Don't let the Accountant Kill Your Brand! Watch for the 3 Warning Signs.
Brands are living things too. Just like other beings, brands grow, mature and change; but unlike most species they don't necessarily have to die. Unfortunately though, many do. Infact many die prematurely through neglect.
This is the story of Farmer Bob, a Magnificent Mango Farmer who created a brand and Mr. B.A. Nob who for all his financial cost cutting prowess managed to destroy it.
The Tale of Farmer Bob's Magnificent Mangos
Chapter 1: The Making of a Successful Brand.
I'm Bob and I'm a Mango Farmer. I love my Mangos. I know what types of seeds to plant, I know how to put nutrients into the soil to ensure the seeds are well fed, I know how to keep them watered well to produce not only the best fruit, but LOTS of it.
I call my Mangos Farmer Bobs Magnificent Mangos and identify them with a sticker in the shape of a heart. People actually ask for them by name and pay extra because they are consistently bigger and more juicy than any other Mango on the market.
Every year I invest in the best horticulture ....sometimes I even play my Mangos a little classical music. And every year they bear the best fruit and in ever increasing quantities. Sales continue to thrive.
After 5 years building up my successful business I decide I've made enough money to retire to the South of France, so I sell my Mango farm to a large fruit farming cooperative owned by the shareholding public.
Chapter 2: The Making of a Successful Pillage
Not content with making a healthy profit, the push is on from the co-operative for a higher profits. Knowing in the first year that they cant possibly achieve higher profits through by increasing prices, the cooperative opt instead to slash costs. So - they cut labour, buy cheaper fertiliser and reduced their vigilance in pest control. The head accountant Mr.B.A Nob was over-heard to say...
Warning Sign 1: Lets cut costs (size & quality)- no-one will notice the difference
" No-one will notice the difference, I mean we can make large incremental gains by reducing unnecessary production expenses".
And guess what! In Year 1 it worked. B.A.Nob was the hero of the Management Team.
However, over time, as new crops came to maturity without the right nurturing; the Mangos began to suffer. It began with FBMM starting to look a little less Magnificent.
The loyal FBMM buyers who were happy to pay more became disenchanted with the Mangos noticing the difference in size (they were a lot smaller) and quality; but not in price. So they bought something else.
Warning Sign 2: Lets go on special every second week
The co-operative buoyed by the initial increase in profits but alarmed by the drop in sales decided to drive sales by putting the Mangos 'on special' to hit a lower price point than the opposition Mangos. Again, somewhat predictably sales increased but margin didn't.
Regardless, the co-operative took a collective sigh of relief, sales were back on track. And given the success of this ploy it was felt that the best option would be to put the Mangos on special every second week in order to makes sales budgets. Sales indeed went up every second week.
With profits down though panic set in: Labour costs were reduced and with that went the horticulturalists. They further reduced overheads by purchasing bulk fertiliser at an amazingly low cost, all negotiated by B.A.Nob.
He shone his fingernails on his chest proudly - this was his game.
Chapter 3. The Demise : An Ad the Boss loves.
The Mangos kept being produced but they were of inconsistent quality and lost their juiciness. Much of the batch had to be sold for pulping and canning. Once again all eyes were on Mr. B.A. Nob and he decided advertising would fix the problem.
Warning Sign 3: We'll do some cheap ads (anyone can write ads)
He emailed the Marketing Department before realising that there was none. He'd fired them all - he was heard to mutter "oh well, its not that hard is it? I can write an ad... I'm a creative guy."
He wrote an ad that HE LOVED, as did his wife (vital barometer of excellence) , the boss did too and so did the cooperative. The ad told people about the quality and value of FBMM (even though they used 'stunt' mangoes for the filming of the ad- there's werent good enough).
"That'll do the trick" he said "if we tell people we're better for long enough people will eventually believe it."
The previously loyal FBMM buyers were prepared to give them the benefit of the doubt initially and once again looked for the famous insignia. Many even tried the fruit. But - it hadn't changed; it wasnt good quality and so certainly it wasnt good value.
After the ad went live there was turmoil. Sales had seen a sharp increase and then dropped away to previous levels. The consensus was that advertising didnt work. In this case, pulling the advertising was a wise move. And, the once loyal FBMM buyers felt betrayed; it was one thing to lose product quality but quite another to pretend to be something better.
Chapter 4: RIP FBMM
Costs were cut further to the point where the fruit that was grown was no good for market and could only be sold off to pulpers. Margin was low and the brand name disappeared into the cans with the rest of the squashy Mango. FBMM was no more.
The lack of investment in the product; in understanding, in labour, care and truth led to the demise. Sure the Mangos were still produced but the brand didn't exist without the values, it's promise and expectations delivered.
Without understanding, discipline and appropriate investment the prognosis for brands long term is poor. And, as is obvious, price cutting and promotion is a band-aid which inevitably promotes an association with parity.
Any any association with parity is a reason to consider NOT choosing the brand.
May your Mangos thrive.
Tania Farrelly. Independent Brand Strategist & Social Researcher