Branding matters more on the Internet

many attributes in common. One ofthe chief contributions to their stayingpower is that they have developed andsustained strong brands.

For many years, branding has beenrecognised as one of the fundamentaltenets of a successful business be-cause good branding confers manyadvantages on a company. This soundslike the sort of textbook reading from

‘There’ll be two types of business in the year2000: those online . . . and those out ofbusiness’.

Bill Gates

SETTING THE SCENE: WHY BRANDINGMATTERS TO BUSINESSESThose companies that have dominatedthe FTSE or the Fortune 500 have

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

Helena RubinsteinManaging Director, The Lab,Waterside House, 47 KentishTown Road, London NW1 8NX

E-mail:[email protected]

Branding matters moreon the InternetReceived (in revised form): 17th January, 2001

HELENA RUBINSTEINco-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 strategicplanning director in a communications agency prior to specialising in brand strategy, organisation andcommunications. In recent months she has researched the developing e-commerce marketplace and has beenfocusing on bringing commercial and marketing disciplines to bear on the new online world.

CAROL GRIFFITHShas 18 years of client-side experience in developing and implementing service brand strategies with blue-chipcompanies. As head of brand strategy at NatWest she led the brand work stream within a complete overhaul ofthe group’s direction, developing the new brand strategy, internal staff mobilisation and advertising andpromotional programmes.

In 1999 she moved to management consulting, initially within NatWest, where she developed the customerproposition and media launch programme for NatWest’s Internet bank. She now specialises in bringing thedisciplines of conventional marketing to bear on dot.com developments — identifying and delivering cohesiveexternal and internal strategies, activities and staff behaviours to achieve consistent, branded customer service.She regularly lectures on brands and organisational development across Europe.

AbstractThe bubble appears to have burst in high-tech stocks — or at the very least has deflated. Investorsseem to be returning to the safe long-term bets of the old-economy companies. This correction inthe market is an ideal opportunity to review what has been happening to those companies thathave been establishing themselves on the Net.

This paper takes a look at what lessons the new economy can learn from the old, and also howthe Internet is fundamentally changing how companies manage their brands. The basic premise isthat on the Internet the brand itself must be at the heart of the business strategy. The emphasisshifts from brand to ‘branded experience’, and becomes an issue for the whole company. The keyprinciples of how to develop your brand remain the same, but the need for speed means that howyou manage it will change forever.

This paper draws on the authors’ extensive experience of building brands online and offline, andof aligning/integrating internal values and behaviours with external manifestation of the brand.

able to command a higher price andhence ensure future sales and profits.In the end, strong brands trans-late directly into superior shareholderreturns.

This can be clearly demonstratedby Figure 1, which shows the valueattributed to a brand as a propor-tion of the market capitalisation. Com-panies such as Coke and Ford, whichare among the most highly valued inthe world, have more than half oftheir value accounted for by the brand.Some companies, such as Hertz andAdidas, have a greater proportion oftheir value attributable to the brandthan to their tangible assets.

But brands also confer other ad-vantages. They can be an inspirationfor employees and act as a rallyingpoint; they provide a focus for consis-tency of communications and action;they help to differentiate from com-petitors; they can act as a touchstonefor the development of new products

the marketing section of any MBAcourse, but time and time again strongbrands translate into real equity andsustained profitability. How do they dothis?

Benefits of brandingAny even half-savvy consumer willtell you that brands have meanings forthem over and above the basiccharacteristics of the product orservice being offered. Coke is not justa brown fizzy liquid but ‘the mostfriendly and ubiquitous drink in theworld’; Fedex is not just a parceldelivery service but ‘an utterly reli-able business partner’. These complexpromises are developed over time andoften after considerable effort andexpense have been spent on ensuringthat the brand promise can bedelivered and then communicated.The ultimate aim for companies is tocreate something distinctive that is

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

Figure 1 Brand value as a percentage of total market capitalisation

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

50

100

150

US$,000M

Source: InterBrand

BRAND VALUE AS APERCENTAGE OF TOTAL

MARKET CAPITALISATION

(US$Million)

BRANDING MATTERS MORE ON THE INTERNET

There are two critical reasons whythis is true:

— brands help people to make choices— branding is transparent on the In-

ternet.

Brands help people to make choicesAs well as performing several impor-tant roles for businesses, brands arealso important for customers. One oftheir fundamental roles is in simplifyingchoice. People are faced with ever-increasing choices about what to buyin virtually all areas of their lives (thereare few real monopolies left). How,then, can they make a decision aboutwhat is right for them? One obviousaspect of the decision making is to gofor a name they trust; to select acompany of which they have heard;one which has a reputation for quality,service and reliability. In the end, to beon the shopping list the buyer has tohave heard of you and believe inyou.

