Thanks to social media and technology, innovation is happening more often than ever. That's the case for both your company and your competitors, however, so if you don't bring something different to the picture, people will ignore you.
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That's according to David Aaker, marketer and prolific author, who sat down with George B. Thomas on Episode 554 of Marketing Smarts.
"There's all kinds of studies, dozens and dozens of incredible studies on new products and what makes them successful," David says. "It's being different. If they're different, people listen to their information, and they buy them and they try them. If they're not different, they ignore them.... 'My brand is better than your brand' doesn't make it, it doesn't create growth. It just doesn't."
Innovating differently is something David refers to as disruptive innovation: "It's something different and new and worthwhile that defines what you buy to the extent that if an offering or a company does not provide that, they will be less relevant in the marketplace."
Good stories also provide relevance, as do social efforts. But "creating a new subcategory," or being different, will ensure you stand out.
"If you've really done [disruptive innovation] well, what you've done is to reduce or eliminate the relevance of competitors, and you've enhanced the relevance of your offering.... Relevance is visibility and credibility."
Listen to the entire show from the link above, or download the mp3 and listen at your convenience. Of course, you can also subscribe to the Marketing Smarts podcast in iTunes or via RSS and never miss an episode.
George B. Thomas: I'm super excited because we're talking about branding, stories, social efforts, and all sorts of innovation with David Aaker. By the way, did I mention that all of that is towards the B2B lens? Of course, you know how the show goes. We're going to talk about what keeps David up at night, we're going to talk about what success looks like, we're even going to cover some of the hurdles that might come along the way. Of course, we'll land the plane with some words of wisdom from David around the branding, stories, social efforts, and innovation conversation that we're having today.
David Aaker is the vice chairman of Prophet, and Professor Emeritus of marketing strategy at the University of California Berkley Haas School of Business. He is the winner of five career awards for contributions to the practice and science of marketing, including the Paul D. Converse Award, the Vijay Mahajan Award, the Buck Weaver Award, the Sheth Foundation Medal, and being named to the NYAMA Marketing Hall of Fame. He has published over 100 articles and 18 books that have sold well over 1,000,000 copies and have been translated into 18 languages, including Strategic Marketing Management, Building Strong Brands, Brand Leadership, Brand Portfolio Strategy, From Fargo to the World of Brands, Spanning Silos, Branding Relevance, and much more.
Named one of the top five most important marketing business gurus in 2007, Aaker has won awards for the best article in the California Management View and the Journal of Marketing, not once but twice. A recognized authority on brand strategy, he has been an active consultant and speaker throughout the world. He regularly blogs at DavidAaker.com. Of course, you can visit him on LinkedIn.
With that out of the way, let's get into the good stuff. You know what time it is. David Aaker, B2B branding, stories, social, innovation, all the things that you need to be jotting down those precious notes for those action items that you're going to take after this episode.
I'm super excited because today I get to sit down with David Aaker and we're talking about B2B branding, social media, disruptive innovation... we might even talk about story along the way. This is going to be jam-packed with a bunch of information that you as a B2B marketer need in your organization, need to pay attention to, and probably just need to maybe rewind a couple of times as you listen.
David, how are you doing today?
David Aaker: I'm good. Thanks for having me.
George: Absolutely. Thanks for joining us. On the podcast, I like to have fun with some of the questions that I ask, as you'll find out along the way. The first one that I like to ask, and we might bundle this all together in a thing, when we're talking about branding, social media, innovation, story, and organizations, B2B marketers inside those organizations, I want to know what keeps you up at night? It could be a nightmare, it could be a dream, but what keeps you up at night around this topic?
David: I'm usually involved in my latest book, whatever that is. Since you're asking me today, I'm really focusing in on how do you make social effort more effective because the world simply needs it. There's inequality, there's climate change, there's healthcare and wellbeing. The world needs businesses to step up because they have the agility, they have the resources, they have the know-how to do something.
My take is the way to make them more effective is to use them, in addition to having a social impact, to build the brand. To build your brand you give it energy. Some of these brands don't get much energy from their offering. To give them an image lift and to give them a way to gain engagement, which is the highest level of customer connection. At the moment, that's kind of top of mind for me.
George: I love it. It's interesting, you mentioned the word social effort. Can you maybe dive into when you talk about social effort what you mean with that, with companies and people who work in these organizations?
