An Interview with Tim Halloran

halloran-final
Tim Halloran, President of Brand Illumination, and author of Romancing the Brand

You can’t spend 10 years running brands like Powerade, Dasani, and Cherry Coke, and another 10 guiding companies like Home Depot, Kraft Foods and the NBA without learning something smart about branding. Well, okay, maybe you can, but Tim Halloran, President of Brand Illumination and author of Romancing the Brand didn’t. A veteran of the cola wars, and an adjunct faculty member of Emory University’s Goizueta Business School and Mercer University’s Stetson School of Business, Tim, who you can reach here, recently discussed with us some of the finer points of his book (which we reviewed here).

the measure of a relationship

Agency Review:
Romancing the Brand
is, as the subtitle states, intimately connected to relationships. And we have argued elsewhere that the true measure of any relationship – be it between spouses, family members, friends or businesses – is the ability to say “no” and have it mean something. But it would seem that one of the things you’re leaning towards in your book is the ability of a brand to say “no” to its customers, and of customers to say no back. Do you think that this measure holds up in this context?

Halloran:
I do. Brands that operate within a strategic framework know that some customers are more valuable than others. Some are more likely to “fall in love” with a brand than others. Some are willing to pay more. Some are going to be more likely to “cheat” and move to a competitive brand.

Agency Review:
Can you give us an example?

Halloran:
Look no further than Delta Airlines who really is pursuing the business traveler and doing all they can to “fire” the leisurely discount traveler by making it less appealing for that traveler to fly the airline. Those customers just aren’t a priority for Delta – it’s a much better investment for them to focus their efforts on the more lucrative business traveler. You’ve got to identify who your “most valuable consumers” are and develop a plan to win them over.

Agency Review:
It’s interesting that you took this immediately to a company saying “no” to a relationship – not simply no within a relationship. Which raises an interesting question: is the nature of relationships within marketing an “all or nothing” case? That is, do you think you can say no to customers outright, but you can’t say no to an aspect of their behaviour (in an attempt to modify it)?

Halloran:
It’s not necessarily all or nothing at all. I think we see firms trying to modify consumer behavior all the time by incentivizing certain behaviors. For example, Dunkin Donuts really wants you to use their Dunkin Donuts app. They offer additional rewards if you do and you sometimes get better deals. IKEA really disincentivizes consumers from using their delivery service. Sure, its there and available, but its not something they really want you to use. They have established a ritual and routine with their consumer – you buy it here in a flat box, put it in your car, and you put it together. And if you do that, you’re going to get some pretty cool looking furniture at a pretty good price.

relationships part 2

Agency Review:
We’d like to take this discussion of relationships a step further – because it occurs to us that when you shift the conversation with the target from the purely transactional to one about a relationship, then you alter – and considerably expand – how the two sides can engage with each other.

Halloran:
It comes down to how your best consumers can engage and promote the brand. So it’s not just about a transaction, but of course those are essential. It goes much beyond that. Your brand’s best consumers will be influencers to others. They will drive word of mouth about the brand to others. They will engage and act as leaders in online (and offline) brand communities. They will engage in brand co-creation activities via social media, blogs, etc.

Agency Review:
This would seem to be a spectacularly potent idea for marketing in the age of social media – but one that doesn’t necessarily obviously and instantly redound to the bottom line, which is how most brand managers are measured.

Halloran:
While these are not traditionally measured, they should be. How many of your influencers have engaged in your brand related content via social? How many of your influencers have shared something (either physically or digitally) with someone else? How many have made a comment or responded to a brand related post?

Agency Review:
Are you finding the fact that there’s no obviously direct-dollar-ROI measurement is making this insight a difficult sell to marketers?

Halloran:
I encourage and work with my clients to develop non-traditional brand tracking systems that go above and beyond your standard brand health measures.