The Internet magnifies this problem

and services; and they enable com-panies to appeal appropriately to mul-tiple target audiences.

BRANDING MATTERS MORE ON THEINTERNET

— There are 7,598,697 websites onthe Internet. A new dot.com islaunched every half hour.

— The number of Internet connec-tions is expected to increase by afactor of four over the next fiveyears.

— 81% of people will not buy onlinebecause fly-by-night retailers worrythem.

If the discussion above demonstrateswhat brands can do for business ingeneral, then they become even morecritical in the virtual world. If strongbrands are important to companiesoperating in a world of bricks andmortar, they are even more impor-tant in the open market of theInternet.


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

T r a in line .c o m

L e tsbu y it.c o m

F ir e dup .c o m

F T.c o m

Q XL

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

£ spend first quarter of 2000

RUBINSTEIN AND GRIFFITHS

fulfilment and delivery is visible to theconsumer (Figure 3), and says some-thing about the way you deliver onyour (even implicit) brand promise.

This begins with the way youmarket to and target potential cus-tomers (what you communicate). Oncepeople have accessed your site theyneed to be able to navigate their wayaround it easily and quickly and be ableto register without it taking up toomuch time or asking for unnecessaryinformation. Once they have registeredand decided to buy, consumers mustfeel that any financial transaction is safeand private and they will expect thegoods to be delivered on time, at atime and place which is convenientand with the right items. Should therebe a problem, after sales service needsto be exemplary. All these activities arerepresentative of your brand’s promise.It was not that these activities did notoccur offline but that online they

tenfold. There are literally thousands ofvendors selling their wares. What arebuyers going to do? They are going totap in the name they have heard of andbelieve in. This obviously gives theestablished players (often high-streetnames) an advantage. It explains whyso much effort and money goes intosecuring memorable domain names andwhy the new breed of dot.com com-panies is spending so much on conven-tional advertising (Figure 2). But mosthave not yet gone beyond awareness tothinking about what they have to do tobuild the trust and promise required tobe a true brand.

Branding is transparent on theInternetThis brings us to the second reasonwhy branding matters more. Thewhole process from downloading andnavigating the site through to all the


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

E-mail management!error resolution!claim management!call centre integration

Collateral delivery!document processing!pick/pack/ship

Financial data!security!privacy!integration!bill presentation

Registration!product info!community!personalisation!guided selling

Marketing!targeting!position!partnerships

Site

interaction

Transaction

platformsOrder

fulfilment

Cus

tom

erse

rvic

e/su

ppor

t

Customer recruitmentand retention


the authors, you have been disap-pointed when buying from some of thewell-known brands now trading on theInternet, you will know that the basicrules warrant reiteration.

A sound economic base for theproposition

Sound economic basisThe demise of Boo.com, e-Toysand letsbuyit.com has proved tobe a wake-up call to manyinvestors in the sector. In the caseof Boo.com a good idea on paperwas undermined by unrealisticroll-out plans (eight languages in18 countries), an overly com-plex ordering process and poordelivery. As with the off-lineworld, it pays to test the conceptout in one area, and iron out theservice wrinkles before trying toexpand. There is a similar les-son for letsbuyit.com, where thefundamental lessons of a scalethreshold seem to have beenignored.

This is the most basic rule of all. Thebig question is can I provide somethingbetter, cheaper or different online thanI could anywhere else? Even then,being cheaper may give you a short-term advantage but is not usually asustainable way to get growth andprofits.

Understanding how the Internetwill help you to deliver sustainedshareholder value (low-cost supply,sophisticated customer management,faster fulfilment, disintermediation,

are more transparent and very muchfaster.

ARE THERE NEW RULES?A growing realisation of the vital roleof brands on the Internet is leadingpeople to re-examine the approachesthey take to branding on the Internet.Do we need completely new ways ofdoing things, or are we in danger ofthrowing the baby out with the bathwater? The answer to both questions is‘yes’.

THE FUNDAMENTAL PRINCIPLES STAYTHE SAMEExperience tells us that it is unwise topretend that you are starting with ablank sheet of paper. While the In-ternet is encouraging people to ‘breakthe rules’, ‘think out of the box’ andseek to make a ‘step change’, thereseems no valid reason why the logic ofcommerce should disappear altogether.Yet recent newspaper headlines wouldsuggest otherwise. Wiser voices haverecommended caution, but the newgold rush fever has proved too great.The recent correction in the marketsuggests that the sceptics may havebeen right.

