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New Book Shows CEOs How to Harness the Power of Brand Q&A with David Kincaid, Level5’s Founder and author of The Brand-Driven CEO: Embedding Brand into Business Strategy
Level5 Strategy
Q&A with
David Kincaid
Level5’s Founder and author of The Brand-Driven CEO: Embedding Brand into Business Strategy
In our age of disruption, customers are increasingly turning to trusted brands for comfort. With COVID-19 fast-forwarding this trend, it’s becoming essential for senior leaders to harness the power of their brand if they want to seize market share and boost their bottom line. So why aren’t more companies leveraging their brands to capture customer loyalty? David Kincaid’s latest book, The Brand-Driven CEO: Embedding Brand into Business Strategy, reveals why most business leaders misunderstand, overlook and under-utilize the value of their brands. Find out what prompted David to write the book and how today’s leaders can benefit from an earlier era that treated brand as an asset worth investing in instead of a marketing cost to be cut.
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The Brand-Driven CEO
You spent 25 years in high profile, corporate brand management positions working with some of the largest brands in North America. What key insights have you gleaned that made you write this book? I had the chance to watch great brand leaders of some of these companies view their brand as the central organizing principle around which their entire business was coordinated. American Express was clear that its brand stood for a level of customer service and capability that people couldn’t receive with other financial payment cards. This is why it was known for its higher level of service and membership privileges. The company went so far as to acknowledge its card holders as members, so even the language the company used set American Express apart as a customer-experience driven brand. It had no spending limits and had a range of unique benefits that members valued whereas Visa and MasterCard were full of rules and constraints. This is typical of other successful companies – they see their brand as something to be experienced rather than just a product to buy. They understand that product features are proof points to a bigger brand proposition, which is why brands that focus on customer experience outperform pure product-driven brands.
“In a nutshell, because corporate values shifted over time and companies became overly focused on short-term gains instead of sustainable profitable growth.”
Labatt is another example. The brewery managed a large portfolio of brands as customer experience vehicles, not just liquids in a bottle. Labatt understood the beer market and what motivated consumers, and because of that it was able to create a portfolio of different beers for a variety of beer lovers. This consumer understanding is what enabled Labatt to become the No.1 brewer in Canada. Working with Labatt, American Express and others opened my eyes to the importance of the brand
as a guiding principle in a company. We’re seeing now with the COVID-19 pandemic that the companies that have sustained themselves are those that continued to reach out to consumers through innovative methods and engage them in ways that are meaningful for them – with a real sense of purpose. They continue to be consumerdriven, not product driven. These organizations didn’t set out to create mere purchasing decisions – they were determined to capture loyalty. This book is anchored around your observations that brands are often among the most underleveraged assets in a company. Why aren’t today’s leaders doing more to harness the power of their brand? In a nutshell, because corporate values shifted over time and companies became overly focused on short-term gains instead of sustainable profitable growth. Many organizational leaders I worked with came of age in the consumer-packaged goods (CPG) era between the 1950s and 1970s when companies such as Colgate and Proctor & Gamble ruled supreme. These managers had it drilled into them that a brand was an asset that needed investment, knowledge and commitment before it brought value to the company. For the most part, companies continued to implement this principle well into the 1990s and early 2000s. But the financial crisis of 2008 caused market leadership to change overnight. Suddenly, a group of leaders were put in charge with largely financial backgrounds because they were hired to return companies to profit. So, instead of brand-driven leaders who harnessed value propositions and the consumer experience, we now had leaders who were focused on squeezing an extra half point out of a profit margin. Said another way, cost cutting. This new breed of leadership viewed brand management and its components – marketing, sales, market research, product development, etc. – as costs rather than assets that need time and investment to generate ROI. Because, what happens when investment in those areas goes down? Companies’ ability to connect with the market goes down as well. All they end up doing is selling the product at the lowest price and it’s hard to compete on price point alone. As soon as bean counters are running
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Level5 Strategy
