If everybody has your attention, nobody does. That's a problem — but it also paves the way for 2020s new currency: meaning.
Join Paul Campillo, Typeform's Director of Brand, as he explores why becoming a meaningful brand is more critical than ever — not just for your business, but for society.
Paul met with David Aaker. With three decades of work and his 18th book underway, David Aaker is one of the fathers of modern branding. They spoke about strategic branding and the value it brings a company. Here's a taste:
Want to watch the full interview? Head here.
If you're looking for the transcript, keep reading…
Introduction
Paul Campillo (PC): Today, we're in Berkeley, California, and we're talking to David Aaker, hailed as the father of modern branding. David has written 17 books that have been translated into 18 languages, and sold over a million copies. Even at 83, he's an active consultant at Prophet and is currently working on his 18th book.
David Aaker (DA): The thing is to keep your eyes open for an opportunity and then be willing to take some risks.
PC: Today's topic? Have the professor's concepts stood the test of time, from the 1980s to now? Let's find out. Enjoy the conversation.
PC: Oh, you were born in Fargo?
DA: I was born in Fargo.
PC: Fargo's only known for one thing, it's the movie. I lived in South Dakota for a while though.
DA: Did you?
PC: Yeah.
DA: Well, the movie was actually in Brainerd, not far.
Looking beyond the short term
PC: First of all, David, thanks for inviting us into your home. There's a range of topics that we can explore, but the first one is a question for you, and about you, who is David Aaker? How would you answer that to the world?
DA: Well, I have three kids and I have a wife and a family and so on, and, and I play golf, and I bike, and I used to play a lot of tennis, but professionally I've sort of had two careers. One has been a purely academic one, in which I did a lot of research in the context of advertising and market research and business strategy.
DA: And my second career really evolved in, almost 30 years ago now, when I came to the realization that people were too short-term sighted in managing their business and they needed to instead start building assets, instead of just managing the short term P&L (profit & loss statement).
PC: When you say too shortsighted, what were you noticing?
DA: They had strategies that were focusing on cost reduction, for example, strategies that really harmed brands and they were struggling to find growth avenues. And so they were beginning to realize they needed to, to build brands and one in particular was the brand asset. And because heretofore, they hadn't viewed branding as a potential asset, but rather as something tactical.
PC: Very surface level.
DA: Yes. And, and so I decided that I would sort of join this emerging voice to develop brands' assets. And I wrote a book defining what brand equity was. I wrote a book on how you manage brand equity. And since then I've written a lot of other books and given blogs and articles and talks and so forth about the general challenge of managing brands strategically.
PC: When did it first hit you that, Hey, people are missing something here.
DA: Well, it was in the late 80's, and the table was set with the dissatisfaction, with the limitations of cost reduction strategies, and the need to grow. And the inability of things like advertising and sales to help you do that.
PC: How did you know that it was harming the brand? Like, cost reduction strategies? Like, people weren't aware, right? They were, Hey, this is what we should do.
DA: The real final sort of telling sign was when the first ability to monitor sales quantitatively came out and what happened was, they found that what really triggered sales was price reductions. And so everybody started doing price reduction, promotions, and, and what happened was, they taught the consumer two things. One, the most important thing was price. And two, if you wait three months, it'll be on sale.
DA: And so brands were really destroyed. I mean, it took the Kraft brand two or three years to recover from that. It had really destroyed brands. And, and so that's when people started to realize this wasn't working.
PC: But how was the brand destroyed? Because, there's-
DA: Because of these two things. Customers were taught that prices are important. The only thing you'd need to know is the price, and two, that if you waited a while it'd be on sale.
PC: So in a sense, pricing wars are a race to the bottom, you know?
DA: Yes.
Putting brand in the spotlight
PC: And, and, and people are really missing out on the other things that brand brings, the other values that it brings. What would you say those things are? Because, if you talk as you talk, like a brand is an asset, then how is it an asset? How is it valuable to the company?
DA: Well, I talk about brand equity, and brand equity really has three components. And the first one, is just visibility and credibility. So to be relevant, to even be considered, you have to be visible and you have to be credible.
PC: What's visibility?
DA: Well, it, it, there's several levels of it, but at one level, it's sort of the top of mind. If you want to buy a car, what kind, what brand of car comes to mind.