Agency Review:
That’s terrific – can you give some examples of tracking systems that you think are particular good? Because we’ve found that’s usually the first hurdle for clients – how is this moving product off the shelves?

Halloran:
I think you have to find those measures that correlate strongly to the traditional purchase measures (i.e. future purchase intent or P1M purchase or whatever the case may be). Some of those measures may be attitudes and/or opinions (i.e. “Is a brand for me”) while others may be behavioral (interacted with the brand on social media x times). Some will be very category specific.

the value of sports

Agency Review:
We were intrigued by your discussion of the Atlanta Falcons because we believe that the marketing of sports teams often helps people understand branding in ways that they couldn’t grasp before. For example, marketers love to build their marketing around “features” and become anxious when you tell them that features separated from consumer benefit & need are meaningless. And yet it’s clear to anyone that merely making a feature like “winning” the centerpiece of your brand is foolish, because when things go wrong (and things always go wrong at some point), you have no brand – no relationship – to fall back on. In the book it looks like the Falcons came to this realization fairly quickly, but most marketers don’t. So why did the Falcons?

Halloran:
For the Falcons, it was really forced on them as a result of the Michael Vick crisis. They had built their entire brand around one player – and when that player came crashing down, so did the brand. So, they had to really start over from ground zero. They still aren’t all the way back, but they are making progress. I think with their new stadium opening next year (Mercedes Benz Stadium) that it will help even more because they will now control everything (the Georgia Dome is not owned or operated by the Atlanta Falcons).

Agency Review:
In other words, they’re not putting their eggs all in one basket.

Halloran:
Right. And thus taking advantage of all the assets a diversified approach affords them. They’ve already started by saying that the stadium will offer non-inflated food prices. For example, a hot dog will be just $2! When was the last time you saw that?

Agency Review:
Probably not since I was at Wrigley in 1969, honestly…

Halloran:
In general, sports teams are getting better at marketing. Go to any game right now – baseball, football, etc. They are really trying to emphasize the in-game experience for the fans. You could argue that an NBA basketball game is bordering on being more of a show than a sporting event. If a fan comes to a game and has a good experience, win or lose, than you’ve been successful. We talk about the Dallas Cowboys still being “America’s Team” in the book. They’ve won one playoff game since 2009 and haven’t been to a Super Bowl is over 20 years. Yet, every year, Forbes ranks the Cowboys as the top valued sports franchise in the US (2016 value $4 Billion). That is the mark of a truly great brand. Winning is not essential.

Agency Review:
We get all that, but our question wasn’t so much about winning, as it was about why the Falcons came to the realization fairly quickly when everything went, if you’ll excuse the expression, south. The annals of marketing are filled with companies who, when faced with similar disasters, failed to change their ways and continued instead down the path to destruction, doing what they’d always done because they didn’t know how to do anything else. Why didn’t the Falcons?

Halloran:
It was partially out of necessity. They didn’t really have a “go to” star player anymore. You know the quote, “Necessity is the mother of innovation.” In my experience, sometimes it takes a complete failure to wake marketers up and give them that “slap in the face.” The best marketers are the ones that recognize when things are starting to go south before they actually do. The best ones can read the cues and see the trends before they actually come to fruition into their marketplace. That’s why being on top of consumer sentiment and opinions is so critical to marketing managers. You can’t just lock yourself in the four walls of your building and work on your own business. You’ve got to stay in touch with what’s happening in the greater world.

the awful truth

Agency Review:
Your example of the Atlanta Falcons is also interesting for another reason that we’d like to dig a little deeper into. Namely that sometimes the problem is deeper than you think.

Halloran:
How do you mean?

Agency Review:
For example, the Falcons could have “solved” the Vick/Petrino debacle by simply signing a “replacement big name player and coach”. But kudos to them that they dug deeper and said “The reason we needed Vick and Petrino in the first place was because we, the Atlanta Falcons, didn’t mean anything to our customers and we were trying to use the brands of Vick and Petrino to hide that fact.” Why do you think that level of honesty is so rare in marketing – be it inside sport or out?