David: Really good question. I've looked at hundreds of companies. What they usually do is they have a social effort that consists of a series of grants. They might give hundreds of grants to all kinds of nonprofits. They have a volunteer program where everybody gets two days off to go volunteer. They fill out an ESG report, which has hundreds of dimensions. All of this is ad hoc, it's fragmented, it's not focused, usually not that effective, and most of all, it's impossible to communicate. Their employees are wanting them to do something, some of their customers are wanting them to, even their investors want them to do something, and they can't communicate what they do.
So, what I say is you need signature programs that are branded, that really do make impact, that have visibility, that are newsworthy, that are creative, that are different. You use them to be the flagbearer for your social purpose.
George: I want to start to break down some of these individual elements that we put in the title of branding, social media, social effort, disruptive innovation. When talking about branding, social media, and disruptive innovation, when we say disruptive innovation, what do you mean?
David: I define disruptive innovation meaning when you establish a whole new category by creating some must-haves that customers insist on. These can be functional must-haves, but they can be emotional, they can be personal, they can be the way you buy, the way you use something, but it's something different and new and worthwhile that define what you buy to the extent that if an offering or a company does not provide that, they will be less relevant in the marketplace. That's what I mean by that. What I observe by reading all kinds of books—like Blue Ocean and Disruptive Innovation by Christensen, and all of those books and articles about it—they never mention branding. It's not even in the index. Honest to God, it's not in the index.
My take is if you have a disruptive innovation, like Prius was a disruptive innovation, they owned a subcategory for 12 years, absolutely owned it. There's a lot of disruptive innovations in the e-commerce space, in eyewear, in razor blades. Dollar Shave Club, for example, is a disruptive innovation.
Branding has to do four things, and they're indispensable. They have to become the exemplar brand, the spokesman for the new subcategory. They have to position the subcategory, which is different than positioning the brand. They have to scale it really fast these days. They have to build barriers. Those are all branding jobs, those are all indispensable for having your disruptive innovation be successful.
George: It's interesting. I love this idea. You're like it's not even in the index, it's not in the book. Dive a little bit deeper into why is disruptive innovation important when thinking about B2B brands and branding for these initiatives.
David: It's because literally, with some rare exceptions, it is the only way to grow. The only way. I think the most robust empirical law that we have in all of marketing, if you go back a whole century of research and observation about marketing, the one empirical law is that we know what causes a new product to succeed. You know what that is? It's being different.
There's all kinds of studies, dozens and dozens of incredible studies on new products and what makes them successful. It's being different. If they're different, people listen to their information, and they buy them and they try them. If they're not different, they ignore them. That really is some support for the idea that if you want to grow, "my brand is better than your brand" doesn't make it, it doesn't create growth. It just doesn't. What does create growth is to create new must-haves to finding new subcategories.
George: You talk about being different. We did a great episode with Sally Hogshead about Different is Better than Better. If you haven't listened to that two-part series of Different is Better Than Better, then you definitely need to check it out.
David, let's go ahead and dig a little bit deeper. We're talking about you have to create this subcategory, you have to create this innovation, you want to be different, because you're different you need to pay attention to branding yourself in that direction, and I'm sure that could be a whole conversation in itself. Let's bring it up today and talk about how does innovation, how does branding then collide with what maybe companies should be doing with B2B social media strategies, tactics, conversations.
David: Do you mean if you have a disruptive innovation or just in general?
George: If you're trying to create that disruptive innovation and get it out to the world, you've branded it, now how do you get that message out to the world?
David: One of the realities today is that we do have social media, so everything has changed. What that means is that it's possible to scale. You have things to work with, you have tools that you didn't have 15 years ago. One of those tools is social media. It turns out that you don't need five or nine months and a brief to an advertising agency and wait for them to buy media and so on. You can be in the marketplace in two days with social media.
Dollar Shave Club is not a B2B company, but when they started with the three-minute video that was hilarious, it was all about ridiculing Gilette and ridiculing the drug stores that sold this stuff, and they got 18,000 subscribers to their razor blade service in 48 hours. That launched the company. They sold for a billion dollars four years later to Unilever. You couldn't do it without social media.
Social media gives you one tool that you didn't have before. It makes the objective or the need to scale your more feasible than it ever did before. That's not to say that it's easy. It's not easy to go viral, it takes a lot of luck and so on. I've done 380 blogs and maybe 20 of them have gone viral, only one or two really viral. There were a lot of really good ones that didn't.
Just to say you have social media and you have the possibility to reach a large audience doesn't mean it's going to happen. Nevertheless, that's a tool that you have to work with. It goes back 60 years to the idea of word-of-mouth communication and how powerful that was. People knew about it way back then, and that's when you had people-to-people.
George: I love this. It's still people-to-people, or I like to say human-to-human. Marketing Listeners, you don't have to go viral. Just go value, that will get you a lot of the way down the road.