DA: And the second is credibility, because if you want to buy an SUV, you need a brand that is credible in that arena. Second is the brand image, and that can involve anything that's relevant to your perception and judgment about a brand. It can be brand personality, it can be organizational values. It can be self-expressive benefits. It provides a basis for a relationship.
DA: And the third thing is customer loyalty. And I believe that should be a part of the brand equity, because if you are buying a brand, that's really what you're buying and you're buying the loyal customer base. And, more than that if you decide that's part of the brand asset, it really changes the way you manage your brand, your marketing and your business, because it forces you to start looking at customer and customer relationships.
DA: How can I tie the customer to the brand, to the business? And because that's just an enormous advantage, if you can develop a loyal customer base.
PC: Loyalty, does it come from those other two things, visibility, credibility, and then you could say all the, maybe psychological forces that attract somebody?
DA: Yeah, it does. It is influenced by visibility and credibility. It's influenced by the brand image, but it's more than that. It's a relationship that is focused on the user experience, the buying experience. There's a lot of things that go into loyalty that are often reflected in the brand image but you don't get there just by looking at the image.
PC: When you brought this idea, I'd say you brought this idea to the market, you know, brand equity. What was the reception like?
DA: Well, the first book defined brand equity, and more than that, showed why it was valuable. So the second book talked about how do you manage brand equity and the cornerstone was this brand vision model, which I then called brand identity model, which was, how do you determine what you want your brand to stand for. These two, both books, both just sort of exploded.
DA: They just, a lot of people use them as a way to understand brand equity and to understand how to manage brand equity. So it was a really exciting time for me. And since then, I've gotten into disruptive innovation and the role brands play in disruptive innovation in my subcategory book. And the role of stories in breaking through the clutter in communicating your brand message.
Branding the change
PC: Yeah. What did it seem like, I don't know, there was a barrier to increase growth because, you know, that's the whole concept of disruptive innovation, right? Like you constantly have to bring something new, something useful, to the market, but did it seem like companies were kind of stalling out and maybe not being bold enough or not being innovative enough, and?
DA: Well, when I look at the disruptive innovation literature, and there's hundreds of books and, you know, six or 10 of them are seminal books in the strategy literature, and they, they, they almost never mentioned branding it's as if this, this disruptive innovation can be successful without branding.
PC: What's the, what's the role there? What's the role of branding, in disruptive innovation?
DA: I say, it said, it has three roles. One is, one role is to position the whole new subcategory or the whole disruptive innovation. Because you want to make this subcategory, the new subcategory, otherwise, you know, it was all a waste of time, and to make it win, you've got to really position the subcategory. You have to really highlight what are the new, I call must-have characteristics, that represent a newer, improved use experience or buying experience.
DA: The second thing branding can do, is help you scale. And it's really important these days to scale quickly. So branding can help you communicate using social media with things that go viral. They can, you know, excite a core customer base and get them involved and so on.
DA: And the third thing you can do, is build barriers to prevent other competitors from being relevant to this new subcategory. Most strong brands have some kind of a branded differentiator, or branded energizer that creates differentiation energy for them.
DA: And so UNIQLO is, you know, a really powerful Japanese clothing chain, kind of like Gap. So it needs to differentiate itself. It needs to have something to supply energy to it. Otherwise it's just another clothing retailer.
PC: Right.
DA: So a way to tell the story of Uniqlo, is to say, we are a clothing retailer that really gets involved in developing fabrics that will make a difference. If they just talked about, you know, we got fabrics that will really keep you warmer in the winter time, come to Uniqlo and buy it. And another retailer will probably say the same thing. They got fabrics that will keep you warm, too.
PC: Yeah, anyone can make that claim.
DA: But they have something that's different. They have an innovation, and they branded it. They call it HEATTECH.
PC: This really is coming from the core, right? This is really coming from what you call the brand vision?
DA: Yeah, the brand vision is really the cornerstone of what a brand stands for, and the brand really represents the business strategy and the product offering, and so on. And so in the case of Uniqlo, the business strategy is to do innovations of fabrics and make that part of the thing. So the brand strategy is sort of representing that and helping you communicate it.
Telling stories that guide
DA: To create a brand strategy, you need to know the business strategy. And what happens a lot, is you only realize that you don't have a well-defined and well-developed and well-articulated business strategy. When you created, tried to create a brand strategy and you couldn't do it. So a lot of times, the process of generating a brand strategy will precipitate an effort to clarify the business strategy.