the place, they tend to cut whatever is considered “cost” on the income statement. This has had a negative effect on many sectors. Supermarkets compete purely on price now, regardless of what they’re promoting – fruits, meats, soft drinks etc. Their advertising is focused on lowest everyday pricing rather than quality. Airlines are another industry example that competes primarily on price. Air carriers used to have a wider range of travel class that came with different food, beverage and service menus, so if you chose to pay more, you also got more. Mercedes recently launched a C class which, when you think about it, is off brand. This illustrates to what degree even higher end products have become price driven. When products are less consumer focused there’s a lot less differentiation. Once products become very comparable, it causes all competitors to bring their price down which drains the margin out of sectors that used to be very profitable. I wrote the book because I saw this trend of purely profit-driven leadership being questioned. Consumers, especially Millennials, are seeking more purpose. They’re looking for socially responsible brands that can engage them in a range of ways – not just sell them something off the shelf or online. As I say to my MBA students, you can’t cut the costs in areas that are your bread and butter. So, while Millennials look for quality merchandise, many of them don’t want it at the expense of the environment or gender equality. They’re seeking a higher order purpose and they want to feel good about their decision to buy a certain brand. If they know that a certain brand is using child labour to produce products en masse at low price points, many are likely to boycott it and talk about it on social media. The market has changed since the golden age of CPG, with Millennials dictating market rules today. They hold a large portion of spending power, yet organizations struggle to come up with a strategy that wins their hearts and minds. How can today’s companies leverage the power of their brand to capture Millennial loyalty? First off, I’d like to burst the bubble of anyone who thinks Millennials can’t be loyal – they’re as loyal as Baby Boomers and Gen Xers. But their loyalty is expressed differently. If they can’t be loyal why are so many of them
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prepared to stand in front of Apple stores at 4 a.m., in the pouring rain, waiting to buy the latest iPhone? From a purely functional perspective, all they’re buying is a phone with a better camera. This speaks to the strong connection between Apple and its consumers. The Apple brand has seeped its way into Millennials’ hearts, minds and wallets because it delivers on a bigger value proposition than its functionalities. Apple speaks to Millennials on an emotional level. The company understood that people are looking for easy-to-use products that work well but also look cool. Moreover, it has been consistent on delivering that promise and it has evolved in parallel with the users’ expectations. The reason Apple’s competitors and many other companies fail to leverage that loyalty is because they stopped conducting research and development. As a result, they don’t understand what’s driving Millennial purchase decisions. When you don’t understand what makes your consumers tick and what’s important to them, then you’ll tend to continue selling your product at the lowest price. The offer becomes completely functional and it comes down to download speeds, data capacity and so on. Many phone brands market themselves this way – all they communicate to shoppers is “Here’s your phone, here’s what you do with it and this is what you pay for it.” And that’s what many Millennials have come to expect. There’s so much comparable variety that they make their purchase decision based purely on the lowest price rather than their love of a particular brand.
“Consumers, especially Millennials, are seeking more purpose. They’re looking for socially responsible brands that can engage them in a range of ways – not just sell them something off the shelf or online. As I say to my MBA students, you can’t cut the costs in areas that are your bread and butter.”
The Brand-Driven CEO
In this game-changing book, David Kincaid shows how senior leadership can turn their brand into a long-term strategic generator of future revenues and profits.
Part 1
Part 2
Part 3
Unlocking a Different Kind of Value
The New 4Ps and Six CEO Success Factors in Action
The Brand-Driven CEO Assessment and New 4Ps Playbook
A branded business system™ creates a cohesive approach to maximizing brand value and delivering that value to the customer. As a business system, the brand and all the activities surrounding its value drivers become fully integrated into an organization’s operations and management values.
Either intuitively or strategically, branddriven CEOs regard the New 4Ps not only as strategic contributors to the brand but also as sources of substantial untapped value.
Are you, your senior leadership team, and your organization ready to begin your brand journey?
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Level5 Strategy
“I wrote this book for the same reason I founded Level5™ – I wanted to help business leaders reestablish their perspective of brands as assets. Many leaders lost their trust in the brand as a concept and I want to help them rebuild that trust.”
