Why Brands Fail
(And Why Yours Doesn't Have To)
Not every brand is a success. Some, like Kmart and Oldsmobile, simply grow old and tired. Others collapse from moral decay (Enron). And many, many brands never achieve success because they can’t compete in a crowded marketplace. So let’s look at a few examples and see what we can learn from them.
Fallen Angels
For almost 80 years, Arthur Andersen, the former Big Five accounting firm, built its reputation on honesty and impeccable standards. The company’s former motto, “Think straight, talk straight,” defined the firm’s style and convictions. But by the 1990s, the firm had lost its way. Their guiding principles vanished in a flash of irrational exuberance and greed. And mountains of shredded documents couldn’t hide the firm’s entanglement in energy giant Enron’s ethical wrongdoings. In a spectacular fall from grace, a name that had once defined trust and business ideals became synonymous with corruption. Corporations that had once hired Andersen for its sterling reputation couldn’t run away fast enough. In a matter of months, the Andersen brand had all but vanished.
Sweet Success?
In 1985, the Coca-Cola Company made one of the most famous brand blunders in history. Arch-rival Pepsi was gaining market share. Pepsi had positioned itself as the “young” brand and proclaimed itself the best tasting cola. Meanwhile, Coke’s market share had dwindled to an all-time low. Coke needed to take action. In blind taste tests, a sweeter version of the company’s flagship drink actually outperformed Coke and Pepsi. In a spasm of logic, the world’s number one brand rolled out the reformulated New Coke. What the company didn’t understand, of course, was that Coke was not about taste at all. In fact, the brand is built on people’s emotional attachment to something iconic and eternal. In the minds of loyal customers, “New” Coke was no longer Coke at all. Instead, it had become something inauthentic, not “The Real Thing” of their childhood. New Coke was such a colossal failure that in less than three months it was yanked from shelves and replaced with the reassuring familiar taste of Coke Classic.
Stuck in Traffic
In 1999, two companies, Flexcar and Zipcar, launched the U.S. car sharing industry. Today, they are battling for the minds of early adopters. As category innovators, these two companies have the attention of the media and the public. Recently, established rental car companies have begun to elbow their way into the game. It’s unlikely that Enterprise or Hertz will ever be major players in this market, as they are already associated in peoples’ minds with rental cars. To overpower the brand awareness that Flexcar and Zipcar have established in the car sharing category would require huge marketing investments. And to make a strong move into a risky new market could damage a rental car company’s core brand. We doubt rental car companies have the courage or the clout to command the limited resources (city parking spaces) and brand awareness that Flexcar and Zipcar have established as market leaders. We don’t hold out much hope for rental car companies in this limited market.
So why do brands fail? As the examples above show, brands fail for all kinds of reasons. In the end, however, the cause of a brand’s death or stagnation is its failure to sustain an emotional connection with customers. Whether a brand embodies trust, tradition, or innovation, it has to live up to customers’ expectations or it will never inspire a loyal following.
5 Ways to Avoid Brand Failure
- You can’t really control your brand (though you can influence it). Your brand is created not in the boardroom but in the minds of your customers. So listen to what they have to say and build on your strengths. You’ll never succeed if you try to be something else.
- Don’t water down your brand. If you are known for a particular service or product, resist the natural urge to expand your offerings. You are almost always better served by narrowing your focus.
- Take an honest look at your market. Are you just another face in the crowd? You can only build a loyal following if people notice you. Make sure you offer something fresh so that your business will stand out in the crowd. Think of ways you can differentiate your business, whether it’s your products, the way you talk about yourself, or the way you present yourself visually in the marketplace.
- Make your employees living brand ambassadors. If they are enthusiastic about your brand, your clients will be, too.
- The world is filled with marketing chatter. Simplify your message so that people quickly can grasp what you do and how you are different. If your brand is relevant, clearly communicated, and memorable, you are on the right track.
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