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Branding matters more

on the Internet
Received (in revised form): 17th January, 2001

HELENA RUBINSTEIN
co-founded the lab after almost 20 years of experience of working on strategic, planning and marketing issues.
She has worked as an inner city business adviser, a health facilities management consultant, and a strategic
planning director in a communications agency prior to specialising in brand strategy, organisation and
communications. In recent months she has researched the developing e-commerce marketplace and has been
focusing on bringing commercial and marketing disciplines to bear on the new online world.

CAROL GRIFFITHS
has 18 years of client-side experience in developing and implementing service brand strategies with blue-chip
companies. As head of brand strategy at NatWest she led the brand work stream within a complete overhaul of
the group’s direction, developing the new brand strategy, internal staff mobilisation and advertising and
promotional programmes.
In 1999 she moved to management consulting, initially within NatWest, where she developed the customer
proposition and media launch programme for NatWest’s Internet bank. She now specialises in bringing the
disciplines of conventional marketing to bear on dot.com developments — identifying and delivering cohesive
external and internal strategies, activities and staff behaviours to achieve consistent, branded customer service.
She regularly lectures on brands and organisational development across Europe.

Abstract
The bubble appears to have burst in high-tech stocks — or at the very least has deflated. Investors
seem to be returning to the safe long-term bets of the old-economy companies. This correction in
the market is an ideal opportunity to review what has been happening to those companies that
have been establishing themselves on the Net.
This paper takes a look at what lessons the new economy can learn from the old, and also how
the Internet is fundamentally changing how companies manage their brands. The basic premise is
that on the Internet the brand itself must be at the heart of the business strategy. The emphasis
shifts from brand to ‘branded experience’, and becomes an issue for the whole company. The key
principles of how to develop your brand remain the same, but the need for speed means that how
you manage it will change forever.
This paper draws on the authors’ extensive experience of building brands online and offline, and
of aligning/integrating internal values and behaviours with external manifestation of the brand.

‘There’ll be two types of business in the year many attributes in common. One of
2000: those online . . . and those out of the chief contributions to their staying
business’. power is that they have developed and
Bill Gates sustained strong brands.
For many years, branding has been
recognised as one of the fundamental
Helena Rubinstein
Managing Director, The Lab,
SETTING THE SCENE: WHY BRANDING tenets of a successful business be-
Waterside House, 47 Kentish MATTERS TO BUSINESSES cause good branding confers many
Town Road, London NW1 8NX
Those companies that have dominated advantages on a company. This sounds
E-mail:
helena_rubinstein@thelabuk.com the FTSE or the Fortune 500 have like the sort of textbook reading from

394 䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001
BRANDING MATTERS MORE ON THE INTERNET

51% 75% 63% 64% 64% 76% 70% 61% 66% 71% 59% 110% 151%
150

BRAND VALUE AS A
PERCENTAGE OF TOTAL
100 MARKET CAPITALISATION
(US$Million)

50

US$,000M
Source: InterBrand

Figure 1 Brand value as a percentage of total market capitalisation

the marketing section of any MBA able to command a higher price and
course, but time and time again strong hence ensure future sales and profits.
brands translate into real equity and In the end, strong brands trans-
sustained profitability. How do they do late directly into superior shareholder
this? returns.
This can be clearly demonstrated
by Figure 1, which shows the value
Benefits of branding attributed to a brand as a propor-
Any even half-savvy consumer will tion of the market capitalisation. Com-
tell you that brands have meanings for panies such as Coke and Ford, which
them over and above the basic are among the most highly valued in
characteristics of the product or the world, have more than half of
service being offered. Coke is not just their value accounted for by the brand.
a brown fizzy liquid but ‘the most Some companies, such as Hertz and
friendly and ubiquitous drink in the Adidas, have a greater proportion of
world’; Fedex is not just a parcel their value attributable to the brand
delivery service but ‘an utterly reli- than to their tangible assets.
able business partner’. These complex But brands also confer other ad-
promises are developed over time and vantages. They can be an inspiration
often after considerable effort and for employees and act as a rallying
expense have been spent on ensuring point; they provide a focus for consis-
that the brand promise can be tency of communications and action;
delivered and then communicated. they help to differentiate from com-
The ultimate aim for companies is to petitors; they can act as a touchstone
create something distinctive that is for the development of new products

䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001 395
RUBINSTEIN AND GRIFFITHS

