25 Of The Worst Business Failures in History

It is said that up to 50% of businesses fail within five years of inception. Most of these business start and end in obscurity. A few of them, however, start up with the verve of a cannonball, only to crash with equal fanfare. Some of the companies listed below, like Enron and DeLorean, exemplify this cataclysmic appeal. Others, like Pan Am and Woolworth’s, just tug at our heartstrings.

25. Fashion Café

Want some Newports with that iceberg lettuce?

A restaurant that serves gargantuan burgers and fried appetizers founded by a bunch of supermodels and fey fashionistas didn't work? Hmm, I wonder why. “The $20 Salad Extraordinaire,” created exclusively for Naomi Campbell, reportedly consisted of a glass of champagne, a pack of Newports and two slices of tomato accompanied by an iceberg leaf. Famed restaurateur Tommaso Buti was the “brains” behind the operation. He over-franchised the cafes, was accused of mismanagement, then followed Christy Turlington in selling his stake in the company. Buti, already accused of defrauding investors, was arrested in 2000 and charged with wire fraud, conspiracy, money laundering, and transportation of stolen property.

24. CBGB

A legend turns into a men’s store

In 2006, after 33 years of offering up legends like the Talking Heads, Blondie, Misfits and the stalwart Ramones, CBGB, the most famous underground alt-rock/punk club in the world, closed its doors. It was shuttered to make way for a high-end men’s fashion store. Patti Smith gave the historic club an emotional, if punk, goodbye by tearing the stage and room apart. Ironically, the very same shrine that so many skinny-jean hipsters and adrenaline-fueled punks would come to mourn was originally started by Hilly Kristal as a venue for his favorite music: “Country, Blue Grass and Blues.”

23. The Edsel

Ford’s biggest flop

In 1958, Ford’s newest vehicle, launched on “E-Day,” flailed, flopped, and imploded. Ford kept the Edsel under wraps as a new kind of futuristic, experimental car. One fateful day in 1958, the Edsel was revealed…and immediately faceplanted. This car of the future was blah by anyone’s standards. By November 1959, when Ford finally mercy-killed the Edsel, it had lost an estimated $250 million–nearly $2 billion in today’s dollars. Edsel is now synonymous with a marketing business failure.

22. Flooz.com

The name says it all

Flooz.com blew through up to $50 million dollars trying to convince new Internet users that money online would work like frequent flier miles or gift cards. Part of that money went to a notoriously bad ad campaign featuring Whoopi Goldberg (before she was cool again). And the name? Flooz is derived from the Arabic word for money. In August, 2001 the company folded their chairs and went home. Apparently, people could just use their credit cards. Whoops!

21. The Hit Factory

A New York classic goes condo

Deep in New York, in the heart of Hell’s Kitchen, The Hit Factory was one the world’s most recognized recording Studios. Started by Edward Germano in 1975, it saw everyone from Tony Bennett to U2 record amazing tracks. After Germano’s death in 2003, his wife Janice took over operations. Citing the “digital age,” she closed the doors and sold the building, moving the operations to an existing Hit Factory in Miami. Troy Germano, Edward’s son, later acknowledged publicly that his mother simply closed it out of greed. She wanted to move to Miami and thought she could make good money on the building’s sale. It is now a luxury condominium complex, with prices starting at $1 million.

20. Betamax

BetaWrong

I could give you facts, figures, and dates to support why Betamax failed so miserably, but that would be a blog post unto itself. Suffice it to say: Betamax was bulky, complicated, ugly, expensive, publicly ridiculed, horribly marketed, disdained by the media, and only capable of sixty minutes of recording and playback. The capper? Most Hollywood movies that people rented were just a little bit over one hour. Too bad…and good riddance.

19. SwissAir

The “Flying Bank” ends up buried

The former national airline of Switzerland, Swissair, used to be so financially stable that it was known as the “Flying Bank.” Founded in 1931, Swissair epitomized international transportation until the late 1990s, when the airline’s board decided to follow an aggressive borrowing and acquisition policy called the Hunter strategy. Then, the terrorist attacks of September 11, 2001 put a void in the company’s plans Swissair found itself hamstrung with debt. Unlike some other airlines, however, Swissair couldn’t handle the financial hit. Mismanagement and bad ideas—trundling large sums of cash to purchase fuel at foreign airports, for example—left the airline gasping for oxygen. In 2002, Switzerland was embarrassed to lose its national icon for good.

18. Ponzi’s Security Exchange Company

Bernie Madoff’s famous forebear

It’s quite an achievement to have a breed of financial scam named after yourself. Charles Ponzi, an Italian immigrant, ran a staggering 6-month pyramid scheme in 1920 by gaining investments (over $15 million) from an ever-growing pool of more than 40,000 investors. Ponzi would use “profits” from new investors to pay “interest” to old ones. Using a trade system of international reply coupons for postage stamps and leveraging exchange rates, Ponzi made a lot of people money through the “Securities Exchange Company,” which claimed to leverage exchange rates through an international postage stamp reply coupon trading system (this mouthful of a phrase reminds me of how people described derivatives in 2008). But his scheme ruined lives–including Charles’ own. After jumping a few bails, he did prison time from 1926 through 1934. Years later, he died, penniless, in a Brazil charity hospital, half-blind and partially paralyzed.

17. Woolworth’s

The bad economy bullies Woolies towards its own demise

Brits, who held "Woolies" close to their hearts, were were crushed when this comfort food and houseware retailer closed its last 807 stores after nearly 100 years of service on High Street and beyond. At one time, Woolworths was the leading music retailer in the entire U.K. During the 1950s and 60s, the store was instrumental to the Beatles’ sales success Indeed, Woolies also played a role in breaking Madonna to the rest of the world. Hey, she’s a Brit now. Maybe she’ll pony up the cash to save them? Not likely.

16. Premier Smokeless Cigarette

Taste-wise, charcoal just doesn’t cut it

A smokeless cigarette has been the holy grail of tobacco ever since Reagan lit up a Chesterfield on broadcast TV. In an effort to reduce the harmful effects of inhaling cigarette smoke, RJ Reynolds launched the Premier cigarette, a “smokeless nicotine delivery mechanism that looks and feels like a premium cigarette,” in 1988. The product ended up a miserable flop. Not only did this expensive cig taste like charcoal, it ended up being employed by drug users as a handy “delivery mechanism” for substances other than tobacco. The cost of the project? A cool $1 billion.