I want to circle back in. I love that you called social media a tool, because I think another tool that we can have in our toolbelt is this idea that we hit upon at the very beginning, and that's story. You're trying to have this disruptive innovation. How does story collide with what you're trying to do?
David: In today's environment, there's media clutter, it's all over the place, and you have information overload. People cope by basically ignoring, they stop processing. Not only that, but if you do somehow by brute force get it through, they're skeptical. Everybody says, "Yeah, but," or, "You don't really deliver, you're talking tokenism or something."
Well, what does break through is stories. If you have an interesting story about your company values, your company heritage, your product functionality, and so on, a story does break through. If you have a story that I call a signature story that really tells your strategic story in a way that has some pop, that has some wow, that makes it a you-have-to-hear-this kind of thing, that's the kind of story I'm talking about. Let me just give you a couple of examples.
There was a company in China in the mid-'80s that was going out of business; they made junk. They had a middle manager take over the company and said, "Try to save this." Two weeks later, a customer came in with a defective appliance and he said, "Go to the warehouse, they'll find a new one for you," and 70% of those were defective. He brought them all on the shop floor, got some sledgehammers, and his employees smashed them. He said, "From now on, building quality stuff, no more of this defective crap." That company today is the largest manufacturer of appliances in the whole world. It really started with a quality promise.
Today, that sledgehammer is in a museum. Every employee of Haier knows about the story, most of the retailers do as well, and even some customers. They know that Haier means quality. You can say, our company makes quality products, we design for quality, we test for quality, and it's all bullshit, everybody says that. Haier has the sledgehammer, they have the story, and that is memorable. That says it all. Nobody counterargues. Nobody voices skepticism about the story. Nobody goes to sleep when they tell that story.
All the B2B companies I know, including my own at Prophet, we're a branding transformation consulting company, they have all of these stories to illustrate how great they are. My company has a hundred or more. They go into a client, and they say, "Let me tell you a story about how we did that and how great we are." Those stories almost always are watered down, they don't have any of the tension, the excitement that went into creating that story or that application for a customer, but they sort of check the box of we have a story for this kind of application and we're going to use it in this kind of pitch.
What I'm saying is that just because you have stories, just because you have client stories, maybe you have a lot of them, maybe you have one for every conceivable situation, just be careful that they're not watered down, that they have some tension, they have some emotion, they have some interest level. To do that, you have to have some detail. You have to have customers that are willing to let you tell the story and how shitty things were before you arrived and how you saved the day, and how you had tension along the way, there was some pushback and you had to overcome some hurdles. That has to be in the story.
George: I love that. That's a super powerful part, that last little segment right there. The power of story and what it does to the mindsets of the humans who hear it, who are part of it, or maybe being shared with it in the future.
This question has been banging around in my brain the entire time we've been talking because I know there's a lot of different types of organizations, B2B marketers that work in different types of organizations listening today, so I have to ask the question to see where it goes. Is disruptive innovation for everyone? In other words, who would you be like yes it is or no it's not, and maybe here's why? What are your thoughts?
David: It turns out that disruptive innovation has always been with us, it's always been the only way to grow. But for most organizations, even big companies, the opportunity to have a disruptive innovation was rare, it wouldn't happen very often. Today, in the digital world, it happens more frequently because not only do you have social media, you have e-commerce. You can be in the retail realm in a matter of hours or days.
You don't have to convince some sales force somewhere to handle your product. You don't have to create a sales force. You don't have to find retailers. You can be in the marketplace within days with e-commerce, they can go directly to you and order. Then we have the Internet of Things, which has really changed things. We have artificial intelligence, which has really changed things. So, these are tools that allow us to be in the marketplace effectively very quickly or to come up with a disruptive innovation.
We have The Internet of Things, we have the internet, we have GPS, and we have so many things that we just didn't have a few decades ago. What that combination of things means is that the opportunity to have a disruptive innovation is much more frequent than it used to be. It may be ten times more frequent. What that also means is the opportunity for your competitors is more frequent, too, so you have to worry about staying relevant.
Relevant means that you have the visibility and credibility to be considered. If somebody else is creating a new subcategory, you lose relevance.
George: I love it so much. If we're a company that we're like we actually have an opportunity to disrupt a space, to create a subcategory, we love what David is saying, we need to focus on branding those initiatives, we need to think about the story that we have to tell, we need to figure out a social media strategy to do that, what are the hurdles that are going to get in the way of success? What are the things that the Marketing Smarts listeners should be watching out for along the way?