Q XL

F T .c o m

F ir e d u p .c o m

L e tsb u y it.c o m

T r a in lin e .c o m

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000


£ spend first quarter of 2000

Figure 2 Quarterly advertising expenditure by UK dot.coms, January–March 2000

and services; and they enable com- There are two critical reasons why
panies to appeal appropriately to mul- this is true:
tiple target audiences.
— brands help people to make choices
— branding is transparent on the In-
BRANDING MATTERS MORE ON THE ternet.
INTERNET

— There are 7,598,697 websites on Brands help people to make choices


the Internet. A new dot.com is As well as performing several impor-
launched every half hour. tant roles for businesses, brands are
— The number of Internet connec- also important for customers. One of
tions is expected to increase by a their fundamental roles is in simplifying
factor of four over the next five choice. People are faced with ever-
years. increasing choices about what to buy
— 81% of people will not buy online in virtually all areas of their lives (there
because fly-by-night retailers worry are few real monopolies left). How,
them. then, can they make a decision about
what is right for them? One obvious
If the discussion above demonstrates aspect of the decision making is to go
what brands can do for business in for a name they trust; to select a
general, then they become even more company of which they have heard;
critical in the virtual world. If strong one which has a reputation for quality,
brands are important to companies service and reliability. In the end, to be
operating in a world of bricks and on the shopping list the buyer has to
mortar, they are even more impor- have heard of you and believe in
tant in the open market of the you.
Internet. The Internet magnifies this problem

396 䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001
BRANDING MATTERS MORE ON THE INTERNET

Marketing
ᎏtargeting
ᎏposition
ᎏpartnerships
E-mail management Customer recruitment
ᎏerror resolution and retention
ᎏclaim management
ᎏcall centre integration

ort
e/s er
upp
m

inte
ser usto
Registration

Site on
ᎏproduct info

ract
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C
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i
ᎏpersonalisation
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O ilme
fu

n
rd n
tio
lf

sac ms
er t
a n r
Collateral delivery Tr atfo
pl Financial data
ᎏdocument processing
ᎏpick/pack/ship ᎏsecurity
ᎏprivacy
ᎏintegration
ᎏbill presentation

Figure 3 Online experiences: A radical shift in consumer interaction dynamics

tenfold. There are literally thousands of fulfilment and delivery is visible to the
vendors selling their wares. What are consumer (Figure 3), and says some-
buyers going to do? They are going to thing about the way you deliver on
tap in the name they have heard of and your (even implicit) brand promise.
believe in. This obviously gives the This begins with the way you
established players (often high-street market to and target potential cus-
names) an advantage. It explains why tomers (what you communicate). Once
so much effort and money goes into people have accessed your site they
securing memorable domain names and need to be able to navigate their way
why the new breed of dot.com com- around it easily and quickly and be able
panies is spending so much on conven- to register without it taking up too
tional advertising (Figure 2). But most much time or asking for unnecessary
have not yet gone beyond awareness to information. Once they have registered
thinking about what they have to do to and decided to buy, consumers must
build the trust and promise required to feel that any financial transaction is safe
be a true brand. and private and they will expect the
goods to be delivered on time, at a
time and place which is convenient
Branding is transparent on the and with the right items. Should there
Internet be a problem, after sales service needs
This brings us to the second reason to be exemplary. All these activities are
why branding matters more. The representative of your brand’s promise.
whole process from downloading and It was not that these activities did not
navigating the site through to all the occur offline but that online they

䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001 397
RUBINSTEIN AND GRIFFITHS

are more transparent and very much the authors, you have been disap-
faster. pointed when buying from some of the
well-known brands now trading on the
Internet, you will know that the basic
ARE THERE NEW RULES? rules warrant reiteration.
A growing realisation of the vital role
of brands on the Internet is leading
people to re-examine the approaches A sound economic base for the
they take to branding on the Internet. proposition
Do we need completely new ways of
doing things, or are we in danger of
throwing the baby out with the bath Sound economic basis
water? The answer to both questions is The demise of Boo.com, e-Toys
‘yes’. and letsbuyit.com has proved to
be a wake-up call to many
investors in the sector. In the case
THE FUNDAMENTAL PRINCIPLES STAY of Boo.com a good idea on paper
THE SAME was undermined by unrealistic
Experience tells us that it is unwise to roll-out plans (eight languages in
pretend that you are starting with a 18 countries), an overly com-
blank sheet of paper. While the In- plex ordering process and poor
ternet is encouraging people to ‘break delivery. As with the off-line
the rules’, ‘think out of the box’ and world, it pays to test the concept
seek to make a ‘step change’, there out in one area, and iron out the
seems no valid reason why the logic of service wrinkles before trying to
commerce should disappear altogether. expand. There is a similar les-
Yet recent newspaper headlines would son for letsbuyit.com, where the
suggest otherwise. Wiser voices have fundamental lessons of a scale
recommended caution, but the new threshold seem to have been
gold rush fever has proved too great. ignored.
The recent correction in the market
suggests that the sceptics may have
been right.
In the authors’ view, this is because This is the most basic rule of all. The
the following rules of thumb must still big question is can I provide something
apply: better, cheaper or different online than
I could anywhere else? Even then,
— have a sound economic base (and being cheaper may give you a short-
a clear customer promise) for term advantage but is not usually a
developing an Internet proposition sustainable way to get growth and
— understand and have knowledge of profits.
your consumers and customers Understanding how the Internet
— decide what role the Internet is will help you to deliver sustained
going to play. shareholder value (low-cost supply,
sophisticated customer management,
This is not rocket science. But if, like faster fulfilment, disintermediation,