15. Bre-X Minerals

Fool’s gold strikes again

If someone tells you they’ve struck gold on the isle of Borneo, grab your money and run the other way. In 1995, Bre-X Minerals was a tiny mining company based in Calgary with stock worth under $1 when they announced they had found extensive deposits of Gold in Busang, Indonesia. As a result, their stock shot to almost $300 CAD a share. A series of strange events, including a man fallen from a helicopter and eaten by tigers, roused enough suspicion to unravel the fraud. By 199, an outside analysis of the sites samples revealed that Bre-X had faked their findings by “salting” samples with gold dust. Within weeks, the NASDAQ and TSX delisted the company, which at one point held a market cap of $4.4 billion. Investors slapped their foreheads, and Bre-X Minerals slunk into history as a major business failure.

14. IndyMac

IndySplat

On July 11, 2008 the FDIC seized the assets of the largest Savings and Loan in Los Angeles and the 7th largest loan originator in the country. The seizure sparked rumors of bank runs. It also gave the public the first real, Main Street glimpse of the Financial Crisis of 2008. IndyMac was founded in 1995 as Countrywide Mortgage Investment. Its purpose was to provide a means of collateralizing loans too high in value for Fannie Mae and Freddie Mac to service. At the time of its seizure, IndyMac held nearly $30 billion in assets, making it the fourth largest bank failure in history.

13. Edison Records

First isn’t always best

It’s always difficult being first.  Thomas Edison founded the first record company and invented the phonograph, the first device made for recording and playback of sound, in 1877. This achievement led to all of the music industry as we now know it. Surprisingly, it was also the first dictaphone in history used by businesses. World War I shortened the supply of materials Edison could use for his highly secret wax recipe, used in manufacturing. The company’s market share fell. As other companies seized the opportunity the make “needle-cut” records (an Edison Labs invention) Edison Records lost customers and credibility. It closed its doors in 1929.

12. Tucker Automobiles

There’s a reason only four of them ever died

The ambitious car company that Preston Tucker started was only in business one year (‘47-‘48). It produced a mere of 51 cars, but its story remains enshrined in museums, car clubs, film and even a video game where everyone drives a Tucker. The fatal flaw? Offering customers the option to buy their accessories before their car was built. This program started a witch-hunt by the SEC. Amid accusations of fraud and the “Big Three’s” influence over government, Tucker Automobiles went belly-up. I will spare you the argument of whether it was the best car ever made, but out of that original 51, 47 Tuckers still exist today. Let that be your clue.

11. Sharper Image

Buy, but do not inhale

Started in 1977 as a catalog selling jogging watches, the Sharper Image eventually grew into a high-end customer electronics store. As iPods and other branded, high-tech items took over the store’s traditional market share, it launched into the infomercial business with the Oreck vacuum and Ionic Breeze. Unfortunately, the Ionic Breeze did not purify the air as it said it did. After losing a lawsuit against Consumer Reports for a negative review, the testing company released findings that the Ionic breeze actually produced trace levels of ozone. In 2008, the store went bankrupt, forcing shoppers to buy their overpriced, Japanese made, brushed steel, throw-away executive gifts elsewhere.

10. Washington Mutual Bank

See bank run

WaMu was America’s largest Savings and Loan association, the sixth largest bank in the U.S., and (drumroll please…) the largest bank failure in history. Let that sink in for a minute. After a 10-day run on the bank in late September 2008, with total withdrawals in excess of $16 billion USD–almost 10% of the deposits–the FDIC seized WaMu’s assets. JPMorgan Chase bought WaMu subsidiaries the next day for what many suspect at pennies on the dollar. The holding company is currently in Chapter 11.

9. Enron

They made the E crooked for a reason

Enron was an energy sector leader that started to dabble in e-commerce and exotic investment areas, such as weather futures. In 2001, Enron, once valued at $90 billion and the 7th largest company in the United States, went bankrupt. It took jobs, investor savings, retiree futures and even some lives with it. In following years, it emerged that they shredded documents, started partnerships with their own shell companies, and engaged in massive inside trading. Enron is now synonymous with the business outcomes of galloping greed.

8. Polaroid

Go digital or die

Shake it like a Polaroid picture! You know you’re good when your name is the product. (Hello, Kleenex). But while you and I were buying our first digital camera, printing pictures and later taking photos with our phones and PDA’s, the execs at Polaroid were snapping and shaking their pictures into oblivion. So loved was the brand that countless people took daily shots of and created art, diaries and literature using these magical snapshots taped to their walls or to the street. The leader of an amazing niche technology that so enriched anyone born before 1980, Polaroid went bankrupt in 2005. The name may emerge again, but the brand and the impact will always be retro.

7. Atkins Nutritionals

Fadkins takes a bad fall

Apparently, bread won. Remember when all of your friends ordered their lunch without the bun and no potatoes, but with lard-laden beef and cheese? Atkins engineered the “low-carb” craze, a fad diet claiming you could “lose fat by eating fat.” Dr. Robert Atkins released Dr. Atkins’ Diet Revolution in 1972. In 1992, revised version gained popularity; the fad really took off at the beginning of millennium. Questions arose from the medical community about the diet’s long-term effects. Countless others, from the FDA to top chefs, also lined up to take shots at it. In 2003, it was reported to a skeptical public that the good doctor slipped on an icy sidewalk and died. The company went bankrupt within two years amidst the suspicion that his diet killed him. Meanwhile, a fickle public ditched low-card for the next fad. A year later, a leaked medical examinations report revealed that Dr. Atkins, 72, had a history of heart attack and congestive heart failure. He weighed 258 pounds at death.

6. Bethlehem Steel

When service kills steel

Everything you know about historic America has Bethlehem Steel in it. Founded when James Buchanan was our nation’s president, Bethlehem Steel was the backbone of the first blasting furnace, railroads, skyscrapers, coal, nuclear reactors, warships, cargo vessels, large construction projects like arenas, and other major infrastructural accomplishments. However, the company never adjusted to the new service-based economy that gained ground in the 1990s. Cheap imports worsened the situation. Bethlehem Steel, a piece of American history, disappeared forever when it filed for bankruptcy in 2001.

