Brand Failures

226 Brand failures
now believe brand development should be measured less in terms of how
quickly a site can expand its customer base and more in terms of how existing
customers decide to come back. As Rory Sutherland, executive director of
Ogilvy One has put it: ‘The Internet is about brand depth, not breadth. It’s
not worth chasing share of market, it’s share of wallet that really counts. Once
you have your loyal community, there are fabulous opportunities for crossselling,
personalised services and meeting the multiple needs of the same
group.’
Not only does the Internet enable companies and their customers to engage
in conversation with each other, but it also helps customers to talk to other
customers about your company. As the Cluetrain Web site explains, ‘Markets
are conversations. Through the Internet, people are discovering and inventing
new ways to share relevant knowledge with blinding speed. As a direct
result, markets are getting smarter – and getting smarter faster than most
companies.’
Prolific e-brands such as Amazon, eBay, Yahoo! and MSN have learnt that
if visitors communicate with each other, it not only increases their loyalty to
a site (and hence their ‘lifetime value’) but it also enables the brand to develop
in line with the needs of the consumer by providing visitors with a platform
on which they can voice their opinions on the brand. In some cases opinions
aired in community forums have led to a radical rethinking of e-companies’
marketing strategies.
For instance, when Amazon was toying with the idea of variable pricing,
it decided to trial run the policy for one week on its DVD products only.
Amazon then monitored its DVD Talk chat forum to try and gauge consumer
response. When it spotted a handful of negative comments Amazon
immediately announced that it was withdrawing the policy because, in the
words of Amazon’s chief executive Jeff Bezos, ‘it created uncertainty for
customers rather than simplifying their lives.’ Amazon was therefore able to
act quickly, before it became too heavily associated with what was appearing
to be an unpopular move.
However, none of this means that the fundamental purpose of branding
has changed. Daniel Letts, senior consultant at brand strategists Wolff Olins
(who have clients like BT and Unilever), believes it is wrong to assume that
branding online is incompatible with offline branding. ‘The fact that people
treated it so differently in the early days, is one of the reasons why so many
online brands fared so badly. After all, we don’t talk about ‘TV brands’ and
treat Sky very differently because its primary channel is TV do we’