PC: I would say from my experience, there's so much confusion around what a strategy is. What's an example of a business strategy? What's an example of a brand strategy that people can really sink their teeth into?
DA: That's a really good question. If I was in a group, I would ask the audience to answer that question. You know, a business strategy, say Lifebuoy Soap, the business strategy is to create soaps that, that really disinfect, and can, can help you prevent disease, and that's their core purpose. And then to distribute this soap in an efficient way that can, can make it available to a lot of people throughout the world.
DA: The brand strategy then has to reflect what that product is, and, and what its purpose is, and how it does it. But then in the case of the Lifebuoy soap, they also have a big social program called 'Help a Child Reach 5', and this social program then becomes part of the Lifebuoy brand.
PC: Help a child reach age five? Oh, wow.
DA: Turns out, several million kids die before the age of five throughout the world, mainly due to waterborne illnesses, many of which could be prevented if they washed their hands more properly and more regularly.
PC: Wow, okay.
DA: So the program is involved, helping them do just that, learning how to wash their hands, and getting in the habit of doing it better. And that becomes an important part of the Lifebuoy brand. It's part of their core, serving a purpose. It's got a lot of energy. They had three videos that communicated what happened in three villages. If you promoted that program, they got 44 million views. This is bar soap.
PC: Right.
DA: You don't get 44 million views talking about bar soap.
PC: Like, are you saying the brand shares the way that it gets activated? It's the way that it's done. It's the way that the product is out there. It's the way marketing is creating a campaign?
DA: Well, it does it, in two ways. One, it provides a guide, internal guide for the organization to know what kind of R&D to do, what kind of production quality to have. And so it's a guide internally, telling us who we are, what kind of company we have, what kind of offerings, so it tells people what to invent, what, how to produce, and so on. But externally, it tells people what this sort of offering in the marketplace is, how they should perceive it. How should they evaluate it?
PC: It seems that there's a huge connection between the culture of a firm and then how it expresses itself to others.
DA: Oh, the brand has a, usually has a, quite an overlap with culture because part of the brand vision should be elements of the culture, probably, because it will, especially with service firms, usually includes organizational values. Both what is our culture and values, and what does our brand stand for? Ask some very basic questions about the company, and the really strong companies have good answers. You have to have your take on quality. You have to have to, your take on innovation.
DA: Another way to create differentiation and tell your brand story so that it would be different from other companies’, is to have stories. Like there's a story of Haier, who in 1986, they promoted some middle manager to be CEO of this appliance company that was failing. And they put this guy in, in charge, and he in the first few weeks learned that 70% of the appliances in the warehouse were defective.
PC: Seventy, 70%?
DA: 70%. He brought them all on to the shop floor, and he got a sledgehammer, and had people destroy them all. And he said, from now on, we're a high quality company and we're not going to put out anything that's not high quality.
PC: Okay.
DA: That sledgehammer's in a museum in their headquarters today, and everybody knows that story. Haier, today, is the largest selling appliance manufacturer in the world.
PC: If you're advising someone to come up with a signature story, what, what qualities are you trying to focus, get them to focus on.
DA: The problem today is that there's too much clutter out there. There's too many media vehicles, and there's information overload. And the coping strategy of most people is simply to ignore it, or, if it does penetrate through their barriers, they counter argue. They're skeptical. So how do you break through that? And what breaks through all that clutter and information overload? Stories. People will tend to stories.
PC: And stories, in, you mean like, a more journalistic capacity?
DA: Yeah. I mean, once upon a time, this person did that or some event unfolded. So the challenge though, is to get stories that have a wow factor, that are so entertaining, so interesting, so useful, that you really need to share it. It also has to have, or imply, a strategic message. So it's not just out there, but it's got a job to do.
DA: For the Lifebuoy case, it was to get people to, you know, to believe that this social program was really having an impact. And it was, it was addressing an extremely important problem, and it was its purpose, and it was doing it in such a way to make a difference. It's its mission.
Tracking transformation
PC: Can we talk about, more broadly, your career span, I mean, if you're talking from the 80's to now, you've seen a lot of changes. You've seen some things that have stuck around, and some things that have kind of fallen away. What have you seen kind of fall to the wayside?
DA: What's really changed is the acceleration of innovation, disruptive innovation, especially, and this concept of subcategories is now something that just comes at lightning speed. And when it comes, the ability to scale, and to create initial growth is so pronounced.