5. Pets.com

Big isn’t better

Pet’s can’t drive, and sock puppets make bad spokespeople, but Pets.com made the dot-com bubble their own in 2000. They overexpanded by opening a nationwide network of warehouses nationwide too quickly (taking a hint from Starbucks). Unfortunately, profits never caught up with media buys for commercials. In marketing, nothing is worse than having everyone know who you are and no one interested in what you sell. Widely recognized as the icon or poster child for dot-com failure, its stock went from over $11 in early 2000 to just $.19 on Election Day that same year, when the company closed its doors.

4. White Star Lines’ “Titanic”

A disaster of titanic proportions

White Star Lines, which built the Titanic, has oddly disappeared from the lore surrounding the fated giant. The fated vessel was conceived of in 1907, when executives Bruce Ismay and Lord Pirrie drastically changed and expanded their shipping transportation business to compete with Cunard’s new luxury oceanliners. The result was a line of gargantuan luxury liners that moved more passengers and freight than anyone else on the market. Three ships came out of the venture: The Olympic, the Titanic, and the Gigantic. You know the rest of the story. Cue the music!

3. Commodore Computers

You can’t kill the C64

Between 1983-1986, Apple, IBM, and Atari computer were quaking in their boots. The reason? The Commodore 64 was selling 2 million units a year and dominated nearly 50% of the total market. As the company tried to innovate by releasing the Commodore plus/4, a faster, smarter version with a color screen, they alienated their original customer base. The new model was incompatible with the cherished C64. Commodore tried to discontinue the old line in the US by 1990 and announced it would stop shipping them in 1995. The tactic didn’t work. Customers all over Europe continued to snap up the C64s until it became impossible for the company to manufacture them at a reasonable price without selling new, more expensive models. As they say, “you can’t kill the C64.” The company went bankrupt in the spring 1994.

2. DeLorean Motor Company

A man, his cocaine, and his car

As is often the case in the automobile industry, it’s hard to separate the man from the vehicle. John DeLorean was a hero amongst the very rich for creating the kind of car the future promised. With a stainless steel-skinned body, sleek lines and doors that opened vertically (gull wings), his DMC-12 hit the streets in 1980. Over the next three years, only 8,900 cars would be made. The car played a feature role in “Back to the Future” and become a potent status symbol. Then, in 1983, a sting revealed John on tape saying “this cocaine is as good as gold,” referring to a suitcase full of drugs valued at $24 million. Later acquitted on entrapment grounds and cleared of defrauding his partners, he would never gain the investor’s trust again.

1. Pan Am

The icon that didn’t pan out

It’s amazing how a country’s identity can be so closely tied to a business. Such was the case with PanAm. Founded in 1927, the airline was a part of American culture for the better part of the 20th century. It lead the industry in international flights and luxury travel. It was also the first airline to make widespread use of jumbo jets, and the first to use an air staff of stewardesses as a PR focal point. Little girls grew up wanting to be PanAm stewardesses, and boys grew up wanting to pilot one of the fleet. Heck, the Beatles arrived on one. Unfortunately, as an American icon, PanAm was also a target for terrorism. A few horrific incidents, coupled with the increased global competition that came with deregulation, caused the airline—and its accompanying era—to collapse in 1991.

Doesn't matter how long you have been in business or how successul you are, no business has the privelege of 'set it and forget it'.  To be successful, especially during these times, you must be diligent to your brand, on a daily basis.

as reported by Business Pundit

Bank Brands Can Rise Again

Money by H a l t e n h o f

The banking industry took quite a pounding in 2008. If you are looking for a point of differentiation, it seems like just surviving is a symbol of success right now.

If the banks that are still standing want to actually recover, the need to quickly mobilize their brand plans, really define their message, dig deep to determine what makes them the best choice.

Basically, banks need to change the conversation. They have to start defining themselves and stop letting the national media define them.

To effectively change the conversation, banks need to look deep within themselves and see what they find.

What is their Brand Promise? What are they promising the consumer? What is the consumer looking for?

It seems that so many banks are resistant to 'branding' and want to focus completely on 'selling'. Promoting the brand promise of the bank is actually better than ads that 'sell'. It's the difference between attracting transactional vs. relational customers.

Do you want a customer that is gong to shop your rate and hop from bank to bank looking for the very best deal? Or do you want a customer that does business with you regardless of the rate?

Now is the time for banks, at least the good ones, to step forward and proclaim from the mountaintops what it is that makes them great. Don't let another bank, or even worse the media, define who you are.

Independent Ad Agencies Tapped in 2009

"There is no such thing as national advertising. All advertising is local and personal. It's one man or woman reading one newspaper in the kitchen or watching TV in the den." – Morris Hite

As 2009 begins, it is rapidly becoming apparent that there is a shift in the Advertising landscape. Clients are faced with much smaller marketing budgets.  Clients are preparing for a continued dip in sales. Global ad agencies are laying off large numbers of staff across the board.

All of these factors will add up to what will probably become one of the largest shifts in Advertising since the development of the computer.

Clients will begin to look beyond the large, slow, expensive agencies of yesterday and search firms will be told to procure new options for the list of consideration.

It seems that clients are starting to realize that their preconceived notions might not be accurate.  The quality of the work is not based on the size of the agency.  The strength of the message is not improved by the location of the agency.  The power of the creativity is not enhanced by the extension of the network beyond the borders of the U.S.

Clients are starting to look beyond the standard line up of agencies.  Clients are looking beyond agencies located in big expensive markets.  They will be surprised at what they find.  Great work for a good price.  Talented creative geniuses living in communities of less than 250,000 people because of the sense of community.  Account Planners that guide great strategy because they actually live next to and go to church with the people in the target audience.

It is a new day for Advertising and I think we will all be the better for it.  

Developing Your Brand Plan

3 Things You Should Never Do For Yourself:

1. Cut Your Own Hair
   
2. Remove Your Own Appendix
3. Develop Your Own Brand Assessment and Plan

Even the greatest marketers can't look into their own companies, services and products and create their own brand assessments and plans.  It takes a specialist, a branding agency, to talk to employees, customers, vendors and get to the heart of the matter.

