beer and wine. Shake Shack’s burgers are 100% all-natural Angus Beef and contain no hormones or antibiotics. All burgers are ground fresh and sourced from local artisans. Shake Shack combines high quality classic food with a pleasant customer experience.

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Shake Shack was a complete accident. Shake Shack started as a hot dog cart in Madison Square Park in Manhattan. It began when Danny Meyer and the Madison Square Park Conservancy decided to raise funds to help turn the park around. The cart was a success. The stand disposed of the notion that fast food had to be precooked or even prepared quickly in favor of quality ingredients and customer experience. The lines for the hot dogs soon became so long that New York City and the Union Square Hospitality Group, which operated the stand, decided to open a bigger facility at the same location in 2004.

The concept resonated with the local community. Soon there were long lines with more than an hour wait. In 2008, The Union Square Hospitality Group opened another location on New York’s Upper West Side and in 2009 at the New York Met’s new stadium, Citi Field. In 2009, the New York Times called Shake Shack the “anti-chain”. Each restaurant has a unique design that represents the local community. It is the opposite of the typical fast food chain which crams people into a cookie-cutter space to feed them as many unhealthy calories as possible – then get them to leave.

The Union Square Hospitality Group owns Shake Shack. Union Square Hospitality Group was founded by Danny Meyer and runs some of New York City’s most famous restaurants including Union Square Cafe, Gramercy Tavern and the North End Grill. Shake Shack’s management team honed it skills running upscale restaurants.

Shake Shack has taken the time to get the concept, brand and experience right before expanding. They focus on trying to do three things really well:

  • Consistently deliver the highest quality, most delicious food
  • Create a place where people love to come together in the neighborhood
  • Offer great value

Their internal motto is “The bigger we get the smaller we need to act”. It will be interesting to see if Shake Shack can maintain a great customer experience as it expands.

Have you eaten at a Shake Shack?