398 䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001
BRANDING MATTERS MORE ON THE INTERNET

unique niche offering, for example) is obvious, but we are dealing with a
critical to this debate but so too is technical world, where too often the
understanding the ‘consumer promise’. fascination is with a technological
At base, great brands satisfy a human capability rather than with meeting real
need. If the service or product cannot needs.
fulfil this basic promise then it will not Many of the companies the authors
survive. In other words, the acid test is have worked with have organised
still can I deliver something genuinely themselves around the technology
different, more efficiently and effec- rather than around customer needs. For
tively than anyone else? example, a new start-up based on WAP
technology grouped its divisions
around the different types of technol-
Understand and know your ogy delivery rather than around
consumers and customers customers who would be signing up
for sports services or financial services.
Furthermore, once you have under-
Know your customers stood the needs and dreams of your
Another example of understand- customers, can you meet those needs
ing the customer base concerns profitably? Understanding the correla-
global brands. If you are global tion between profitability and the
then consumers will have global relationship value in your business will
expectations of you. The Gap is help you to decide how far you can
one such brand. It has an excel- realistically go. What are the key
lent website where you can or- indicators of lifetime value — length of
der from a good range of basic relationship/breadth of product take-
clothes . . . if you live in the USA. up/share of customer wallet? Are there
Yet customers in Europe are also clear segments? Is the relationship
loyal to the brand. Compare this determined by speed or information or
with River Island, which stocks a geography? It is important to look at
different range in the USA but the underlying causal relationship not
will happily mail these clothes to just the short-term effects, because
people in the UK. brand loyalty (unless you have first-
mover advantage coupled with first-
class customer service and fulfilment) is
pretty non-existent on the Internet.
Again, this sounds like a truism, but it Information provided by your users
is critical to the success of any will help you to identify and cherish
enterprise. Maintaining a profound and your best customers, enable you to
intuitive insight into human nature and protect them from competitors and
values that goes beyond that of your encourage their loyalty.
competitors will help to confer a
genuine sustainable advantage. You
need to research into emotional as well Decide what role the Internet is going
as rational drivers. This means being to play in your company
tuned in to the needs, wants and The Internet is providing many com-
dreams of your consumers. It sounds panies with a unique opportunity to

䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001 399
RUBINSTEIN AND GRIFFITHS

rethink their future. For some, the Delivering a consistent brand


Internet may be working merely as an experience
additional channel through which to
sell products or services, for others it
may represent a way of simplifying or Branding the experience
consolidating the supply chain. But It may be a mistake to view the
some companies are using it to move Web as just another distribution
them from what they are today to channel. The Nike swoosh can be
where they want to be. It is enabling seen everywhere, but when For-
them to refresh and reinvent the com- rester Research surveyed their
pany and its image. website they found that it was
An excellent example of this is anything but a hot destination.
Iceland, which saw the opportunities Why? The site was complex and
opened up by the Internet to reposi- hard to navigate; the pictures
tion the brand altogether. Iceland had of sports stars took ages to
a reputation for being focused solely on download. The content was not
frozen foods and related products, and offering a solution, but more
had an image which was downmarket importantly it was not offering an
and narrow. They have used the experience.
Internet not merely as a new channel
through which to distribute their wares
but as an opportunity to revisit the The prevailing wisdom used to be that
customer value proposition, alter their the consumer relationship was based on
consumer profile and revamp the the product alone, and we focused
company’s image. Today, many more on finding its USP and point of dif-
people see Iceland as a pioneer in this ference and ramming this home at
field and the new customer base is every opportunity. The product brand
more upmarket and will spend more was underpinned by the ability to get
with them. distribution. A company that defines
itself around a product provided to an
ever-changing marketplace is generally
ONLINE BRAND SUCCESS FACTORS reactive and must redefine its business
This paper has discussed some of the every time a product changes or be-
basic rules of branding which still seem comes obsolete (or it goes out of
to apply online. But where are we business). Later we came to realise that
beginning to see some new ap- most brands had a service component
proaches? There seem to be several as well, and we had to ensure that the
issues to reconsider: level of customer service was commen-
surate with the brand promise. This
— delivering a consistent brand ex- evolution was underpinned by the ad-
perience vent of call centres enabling contact to
— integrating all the expressions of the be made on a mass scale.
brand Now the presence of brands on the
— establishing brand awareness Web has meant that we have to brand
— measuring every new initiative the experience. Brands have to be
against the brand. useful. They have to offer a solution