A branding agency will dig deep to uncover what you think about yourself as well as what others think of you.  

A branding agency will work with a bank and move them past their desire to stake next year's profits on advertising a CD with a rate that is 1/8% better than the bank on the next block.

A branding agency will be able to isolate the one best message that will best connect you with your customer.

It's hard to look into the mirror to cut your own hair and it's even harder to look into the mirror to learn about yourself.

Don't remove your own appendix.  Hire a specialist.  Hire a branding agency. 

Branding for the Entrepreneur

To be a successful entrepreneur in today’s world holds many challenges, which is evident by the rise a fall of businesses each day. Some explode onto the scene quickly and fade, while others thrive as they develop strong brands that stand the test of time. The ones who succeed, either by luck or by design, have come to an understanding of the importance of strong branding and have successfully implemented it into the fabric of their business plan.

Sure, there are many variables in the success or failure of a business, but more often than not, it rests in the lack of brand awareness, or more importantly, a lack of understanding and appreciation of the importance of branding. But before we even begin to discuss branding, we have to first define what it is. To start with, let’s discuss what it is not.

Marty Neumeier, author of The Brand Gap, states it best when he says, “First of all, a brand is not a logo. Second, a brand is not a corporate identity system. And finally, a brand is not a product. A brand is a person’s gut feeling about a product, service or company. It’s a gut feeling because we’re all are emotional, intuitive beings, despite our efforts to be rational.” Neumeier goes on to state. “A brand is not what you say it is, it’s what they say it is.”

Based on this definition, all businesses have a brand whether they like it or not. The problem is, few businesses take into account the depth at which their target audience connects with their brand on a daily basis. While businesses can’t control this process entirely, they can help to influence its outcome by developing branded touch points to support the brand promise at all times.

Many small businesses and start-ups feel that branding is just for products or big companies. The truth is, branding works for any industry regardless of size or location. Corporate giants such as Coke, Cisco, Nike, GE  and Disney, have each mastered the branding game by developing brand equity on a global level. This brand equity describes the value their customers place on their brand name. That value breaks down into terms that are often emotional, like, trust, reliability and security, and is true for both consumer and B2B companies.

According to Mia Pandey, a featured writer for brandchannel.com, “Branding is already gaining currency as an important issue in B2B markets and is certain to become an increasingly important factor, as industrial companies seek more ways to differentiate themselves and build a more holistic offering based on both rational and psychological motivators.”

And while millions are spent each day to deliver their message to the masses, the same branding techniques can be utilized on a local and regional level without breaking the bank to do so. A great example of this is the downtown Lafayette restaurant, Tsunami Sushi.

If you were to ask five random people in Lafayette to name the best sushi restaurant, chances are, most if not all, would say Tsunami, regardless of if they have actually been there or even like sushi. The reason for this is brand advocacy, or word of mouth advertising, which is a direct result of brand loyalty. The question is, what is it that inspired this loyalty and advocacy? Was it the food, the service, the atmosphere or something else entirely?  Chances are, it’s all of these things and more.

What Tsunami did right was establish their focus from the very beginning by defining their true point of differentiation. 

According to Michele Ezell, co-owner and founder of Tsunami, “We knew from the beginning that we wanted something different, something that at the time Lafayette did not have. We also wanted to create a place that offered more than just great food and service, but also provided an escape from the daily grind.”

Whether Ezell intended for it to be, she had just described her promise, and from this promise, her brand was officially born. 

Now, obviously there is a multitude of other elements that went into developing the Tsunami brand over time, but by establishing their focus early on, Michelle and her partners were able to base all future business decisions on the essence of the brand. Many of these decisions would lead to the development of brand touch points such as the location, the décor, the menu, the staff selection, the uniforms, the music played and even the name of the restaurant itself. By properly managing these touch points, Tsunami was able to build a road map that led its consumers toward a specific brand experience.

Please note, none of the branding elements I just mentioned for Tsunami had anything to do with a logo or advertising. This is not to say that logos and advertising aren’t important elements of branding. They are, but to start and end there would be like going on a date with the best looking guy or girl in school only to realize they had the I.Q. of a tomato and the personality of a rock.  Sure, it would be great at first, but eventually you will want more.

Businesses with well-defined brands will find that they have increased market share, preferred status with customers, increased valuations, reduced employee turnover and often a very well-defined culture with employees aligned around a common purpose.

So whether you’re an entrepreneur or a business needing a brand overhaul, take the time to ask yourself a few questions before spending money on marketing that may or may not work.  A few of these are: what emotions does my company evoke? What differences may we authentically claim? And most importantly, why should we (the public) even care? Once you have the answers to these, you will be ready to build a brand that has focus, harmony and connection within any category and in any market.

 

Michael Russo

Creative Director

The Russo Group

 

Razor Branding - The 5 R's to a Successful Brand

The Russo Group's branding process - Razor Branding -  has been refined from years of working in and with multiple industries. From that experience the 5 R’s were developed.

Razor Branding revolves around the customer, your customer. You have to get to know them. Who they are, what motivates them, what their needs are, and most importantly, how to best reach them.

We hope you take a moment to read through the 5 R’s to gain a better understanding of Razor Branding and how it can be best implemented to improve your business and your brand.

1.  REALIZE

Successful brands understand that the consumer owns the brand, and the value of your product, message or service comes only at the time of purchase. 

Only then do they buy into your brand. 

Only then do they become advocates.

But keep in mind, this advocacy - the single most powerful marketing solution known to man will only come after the sale. Did they get what they were promised? Did you remain true to your brand position? Did they become customers for life?

Questions to Ask
. What "mental real estate" is yours to own?
. What emotions does your company or product evoke?
. What differences may you or your business authentically claim?
. Why should we care?  

2.  RESOLVE

Your promise is your brand. It connects you and the customer, developing a relationship that can either flourish or fade. But to even get to that point you must first find a way to get their attention and hold it. In order to do so, you must identify your value proposition – the one thing that sets your company and the product you are offering apart from the competition – always making sure it is a difference that can be delivered.

