“What a product and brand portfolio is and why you need to define it…What is the relationship between brand portfolio and brand architecture?…How to develop your brand portfolio…Managing your brand portfolio (I)…Managing your brand portfolio (II)…The customer experience journey…What is the purchase funnel?…The touchpoint concept…Identifying your touchpoints…Prioritizing the key touchpoints…Defining the touchpoints roles…Implementing the brand at the key touchpoints…”
4.0 What a product and brand portfolio is and why you need to define it.
4.1 What is the relationship between brand portfolio and brand architecture?
4.2 How to develop your brand portfolio.
4.3 Managing your brand portfolio (I)
4.4 Managing your brand portfolio (II)
5.0 The customer experience journey.
5.1 What is the purchase funnel?
5.2 The touchpoint concept.
5.3 Identifying your touchpoints.
5.4 Prioritizing the key touchpoints.
5.5 Defining the touchpoints roles.
5.6 Implementing the brand at the key touchpoints.
4.0 What a product and brand portfolio is and why you need to define it.
In the last module, we discussed about how to develop a user brand architecture.
You might be asking yourself, why do companies have so many brands? Especially since, in the eyes of consumers.
You are not even facing competition from your own distribution channels through their own brands.
From a brand perspective, how do you deal with the situation, do you continue launching brands, do you use existing brands, do you re-position your brands? That is why brand portfolio strategy was born.
The objective of the grand portfolio is to maximize its value by strategically growing, leveraging, and protecting brands to ensure optimal coverage across a market with minimal overlap.
Determine the right level of investment for each brand.
We wrap the module with a lesson from my experience on which are the key symptoms that you might be suffering from a brand portfolio issue.
4.1 What is the relationship between brand portfolio and brand architecture?
In the last lecture, we discussed what is a product and brand portfolio and why do you need to find yours.
If you recall from our last module, brand architecture answers to the question of how should I best structure and communicate my portfolio brands.
How should these brand be called? Or how should it have a relationship with our master or corporate brand? When you have already decided that you are going to launch a new product, you look at your brand architecture guidelines in order to name it.
On the other hand, brand portfolio answers to the question of how to use my brands to achieve top or bottom line growth.
Is this the right brand to generate the expected 15% growth in revenues? Or is this the right category to generate the expected 5% growth in margins? Let’s look at an example in the other category.
Below their sub brands, they have product names, like the Mercedes A250 or the A250 Sport 4Matic etc, etc.
Mercedes-Benz brand architecture is about the categorization of their vehicles and the linkages between them and their master brand.
After they answer whether there is an opportunity worthwhile of pursuing, then and only then will Daimler apply their brand architecture rules to name it.
In other words, in our little example, portfolio answers the question of whether it is worthwhile for Daimler to pursue the development of a product and a brand for this specific target segment in this price range.
GAP is the brand of dress that people who want to always wear a casual style.
For a little exercise, let’s provide the price of the GAP brand product in the mid-price range.
As you can see, these brands have different target customers.
If tomorrow the GAP Incorporated decides to create a timeless classic brand for the active seniors who like to go out and explore the world, that would be a strategic opportunity and required an analysis.
From a brand architecture perspective, given the House of Brands model of the GAP Incorporated, they we need to either create a brand from scratch or buy an existing one that has an equity with that specific target segment.
Now that you know the relationship between portfolio and architecture, we can discuss in detail how to manage your brand portfolio.
4.2 How to develop your brand portfolio.
In the last lecture we learned the relationship between brand architecture and portfolio.
Please remember, portfolio strategy is about the effective creation, deployment, and management of brand assets in support of the top and the bottom line growth.
Our objective is to maximize the portfolio valley by growing, leveraging, and protecting brands to ensure optimal coverage across market map with minimal brand overlap.
Rationalizing your portfolio with too many brands to achieve economies of scale or achieving synergies follow amine activity.
So how do you develop that brand portfolio strategy? Five steps.
Which is the gap between the current business performance and your five year growth goals? Where does the business make money? What role should the brand portfolio play in closing that gap.
The second great tool is mapping your brand portfolio.
Map all the brands in the portfolio to the axis that makes the most sense.
The key questions that you want to address here is, what is the market structure in terms of number, sizes and the characteristic of different customer segments? How do customers view the brand portfolio? Which segments represent the greatest opportunity for the brand? What is the required to win them over and how are they accessed? What turns on dynamics are impacting channel, distribution, pricing et cetera.
Step three is to develop deep customer insights that can uncover new opportunities where we can leverage the brand to drive value to growth or greater efficiency.
How does the customer view their business? What are met customer needs can the brands fill? We should be able to identify the overlap between market opportunities, our branch relevance and organizational capabilities.
Oracle is to develop the ultimate brand portfolio strategy and to quantify the impact, the resource requirement, the cost and the return of investment of the different scenarios.
