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THE SIX RULES OF BRAND REVITALIZATION: ETSY’S BRAND RECOVERY

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Recent news about Etsy indicates that the new leadership under CEO Josh Silverman has implemented a successful brand turnaround. The online crafts seller was in dire straits just a year ago. There was consensus among many that Etsy was doomed, a victim of not only Amazon, but also other direct to customer selling on sites such as Instagram.

However, today, Etsy is thriving. As Financial Times so clearly stated: “The results suggest that the problem was not the threat from a Seattle e-commerce giant but rather its own mismanagement.” Brands do not die a natural death. There is no natural brand lifecycle. Brands can live forever but only if properly managed. Brands under inept leadership falling under the spell of common tendencies for trouble such as losing sight of the core customer, letting bureaucracy and processes take over, playing not to lose instead of playing to win, failing to adapt to changes in the marketing world, or not having a clear direction, inevitably move into the death spiral. Mr. Silverman followed what we call The Six Rules for Brand Revitalization.

Mr. Silverman did the following:

Rule #1 Refocus the organization: Mr. Silverman refocused the organization around a clearly articulated brand direction. He gave employees a vision of a possible dream, a common ambition that all could buy into and implement.

Rules #2 Restore brand relevance: Etsy had evolved to an “eccentric” crafts fair avoiding fundamental marketing approaches, and had favored its craftspeople over the customer. And, although the headquarters still retains its quirky character, there have been substantial brand changes designed to attract new customers. One of the top brand priorities is making and keeping core customers happy.

Rule #3 Reinvent the brand experience: Etsy’s website was cumbersome and off-putting, especially for novices. One of the first changes made was to improve the website to make the site easier to find and easier to use. Marketing the experience is now a priority as Etsy indicates it will increase its marketing budget to communicate the Etsy experience.

Rule #4 Reinforce a results culture: Mr. Silverman focused on stopping the bleeding. He implemented job cuts but also increased commissions, keeping these below that charged by Amazon. The focus is on generating high quality revenue growth. Furthermore, Etsy is solvent enough to begin reinvesting in the brand.

Rule #5 Rebuild trust: Etsy’s craftspeople made a record US$1billion in gross merchandise sales over the last holiday season in 2017. Even though sellers were miffed about the increased commissions, it is clear that the new approach is working, offering them a better platform for their goods. As for customers, an easier, more comfortable, consistent brand experience that delights is fulfilling the promised brand experience. Consistent delivery of the promise to employees, sellers, and customers builds trust. Be consistent.

Rule #6 Realize global alignment: Through Mr. Silverman’s focus, the brand has a common, global direction. Now, that the brand is on solid footing, Etsy is expanding its global presence. Etsy closed a deal with the German crafts site DeWanda, whereby DeWanda shuts down and refers its craftspeople to Etsy.

In speaking with analysts and fund managers, the problem at Etsy was a “classic” management problem. The previous CEO was a technical engineer rather than a brand-business focused leader. And, although there were technical difficulties at Etsy, brands need classic brand management even in our techno-obsessed, digital, online and mobile world. Brands can be murdered by misguided marketing practices. Brands die when they suffer from self-inflicted wounds of mistaken marketing actions.

The turnaround at Etsy has demonstrated that if properly managed, it is possible for brands to thrive in an Amazon-dominated business environment. It is all about winning and keeping customers every day. Brand leadership is a never-ending commitment. And, as Etsy shows us, brand success does not just happen; we must make it happen.

 

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Photo Credit Etsy

THE CAROUSEL OF CREDIBILITY GRAB THE GOLD BAND OF BELIEVABILITY

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What goes around, comes around. From the beginning of advertising, expert testimony was the way to sell a brand. From the remarkable RJ Reynolds cigarette ads that touted that Doctors recommend Camels, to the ADA seal of approval on Crest toothpaste (Look Ma, no cavities!), to Ronald Reagan and GE, to TV star Mariette Hartley selling Polaroid cameras, to today with Marie Osmond and Oprah Winfrey confirming their weight loss results with Nutrisystem and Weight Watchers, respectively.

But, overpowering expert testimony has been the increasing reliance on peer review, peer ratings, and online peer influencers and websites of peers alerting us to situations such as the food safety (alleged) poisonings at Chipotle. Many people do not make a hotel reservation without checking with TripAdvisor, even though faceless, unknowns of potentially sketchy backgrounds are dishing their opinions. They do not make a restaurant choice without checking Yelp. They select a doctor by searching for patient ratings. They select a home-repair person by checking Home Advisor.

Things have changed. The carousel of credibility has turned around with its calliope crooning a new crescendo: experts and academics are now more trusted than peers. The credibility and validity of peer ratings are being questioned.  According to the 2018 Edelman Trust Barometer, just released, 2017 was a good year for faith in experts, and a really bad year for faith in peers. Technical (63%) and academic (61%) experts became the most credible spokespeople relative to “a person like yourself,” which dropped six points to an all-time low of 54%.