400 䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001
BRANDING MATTERS MORE ON THE INTERNET

to a problem, an experience and an apparent queuing time. These tech-


opportunity to interact. There is no niques reinforce the positive brand
way you can provide a rewarding ex- values and contrast favourably with the
perience without regularly asking for many other service companies which
feedback. have yet to understand this. There may
The experience is the product. The be no substitute for old-fashioned
Internet enables you to dimensionalise human intervention when the cus-
your brand by forcing you to create tomer is stuck in a service loop, but the
interactive, immersive and dynamic ex- ‘call me’ button provided by many
periences for your customers. This im- companies is a step in the right
pacts on everything you offer, from the direction.
navigational flow to the speed of your
site and the speed of fulfilment. This
evolution is underpinned by technol- Reinforcing brand values
ogy. Disney are adept at letting their
Delivering a consistent brand ex- ‘guests’ know how long they will
perience is one of the cardinal rules of be in a queue and delight them
branding, which is as true online as with entertainment; Ticket master
offline. But it is made even more have learned that they can exceed
important because of the transparent customer expectations by telling
nature of the e-value chain described customers that they are 19th in
earlier. the queue and it will take ten
As the lines between shopping and minutes, but in reality the cus-
relaxing at home between advertising tomer is answered within five
and entertainment begin to blur and minutes. Is it possible for the
consumers become involved at every online experience to be similar?
stage, so brands become more about
the experience not the product. It is no
longer enough to communicate and
promote awareness of your name, as do Integrating the online and offline
Ford, no longer enough to create an experience through all expressions of
image like Tango, nor is it enough to the brand
differentiate by product capability and
specification, like Direct Line. On the
Net you have to orchestrate everything The Boden experience
you do to deliver a highly differen- When Boden first went on-
tiated and consistent positive ex- line orders increased massively.
perience. At the same time, the Lead times became longer as
Internet encourages customers to ex- they struggled to keep up
pect instant gratification without com- with demand. The problem, it
promising quality, reliability and trust. transpired, was that they were
Companies in the leisure industry used to holding minimal stocks
with long experience of handling high and sizes. The managing director
customer volumes have evolved simple wrote personally to every cus-
ways of always seeming to deliver on tomer to explain what had
their promise, such as minimising

䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001 401
RUBINSTEIN AND GRIFFITHS

T The
he look
lookofoft the
he sit e
site TheTway
he way
the t he
cust omer
customer ser vice
service
The user peopleanswer
people answer t he
T he use ffriendliness
r iendliness phone
the telephone

The value-added Your company ᎏ The speed at which


T hepackages
speed at which
services dot.com or otherwise ar e deliver e
value-added ser vices are delivered

The lack of
technical glitches The
T heease
easeof
ofreturns
r et ur ns
T he lack of t echnical glit ches
The navigability of the site

Figure 4 Expressions of the brand

employees need to use with customers


happened and how they were have to be honed to give a good
going to deal with it. account of the brand. Ensuring that the
This rapid crisis management brand promise and its implications are
appears to have retained the widely understood and acted out
loyal customer base, but also in every customer interaction is
demonstrates how selling on the paramount. The foundation for provid-
Net forced Boden to rethink their ing a positive brand experience is
operational strategy to reduce lead getting the basics right: accessibility —
times by moving to a bigger ease of contact, responsiveness, user
warehouse and changing their friendliness — and reliability —
stock policy. delivering on the promise rationally
and emotionally.

Go beyond establishing brand


Physical, promotional and behavioural awareness (and accessibility)
manifestations of the brand need to be In the latest round of dot.com start-ups
coherent (Figure 4). While it may not the emphasis seems to have been on
be possible to update all products, hyping the name to build awareness
processes and outlets to keep pace with ahead of a rush to the market. But a
developments on the Internet, there is well-recognised name is not the same
a need to deliver the brand promise as a strong brand, and it is not a
clearly and consistently across all touch guarantee of business success.
points. The example of lastminute.com
Service brand managers are well demonstrates this point clearly. A good
acquainted with the difficulty of coor- idea on paper, hyped to an extraordi-
dinating multiple products across mul- nary degree through paid-for media
tiple touch points, but it is a new and collateral press comment, it was
challenge for FMCG brands beginning undermined by a failure to understand
to trade on the Net. the economics of its proposition and
The skills and behaviours that genuinely deliver the promise made.