In the authors’ view, this is becausethe following rules of thumb must stillapply:

— have a sound economic base (anda clear customer promise) fordeveloping an Internet proposition

— understand and have knowledge ofyour consumers and customers

— decide what role the Internet isgoing to play.

This is not rocket science. But if, like



obvious, but we are dealing with atechnical world, where too often thefascination is with a technologicalcapability rather than with meeting realneeds.

Many of the companies the authorshave worked with have organisedthemselves around the technologyrather than around customer needs. Forexample, a new start-up based on WAPtechnology grouped its divisionsaround the different types of technol-ogy delivery rather than aroundcustomers who would be signing upfor sports services or financial services.

Furthermore, once you have under-stood the needs and dreams of yourcustomers, can you meet those needsprofitably? Understanding the correla-tion between profitability and therelationship value in your business willhelp you to decide how far you canrealistically go. What are the keyindicators of lifetime value — length ofrelationship/breadth of product take-up/share of customer wallet? Are thereclear segments? Is the relationshipdetermined by speed or information orgeography? It is important to look atthe underlying causal relationship notjust the short-term effects, becausebrand loyalty (unless you have first-mover advantage coupled with first-class customer service and fulfilment) ispretty non-existent on the Internet.Information provided by your userswill help you to identify and cherishyour best customers, enable you toprotect them from competitors andencourage their loyalty.

Decide what role the Internet is goingto play in your companyThe Internet is providing many com-panies with a unique opportunity to

unique niche offering, for example) iscritical to this debate but so too isunderstanding the ‘consumer promise’.At base, great brands satisfy a humanneed. If the service or product cannotfulfil this basic promise then it will notsurvive. In other words, the acid test isstill can I deliver something genuinelydifferent, more efficiently and effec-tively than anyone else?

Understand and know yourconsumers and customers

Know your customersAnother example of understand-ing the customer base concernsglobal brands. If you are globalthen consumers will have globalexpectations of you. The Gap isone such brand. It has an excel-lent website where you can or-der from a good range of basicclothes . . . if you live in the USA.Yet customers in Europe are alsoloyal to the brand. Compare thiswith River Island, which stocks adifferent range in the USA butwill happily mail these clothes topeople in the UK.

Again, this sounds like a truism, but itis critical to the success of anyenterprise. Maintaining a profound andintuitive insight into human nature andvalues that goes beyond that of yourcompetitors will help to confer agenuine sustainable advantage. Youneed to research into emotional as wellas rational drivers. This means beingtuned in to the needs, wants anddreams of your consumers. It sounds



Delivering a consistent brandexperience

Branding the experienceIt may be a mistake to view theWeb as just another distributionchannel. The Nike swoosh can beseen everywhere, but when For-rester Research surveyed theirwebsite they found that it wasanything but a hot destination.Why? The site was complex andhard to navigate; the picturesof sports stars took ages todownload. The content was notoffering a solution, but moreimportantly it was not offering anexperience.

The prevailing wisdom used to be thatthe consumer relationship was based onthe product alone, and we focusedon finding its USP and point of dif-ference and ramming this home atevery opportunity. The product brandwas underpinned by the ability to getdistribution. A company that definesitself around a product provided to anever-changing marketplace is generallyreactive and must redefine its businessevery time a product changes or be-comes obsolete (or it goes out ofbusiness). Later we came to realise thatmost brands had a service componentas well, and we had to ensure that thelevel of customer service was commen-surate with the brand promise. Thisevolution was underpinned by the ad-vent of call centres enabling contact tobe made on a mass scale.

Now the presence of brands on theWeb has meant that we have to brandthe experience. Brands have to beuseful. They have to offer a solution

rethink their future. For some, theInternet may be working merely as anadditional channel through which tosell products or services, for others itmay represent a way of simplifying orconsolidating the supply chain. Butsome companies are using it to movethem from what they are today towhere they want to be. It is enablingthem to refresh and reinvent the com-pany and its image.

An excellent example of this isIceland, which saw the opportunitiesopened up by the Internet to reposi-tion the brand altogether. Iceland hada reputation for being focused solely onfrozen foods and related products, andhad an image which was downmarketand narrow. They have used theInternet not merely as a new channelthrough which to distribute their waresbut as an opportunity to revisit thecustomer value proposition, alter theirconsumer profile and revamp thecompany’s image. Today, many morepeople see Iceland as a pioneer in thisfield and the new customer base ismore upmarket and will spend morewith them.