Halloran:
I think it is getting better. I think it has to.

Agency Review:
But if you think it’s “getting better” then that must mean think that it must be bad, yes? So to go back to the question, why? Why is it so bad? We have theories, but we’d like to hear yours.

Halloran:
I think traditionally, marketers saw consumers as fish to haul in or shoot down. It’s why I don’t really like the term “target” market. The word “target” makes it seem like a game – you’re trying to hit the bullseye and shoot them down. I think that either unconsciously or even consciously in some cases, marketers felt like it was a game and you do what you can to win those consumers over. The marketer wanted to be in control of “the game” and bend the rules so that he/she could “win.” Even if it meant hiding some of the less glamorous elements of your product or service.

Agency Review:
Okay, and now the flip side of that – if things are changing, what’s driving the change, if anything?

Halloran:
We are in an age, partially driven by technology, where firms have to be transparent. Clearly, that is a good thing. Millennials, who are the utopian consumer right now for marketers due to their size and influence (Gen Xers like me have been kicked to the curb!), are demanding honesty and transparency. And as I discuss in the book, if you are talking about being in a successful relationship, be it with a spouse, friend, or in a brand’s case, with a consumer, honesty and transparency are essential for the health of the relationship.

Agency Review:
But we both know that the there may not be any two words in business that a CEO wants to hear less than “honesty” and “transparency” – in spite of all the books telling them that that’s what consumers want. Those words signal exactly the kind of loss of control that terrifies them. And yet, we completely agree with you that this is what they need to do and why. So how do you convince them – especially when, as we discussed before, the results are neither immediate nor obvious?

Halloran:
Look, marketing has changed. Those that don’t change are going to go the way of the T Rex. It’s no longer about marketers screaming at consumers. You have to engage them in a conversation. That conversation may go to places where you don’t want it to go, but its got to happen. I argue that consumers will respect your brand even more if you expose yourself, warts and all, to them.

anti-relationship systems

Agency Review:
While we agree with you about how important building real relationships between brands and customers is, we’re also quite aware that they don’t happen overnight. And yet most companies seem to be structured in a way that makes long-term goals, plans and relationships almost impossible. Brand managers are rotated across brands, CMOs bounce from company to company, marketing campaigns change annually. So how do you overcome this structural problem with companies when you preach relationships?

Halloran:
Yes, that is a huge struggle. You have two competing factions – shareholders and/or management demanding bottom line results and brand people trying to grow consumer relationships. The upshot of this is that to “make the numbers” they have to sometimes do some pretty stupid things.

Agency Review:
No kidding. Tell us about it…

Halloran:
I can’t tell you how many times I’ve seen brand equity destroying coupon initiatives that are implemented at the end of a quarter so that a goal can be achieved. It’s the classic example of cutting off your nose to spite your face. In the coupon case, you are training your consumers to expect less value from your brand.

Agency Review:
That reminds us of one of the things we tell our students – whether they’re undergrads, MBA candidates or brand managers out running brands: You define the parameters of the conversation. Everything you do tells the consumer what’s permissible and acceptable. And if you make the conversation purely about price, then it becomes extremely difficult to make it about anything else. Would you agree?

Halloran:
It’s the heroin of marketing. Once you go down the path of ongoing price cuts, you then need to cycle that volume, and how do you cycle that volume? You need a bigger price cut, and then a bigger one, and a bigger one. Each subsequent price cut gets you less and less of a “hit” and you inevitably take the brand down the path of destruction.

Agency Review:
Couponing = Heroin – excellent. We may steal that…

Halloran:
I preach to my clients to look at the bigger picture and think longer term. How do you create value outside of the economic arena, so that price becomes less and less of an issue. If the value is there, whether it be functional, emotional, or social, the consumers will absolutely pay a higher price. But it still remains a big issue.