David: I think that one thing, this particularly is true of startups, but it's true in general, is that if you have a disruptive innovation, you need to access branding talent, branding concepts, and branding tools. What happens is that the number one priority is to have people on your team that have the technology and the skills and the resources to come up with this disruptive idea and to make it happen. That's number one.
For a startup, number two is to get money. But even within a business, the number two thing is to get organizational support for this. You have to have a home in the organization. You have to have funding within the organization. That's the number two job.
Then everybody knows you need marketing, you need to have advertising, you need a name, you need a tagline, and so on, but what you really need is the branding strategy. You need branding talent within the organization or outside of the organization, you have to be able to realize that is an indispensable part of your future success.
I think that's a problem that really isn't recognized, or even if it is recognized, they find it difficult to do that. So, most disruptive innovation programs lack up front branding.
George: One of the things that I like to do on the podcast is two sides of the same coin. I just asked about hurdles, potholes, things that get in the way. When you think about maybe there's a company or a couple of companies that are killing it, what in the world does success look like around this we came up with an idea, we executed it, we're branding, we're storytelling? What does success look like, how do we know we've reached this disruptive innovative idea nirvana, if you will?
David: You look at Apple, you look at Microsoft, you look at Caterpillar, you look at Goldman Sachs, and all of these B2B companies, what you see is really a solid use of branding. We have things like Microsoft Word and PowerPoint and Office, and Apple iPod and iPhone. All of these are brands or sub-brands or endorsed brands that really stand for something. You say, "What is the iPhone about," and people can give you three, four, five pillars that become well known, and it really is the foundation of their success. These are dynamic and they change over time. They've handled the dynamic thing so well in all of these cases.
I think that the key thing that you're looking for is relevance. If you've really done it well, what you've done is to reduce or eliminate the relevance of competitors and you've enhanced the relevance of your offering. Again, relevance is visibility and credibility.
George: I absolutely love it. As we land the plane here and let the Marketing Smarts listeners get back to their regularly scheduled day, you've been on a journey, I've been on a journey, the listeners have been on a journey, and along a journey, we pick up some of what we call wisdom. What are some words of wisdom around the topics, because it has been many that we've been talking about today, or it could be life in general? What are some words of wisdom that you want to leave the Marketing Smarts audience?
David: My take, and it has been for some time, first my take was to try to understand branding and how people should manage brands. It started out with, what is brand equity. It turns out to be relevance, image, and loyalty. Then I talked about how to manage it. That is, really develop what are your brand pillars and how do you communicate them.
Lately, these last four or so books that I've done, what I really focused on is to apply branding to strategic areas that have ignored or underplayed branding. I brought branding to the problem of breaking through the clutter in the form of storytelling, I gave a branding slant to that. I gave a branding slant to disruptive innovation. I gave a branding slant to social programs and being effective there. That has sort of been my take.
George: Marketing Smarts listeners, did you take lots of notes? I have to ask, what is your one thing, your number one execution opportunity after this podcast episode? Make sure you reach out and let us know in my inbox or on Twitter using the hashtag #MPB2B.
I also have to ask are you a free member of the MarketingProfs community yet? If not, head over to Mprofs.com/mptoday. You won't regret the additional B2B marketing education that you'll be adding to your life.
We'd like it if you could leave us a rating or review on your favorite podcast app, but we'd love it if you would share this episode with a coworker or friend. Until we meet in the next episode of the Marketing Smarts Podcast where we talk with Jodi Daniels about how marketers can navigate a world minus cookies and what does that even mean, I hope you do just a couple of things. One, reach out and let us know what conversation you'd like to listen in on next. Two, focus on getting 1% better at your craft each and every day. Finally, remember to be a happy, helpful, humble B2B marketing human. We'll see you in the next episode of the Marketing Smarts Podcast.
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Published on July 13, 2023
David Aaker, vice-chairman of Prophet and professor emeritus of marketing strategy at the University of California Berkeley Haas School of Business. He is the winner of five career awards for contributions to the practice and science of marketing, including the Paul D. Converse Award, the Vijay Mahajan Award, the Buck Weaver Award, the Sheth Foundation Medal, and being named to the NYAMA Marketing Hall of Fame. He has published 100+ articles and 18 books that have sold over a million copies and have been translated into 18 languages, including Strategic Market Management, Building Strong Brands, Brand Leadership (with co-author Erich Joachimsthaler), Brand Portfolio Strategy, Brand Relevance, Aaker on Branding, Creating Signature Stories, and others. He blogs regularly at davidaaker.com.
LinkedIn: David Aaker
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