Phil Darby of The Full Effect Company speaks with Rob Llewellyn about the disconnect between branding and business transformation.
Rob Llewellyn: I'm speaking with Phil Darby today. Phil is the founder of the Full Effect company, a consultancy that helps organisations build brands and align their business's behind them.
Rob Llewellyn: Phil, welcome.
Phil Darby: Hi Rob, thanks very much for having me. I'm delighted to talk to you again.
Rob Llewellyn: Yeah, it's good to talk to you again, Phil. We're going to talk about brand, let's start off with probably the most fundamental question I could ask you, what is a brand?
Phil Darby: The million dollar question. I travel around all over the place having this discussion with people, and actually it's quite a frustration, because we really shouldn't be having this conversation any more. Everybody who's in marketing should really know what it is. But there's still confusion there, which is strange.
Phil Darby: I tend to view a brand as a community, a community of people with shared values and beliefs. It's represented by a promise, the promise is at the core of the thing. And basically the brand is set up to deliver that promise. So, it means it generates innovations, it develops products and services that customers buy. And then when you buy the products, you wear them as badges and belongings. So it's a community that you belong to in the same way that you move into a particular area to live. You choose a place that matches your beliefs and values.
Rob Llewellyn: For the organisation, Phil, what is the value of a brand.
Phil Darby: Well, I think most people tend to look at brands as an external thing, it's something to do with the relationship between the business and the customers. And of course it is that. But actually, when you look at it that way, you're missing the big opportunity, because really if you consider that the single biggest factor determining the business success or failure is efficiency, having a strong brand is the quickest route to efficiency that you could have.
Phil Darby: Ernst & Young recently conducted a piece of research that revealed that investors, once you've got the compliance issues out of the way, the single thing that most investors could consider to be the indicator of a good investment is marketing, and in particular, brand. Because when you have a brand, you've got that community there, and it's a solid customer base, and a clear promise that will make it easier, and cost less, to attract more customers and build the business.
Phil Darby: So, the real value of a brand is internal, because it drives your opportunities.
Rob Llewellyn: On that note, Phil, how much of an influence does a brand actually have internally within the organisation?
Phil Darby: Okay, well I mean if you think of this community, just try and visualise this community. The community comprises employees, investors, suppliers, distributors, as well as customers. They're involved there. A brand that's managed correctly will have it's entire community, that's all of those people, understanding and being committed to playing their part in the delivery of the brand promise, this promise that's in the centre of the brand. The thing that, when you go to a customer, you say, “You buy this product,” or, “You join our community, and we will change your life in this way.” It's got to be a life changing thing.
Phil Darby: So, once everybody who's concerned with your business, the back end of your business understand what that promise is, and has a very clear target and understanding of what their role is in delivering that, then you start to achieve a whole lot more efficiency.
Phil Darby: So, for instance in terms of employees, you cut out any wastage that's involved in pursuing projects, or initiatives that aren't aligned behind that promise. So you're cutting down costs, and you're cutting down the use of time. You manage with your suppliers, you do better deals with your suppliers, because they understand where you're going. Your investors are more confident, because they appreciate what you're trying to achieve. And the whole thing just hangs together a whole lot more.
Phil Darby: So, that's really just a few examples of the way that a brand will influence the efficiency of a business, and as I said, the single biggest factor differentiating success and failure is efficiency in a business. You just put money in one end, and at the other end you get that money back and some more, provided that you've done the right thing in the middle. And this is what it's all about, it's just aiding efficiency.
Rob Llewellyn: So, Phil, through a transformation lens, what part does transformation strategy play in brand development?
Phil Darby: Ah, right. There's a lot of people around, there's a lot of businesses that are set up that call themselves brand consultancy. And when you look at them more deeply, really what they're telling you is that they are … they're focused on the communication side of the brand, which is sort of logo design and naming, and stuff like this. And the collateral that you produce. Whereas, as I've already said, the real value of a brand is actually internal.
Phil Darby: So, what we do with brand discovery, which is the programme that I use at the Full Effect company, brand discovery starts by helping an organisation define its brand. That is taking 12 coordinates, if you like, of the brand, things that go together to pinpoint what it's about and what it's essence is, and ends up defining the promise. And of course, once you've got that promise, and once you've got all your people understanding what it is, then what you have to do is set about realigning the business behind it. That's where your efficiency comes from.
Phil Darby: So, the role of business transformation, which is sort of your area of the process, is that once we've defined what we're trying to achieve, you can work with the team within the organisation to help them find the quickest and easiest way to delivering that. So if they're fully committed to using their hard and their soft skills, to delivering this promise, you can work with them to develop the processes that enables them to do that.
Phil Darby: And that's why really a proper brand development programme is really … a very small component of that is actually the external communication. It doesn't actually happen until the end of the process. The biggest part of the process is actually restructuring the business in a way. But it doesn't have to be necessarily that radical, but restructuring the business and introducing processes that make it more easy for the employees that you've got at your disposal, and your suppliers, and your partners, and your distributors, to play their part in delivering the promise.
Rob Llewellyn: Now, as we know Phil, transformation, it's not an easy thing to get right. But from your perspective as a branding expert, why do you think there's such a high failure rate amongst transformation programmes?