ONLINE BRAND SUCCESS FACTORSThis paper has discussed some of thebasic rules of branding which still seemto apply online. But where are webeginning to see some new ap-proaches? There seem to be severalissues to reconsider:

— delivering a consistent brand ex-perience

— integrating all the expressions of thebrand

— establishing brand awareness— measuring every new initiative

against the brand.



apparent queuing time. These tech-niques reinforce the positive brandvalues and contrast favourably with themany other service companies whichhave yet to understand this. There maybe no substitute for old-fashionedhuman intervention when the cus-tomer is stuck in a service loop, but the‘call me’ button provided by manycompanies is a step in the rightdirection.

Reinforcing brand valuesDisney are adept at letting their‘guests’ know how long they willbe in a queue and delight themwith entertainment; Ticket masterhave learned that they can exceedcustomer expectations by tellingcustomers that they are 19th inthe queue and it will take tenminutes, but in reality the cus-tomer is answered within fiveminutes. Is it possible for theonline experience to be similar?

Integrating the online and offlineexperience through all expressions ofthe brand

The Boden experienceWhen Boden first went on-line orders increased massively.Lead times became longer asthey struggled to keep upwith demand. The problem, ittranspired, was that they wereused to holding minimal stocksand sizes. The managing directorwrote personally to every cus-tomer to explain what had

to a problem, an experience and anopportunity to interact. There is noway you can provide a rewarding ex-perience without regularly asking forfeedback.

The experience is the product. TheInternet enables you to dimensionaliseyour brand by forcing you to createinteractive, immersive and dynamic ex-periences for your customers. This im-pacts on everything you offer, from thenavigational flow to the speed of yoursite and the speed of fulfilment. Thisevolution is underpinned by technol-ogy.

Delivering a consistent brand ex-perience is one of the cardinal rules ofbranding, which is as true online asoffline. But it is made even moreimportant because of the transparentnature of the e-value chain describedearlier.

As the lines between shopping andrelaxing at home between advertisingand entertainment begin to blur andconsumers become involved at everystage, so brands become more aboutthe experience not the product. It is nolonger enough to communicate andpromote awareness of your name, as doFord, no longer enough to create animage like Tango, nor is it enough todifferentiate by product capability andspecification, like Direct Line. On theNet you have to orchestrate everythingyou do to deliver a highly differen-tiated and consistent positive ex-perience. At the same time, theInternet encourages customers to ex-pect instant gratification without com-promising quality, reliability and trust.

Companies in the leisure industrywith long experience of handling highcustomer volumes have evolved simpleways of always seeming to deliver ontheir promise, such as minimising



employees need to use with customershave to be honed to give a goodaccount of the brand. Ensuring that thebrand promise and its implications arewidely understood and acted outin every customer interaction isparamount. The foundation for provid-ing a positive brand experience isgetting the basics right: accessibility —ease of contact, responsiveness, userfriendliness — and reliability —delivering on the promise rationallyand emotionally.

Go beyond establishing brandawareness (and accessibility)In the latest round of dot.com start-upsthe emphasis seems to have been onhyping the name to build awarenessahead of a rush to the market. But awell-recognised name is not the sameas a strong brand, and it is not aguarantee of business success.

The example of lastminute.comdemonstrates this point clearly. A goodidea on paper, hyped to an extraordi-nary degree through paid-for mediaand collateral press comment, it wasundermined by a failure to understandthe economics of its proposition andgenuinely deliver the promise made.

happened and how they weregoing to deal with it.

This rapid crisis managementappears to have retained theloyal customer base, but alsodemonstrates how selling on theNet forced Boden to rethink theiroperational strategy to reduce leadtimes by moving to a biggerwarehouse and changing theirstock policy.

Physical, promotional and behaviouralmanifestations of the brand need to becoherent (Figure 4). While it may notbe possible to update all products,processes and outlets to keep pace withdevelopments on the Internet, there isa need to deliver the brand promiseclearly and consistently across all touchpoints.

Service brand managers are wellacquainted with the difficulty of coor-dinating multiple products across mul-tiple touch points, but it is a newchallenge for FMCG brands beginningto trade on the Net.

