VOL. MMXIII..No. 209

In Conversation | Thought Leaders and Iconoclasts

Author Steve McKee on the Myth and Magic of ‘Power Branding’

 We hear about extraordinary brands all the time, brands that seem to have remarkable powers for resiliency and a nimbleness across all spectrums from brick-and-mortar to digital to social, coupled with the uncanny ability to remain relevant and on-target with consumers.


What’s their secret, and what does it take to be a “Power Brand”?


Steve McKee is president of McKee Wallwork and Company, an integrated marketing firm based in Albuquerque, New Mexico, and is also a contributing columnist with BloombergBusinessweek.com and the author of the 2009 book, When Growth Stalls (Jossey-Bass Publishing.)


His latest book, Power Branding: Leveraging the Success of the World’s Best Brands (Palgrave Macmillan, $28.00), exposes the myths and magic of today’s most important brands, and why all too often, corporate executives give in to conventional wisdom. On today’s blog, Steve shares his thoughts on why great brands are transformative, measured, and laser-focused on who they are in the marketplace.




BERTRAND PELLEGRIN: You argue that how we measure a brand’s success is not just about metrics — we need to “measure the steps along the way to a sale rather than the giant leap from awareness to transaction.” What are those overlooked “steps”?


STEVE MCKEE: Awareness is an important metric, but brands often measure that, at least casually. Same with online activities on their website and through SEO and social media. Probably the biggest overlooked metric is brand preference, or “likability”, which is a huge predictor of future sales. It’s overlooked for two reasons–first, when the powers that be don’t appreciate the value of it, and second because it takes intentionality (and budget) to measure it. It’s the type of thing you need to track over time in order for it to have any meaning, which means it needs to be part of a long term brand research program. Few companies have the foresight to make–and keep–this a priority.




 The auto industry is a great example of transformative brands, with companies who have managed to reinvent themselves in the mind of the consumer. Are there some industries — like cars — where it can be relatively easier to rebrand?


Yes, and I think primarily because of mindset. The auto industry is very mature from a branding perspective, for a variety of reasons; it’s more than a century old, it’s highly competitive, the stakes are high and the rewards of winning even higher. That makes branding a priority. Compare that to, say, the banking or healthcare industries, which are less mature from a branding perspective and much more risk-averse; they tend to make rebranding more difficult than it needs to be. Of course, this represents tremendous opportunity for a financial or healthcare company that has the guts to break out of the pack. They could run while the others all keep walking.


2014-cadillac-elr-commercial-poolside-video-76465-7Cadillac is one example of a brand that has transformed itself into a modern luxury brand. Their controversial 2014 commercial aligned the brand with unapologetic American Capitalism.



BERTRAND PELLEGRIN: What’s an example of a great counterintuitive brand strategy?


STEVE MCKEE: Avis kicked things off with, “We’re number two. We try harder.” You could draw a straight line from that through Joe Isuzu making fun of the auto dealer industry to Domino’s Pizza admitting that its pizza and its boxes were made from the same material. Dos Equis also gets props for having the most interesting man in the world admit that he doesn’t always drink beer, and Cadillac for making Led Zeppelin the soundtrack for its brand. One definition of creativity is combining two previously unrelated ideas, and all of the above examples do that to one extent or another. It can be dangerous, but it can reap big rewards, too.


What’s the most common misperception about how human beings perceive brands?


The most common misconception is what I call the Fallacy of Rationality. As consumers we’re led around quite a bit by our emotions, making decisions with our hearts as much as our heads — not to mention our subconscious — yet when we put our business planning hats on we act as if consumer decisions are all rational and they’ll respond how we wish if we simply present the right information. That’s just now how human beings work.


Luxury brands are routinely given as examples of highly effective branding. They also spend extravagant amounts of money to do it. Do you think that qualifies a company like Louis Vuitton or Gucci as “power brands”?


Money alone does not a Power Brand make–far from it. In fact, having a lot of money can obscure the need for branding excellence. That said, luxury brands are usually ahead of the game because they have to think correctly to some extent; if you’re going to charge a premium for a product with acceptable substitutes, there must be an element of branding understanding in there. It’s easier for a discount brand to survive without being a Power Brand than it would be for Vuitton or Gucci or any other luxury brand.



 Louis Vuitton’s canny marketing is the stuff of legend, most importantly in its ability to be simultaneously aloof and aspirational, yet entirely ubiquitous and the very definition of a luxury brand.




BERTRAND PELLEGRIN: Brands boast about their exceptional customer service, but all too often they’re talking about their policies, like free returns, than their people. Do you think there are brands out there that do an exceptional job investing in making their people part of the brand experience?


STEVE MCKEE: Yes, but far fewer than claim to do so. We often counsel our clients not to talk about low price unless they look like Walmart, and not to talk about service unless they look like Nordstrom. By “look like” I’m talking not about brand externalities but brand realities like operations and hiring and training and compensation systems. One of my favorite Power Branding principles is “just because you say it doesn’t make it true” and this applies in spades to companies claiming great service. I suppose that’s why one of the most rapidly expanding aspects of my firm’s service to clients is what we call “internal branding”, which is all about living the brand–and developing a brand identity that realistically can be lived, rather than a pipe dream. Another Power Branding principle: Don’t advertise your aspirations.







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 Great brands know who they are — and are not. In the case of Nordstrom, their legendary customer service is the cornerstone of how they do business. However Pepsi’s “Refresh Project” campaign rang hollow and didn’t resonate with how consumers perceived the brand’s character.

In your section called “How,” you talk a lot about how a brand behaves in the marketplace. Do you think some brands “misbehave” and lose customers through awkward strategy?


Without question some brands misbehave–probably more often through a lack of strategy, but sometimes through awkward strategy. I think of the Pepsi Refresh Project from a couple of years ago, which was a misguided attempt to divert people from thinking about Pepsi in terms of what it is by focusing them instead on what it does–in this case a misguided do-good effort at “refreshing” the world. It got a great deal of attention but flopped, and Pepsi corrected its ways. But not without first losing a nice chunk of market share.

 >> READ THE BOOK | Power Branding: Leveraging the Success of the World’s Best Brands by Steve McKee (Palgrave Macmillan, $28.00). Buy it here


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