In the Edelman press release, the head of the Reputation practice said the following: “In a world where facts are under siege, credentialed sources are proving more important than ever. There are credibility problems for both platforms and sources. People’s trust in them is collapsing, leaving a vacuum and an opportunity for bona fide experts to fill.”

Trust in CEO’s is benefiting. For years, CEO credibility has been on the decline. But as the new study reports, “…this past year saw CEO credibility rise sharply by seven points to 44% after a number of high-profile business leaders voiced their positions on the issues of the day.” In other words, CEOs have moved to standing up for what their brands stand for, a welcome change.

Being the purveyor of credibility has responsibilities. As Edelman points out, “building trust (69%) is now the No. 1 job for CEOs, surpassing producing high-quality products and services (68%).”

Brands must leverage this turn of events. Now is the time to involve expert testimony to enhance brand expertise in the brand’s area of authority. Peer testimony is not going away, but allowing it to totally define and drive the brand is creating a lot of baseless buzz rather than believability.

Brand credibility is a driver of purchase intent. Studies show that the more credible the brand, the higher is the purchase intention toward the brand. Customers show greater purchase intention toward brands that are credible. Research from 2004 indicated that brand credibility could increase the probability of inclusion of a brand in a customer’s consideration set. The years of research on credibility and brand clearly articulate that one of the significant factors in augmenting brand credibility is based on providing expertise.

Credibility means that the brand can be believed to consistently deliver what it promises. The support of “credentialed” individuals is a factor that helps build trust. Credentials means having specific qualifications or checkable achievements as indicators of relevant expertise.

The question for brands has always been “who do you trust?” Brands relied on their heritage, and sometimes the support of experts. But, in the modern social media age, brands relied on the power of peer ratings and comments.

It seems the carousel is spinning around to a new time for trusting the experts over the amateurs. Peer reports and ratings will always be important. But, in a world of information overload, expert testimony will rise in importance. Brands must step out into this brave new world where expertise is the new king. Brands must adopt a new view on how to communicate their expertise as an authoritative source of quality, leadership, and trust.

 

 

 

 

 

 

 

DITCHING THE DARK SIDE, BOOSTING OUR BEST SIDE

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Social media is the premier tool for The Age of I, where people want to be seen as individuals while at the same want to belong to identifiable groups. Social media allows people to communicate their individuality to anyone, anywhere, any time. At the same time it connects people to like-minded others. It embraces individual differences. It fosters communities. Social media opens doors to new ideas. It reinforces familiar ideas. It gives the voiceless a voice.

However, social media has a dark side. Social media can distort the truth while eroding trust, as Facebook is now aware. Marketing has an opportunity to play a role steering social media away from the dark side by promoting our best side.

Facebook has finally recognized that its laissez faire attitude to news postings has created a swamp of suspect stories that torpedo truth and trash trust. As helpful as Facebook can be in our lives, it has a tendency to devolve to the dark side. Facebook believes it needs to address this now, especially since the US will be in election mode for House and Senate seats in 2018.

Facebook is a social media force of galactic proportions. Although Mark Zuckerberg is neither Darth Vader nor obi Wan Kenobi, the good over evil tension of Facebook is a battle worth having. Mr. Zuckerberg believes that by providing a trust metric, Facebook will be able to include trustworthy news sources while blocking less trustworthy sources. We can only wait to see how this turns out. Facebook is asking Facebook users to provide the judgments that create the trust metric rather than allowing the brand to become the arbiter of truth. (There is already serious blowback regarding this metric. For example, The Atlantic and The Shorenstein Center on Media, Politics, and Public Policy have recently expressed concerns.)

Brands no longer have the option of sitting by and waiting for the dust to settle. Brands need to evaluate how they can bolster our best intentions. What can brands do to bolster our better intentions?

Become part of the solution for customers’ important issues

Customers prefer brands reflecting values that match their own.

Behave predictably

Erratic behavior and changing beliefs and practices confuse customers and dilute trust. Consistency breeds comfort.

Provide information

If you do not, customers will find it anyway. Social media is an image-maker or an image-breaker.

Respect the customer

Communications that talk down to, or demean customer’s thinking may be funny and witty, but you may be insulting someone.

Seek out credible third-party testimony

Borrowing credibility works: peers and influencers matter. There is a positive halo effect.

Show you care

Whether globally or locally, find issues that show you care about and then don’t spectate, participate. You are what you do.

Speak up

Do not stay silent. Silence may be golden but only in the library reading room. Be proud out loud.

Be visible and up front

Do not hide from the debates. Don’t obfuscate. Keep it simple. Be clear. Confusion leads to discomfort. Stand up for what you stand for. Customers want to know the simple truth. Someone once wrote, “ A secret is a private truth and that is an acceptable definition of madness.”