PC: Like we've seen with Airbnb or Uber, or-
DA: Airbnb, I mean, or Dollar Shave Club and Casper mattresses. And they just exploded, and became billion dollar businesses in just a few years.
PC: Right.
DA: And behind that acceleration is social media, helping you communicate. You don't need a $20 million ad agency, and your campaign, you don't need two years to develop it. And then there's E-commerce.
PC: Yeah.
DA: Dollar Shave Club was up, out there, in the marketplace within months.
PC: We're really, when you talk about all these things, we're really talking about connectivity, no?
DA: You're talking about the digital transformation, really, and that really has changed. Competition has changed branding, it's changed the pace of disruptive innovation. That's a big change.
PC: How would you advise people to start thinking about this in a very practical way?
DA: That's a really good question. One place to start is the customer experience. You look at the customer experience and you see how digital transformation has influenced that, and how it could be improved through using digital transformation more intelligently.
DA: I'm connected with a company called Prophet, that's a consulting business, and one of our largest clients, I was talking to today, and said that one of the reasons that she got a connection with Prophet is because she thinks we share the right values. And that comes from all our social programs that we're involved in and our mission to have better diversity and so on. And that was one of the things that made it comfortable for her to work with us.
PC: What's, give us an example of some of Prophet's values and social programs.
DA: Well, we've always had a profit for nonprofit day, where we devote one day of everybody's business life. It's the same day, we do consulting for nonprofits. And we have, we just hired a Chief Diversity Officer, and we have a diversity program. And then we have an environmental program, and we've hired an organization to help us do that better.
PC: What do you mean, like make Prophet's buildings more sustainable?
DA: Yes. And there's all kinds of travel elements that affect sustainability. My general point is that employees and customers, you know, at least some of them, have an affinity for people that share their values.
PC: One thing I don't think we touched on enough, is the role of the customer or the role of your market in shaping the brand. What are your thoughts on that?
Boy, that's a really good question. I haven't thought about it, to tell you the truth. I mean, I guess the idea is that the customer's creating the brand, that it's sort of a bottom up kind of thing.
DA: Or they're being included more in the creation of-
DA: It's a good question, but again, if I had an audience here, I would throw that into the audience, and let them respond.
PC: Well, we've seen it, we've seen it, we've definitely seen a power shift, because of the technological shift. We've seen a power shift go from a brand dominating the narrative, to people controlling the narrative.
DA: Well, yeah, I had a friend at Stanford that wrote a book about that, who claimed that there is no, brands aren't important anymore, because customers can look things up on Google and so on and they don't need brands. And, my observation is, that you can argue that brands are even more important-
PC: How so?
DA: Because the fact that they create visibility and credibility means that they sort of dictate what brands get pursued, and what brands get considered. And maybe in some categories, people can do research, and not rely on their impressions of the brand, but still just having visibility and credibility means that they'll be in that consideration set.
DA: And also, if you look at the loyalty, and the ways people have an affinity for a brand. Shared values, for example, brand personality, for example, just the comfort level they have with some brands that dictates their relationship. That's not something that is overcome by the ability to seek objective information.
PC: And then that relationship could even go to another level, if they're involved in say the creation of a product, or involved in the creation of features, or involved, directly involved in the storytelling. Right?
DA: That's a really good point. Yeah, you're right. One of the most important characteristics of a brand is the involvement of the employees or the customers or the investors, or whoever, to the extent they're more involved, then they're going to have a better relationship.
Defining your brand
PC: Final question. Jeff Bezos says that a brand is what people say about you when you're not in the room. What do you want people to say about you, when you're not in the room?
DA: Well, my goal, for now three decades, has been to have some role in helping people view brands as an asset, and therefore change the way they do marketing and the way they really conduct business in general. That's been my hope, and my dream, and so if people think that I've done some movement in that direction, that would be good.
PC: Well, hopefully we can move a few more with this interview. Thanks, professor.
DA: Thank you for having me, Paul.
Conclusion
PC: So that was Professor David Aaker, a man who has devoted his life to ensuring that you understand that your brand is an asset, so treat it like one.
PC: One big takeaway for me: the brand principles, espoused in his first work, are just as relevant today. So remember, focus on best principles, not so much on best practices, and you should be good.
PC: Thanks for watching this episode of Meaningful, and don't forget, let's make every interaction count.