Consider different strategies for pursuing opportunities, including extending brands into new areas.
Step five is to finalize a road map to migrate from current state to the desired future state brand portfolio.
How can the organization best executes the recommended brand portfolio strategy? What are the quick to build momentum for that strategy.
There is a tendency for companies to forget about portfolio and begin to launch new brands.
Why? Because brands are emotional and many persons will want to have a legacy built on a brand they launch.
4.3 Managing your brand portfolio (I)
You could be asking yourselves, how do we grow revenues without impacting brand equity, like the negative effects of coupling? When we talk about leverage it refers to how to use the existing brand platforms for growth.
If you move into a new category, think of which brand should be used to expand into the new category.
So when launching a new brand, you need to ask yourself, does this initiative generate sufficient revenues and return to support on-going products? If I use an existing brand, could it inhibit or take away attributes to that product’s brand promise? Can the new product diminish or confuse the positioning message of the existing brand? For example, Nestle the maker of chocolates and other great foods, also owns a pet food called Purina.
So you ask yourself, is there a strong reason to launch a new brand? Do we need to own a specific benefit in the category? For example, if were PNG, we use Head And Shoulders to own the dandruff category and Patent for the vitality category.
Is there a cash cow role for one of the brands? Are there any that could be eliminated or reduced to the scripted status? Can we merge some of these? The last challenge is not exploiting the existing brands to their fullest potential in order to generate new opportunities.
Can your brand become a platform for expansion? Think of Dove that came from being a soap brand with $200 million in sales into a whole beauty category of brand with more than 4 billion in sales.
Is a new market attractive in size and growth? Are there favorable trends that support this? How fierce is competition in that market? How long have they been there? What is the presence and the customer loyalty levers of those competitors? Are there political uncertainties that add risk? Can the company develop an existing business model? Or are there cultural barriers that prevent it? Can the organization’s product really add value to that market? Now that you know how to manage a brand portfolio, I will share with you my list of symptoms that indicate that you might have a portfolio issue.
4.4 Managing your brand portfolio (II)
If your revenue growth is slowing or your competitors are growing faster in your key categories, you might have a portfolio issue.
The second symptom is if you are losing market share to all competitors or new entrants.
These would mean that your brand or brands are not relevant anymore to our target customers.
The fourth symptom is if you have no clear brand driven growth platforms to fuel future growths, but rather you have to launch new brands every time you want to launch a new product.
The fifth potential issue is when you have overlapping brands in a portfolio offering with similar products and services targeted to the same customer.
The sixth potential symptom, is when there is an inefficient allocation of brand building resources to support your brands in your portfolio, you might have too many.
Now that we have brand architecture and portfolio, we need to start working on how to translate our brand into a compelling customer experience.
5.0 The customer experience journey.
The focus of this module is to learn how you can translate your brand into a compelling customer experience.
Why do you need a well thought out customer experience? One that is not generic.
Let’s talk about to some customers to see their point of view.
Notice how they don’t talk about a good customer experience but their specifics of their branded customer experience.
A branded customer experience is a valuable asset, like Howard Schultz, chairman of Starbucks, used to say, a brand is something unique bought by a customer but a branded experience is a deep long term relationship that triggers emotions beyond the purchase.
What is our goal in developing in a customer experience is to capture and retain loyal customers who are passionate about your brand.
Why? Well, research by for example, company suggest their returning customer spend on average, 67% more than first time customers.
Let’s see what our customers have to say about it.
Another research by the center for retail management on North West University founded up to 15% of a business small loyal customers, account for 70% of the company’s total sales.
On the flip site, research conducted by the US small and business administration found that 68% of customers leave a brand because they are unhappy with a service they received.
Only 14% left because they were unhappy with the product, so what is the cost of lost customers? Well first, negative word of mouth.
Research by the White House official office of consumer first found out that a satisfied customer will tell between 9 and 15 people about their experience.
Lost customers means that you have to capture new ones.
The cost of bringing a new customer to the same level of profitability as a lost one is up to 16 times more expensive, according to a research by Lynn Grady.
How do you capture and retain loyal customers? We have to create a branded customer experience.
I hope to have opened your eyes at the importance of creating a branded customer experience.
The module is structured, so you can first learn the different concepts related to customer experience.
After you have mastered them, we will develop together a branded customer experience for your brand.
We wrap the module by learning how to actually implement the brand values into your customer experience.
5.1 What is the purchase funnel?
In the last lecture we introduced a concept of the customer experience journey and we discussed how important it is to achieve success for your business.
The focus of this lecture is to discuss a tool that will help you design a compelling customer experience.
Let’s begin by having you think of the last relevant purchase you made.
Thus the first step of the purchase funnel is having your target customers be aware of your brand.
This is the stage we call consideration, the second one in the purchase funnel.
I decided to purchase my trip to South Africa.