Phil Darby: It is massive, I read somewhere it was something like about 80% of transformation budgets fail. But I'm not surprised, because, as I said, traditionally people tend to approach brand development, which is again, I still think that this is what we're talking about with business transformation, it is aligning behind a brand. But I think that people approach it from the wrong end really. They see the transformation as the be all and end all, or they see the brand model development as being the be all and end all. And they don't actually see that you need to put the two things together.
Phil Darby: And I think that's really been the reason why these things fail so often. I mean I know there's a common belief that a lot of transformation projects fail because they don't have support at CEO level, and that's something that you and I have discussed before I think. But I think one aspect of that is this understanding of what we're doing with the transformation.
Phil Darby: So, a lot of people firstly start off doing transformation without having a brand model. And the brand model is your brief really, that's the brief to you guys. This is our promise, this is what we want to deliver. How are we going to structure the business to do that? And a lot of businesses just say well okay, let's just make the processes more efficient, regardless of whether they're aligned behind delivering the promise.
Phil Darby: So that's one reason that they fail. But from my perspective, as I said, the brand discovery programme that I run has distinct stages. The first stage is defining the brand, and that's producing your brand model. The second stage is internal marketing, that's when you're getting your people behind the idea, and getting them to understand what it is that they're trying to do with their skills and their experience.
Phil Darby: And it isn't until you've actually got that process sorted that you should be going to market. Because when you ake your promise to market, that's a major opportunity. For most businesses, they only go through transformations once they're in some kind of crisis I think. And so this is for many of them their last gasp to really get people to reconsider them. And it's a big challenge to get somebody to reconsider you.
Phil Darby: If you consider that it costs 10 times as much to attract a new customer as acquire a new customer in the first place, than it does to resell to an existing one. And that's a big role of brands. Brands help businesses build relationship that reduce the effort involved in reselling products, and repeat sales to existing customers. But it costs 10 times as much to acquire a customer in the first place, which is why brands pay you back straight away on that level.
Phil Darby: But, if you go to market and make a promise, which is inherent in your brand model. If you go and make a promise to customer that by buying your product, I.e. joining your community and wearing your product as a badge of belonging, that you will change their life in some way, be it a small way or a big way, and then you fail to do that. Then you're going to seriously annoy them. And you just alienate them.
Phil Darby: So, back to this number again of 10 times as much to attract a new customer than it does to sell again, or repeat sell to an existing one. If, having done that, you bring them back on a false promise and you annoy them, and you alienate them, there was some research done, I think it was by Virgin years ago, that showed that it could cost 100 times as much to entice them back again. And you know that from your personal experience.
Phil Darby: The relationship we have with brands, which I call these brand-ships, because they're like friendships, but it's with a brand. The relationship that you have with brands is based on trust. And once you've broken that trust by making a promise and not delivering it, gaining that back again is a big obstacle. You know, with human nature, and people, and your friends, and their grievances, that's the way it goes. And it works the same with brands.
Phil Darby: So, if you go to market with your proposition, to answer your question of course, I'll get back to the beginning again, if you go to market with a promise and you fail to deliver it, you're going to fail big time. It's not just a failure to deliver that promise. I know, okay, yeah, we'll try again next week. You've lost that customer effectively. And the cost of buying them back and redeveloping, in terms of time and money, of redeveloping and reestablishing that relationship where they're prepared to try you again is for most businesses will be untenable. It won't be a viable proposition.
Phil Darby: So, failure very often, and I see this more often than any other kind of failure, is by going to market with a promise that you aren't absolutely certain that you can deliver.
Rob Llewellyn: So, what's the answer Phil?
Phil Darby: I think the answer is, as I've intimated already while we've been discussing this, I think the answer is an end to end solution. I mean firstly it's an educational one, because we've got to get people to understand that brands aren't just about logos and products, and what have you. When I do these seminars around the world, I very often start the thing by saying okay guys, tell me what do you think a brand is? And the hands go up and everybody says it's a product, or it's a logo, or it's stuff like this. So I spend the first few minutes always shooting down these things. So, the first step is to get marketers, and then once we've persuaded the marketers and aligned all the marketers behind the idea, to get the general management of the business behind the idea of brands as communities. And the far reaching influence that they have in a business, not just in the relationship with the customer.
Phil Darby: That's the first stage. But once you've got that, then the executive team have got to be able to go somewhere and plug into a solution. And at the moment, pretty much, I mean I don't know what the percentage is, but most of the agencies that I see that set themselves up as brand consultancies, they do the development or the definition of the brand, and then they hand it back to the client and say okay, make that happen.
Phil Darby: And then the client has to go to somebody like yourself, and plug in your expertize. And there's an inefficiency there. Not necessarily the fact that you're using two companies, but the fact that it hasn't been cohesive from the beginning. That the people who are developing the brand proposition, the brand model, are not already aligned and attuned to the thinking and capabilities of the people who are going to transform the business behind it.
Phil Darby: So, I think the trick to making more of these transformations successful is very much about people like you and I working together and understanding what we each do, so that we can make the process from defining the brand to taking it to market with absolute confidence that you can deliver that promise. A seamless process from end to end. And I think that's really as simple as it is. But it's a big ask really, given that we're still debating what a brand is.