Your book goes into detail about what makes companies successful. What are successful companies doing differently in order to reach the hearts and minds of their consumers? They’re leveraging their consumers’ emotional expectations and framing their connection around it. Victoria Secret took a category with zero brand appeal and turned it into a lifestyle brand. When you think about it, all Victoria Secret is selling is women’s underwear. But over time, shopping at Victoria Secret became a lifestyle statement. It revealed something to the consumer about themselves: it was a treat. The company leaders took the time and investment to educate themselves about how their consumers were segmented and they learned that emotions were driving the brand forward. As a result, they were able to create an experience that was highly customized and personalized. It was unlike the general experience in retail where shoppers browse the shelfs until they see something they like. The reason Victoria Secret is in the red now is because the company didn’t evolve its brand. The leaders had it trapped in a traditional “bricks and mortar” retail business model which is expensive to maintain and innovate with.
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They never gave the digital arena the level of priority it deserved. Going digital sooner and bigger would have enabled Victoria Secret to connect with their shoppers on an even more intimate level. The deeper connection would have resulted in an even more customized experience which is what drives loyalty for a highly personalized category. Victoria Secret stopped thinking of itself as a personal brand experience and started to think of itself in terms of retail sales per square foot. The retailer became managed by a financial mindset instead of a branding mindset. What do you consider the biggest takeaway from this book? The biggest takeaway would be the importance of thinking about your brand as a business system™. I wrote this book for the same reason I founded Level5™ – I wanted to help business leaders reestablish their perspective of brands as assets. Many leaders lost their trust in the brand as a concept and I want to help them rebuild that trust. In the early days of Level5 I used to phone leaders of various companies and offered to talk to them about their brand. Usually I’d get the meeting because I was known in the industry and had an established reputation.
The Brand-Driven CEO
But then they’d say something to the tune of, “Well, we’re not sure we need to do much because we just relaunched our website” or “We just changed our logo so we’re good for now.” Inside I was shaking my head because companies were mistaking brand management for marketing. While you have to market a brand, marketing and branding concepts are different. A lot of leaders are still confused about the difference and I hope that my book will make things clearer. What tangible learnings have you shared in this book that your readers can apply in their companies? They can start to inform themselves and their leadership teams to adopt a brand perspective across their organization. Although brand management is a soft skill to some degree, it can and should be very tangible and measurable. Brand management isn’t marketing – it’s not something you should assign to your marketing department. It has to be owned at the CEO level to be successful. Adopting the brand as a business strategy is a conscious decision made by senior management. Once executives of a company reestablish their brand as an asset, the way they structure their organization starts to change. They start to think differently about the kind of competencies and skills they need to bring in. They
look at priorities differently, including planning stages and their supply chain. All these components undergo a transformation. The book took me four years to write and I engaged four MBA students to help me with the research. Unlike my previous books, The Brand-Driven CEO: Embedding Brand into Business Strategy, is much more fact-based. It draws on world class examples that guide my findings. The book provides CEOs a self-guided assessment and game plan so they can assess their organization and move it along their brand-driven journey. Finally, the book introduces a new management construct based on the new 4Ps of brand management for CEOs who are prepared to embrace their brand as an asset and orient their companies around it. Level5 has survived for 20 years because so many business leaders are in need of a fresh approach to running their business. That’s what we bring to our partners, and I wrote this book as an extension of the Level5 philosophy that views brands as an asset; a business system that structures and determines enterprises’ operating models and drives their business strategy for sustainable, profitable growth.
About The Brand-Driven CEO Drawing upon forty plus years of combined experience as an executive with General Foods, American Express, Labatt Breweries, and Corus Entertainment, and the nearly two decades he’s spent building Level5 Strategy into one of Canada’s top growth strategy consultancies, Kincaid delivers practical assessments and game plans for leaders across functional areas, clarifying the confusion between brand and marketing management. Such hard-earned, actionable insights can help you turn your brand into a long-term strategic generator of future revenues and profits. Buy the book from the following retailers:
The Seminary Co-op 7
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