If we analyze what happens in this funnel, the 33% rate of conversions from consideration to purchase is low relative to the conversion rates at other stages and represents what we call a bottleneck.
This analysis highlights and begins to diagnose where your marketing activities are having impact in which phase of the funnel and where there is an opportunity to improve.
Understanding customer conversion should be part of a larger effort to turning inside into action.
We could identify the customer revenue value of addressing each prioritized bottleneck.
Since based on the average purchase of your target customer, you can estimate the additional revenue you could capture if you improve just 1% in any phase of the funnel.
See, you should calculate the funnel for each of these, and compare the conversion rate at each step of the purchase funnel.
First, that purchase funnels vary by industry since the process that customers use for buying in different categories is different.
Secondly, McKinsey, the management consultant firm, did research some years back that proved that the funnel in certain markets and in certain categories doesn’t have a funnel shape anymore.
Why? Because there is so much information nowadays that consumers can be aware of certain brands and even consider them.
As soon as they begin to research on the Internet or in stores, they might discard some brands in their considerations, say.
Even after your purchase, when you share your experience through a review site, the social networks, this have an influence on future buyers.
In summary, one of the most relevant uses of the purchase funnel is to identify where should the brand invest in customer experience.
Higher conversion rates result from focusing on the bottlenecks, through a branded customer experience that addresses customer needs at each step of the funnel.
Now that you know what is a purchase funnel and how to use the information to improve the bottlenecks, let’s talk about the touch point concept.
5.2 The touchpoint concept.
What are touch points? Brand touch points are all the different ways that a brand interacts with, and makes an impression on, the different stakeholders, such as consumers, reviewers, analysts, etc.
Let’s first work on the touch point concept by looking at Starbucks.
Since a touch point is the point at which a customer touches or interacts with a brand, it could be the actual coffee, or the retail staff, called baristas.
Let me clarify that a touch point is not a quality, an attribute, or a behavior, such as Starbucks fair trade or the friendliness of the staff, or even their environmental policy.
In order to design a customer experience, we need to have a map of the potential touch points.
So how does a brand generate a customer experience at any given touch point? Its touch point experience needs to be designed and managed with the brand strategy in mind.
In a touch point, there could be one or more processes that customers get confronted with.
The next touch point is when the service vehicle pulls up.
The technician himself is another touch point, and so on.
We can see that on top of the actual process, other factors are important in generating the touch point experience.
Which brings us to the most important aspect of defining touch points, people.
Eventually, consistent brand building requires established metrics to monitor and manage touch points.
Let’s talk about the different touch point categories.
Let’s begin with the pre-purchase touch points, which are those that drive a potential customer to place your brand in their consideration set, prior to making the actual purchase.
I hope you’re already realizing the connection between our purchase funnel stages and our touch point map.
Secondly, we talk about the purchase experience, which comprises of all of those touch points that are involved with the customer actually making the purchase.
We can include the touch points that are required or needed for the customers to use the actual product or service.
Third, we have the post-purchase experience, which are all of those touch points.
Lastly, we have other influencing touch points, which are those that indirectly help to make an impression on the brand on its customers and various stakeholders.
Now, if we think of our lemonade business, which ones do you think are the touch points? Now that you have an understanding of the touch point concept, let’s identify the touch points for your brand.
5.3 Identifying your touchpoints.
If you remember in the last lecture we learned a touch point concept.
In this lecture you will learn how to identify your brand’s touch points.
To identify the touch points you have to see the process through the eyes of a target customer segment.
We meet a friend who is drinking a lemonade and shares how wonderful it is.
Our friend mentions that the lemonade stand is just around the corner.
On our way, we look at some posters on the street that point to the lemonade offering.
As we approach, we get a push message on our phone offering lemonade nearby.
I get close to the stand and the person preparing lemonade offers us a trial cup.
It is amazing, a flavor completely different from any lemonade I’ve ever tasted before.
The people preparing to lemonade are impeccably uniformed and seem awfully clean, at least to be preparing lemonade all day.
We receive our lemonade cups and he says that there is a full refund, if we don’t like the lemonade.
The card offered fresh lemonade delivery to our home or office everyday of the year.
Have you been able to identify the touch points? Let’s begin with the pre-purchase touch points, which in this case are word of mouth from my friend, the posters on the street, and the push message on our phones.
The purchase touch points include the location, the decor of the stand, the music, the product comprised of the actual lemonade and the cup, the ingredients and the personnel with their uniform.
The post-purchase touch points are the card that he gave us and the loyalty promotion.
The client was a young hotel chain with less than ten hotels throughout Spain.
When asked what was their issue, they described that they compete with other hotels that are in the adequate category and needed some differentiation.
The research yielded issues with specific touch points that prevented clients from returning to the hotel.
They don’t expect to spend a lot of time in the room, so he looks for hotels that have a convenient location, good rates, and dependable service.
