Regis Mckenna and Branding
While researching for blog topics I came across a list of brand-buildings big dogs. One of them was Regis Mckenna. Regis Mckenna is chairman of The McKenna Group in Mountain View, California. He has spent more than 30 years in Silicon Valley, marketing such innovations as Intel’s launch of the first microprocessor and Apple’s launch of the first PC. I thought I would share an excerpt of his branding philosphy here.
(taken from DarwinMag.com )
” Branding is overrated. On average, U.S. corporations lose half of their customers every five years, half of their employees every four years, and half of their investors every year, according to Frederick Reichheld, author of The Loyalty Effect. That doesn’t sound to me like a lot of loyalty. And I thought that branding was supposed to keep people coming back for more. Meanwhile, we champion entrepreneurs because we want them to establish new brands. In effect, venture capitalists are betting hundreds of millions of dollars every year that people will be disloyal and forgo the brands they’re now using in favor of something new. Traditional marketing and branding strategies haven’t helped most big corporations either. If you look at the top 50 of the Fortune 500 in 1989, you’ll see that 10 years later, 39 had dropped from the Fortune 50. These are the companies that spend the most money advertising and promoting their brands.
So what is a brand supposed to do? Encourage customers to be loyal? Help a company build its position and long-term viability? The $300 billion or $400 billion spent on promotions annually during the past 20 years has not achieved much in terms of lasting corporate performance.
Take the branding of coffee in the United States 10 years ago. Today, we’re all drinking Starbucks—not Folgers, not Maxwell House. Those might still be brands bought in grocery stores, but the brand most people identify with is the one that popped up on a corner in their neighborhood. And that brand didn’t make its presence in our lives through promotion and advertising; it did so by actually building service centers in our communities.
Branding has become a religion in most corporations, and it’s very hard to dislodge it, because people believe that the brand itself is something that changes consumer behavior. We tend to think that branding comes first and the company’s success follows. In fact, when you look at most businesses, the products came first, they built their infrastructures, and their brands evolved along with the success of the products and services over many, many decades. Let’s take Coca-Cola as an example. Every day around the world, 1 billion people buy a Coca-Cola product. Now, take away Coca-Cola’s bottlers. Take away its distributors. Take away its retail centers. Take away its 130 years of experience dealing with the retail environment, and its constant attempt to create new products. And Coke’s ads wouldn’t work. The belief today is that you can create a Coke simply by running ads. And I say, no, you have to build that infrastructure, and that’s not easy. It’s expensive, and it takes a long time to develop so that it becomes a presence in people’s lives.
The Internet has certainly changed the way in which you brand products, but not in the way most marketers think. The Internet is not a broadcast medium like television. It is much more of a service medium in which you allow people to interact and exchange information with you. And it’s going to take another decade before we really learn how to use the Internet effectively. We have had more than 500 years to learn how to use print as an effective medium, and it took a long time for the radio and television to become effective.
Everything that companies are doing on the Web today is practice. People criticize the dotcoms, and so do I. But the fact is that they were social experiments. And social experiments with technology have gone on as long as I’ve been in Silicon Valley—more than 40 years. Intel was once in the watch business; Texas Instruments and National Semiconductor were in watches, toys and games. There’s a lot of technology that we believe has applications, but then the marketplace experiments with it to see how you can deliver those applications or technologies in useful forms. And that isn’t an instant conclusion. It often takes the experience of failure and time to learn and evolve. ”
So the way I read this is that Regis is saying that too much branding can be dismantling for a large business. The same could apply for your personal branding activities. Focusing your branding toward the package rather than the substance is a mistake. Once you finally get people to see you, you should deliver something worth while.
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