Agency Review:
Right, because it feels like it’s a structural issue. Which is why we believe we’ve seen the rise of companies that are aggressively not calling themselves “marketing” or “advertising” agencies, in an attempt to do an “end around” this log jam. Do you think this is a real solution or just a temporary fix?

Halloran:
I go back to a fundamental principle that I preach. Names are just that, names. It’s the product or service behind that name that ultimately provides the value to that name. I don’t care what you call the agency or how you “brand” the category in which it competes – it is either going to deliver or not.

life and death

Agency Review:
Towards the end of the book you talk about what should happen when a brand is discontinued, and we found that quite fascinating. Because on the one hand, it carries through your thoughts about the real risk of real innovation being real failure – and that if you aren’t willing to accept the latter, you’ll never achieve the former. But also because it speaks to the idea that brands are not supposed to be built forever, that they have lifetimes, that just as they are born so also can they die. We think this is quite revolutionary, and probably doesn’t sit well with the marketing executives you talk to. Does it?

Halloran:
No one wants to admit that they’ve failed. And no one wants to admit that after all this investment that it’s just not paying off. I got to realize that firsthand when I was at Coke. I was put over a number of our youth/flavor brands, one of which was a Mountain Dew competitor called Surge. Coke had put a lot of resources into Surge, and I mean A LOT – including an advertisement on the Super Bowl. But the brand was three years in and it was failing. I had to make the decision that resources could be spent better elsewhere and had to recommend to management that we needed to stop throwing good money after bad. There were some people that weren’t very happy with that recommendation! But we knew that every dollar we spent on Surge was a dollar we couldn’t spend on enhancing the relationship between another brand and its consumer base. That’s what marketers forget too often – that there is an opportunity cost to trying to rescue a sinking ship.

Agency Review:
But what’s interesting about your observation about brands living and dying is that it rather lifts it out of the realm of “failure” doesn’t it? It reframes the whole conversation back to the relationship with the consumer.

Halloran:
How so?

Agency Review:
If you believe, as we do, that a product only exists to solve a customer’s need, and if the “brand” is simply the promise that the product will meet that need, then it makes sense that the life of the product is predicated upon the life of the need. And if the need goes away – or is suddenly met in some other more efficient way – then the product goes away. All of which has nothing to do with “failure”, it’s just the life-cycle, as it were, of a product and a brand. We think your perception is spot on, but is also a fairly revolutionary way to look at brands. But it’s also one that most companies will have trouble embracing for a myriad of reasons. Or are we missing something?

Halloran:
Yes, it will be tough because you have perception of value that is historically associated with it. Look, I’m a big sports fan, particularly baseball fan. Growing up my favorite player was George Brett, the Kansas City Royals Hall of Fame third basemen. Throughout the late 1970s and early 1980s, the guy was a superstar. He always hit .300 (and in fact one year flirted with .400, something that hadn’t been done since Ted Williams in 1941 and still hasn’t been done). You could count on Brett hitting .300 and being a huge clutch hitter every single year. You could set your watch by it. Until he stopped doing it. Everything must end at some stage. In the life of brands, it ends when the brand doesn’t deliver the needs that it is supposed to deliver, someone else does a better job of delivering those needs, or the needs change. All things must end. It’s life.

Agency Review:
Yes, but most companies don’t think like that. And suffer the consequences.

Halloran:
Strong companies are able to anticipate those needs and put products/services/brands in the pipeline to stay on top. But others don’t. When the Kansas City Royals won the World Series last year, it had been 30 years since they had won (when Brett was a superstar) because it took them a while to anticipate change. Good teams and good companies anticipate change and have the pieces in place to stay at a high level of performance, even if the players on the field change.

You can read our review of Tim’s book here, or order it from Amazon here  or from Barnes and Noble here – or pick it up at your local bookseller (find one here).

Illustration of Tim Halloran by the brilliant Mike Caplanis