Cautionary tale: A Forbes magazine cover from a little over 10 years ago, crowing about the one billion loyal consumers of Nokia and how they cannot be stopped.
Since that fateful day in 1985 when I first walked through the doors of Procter & Gamble’s hallowed headquarters in Cincinnati, Ohio, I have had the honor of working on some of the world’s most iconic brands. I started working on Ivory soap, Crest toothpaste, and Scope mouthwash; I progressed to Folger’s coffee, Dawn dishwashing liquid, and Mr. Clean. Over the years I went on to work on Pampers diapers, Tide and Ariel laundry detergents, Pringles, Pantene, Olay, Gillette — virtually all of the global P&G brands. I went on to Coke and Fanta and Sprite. I went into BAT and worked on Pall Mall and Lucky Strike. And today I have the honor of helping a great team shepherd the growth of the Fine brand, the market leader and name synonymous with tissues in the Middle East and North Africa. It’s truly been an honor to be entrusted with being one of the caretakers of these great brands. A defining moment for my learnings on brand building, and concepts like “brand loyalty,” came from the early 1990s when I was brand manager of Tide in Morocco. When I arrived, Tide had long been established as an absolutely iconic brand, built before me by a long line of brilliant marketers. The brand enjoyed a stellar 65-percent share. When Tide came to Morocco in the late 1950s, it literally transformed the lives of Moroccan consumers and became a true multi-purpose product. It was the market leader in laundry, in dishwashing, and in household cleaning. It even ranked Top 3 as a body wash! People loved Tide and used it everywhere! I would tell a Moroccan consumer, “I am from Shellicot Tide (the house of Tide in Arabic),” and people would suddenly transform before me. A sudden romantic look would appear in their eyes. They would talk lovingly about Tide and how it “saved their hands” and “made life so much better.” I had never encountered such emotions concerning a laundry detergent! I quickly realized what a special brand Tide was. It humbled me that I was leading such a brand. These experiences had a huge impact on me. I looked at “my brand” as my baby. I didn’t look at it as a brand, but as fine china that needed to be carefully cared for. We didn’t make rash decisions on the brand, and always put the consumer first. We never took her/him for granted. I got angry with the plant every time I thought the pack colors or product were slightly off-standard! I selfishly protected my baby! And, despite a flurry of competitive entries into Morocco, we not only held our commanding share, but we grew it to over 70 percent. Tide Morocco was truly a fortress. I moved on in late 1995 to Poland, and a long line of successors followed, all smart and clever marketers and impressed with the brand’s strength and “brand loyalty.” But then, a small but significant change took place, perhaps a natural evolution of all iconic brands that eventually fall from grace. Instead of treating the consumer’s love of the brand as a fragile item that needed to be carefully nurtured, the team fell into the “Brand Loyalty Myth.” They took the loyalty for granted. Instead of being considered fragile, it was considered strong as steel: “You can do anything, and people will still flock to Tide.” It’s a bit similar to Donald Trump’s famous statement line during the 2016 campaign, “I could stand in the middle of 5th Avenue and shoot somebody and I wouldn’t lose voters.” You start to assume loyalty as the norm. And this is the beginning of the downfall of the brand. Emboldened by the perceived rock-solid loyalty, the Tide Morocco team began taking gambles. A cost-savings idea here and there that “the consumer will accept as they love Tide and are blindly loyal.” “We can get away with it.” A formula change that was poorly understood and suddenly caused some skin irritations. Blinded by the Brand Loyalty Myth, the team ignored the eroding market shares as the brand dropped to 60 percent, then 50 percent, and then even 40 percent. Only then did they wake up to the disaster in progress and start to rectify. They realized their consumers were falling out of love with the brand. But by then, the brand was in freefall and had lost the trust of its loyal consumers, and in turn lost market leadership. I don’t know the shares today but I have heard they are in the 20- to 30-percent range. It breaks my heart to see my old baby now a mere shadow of its former self. The key driver? At its core, the issue is singular: a team fell into believing the Brand Loyalty Myth. And once you do this, you start trimming and saving and “subtly screwing your consumer” and you believe they will stick to you out of blind loyalty. They don’t. They won’t. The accompanying photo is a Forbes magazine cover from a little over 10 years ago, crowing about the one billion loyal consumers of Nokia. How they cannot be stopped. Well, Nokia was stopped. And not so long thereafter. Who owns a Nokia phone today? The one billion consumers are long gone. The brand is in tatters. And it all starts when the stewards of a brand fall into the brand loyalty trap. They take loyalty, and their consumers, for granted. It has been famously said, “Everyone is loyal; it is just a matter of defining what they are loyal to.” I agree wholeheartedly. I believe all consumers are loyal. But the question is, “What are they loyal to?” Most consumers are not blindly loyal to brands. They are loyal to what is in the best interests of themselves and their families. They are loyal to value, that delicate blend of product, image, pricing, performance, that makes them feel like they are spending their precious money wisely. People are loyal to their wallets. They will buy what is in their best interests. Brands that hit the sweet spot in terms of value then enjoy consumer loyalty. But the loyalty is driven not by the brand name itself, but the underlying proposition. Fiddle around with this proposition, and suddenly the value perception can shift. Or the appearance of a better option presents itself. As Tide Morocco and Nokia discovered, your loyal consumers will leave you in droves. The best brand stewards manage their brands with a level of paranoia. They realize the fragility of what they hold in their hands and treat it like fine china. They are careful and considered in their decisions. They inherently realize that every time a consumer walks into a store, it’s a new “election” and the consumer will vote at the shelf. And there is no guarantee he/she will vote the same way as she/he did on their last visit! The relationship with the consumer is nurtured and never taken for granted. These stewards implicitly understand the consumer’s loyalty lies in buying what is best for themselves and their loved ones. They spend their time investing in how to enhance this relationship. Building value, which then drives loyalty. The brand wreckers fall for the Brand Loyalty Myth. They sit in discussions and talk about, “We can trim some savings here and our consumers will let us sell them cheaper product because they are so loyal.” They take loyalty for granted. They seek to exploit loyalty to drive profits or attain other business metrics. They stop focusing on the relationship between the brand and its consumers. If you find yourself in such discussions, all I can say is, “Beware.” You are very likely entwined in the Brand Loyalty Myth, and might soon find yourself the next and latest Nokia. CLICK HERE TO READ THE ORIGINAL ARTICLE