Peter asked a colleague from work who had recently visited Valencia, and he recommended our client’s hotel.
Petey immediately went online, looked at the hotel’s website pictures, and once he get approval from Anne, he decided to go ahead and book it.
Let’s fast forward to the actual arrival at the hotel.
During his wait he decided to write a review of the hotel on the Internet.
Think of the experience that Peter had. Can you identify which are the touch points? Notice how in the absence of other research, we can also probably hypothesize where are the bottlenecks to move this target customer from one face of the purchase funnel to the next one.
Can you guess? Now that you know how to identify and map touch points, we can begin to work on prioritizing those that are key to the customer experience.
5.4 Prioritizing the key touchpoints.
If you remember, in the last lecture, we learned about how to identify touch points.
From the last lecture, we mapped out the touch points for our target customers.
Why? Because understanding customer conversion can focus the organization on those high impact target customer touch points.
Our first task is to identify overlaps between our touch point map and our purchase funnel.
So how do we do this? We compile our spending against each touch point.
Once we have completed this task, it is time to redesign or design, if you’re launching a new brand, the touch points.
First, by overlapping touch points with a purchase funnel, we defined which are the relevant touch point activities that need to be designed or re-designed.
Then we actually re-thought the touch points based on our brand values.
So we had to interview some guests to determine the ten most impact touch points for both the business and the leisure traveler targets.
So you might be asking yourself, how do you actually prioritize a high impact touch points.
I like to think of high impact touch points as those that have the ability to influence in a compelling way, the behavior of a target customer.
When evaluating which are those high impact touch points, think of the frequency of a touch point, how many times your customers will experience it, the influence of the touch point in the actual purchase decision.
In which touch points can your customers be truly more influenced? Think of the last time you purchased something.
Which was the critical touch point? I have a short cut to help you prioritize those high impact touch points.
If our touch point is complex, or even if it’s simple, to implement, but not relevant for our target customer, we should not invest in it.
If the touch point is complex or costly but very important to our client purchase design, we should develop a better understanding of what needs to be redesigned or changed, and evaluate the business case before investing.
Where we should definitely focus are those touch points, there are simple in implementation and very important to our customer.
In order to be able to prioritize, we had decided to cross out the first list of touch points.
Once the list was developed and the cost analysis was complete, we prioritize each type of touch point, user, or tool.
At the end, we had a prioritized list of touch points, which the team felt comfortable and enthusiastic to change.
First, we inventory our touch points by placing ourselves in the target customer’s shoes.
Second, we establish a short list of touch points by evaluating touch point impact on the customer experience.
Finally we prioritize touch points based on our tool.
If we think of a lemonade business, which ones do you think should be our prioritize touch points.
5.5 Defining the touchpoints roles.
To make things easy for you, in our hotel example, I had provided you a cost estimate of the redesigned touch point.
In your brand you first need to decide what is the role that you want each touch point to play in your holistic customer experience.
If we start at the top of the pyramid, we have what’s called branded differentiation.
In most industries, you can only have just so many branded differentiation.
In your hotel example, they were those that would definitely differentiate the experience from other adequate level hotel.
These are the ones where there are many visual and experiential cues that communicate your brand.
In our hotel example, they’re the unique and pleasantly surprising elements of the guest experience that can be delivered consistently across all of the properties.
In our hotel example, those elements that all hotels in the adequate category have.
We decided on two key branded differentiation to deliver the revamp brand strategy.
Visual and experiential cues that support the hotel’s brand and consistently reinforce the unique and pleasantly surprising nature of the hotel experience.
The brand differentiation, the signature icons, and the category redefine’s.
5.6 Implementing the brand at the key touchpoints.
If you remember in the last lecture, we learned to decide what are the different roles that our Touch Point could have in our customer experience.
Remember, before we even begin we need to clearly articulate what we want our customers to experience at each impact touch point.
The first thing that we experience is that there is an automated reply.
Which elements do we have to consider for the customer experience? The waiting time.
Which element do we need to consider in the customer experience? The answer text.
The way she calls you, the tone of voice, the level of friendliness of the greeting, what information to collect, and how she needs to ask the questions.
We need to consider the person’s experience, the level of decision making that she or he has, the efficiency of handling the call, the level of specialization required in their vocabulary.
Think about all of these details and KPI’s and we need to define for the branded customer experience.
Going through this level of details and being thorough is what it takes to be successful in generating compelling customer experiences.
We had to find, as branded differentiation, the bed and the shower.
A two-year plan, the timeline and actions for each functional area to launch and implement the new brand prototype.
So how would you implement our brand at our lemonade business? I hope you have enjoyed this module on developing compelling customer experience.
I know you might be overwhelmed and thinking, will I need to do all of these on my own? Stay tuned for an answer to this question and more in the next module.