It is important to also understand that once a company makes a purchase from you or engages in using your service, they become your customer and should be treated as such. The conversation changes at this point, along with the dialogue. Now is the time to nurture the relationship, ensuring that the buyer remains a buyer – eventually turning them into a brand advocate. 

3.  REINVENT

We know change is hard, but if your marketing solutions haven't evolved in a couple of years, or if you're stuck trying to figure out where to begin, we recommend you read further.

Let's face it, the marketplace has changed dramatically in recent years, and so has your customer. They are more in control of the information and communications they receive than ever before. It is your responsibility to now find ways to change with them. If not, you will soon find you're yelling at an audience that can no longer hear the sound of your voice. They will be too busy surfing the net, flipping the channel, or simply ignoring you all together.

Brand building has never been more important than it is today, which requires a clear understanding of who it is you're trying to connect with and how to motivate them towards action. 

4.  RELATE

Customers are the most important asset of any thriving business. Everyone claims that their service is superior, and that their customers are treated like friends. But are they really?

Far too often we treat our customers like unintelligent fools. We give them worn out messages that are tied to outdated delivery systems. We tend to ignore their needs and force our agendas upon them. That may have worked a few years ago, but not today. Today, customers are seizing control. They can no longer be manipulated with price points, sales, discounts and promotions. They are, dare I say, smarter. Yes, we said it. They are smarter, and have access to an abundance of information.

Through strategic customer profiling, we get to know the target audience using custom methods for obtaining optimal results. Once we can relate to the desired audience, we can craft a message that will not only reach them, but inspire them to action. We will also know how best to deliver this message, an increasingly difficult task.

5.  REACT

Understanding the marketplace and the customer is only the first step in establishing or reinventing your marketing efforts. You must also engage potential clients as never before. Remember, you no longer have the option of dictating the information they choose to absorb. You must make it worth their while.

No matter how creative the advertising, a poorly positioned product, service, or brand will fail sooner or later. For this reason, we work with the client in developing what is most worthwhile to communicate to the consumer.

Once the brand has been positioned, Russo works toward developing a specific set of profiles for the type(s) of consumer that will be communicated to. Without properly identifying the type of consumer, your message will fail.

In order to achieve total brand essence, the consumer must have a complete brand experience. Ultimately, the brand must succeed in demonstrating the brand essence with its above and below line creative, product design, product packaging, sales team (proper training), and physical retail environment. 

Great Moments in Elevator History

Through it, Charlie broke out of Wonka’s factory. In it, babies have been born. And, occasionally, inside it – bow chicka bow wow – you get what I mean.

Ah yes. The elevator. Clearly, not simply a means of transportation.

In corporate America, business happens when people meet. And often, those meetings are more than informal – they’re accidental. They happen in places like hallways, stairwells, lobbies, restaurants, and your kids’ baseball games. They happen “on the elevator.” And so you must, you absolutely must, be fluent in elevator speak.

Rate yourself – When you bump into someone you’ve been trying to meet, do you stare straight ahead, watching the numbers slowly illuminate or make idle chatter about clandestine activity on the missing 13th floor? How about if someone bumps into you – do you fumble for answers to their on-the-spot questioning? Or, if a fellow rider inquires, “So what do you do?” Is your response confident, quick, deliberate?

It comes down to this – are you a victim of what we in the industry call Foot-In-Mouth Syndrome? And, more importantly, is it hurting your business? If so, I offer you the same advice I give my own clients.

In an elevator, you should know how to –

• Explain what you do in 30 seconds or less

• Direct rather than endure the conversation

• Avoid common talk pitfalls

• Choose the right word – and avoid the wrong one

• Determine what a person really wants to know – and if you want to share it

• Redirect a discussion

• Exit a conversation without giving offense

And, most importantly –

• Turn elevator conversations into opportunities for new business

That way, the next time you step in, you can step up too.

Branding Through Facebook

Social Media  is the perfect partner for branding initiatives.  Utilizing social media (blogging, facebook, twitter, etc) provides the portal for one of the biggest fundamental points of branding - having a conversation with the consumer.

The person interested in your business, service or product doesn't want to just observe it from the outside.  To become a true brand advocate and spread the word - to become a part of your tribe - they need to be a part of the conversation.

Social media provide the best platform for that conversation to take place.  You can tell your fans about what is going on and most importantly,  get their feedback.  You can find out what features they are looking for.  What benefits they need.  What color they want.  It's like the best focus group, and you don't even have to cater it.  All you need to do is be brave enough to start the conversation, be prepared for their feedback, and be honest with your faults.  Consumers aren't looking for perfection, they are looking for truth.  You must be transparent if you want to be believable.

This article "Facebook Do's and Don'ts" by Evan Garber provides great tips on how to best utilize Facebook.  

You have to participate in the conversation about your brand - otherwise they will just talk about you behind your back.

Target Demographic: Human Beings*

Some agencies consider demographic profiling as the most important tool at their disposal. But, frankly, I think that is a little skewed.

Don’t get me wrong. As an account planner with a background as a media buyer, I am all about demographics. Just ask anyone. I simply put my hands on a product, any product, and I immediately fall into a trance where I can channel not only who the product is marketed for, but also if it’s the wrong market, and what the real demographic should be.

It goes over great at parties.  

But before I explain why an understanding of demographics alone is not enough, let me tell you what an understanding of demographics is good for. At the basic level, it helps advertising agencies match up client message with creative implementations, creating a call to action that cannot be ignored. At the basic level, understanding that your target customer is 65+ may dictate the use of a larger type face in your ads.

More subtly than that, grouping the thoughts and concerns of a demographic segment into a unified message would seem to make our job easier. Right?

Wrong. Think about yourself, aren’t you, as a person and consumer, a little more complicated than some simple age/gender classification?

The truth is that demographic sectors don’t buy from our clients, human beings do. If we spend all our time trying to speak to DINKs (Dual Income No Kids) will we really get our message across? It’s a waste of time to market to a “target” – especially a moving target. Our focus should always be on people (you’ve seen them around, I’m sure) with names and faces and favorite places.

Certainly, demographic data is helpful. But that’s not all there is. Next time you think about what demographic market you want to capture, try working towards this one – Human Being breathing a must.