The skills and behaviours that


Figure 4 Expressions of the brand

The look of t he sit e The way t hecust omer ser vice

people answer t hephone

The speed at whichar e deliver e

The ease of r et ur nsThe lack of t echnical glit ches

value-added ser vices

The use f r iendliness

The ease of returns

The look of the site The way the customer servicepeople answerthe telephone

The speed at whichpackages

are delivered

Your company !dot.com or otherwise

The navigability of the site

The userfriendliness

The value-addedservices

The lack oftechnical glitches


difficulty for start-ups is to returnto functional brand naming — choose aname that is readily triggered (doeswhat it says on the can . . .). In addition,make good use of third parties —alliances, shared developments, e-promotions — to add visibility andsalience to your offer, provided thatthey fit with your brand.

Measuring every new initiativeagainst the brandOnline marketing really does givemarketing the opportunity to be ac-countable. Any company should begoing online not just for presence butfor results, so it is critical that themeasures of success are agreed earlyand up front. There are tools available,so use them.

Like every other newproduct/channel development, In-ternet development requires carefulevaluation and planning, the setting ofrobust targets and establishingperformance measures in sufficientdetail to be actionable.

e-CRM will enable you to find outwhich of your customers are reallyvaluable to you. Eighty-four per centof online businesses do not follow uptheir online customers and 75 per centdo not recognise repeat customers. Yetit is possible to know who goes to yoursite, how often and what they do whenthey get there. Making use of fast,continuous customer feedback is a wayof increasing involvement and buildingloyalty.

Measures of brand fit — The acidtestOne of the opportunities offered by theNet is to be able to develop new

A number of high-tech companieshave eschewed traditional advertisingin favour of slower-burn options —influencing the influencers, ingredientbranding and word-of-mouth cam-paigns through communities of inter-est.

Slow-burn marketingNextweekend.com has had awebsite registering consumer in-terest since last autumn. Theyhave opted to go for a slow build,generating curiosity, deliveringsolutions and seeking customerfeedback to inform an ongoingprogramme of product andcommunication enhancement.

Companies are also beginning toexperiment with the way in which theInternet allows them to develop adialogue with a segment of customers.In particular, developments in thesoftware for electronic customerrelationship management (CRM) areenabling companies to not onlyunderstand but also influence customerbehaviour through relevant com-munication at the right time with theright offer. These companies arelearning that successful customercommunication is customer initiatedrather than company initiated. Onceagain, we see the customer seizingcontrol.

It is therefore critical that you makeit very easy for customers to find you.People generally know how to findeven relatively obscure items on thehigh street or from Yellow Pages. Onthe Web consumers tend to head forbrands they know and trust.

One way of side-stepping this



It used to be thought that cor-porate strategy was entirely separatefrom the strategy developed for thebrand, but in fact they are entirelyinterconnected. Because brands haveboth meaning and real monetary value,they impact on every aspect of thebusiness and its operations, and thisbecomes even truer on the Web. Thewhole experience for the consumer,from navigating the site through all thefulfilment and delivery, is visible andsays something about the trustworthi-ness of your brand. In the past thischain of activities occurred but waslargely hidden from the end user andtended to occur relatively slowly. TheInternet is a radical shift, as not only isthe consumer actively involved in allstages of the transaction, but also thestages are transparent and happen fast.

Established companies with their bigadvantages in visibility, recognition andreal estate can be huge beneficiaries ofthe Internet and so can innovativestart-ups. The success factor is notwhere you start from but how youbuild and maintain your brand.

Despite all the myths, one realityremains — the customer is stillat the heart of the business. Inthe end, brands are for people.Forget this fundamental truth atyour peril. Branding is also at theheart of business strategy on theNet. It is probably driving it. Apowerful brand promise " consistentdelivery # profitable business.

services and products at break-neckspeed. The new idea looks as if it willdeliver against financial performancecriteria, but is it right for the brand?

Be absolutely ruthless about notdoing things that do not add to thebrand, and stop things that detractor distract from positive, manageddevelopment.

There is real time and there isInternet timeBig global strategic consultancies arefinding that their customers no longerhave time to develop a detailedstrategy for Internet activity. It hasbecome much more ‘seat of the pantsstuff’. Yes, you have to move quicklyto build a brand on the Net, but youalso have to live with the conse-quences of the brand you build. Asthis paper has demonstrated, customerstake the brand you create and developtheir own meanings — so you needto be very sure that the basic brandfoundations you build are the rightones.

BRANDING IS AT THEHEART OF BUSINESS STRATEGY ONTHE NETBranding is more than just a label. It isan organising principle that can bringcohesion to the diversity of a com-pany’s activities and is central to theability to compete and survive.



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Branding matters more on the Internet