SOZO | Pivotal Day 2009

Four years ago today Kimberly Leclercq and I officially formed SOZO | Pivotal and it's been a fun, exciting and challenging 1,461 days.

It's amazing what can happen during a span of 48 short months, but we're excited about the next 48...that's for sure.

We'd like to thank all of our clients, friends, associates, partners and employees for all of their support. Prior to forming SOZO | Pivotal, Kimberly and I had both run our own companies—her's SOZO and mine Pivotal—which we had started back at the turn of the century. So actually, we're both celebrating 10 years as business owners.

You're probably thinking four years isn't all that much of a milestone, but screw it, we're excited! We feel this four-year mark is even more notable not because so many businesses and partnerships fail to make it this far, but because we know we're just getting into a groove! The next four years are really going to be something special...stay tuned!

Pornography

So I'm meeting with a client yesterday and this is how it went...

After showing the website design concepts and site architecture our client, who loved both concepts, favored the second version. Both directions were different in their approach, but similar in that either one would have been effective in communicating the client's message.

This is when I heard the best testimonial ever...

"Dave, it's like pornography," said the client. I wasn't quite sure how to react, but I knew it was a compliment so I laughed.

He continued, "You know it when you see it. I knew what I wanted to see, but I wasn't sure how you were going to pull it together and this is exactly what I wanted to see.

We have great clients here at SOZO | Pivotal!!

Are you dropping your prices?

I certainly don't claim to know much about wedding gowns, but I do know that Vera Wang has established herself as the preeminent fashion designer in this category.

The fact that I'm not Dennis Rodman and I've never been in the market for a wedding dress are important to note considering her name and brand should hardly come close to crossing my radar. Wang has done a masterful job over the years in promoting her brand and positioning her name as the wedding gown designer to the stars as well as an author of a wedding book, Vera Wang on Weddings. She also has a line of jewelry, fragrances, home collections and has made a number of appearances on television; all in a strategized effort to strengthen and promote her brand.

All in all it would appear that she has done everything right...until now. I read in today's Detroit Free Press that Wang has drastically slashed the prices of her gowns by a 30-50% as she introduced her Spring 2010 lineup. Of course, we're in a recession and people just aren't buying and spending like they did in the heyday. That affects everyone, even the Vera Wangs on the luxury goods tier.

But just like cutting marketing in a down economy, slashing prices is just as detrimental when trying to preserve a brand that identifies exclusively with the elite. It's hard to imagine that this price cut will do anything but hurt the brand long-term if only to move a few units during rougher period.

This drastic reduction only makes you wonder: is the Vera Wang brand just a status item or truly a luxury brand. True luxury brands carry clear value and can hardly be reduced under any circumstances. Status items, on the other hand, come and go and they ultimately go by way of red marker mark downs in a pile of wrinkled mess in the back of the store. Luxury is a fickle market to be in. One misstep and you're going from niche market to no market.

If you're selling a product or service today for less than you did five years ago, let me ask you a tough question: were you gouging the consumer during good times? Was your product really worth that price considering to you it carries the same value today as it did five years ago, what's the difference?

Luxury brands with staying power don't mess with pricing. They may tweak other things, but they don't touch the tag. It raises all sorts of questions you don't want your customers asking about your brand. Are they using cheaper materials? Is Vera Wang outsourcing the design to a cheaper apprentice? Why was the gown I bought in 2003 for $9000 now listed for $5500?

I don't mean to pile on Wang, but doesn't she feel she has a "must-have" product? Everything she's done up until now would lead you to believe that, but what happens when things turn around and now she's catering to the masses—trying to grab marketshare in a tough economy? Will her high-end clientele come back or will they flock to a fresh designer waiting in the background and ready to pounce that segment? Could she even consider moving her prices back up?

One of the biggest brand killers is messing with your pricing structure and I don't feel that's exclusive to luxury items. It happens a lot in fashion and it occurs quite often in beer. Believe it or not, Busch Beer used to be considered a premium beer in the late 70s. Sales go stale, drop the price and soon college kids and buying up the 30 packs for $12.99.

So have you considered dropping your prices in order to compete in a new world? Think carefully. There are many things that we should be doing in order to address the fact that our phones aren't ringing as much or the foot traffic in our stores has dwindled. But slashing prices isn't something I would ever consider doing if I wanted to maintain the integrity and value of my service or product.

If you must take a look at pricing, ask yourself: Is it the best decision in the short and long term and how do you plan on answering the questions from your most important critics—your customers?

Microsoft does it again

A few years ago Microsoft unveiled the Zune to compete with Apple's iPod. Its attempt to steal market share failed miserably. Now it's trying to do the same thing in the search engine game with Bing.

Bing? What do you think? This is Microsoft's attempt for a Google killer? Will we be binging for our information? Will you Bing Dave Bing? You get the sense that Microsoft tries way too hard to be cool—that's the kiss of death in business. You're either cool or you're not...there is no try.