Branding: The Promise

The Argument for Branding

It’s 10:31 on a lovely winter morning, and I was just overcome by a strange and very unusual feeling.

It wasn’t deja vu, or what some call a frisson*. But it was an epiphany of sorts:

How do you sell a product or service to those whose mission in life is to sell a product or service?

I mean, shouldn’t someone like myself, a devout, practicing, art director-type guy, be totally immune to “the pitch?” Did I not take the Marketing Pox vaccine back in 4th grade?

I made a promise to the Blog gods that I would never talk about myself, but this is important.  No; this is monumental, and it will now have a profound effect on everything that I come in contact with. Well, at least for the next hour so.

Here’s how they (and by they, I mean us -- the ad peeps) got to me folks:

It was that damn branding. Branding, with a little touch of price-pointing thrown in for good measure.

When I wasn’t looking, or had my back turned to the TV, someone representing a brand made a

promise. More importantly, they kept that promise. Even more importantly, they kept that promise time and time again.

Sorry, about breaking the ad-guy code of silence, but how else can you explain the reason that my family is on its fifth Honda (quality and reliability), or that I only use Colgate toothpaste (never a cavity and totally fresh breath)?

No one “sold” me on those two products, or the countless others, but I vaguely remember a promise those brands made to me, that I bought into that promise, and that I was not disappointed with that buy.

Sure, the term “branding” has been tossed around over the last decade like some two-year-old’s Elmo doll, but when branding is executed by a professional team, and is executed consistently over a period of time, it can be a thing of beauty. And beauty sells, man.

It’s all quite simple really and bears repeating:

A brand is a promise and promises should be kept. A kept promise is a form of trust and once someone trusts you (or your product or service), they’ll beat a path to your door every time.

Make that I’ll beat a path to your door every time. Because even jaded, seen-it-all ad-guys have to buy stuff now and then.

A Strong Brand:

• Enables you to better match your capabilities, services and products with current and future customers

• Enables you to consistently sell your products

• Allows you to control price because of your perceived value

• Helps you to stand out from the competition and competitor brands

• Is more internally efficient because everyone is focused on the same vision

• Focuses how you hire key people—in fact, how you hire everyone

• Enables you to build on what you do best

• Enhances innovation, discipline and strategic focus”

*a sudden, passing sensation of intense emotion

Gary LoBue, Jr.

Art Director

The Russo Group

Why a Logo?

Your logo is your visual image expressed to the world when you aren’t there to speak for yourself. A good logo, or “brand identity,” should present a feeling of what to expect from your company and the people who work there. If done correctly, it can raise your profile, increase your top of mind awareness and allow potential clients to gain a feeling about who you are, what you do and how you do it. It speaks to your character and hopefully captures the essence of your philosophies.

But can a logo do all of that? Yes.

The science behind a strong brand may not be easily detected at first glance. It may be a color

combination, or a certain type face, or perhaps an icon that draws the eye. Often there is simply a feeling that people get when a solid brand reaches inside and embeds itself within the consciousness of those who come in contact with it.

In addition, a strong Brand Identity breeds loyalty and ownership within an organization. It allows employees to rally behind a symbol with pride – and speaks volumes to the dedication of an organization that dedicated the time and finances to treat their banner with so much care.

Why a logo?

Because it’s your company. You’ve worked hard to build it, and it deserves the right to be noticed and remembered.

So why would you trust something so important to a website that offers to create your logo for $99?

Why would you trust your secretary's brother's friend who can use some clip art?

Hire a professional.  Let them delve deep into your brand.  Allow them to develop an identity that will actually properly represent your product or service.

Michael Russo

Creative Director

The Russo Group

Putting your Creative Campaign out to Pasture

Remember your favorite childhood pet, that beautiful Golden Retriever named Lucky?

What a good friend and companion.

And remember when you came home from school one afternoon and your parents told you that they took Lucky to old-man Vernon's farm. They said it was a wonderful place for a dog like Lucky. A place with wide open fields and pastures; a place where he could chase rabbits and take nice long naps under an old oak tree. They said it was for the best, and somehow it all made sense.

Well, I'm here to tell you that your ad campaign is probably ready for Old Man Vernon's farm. Just how old is your current campaign? One, almost two years running? That's nearly 47-years-old in marketing years.

I'm not talking about a reinventing your brand, your brand identity, or your company's positioning statement or tag line. If carefully crafted and executed by a professional creative team, those have a shelf life and can almost be carved in stone.

What I am talking about is a reassessment of your advertising and marketing initiatives. Examining the current marketplace – more specifically your marketplace, determining where the void is, and changing the market's conversation. The topic of conversation will be your product or service. And the void will be filled with the same.

You can skimp on your marketing budget if you'd like, leave your clients and customer base to gnaw on those old print ads like ol' Lucky chewing on a bone, but that will come with a higher price. Flat sales, flat leads, or an even flatter company "wallet." And that's a hole you don't want to dig yourself out of.

I know it can be a hard thing to do, saying goodbye to that good friend and companion, "the old ad campaign." So I'll leave you with this: Like a new puppy, a new ad campaign will generate excitement, run constantly for the first few months, be friendly to all, but most importantly – be devoted to one.

So rest in peace, Lucky. I'll always remember you, but now I know, it was for the best.

Top 5 Identifiers of the Illustration Type

Psychology has long identified four different personality types. But to look at them through the eyes of advertising is a lot more fun. The following is the third in a 4-part series discussing these 4 personality types and how you need to craft your message to be understood by each of them.

The Illustration personality is all about the wow. They want to make sure it looks good and is on the cutting edge. 

The profile of an Illustration:

• Focused on first, newest, most
• Act first and ask later
• People oriented
• Wants to inspire
• All about Me

The Illustration can be identified by the look of their office:

• Prefer to meet in the conference room
• Lots of family photos
• Loves inspirational slogans and motivational posters
• Focused on achievements and awards

The Illustration uses clothing to express themselves:

• Flashy and newest styles
• Bright colors
• Big jewelry

Typical jobs for Illustrations are:

• Entertainment industry
• Advertising managers
• Public relations directors
• Sales
• Politicians

Descriptions typically associated with Illustrations:

• Poised and sociable
• Enthusiastic
• Concerned about causes
• Creative
• Prefers personal contact

Next up...Logo

Jaci Russo

Senior Partner

The Russo Group

Football and the Economy

The University of Louisiana at Lafayette (UL) Ragin Cajuns have had a fantastic season. Their 6-6 record doesn't scream excellence, but having been to their games, it was a great season to watch.