402 䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001
BRANDING MATTERS MORE ON THE INTERNET

A number of high-tech companies difficulty for start-ups is to return


have eschewed traditional advertising to functional brand naming — choose a
in favour of slower-burn options — name that is readily triggered (does
influencing the influencers, ingredient what it says on the can . . .). In addition,
branding and word-of-mouth cam- make good use of third parties —
paigns through communities of inter- alliances, shared developments, e-
est. promotions — to add visibility and
salience to your offer, provided that
they fit with your brand.
Slow-burn marketing
Nextweekend.com has had a
website registering consumer in- Measuring every new initiative
terest since last autumn. They against the brand
have opted to go for a slow build, Online marketing really does give
generating curiosity, delivering marketing the opportunity to be ac-
solutions and seeking customer countable. Any company should be
feedback to inform an ongoing going online not just for presence but
programme of product and for results, so it is critical that the
communication enhancement. measures of success are agreed early
and up front. There are tools available,
so use them.
Companies are also beginning to Like every other new
experiment with the way in which the product/channel development, In-
Internet allows them to develop a ternet development requires careful
dialogue with a segment of customers. evaluation and planning, the setting of
In particular, developments in the robust targets and establishing
software for electronic customer performance measures in sufficient
relationship management (CRM) are detail to be actionable.
enabling companies to not only e-CRM will enable you to find out
understand but also influence customer which of your customers are really
behaviour through relevant com- valuable to you. Eighty-four per cent
munication at the right time with the of online businesses do not follow up
right offer. These companies are their online customers and 75 per cent
learning that successful customer do not recognise repeat customers. Yet
communication is customer initiated it is possible to know who goes to your
rather than company initiated. Once site, how often and what they do when
again, we see the customer seizing they get there. Making use of fast,
control. continuous customer feedback is a way
It is therefore critical that you make of increasing involvement and building
it very easy for customers to find you. loyalty.
People generally know how to find
even relatively obscure items on the
high street or from Yellow Pages. On Measures of brand fit — The acid
the Web consumers tend to head for test
brands they know and trust. One of the opportunities offered by the
One way of side-stepping this Net is to be able to develop new

䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001 403
RUBINSTEIN AND GRIFFITHS

services and products at break-neck It used to be thought that cor-


speed. The new idea looks as if it will porate strategy was entirely separate
deliver against financial performance from the strategy developed for the
criteria, but is it right for the brand? brand, but in fact they are entirely
Be absolutely ruthless about not interconnected. Because brands have
doing things that do not add to the both meaning and real monetary value,
brand, and stop things that detract they impact on every aspect of the
or distract from positive, managed business and its operations, and this
development. becomes even truer on the Web. The
whole experience for the consumer,
from navigating the site through all the
There is real time and there is fulfilment and delivery, is visible and
Internet time says something about the trustworthi-
Big global strategic consultancies are ness of your brand. In the past this
finding that their customers no longer chain of activities occurred but was
have time to develop a detailed largely hidden from the end user and
strategy for Internet activity. It has tended to occur relatively slowly. The
become much more ‘seat of the pants Internet is a radical shift, as not only is
stuff’. Yes, you have to move quickly the consumer actively involved in all
to build a brand on the Net, but you stages of the transaction, but also the
also have to live with the conse- stages are transparent and happen fast.
quences of the brand you build. As Established companies with their big
this paper has demonstrated, customers advantages in visibility, recognition and
take the brand you create and develop real estate can be huge beneficiaries of
their own meanings — so you need the Internet and so can innovative
to be very sure that the basic brand start-ups. The success factor is not
foundations you build are the right where you start from but how you
ones. build and maintain your brand.
Despite all the myths, one reality
remains — the customer is still
BRANDING IS AT THE at the heart of the business. In
HEART OF BUSINESS STRATEGY ON the end, brands are for people.
THE NET Forget this fundamental truth at
Branding is more than just a label. It is your peril. Branding is also at the
an organising principle that can bring heart of business strategy on the
cohesion to the diversity of a com- Net. It is probably driving it. A
pany’s activities and is central to the powerful brand promise ⫹ consistent
ability to compete and survive. delivery ⫽ profitable business.

404 䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001
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