GMAC becomes Ally Bank

Go to allybank.com and one of the first things you'll see on the homepage is a question:

"What is your bank trying to sneak by you?"

Ironic. You may have noticed the new Ally Bank TV spots over the weekend. If you haven't, you will. The new Ally Bank is the old GMAC.

The reason to bring on a new name appears to be two-fold: 1) sweep away the negativity associated with the collapsed auto and housing markets and 2) offer new consumer banking products and drive deposits to offset losses in those loan departments.

So this name change and brand shift is an effort to get people to forget about the GMAC name and its troubles. The Ally Bank mission? Straightforward and honest. What doesn't line up here? Apparently they've been talking about this switch since June. I'm curious to know what those internal conversations sounded like? Who was involved? How did they get everyone on-board? Surely it wasn't just sent out via an email announcement Friday afternoon. Or was it?

This has definitely been a very tumultuous last couple of years in the banking industry. A disastrous financial crisis, numerous mergers, confusing names changes, changes in fees and products and lackluster customer service to name a few. People really don't have anything good to say about banks. Does it really all end with a name change and a promise?

I don't think this approach by GMAC, LLC is necessarily wrong, but I would like to see a little more clarification from Ally that it was formerly known as GMAC—after all that would be the straightforward way of doing things. Sure they do come out in say on the site that Ally is built on the foundation of GMAC Financial Services, I just think it needs to be a bit clearer. I also hope it's not misleading in the sense that they'll never be able to deliver on what they're trying to promise. A new name alone does not bring a tighter promise.

Stadium naming rights done right

The millions of dollars that are spent on putting a corporate name and logo on a stadium—especially in a world of mergers and bankruptcies—has always been lost on me. Consider Pacific Bell Park, SBC Park and AT&T Park, the nine-year-old home of the San Francisco Giants has had more visits from sign companies than BALCO reps.

Clearly I understand why teams sell the rights, but what doesn't make sense is the obscene amount of money invested to hear your name when they say "you are looking live at...."

I just never quite understood how Comerica or DTE Energy ever justify having their name on a ballpark and ampitheater. But word out of Miami is that Dolphin Stadium could be re-named LandShark Stadium and this makes perfect sense. Consider the connection and the intentions of the Miami Dolphins. According to this article, they want to create an "entertaining, tropical South Florida feel." What better way to do that than to align with Jimmy Buffett and his beer?

Essentially I could see this becoming a 65,000 seat Margaritaville. You have to believe that's some sort of a draw—at least in concessions. To me the Dolphins look like geniuses here. While the article estimates the team won't get the $10 to $15 million that they would like, you can't really lose with this association. If the South Florida branding is what they're after, it appears to be a win-win because aligning your beer with the NFL has never been a bad idea.

Finally a naming right pairing that seems to make sense.

Lions rebranding starts today

Last week the Detroit Lions pulled the curtain on a new logo and uniforms. If you don't pay too much attention to this stuff you'd hardly recognize the changes if not for the team making it a bigger deal than it is.

During the press conference—which drew a ton of fans chanting "don't draft Stafford" or some variation of that—the Lions called these changes their new brand.

Ouch. Really? You can change your brand at the drop of a curtain? Why didn't I think of that? Heck, why didn't they think of that when they were 0-4 last year.

Rebranding actually started when Bill Ford, Jr. came out and said Matt Millen should be fired. It continued when he actually was let go a few weeks later. The effort continues and really becomes public with the NFL Draft. The players they draft today and tomorrow won't produce overnight results. Don't get excited about their college stats—YES, last year's Lions team would easily defeat an NCAA National Champion.

Last month when the new logo leaked on NFL.com, I wrote here that I thought the minor revisions were perfect. Those remarks got people excited. People said things like "this team needs to change everything from the top down," or "look at New England and Tampa Bay, they changed their uniforms and won Super Bowls."

Rebranding is a transformation process that has to start from within the organization. It has to be a mandate from the top. The right people have to be in the right places. I find it hard to believe, but perhaps this new logo and sense of identity has made the organization stronger internally. I won't completely dismiss it. Maybe that's indeed what happened when the Tampa Bay Buccaneers got rid of the creamsicle uniforms and opted for a better color scheme. Did it lead them to the Super Bowl? Perhaps in some small way. But you couldn't put last year's Lions team in Pittsburgh Steeler uniforms and think their record would be anything other than 0-16. We've seen clients get excited when we launch a new brand identity. It's helped to reinvigorate their brand, but it's not the only answer.

On a side note, from a pure business standpoint the only thing I don't understand about the new logo is that with such a minor tweaking can they really expect a significant spike in merchandise sales? Maybe that loss of revenue will be a wash since they don't have to rent a bunch of jackhammers.