Tyrell Fenroy is a name to remember. He is now the 7th player in NCAA history to have four 1000 yard seasons. Watching him play is grace in motion. He has a passion for the game that should have been noticed by the Heisman committee.

With a great team around him, including a quarterback (Michael Desormeaux) that will probably go pro and a have career like his predecessor Jake Delhomme, it was a great year to be a UL Ragin Cajun fan. They worked very hard to become bowl eligible for the third time in 4 years. Yet, for the third time in 4 years they have been overlooked.

The state funded Independence Bowl in Shreveport, LA chose Northern Illinois (6-6) to play Louisiana Tech (7-5) on December 28th. When the state of Louisiana is facing a budget shortfall for next year, why wouldn't the Independence Bowl choose an in-state team to keep the money local rather than export it to Illinois. How many Husky fans are going to make the trip down here? How many hotel rooms and restaurant tables will they fill? The Ragin Cajuns would have brought thousands of fans with them to Shreveport. The in-state rivalry would have been great for both schools.

UL deserves it's chance for a bowl game and it's a shame that the Independence Bowl didn't recognize the talent that they had in their own backyard.

Jaci Russo
Senior Partner
The Russo Group

Theme Song

Have you ever thought of what your theme song would be? You know, your own personal soundtrack as you moved through life. Perhaps in sad times it would be something dark and reflective, or for more joyous occasions, something edgier and uplifting.

Now, think about how awesome it would be to have the power to simply flip the channel at any given moment, effectively changing your mood as easily as changing a song on your iPod. The truth is, music possesses the power to do just that. It can affect how we feel and act by connecting with us on an emotional level – in many ways, just like a strong brand. I know, it sound like a stretch, but let me explain.

Our ability to connect with emotions, whether it be through a song or brand, represents our desire for things that make us feel good about ourselves, our decisions and our lives. It also motivates us to act in a certain manor. Think of George Gershwin, Jimmy Hendrix, or Bach. Each possesses a unique sound that is theirs alone – with each provoking an emotional reaction from within. Whether you are fan or not, simply hearing their music will intuitively cause an emotional response.

Now think of Coke, Nike and Apple. What mental real estate do they own within your thoughts? Chances are they are firmly established in your emotional database.

So, do you remember where you were when the music died? Will your customers remember where they were the first time they realized your brand was a recognizable, unforgettable part of their life? If not, perhaps it’s time to give some thought to what your theme song might be. And to be clear, by theme song, we are not referring to a jingle, but rather, the essence of your brand.

Stacey Boudreaux Grow
Account Executive
The Russo Group

Staying The Course

Maintaining your brand through difficult times
(Pulled from the June 2008 Russo Group Newsletter - Revelations)

Chances are good that you’ve noticed the recent changes in our economy. Perhaps it’s the queasy feeling you got this morning as you filled up your car with gas, or maybe it’s the nightly news that works very hard to terrorize us all with forecasts of doom. Either way, we have all felt the pinch these last few months with no real end in sight. It is during these times that special attention must be paid to maintaining the integrity of your brand. Unfortunately though, most businesses forget about their commitment to building and maintaining brand equity and head directly into crisis mode.

Crisis mode generally results in discounts, sales and an attempt to attract transactional customers. While this may help to maintain the status quo, it won’t lead to long term gains. More importantly, you begin to slowly water down your message, losing the relational clients you have worked so hard for. This loss of brand loyalty is difficult if not impossible to regain once it is gone.

Think about it. Has your product or service declined in value since yesterday? No, of course not? Well then, why would you even think of not charging what your product or service is worth? Your brand is worth more than that, and it is vital that both you and your customers regard it as such. Truth be told, once you head down the road of price point marketing, you will soon find yourself chasing after a dog that will never be caught.

Strong brands understand the difference between transactional and relational consumers. Transactional consumers are going to drive to the end of the Earth, or at least the State Line, to get the lowest price (please disregard the amount of gas and time spent on this transaction). They will always make you work harder for less. Relational consumers on the other hand, will always want YOUR brand because of the promises you have made regarding quality, service, and overall awesomeness. They provide you with both loyalty and, wait for it – advocacy, the single most powerful form of advertising available. They rarely look for the best bargain, but rather, the best quality. These are the customers we all want.

If you are an avid reader of our writings here at Russo, you’ll notice that we talk about advocacy and results quite a bit. The reason? They are what we strive for with every branded touchpoint we develop. They are also unattainable as soon as you lose focus on your core promise and begin discounting the value of your product or service. Remember, your promise is your brand – and as soon as you begin slashing prices you lose credibility. So, before you run to the weekly paper and begin announcing the fire sale, think about the ramifications of those actions. Yes, there may still be difficult times ahead, but those who stay the course and remain true to their promise, will find their brand is not only intact, but stronger than ever.

Michael Russo
Creative Director
The Russo Group

Hello. I’m Brand New.

My name is Stacey. I am an account executive. I have one daughter. My husband is an artist. I love my family. I read the New Yorker weekly. I enjoy debates. I like pirate paraphernalia – I’ve had the same red bandana since a family trip to Indiana when I was 6 years young. I love to cook. I love to read. Some of my favorite fiction authors include: Hemingway, Austin, Fitzgerald, Barnes, Hornby, Parker, and Kundera. I don’t like spiders. I sing loudly in my car. I have a fierce sense of justice. I support local vendors whenever I can. I love music. I’m an indie rock girl with classical roots. Some of my favorite bands include: Mogwai, Belle and Sebastian, The Shins, Led Zeppelin, The Smiths, The Beatles, and Dirty Laundry. I like to stay busy. I like working downtown. I like traveling. I like retro clothing. I like to sew – even though I can’t do it well. I like “That’s what she said” jokes, and I’ll call out my own before you can. I’m competitive. I don’t like fluorescent lighting. I love my friends. I talk to myself when I’m concentrating. My brow often furrows when I’m absorbed in something, giving the illusion of grumpiness. I have no piercings or tattoos. Favorite movies: Roman Holiday, This is Spinal Tap, Annie, Annie Hall, Ms. Parker and the Vicious Circle, and Lost in Translation. I’m laid back about some things and severe about others. I like to work. I like to be liked, but don’t have to be. I enjoy talk radio. I have been writing a book, based on my many opinions, called “The Book of Stacey” since I was in seventh grade –It will never be finished. I’m an excellent listener. I’m a better person now than I’ve ever been.

As your new Account Executive I wanted you to have a sneak peak of exactly who I am. I understand that a lot of the details I’ve included are not necessary for a business relationship, but I’m not going to view our affiliation as pure “business, in the traditional sense of the word.” A business relationship implies formality, strict guidelines as to topics of conversation, and (worst of all) little to no enjoyment. Not here. My version of business is personal + personality + perseverance. Your wants and needs…I’m all about them. Your company’s objectives and goals…they’re mine, too! Really - I just want to understand WHY you are you. If I can do that, then customers will be able to see the same thing I do: motivated and smart business—and by business, I mean the updated version…the likeable kind. That’s what we at Russo like to call RESULTS.

I hope this little one-way, e-chat has shown you a bit about the “Stacey Brand” within The Russo Brand.

I’m looking forward to getting to know you.

Stacey Boudreaux Grow
Account Executive
The Russo Group

To Blog or Not to Blog...

A new word has crept into the American business lexicon, inherently intimidating by the very fact that it sounds so friendly – blog.

Here’s the good news. If you’re reading this, you’ve at least a basic understanding of blogging.

Blogs are an affordable and easy way to spread news and information across the internet. Among the technologically savvy (or those aspiring to be savvy), blogs have easily become as popular as the morning paper. You’ll see high-tech geeks as well as small business owners mousing over a blog with their morning coffee instead of perusing the business section.

With blogs’ ease-of-use and setup we are seeing a new information wave distributed as easily as point and click. Blogs have even been deemed instant, universal publishing.

So, why blog? Well, if you’re the sort that loves sharing information with others, (whatever your idea of information may be) you will love blogging. In their infancy, blogs tended to be personal journals - discussions of life’s deeper questions (like the general consensus on whether Brittany will have another break down), but now we see as many business blogs as personal ones. Their white-collar authors share industry information, stock reports, how-tos, and other information that can help outsiders and insiders understand business operations better.

Blogs also place you in the driver’s seat of distributing content for the web – and content is the key these days. It positions you as an expert in your field, allows potential customers the opportunity to learn more about you, and helps proliferate your name on search engines around the globe.

Trust me on this – if you have something to say – there is someone out there who wants to hear it.

So basically, the real question isn’t why should you blog, but why haven’t you yet?

Michael Russo, Creative Director
The Russo Group

The Effects of Branding During a Slowed Economy

By now I’m sure you’ve heard that our economy is a bit on the sluggish side. Some say we are on the verge of a recession, while others assume it has already begun. For businesses it is an anxious time that often leads to price reductions and short-term solutions. The problem with this philosophy is that it can also lead to their brand’s long-term demise.

Effective branding can help get a business through a slowed economy, as well as help it emerge as a category leader.

This is true for branding giants like Nike and Budweiser, as well as local and regional businesses.

The simple truth is branding builds value, and value builds brand loyalty and brand advocacy. The key to discovering and then establishing your value is to first define your point of differentiation. This is where great brands are made. Car dealers, health clubs, public golf courses, homebuilders, local banks, colleges, architects, law firms, widget manufacturers, you name it -- everyone has a unique essence just waiting to be discovered.

Once discovered, it is vital that all touchpoints associated with your business or organization reflect this difference at all times. We like to call this your “promise.” It connects you with your consumer, building both trust and confidence. A strong brand influences consumer behavior over time. With consistency branding can:

* Increases customer usage. Companies enjoy higher sales because more consumers choose a company’s brand over the competition, and their brand leads consumers to try and grow loyal to other of the company’s brands.

* Lessens the likelihood that consumers will migrate to competitor brands.

* Reduces a company’s marketing and sales expenditures. The more loyal a brand’s consumers are, the less a company needs to spend to maintain market share or sales momentum.

Proper branding delivers future revenue for lower effort and cost. It improves new product sales within a brand family and builds long-term customer relationships. Branding efforts, however, must be supported by the business or these benefits will fail to hold up over time. If the consumer becomes disenchanted or dissatisfied with a brand due to poor customer service, unreliable product quality, or other changes that reduce the value to the consumer, the power of the brand will fade.

Michael Russo
Creative Director
The Russo Group

Your Friendly Neighborhood Branding and Integrated Marketing Agency

Growing up, my favorite superhero was Spiderman, hands down. I’d particularly love it when he’d bag a group of robbers and web them up for the police to find later. He’d leave a simple note – “Compliments – Your Friendly Neighborhood Spiderman.”

No matter where he was – fighting the forces of evil in New York City, Los Angeles or some planet in a different solar system – he was always from your neighborhood, the guy next door. There’s a lot of appeal to this. You want to imagine that the person who’s going to save you, who’s going to protect you at all hours of the day or night, is somewhere close by.

Well, times have changed. We have a different kind of web these days that we like to call, the internet. The internet brings us all closer together and makes it possible for people thousands of miles away from each other to have a close and prosperous business relationship. It’s no different with an advertising agency.

Believe me, I know there are benefits to doing business with the shop down the street. But these days, every shop is “down the street.” Between email, IM, video conferencing, streaming audio and a host of other methods, you can and should expect the same kind of service from any advertising agency you partner up with. Because whether it’s defending your brand against a horde of mutant copycats or guaranteeing safe passage of your newest message right into the hands of willing consumers, what matters is the agency powering those solutions. In many cases, an out of market agency can also bring fresh ideas and approaches that can actually change the conversation and get you the results you are looking for.

Our agency? Well, like Spidey, We’re always on duty, ready to fight the good fight wherever it may be.

Compliments – Your Friendly Neighborhood Branding and Integrated Marketing Agency – The Russo Group.


Michael Russo
Creative Director
www.TheRussoGroup.com