Seven Deadly Sins of Branding

How good is your knowledge of Brand America and Brand E.U.?

Bernd Debusmann’s article “Who Wins in U.S. Versus Europe Contest?” challenges our parochial thinking about the competitiveness of Brand America in the global economy.

Who has the world’s biggest economy? A) The United States B) China/Asia C) Europe

Who has the most Fortune 500 companies? A) The United States B) China C) Europe.

Who attracts most U.S. investment? A) Europe B) China C) Asia.

The correct answer in each case is Europe, short for the 27-member European Union (EU), a region with 500 million citizens. They produce an economy almost as large as the United States and China combined.

It is clear from the questions above, Brand E.U. is a formidable competitor to Brand America for share of foreign direct investment inflow. It is also clear when you look at the global FDI inflow share trend. If you look at it on a country-by-country basis, Brand America appears to be the share leader. However, when you look at the data on a trading block basis, you get a very different picture. The numbers suggest Brand E.U. has a strong share of global FDI inflow dollars.

Bernd claims Americans typically have incorrect preconceptions about Brand E.U. He argues that one root cause is media mischaracterization of E.U. members and the E.U. in general as inferior to Brand America. Bernd points out “On a long list of quality-of-life indexes that measure things beyond the GDP yardstick – from income inequality and access to health care to life expectancy, infant mortality and poverty levels – the United States does not rank near the top.” To the degree these indexes portray an even close to real picture of Brand America, we would be wise to take heed and develop strategies to help Brand America become even more competitive for share of FDI inflow.

One of the biggest mistakes marketers can make is to have an over inflated ego that makes them feel justified in disrespecting the competition. This inevitably leads to poor strategic planning and places the long-term competitiveness of your brand at risk. In place branding, an over inflated ego will result in a declining share of capital investment dollars for your community, region or state. It is one of the seven deadly sins of branding.

So, is arrogance the only watch out in branding we should be worried about?

In his book “Brand Failures – The Truth About The 100 Biggest Branding Mistakes of All Time”, Matt Haig highlights seven challenges brands face including arrogance (Brand Ego). Here is a review of Matt’s watch outs restated for our world of place branding.

SEVEN DEADLY SINS OF BRANDING

  1. Brand Amnesia – When a place brand forgets what it’s core promise is, it runs into trouble. An example in product branding, is when Coca-Cola tried to replace its original formula with New Coke. Imagine Las Vegas forgetting its promise of uninhibited fun and trying to replace it with a promise that would try to compete with Silicon Valley. It would probably not be a very successful strategy. While the Las Vegas example is highly unlikely, think about the challenges Florida has when trying to attract capital investment in the face of a strong, established tourism promise of fun and sun. In my opinion, Enterprise Florida has done a brilliant job of building on their heritage of innovation associated with Walt Disney World and NASA by positioning Florida as the “Innovation Hub of the Americas”. Rather than suffer from brand amnesia, they have identified an authentic positioning that appears to be serving them well.
  2. Brand Ego – Were you aware that Harley Davidson tried to extend its brand to perfume? Locations can also suffer from over estimating their own importance and capabilities. Small communities believing they can generate global awareness of their location as a capital investment choice are often surprised at the cost and time required for success. Their ego blinds them to the benefits of collaborating with regional and/or state initiatives that could increase the probability of successful foreign direct investment attraction. Instead, local EDOs invest in foreign missions with limited real payout potential.
  3. Brand MegalomaniaTrying to be everything to everybody is a sure recipe for disaster. But, economic development professionals can fall in love with all the assets in their community and avoid selecting the few most important to feature when promoting their location to capital investment decision makers. Brand megalomaniacs talk more than they listen and often miss hearing the potential investor’s real needs. Sales experts generally agree this is a path to failure.
  4. Brand DeceptionAuthenticity is critical to success for product, corporate and place brands. There is an old saying that “Nothing kills a brand faster than great advertising.” The message is that your promise needs to be authentic because consumers are very good at distinguishing fact from fiction, and once burned are reluctant to extend their trust a second time. For economic development professionals, it means you place promise must be realized by capital investors each and every day. The “walk” needs to match the “talk”. If you promise more than your community can authentically deliver, it will be difficult to attract or retain the capital investment needed for economic prosperity.
  5. Brand Fatigue – Avoid becoming bored with your promise. Just because you have invested in promoting your location doesn’t mean the message has been heard or believed by potential capital investors. Frequency and consistency in communication is key to branding success. Jumping on the latest news or positioning idea is a perfect way to create static, but not an effective way to communicate. Know how to tell your community promise in a heart and mind opening way. Feel free to refresh the story with new examples or proof points, but tell a consistent story that communicates your core promise effectively.
  6. Brand Paranoia – This is the opposite of brand ego. In place branding it is a belief that your community’s fate is totally driven by the actions of a nearby city or region. Economic development professionals take a competitive position and become blind to opportunities for collaboration. The focus becomes gaining a greater share of a “fixed pie” of capital investment instead of strategizing on ways to “expand the pie” for everybody. This thinking and the resultant behavior is drives tends to have destructive consequences.
  7. Brand Irrelevance – Effective place branding requires you to proactively manage your location’s identity, not simply communicate your current image. It is important to understand how relevant and competitive your place brand is. Determine what your location needs to be able to promise in order to attract and retain capital investment. And, have a robust product development plan (i.e. asset creation, infrastructure investment, public policy reform) to close the gap. Failure to do so, risks your promise becoming irrelevant and your community experiencing an economic crisis.

One way to avoid the seven deadly sins Matt identifies is by always maintaining a healthy respect for your competition. This will help you have a productive dissatisfaction with the status quo and encourage you to routinely think through how your location can become even more competitive for capital investment.

To ensure I don’t fall into the trap of brand paranoia with this blog post, it is important I highlight that coming out of the global economic crisis, there are signs Brand America is actually doing better. Several global reports have suggested Brand America could be on the rebound, and the most recent FDI inflow share data (2008) suggest a slight upward trend. The question though is around sustainability. Organizations like Invest in America are working hard to help ensure the progress is not only sustainable, but also accelerated.

I would be interested in knowing your thoughts on the strength of your EDO’s understanding of Brand E.U., or Brand Asia as competitors for FDI. Could and should it be strengthened? Are you giving global competition enough respect? Which of the seven deadly sins do you think Brand America may be at risk of committing and why?

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6 Comments so far

  1. Jim Matorin

    March 11, 2010

    Excellent checklist Ed, but I do not think we are comparing apples with apples here: branding to consumers being the same as branding to capital investors. Consumers and capital investors have different needs. I also believe that the sun shines for everyone, so when it comes to captial investment I am not convinced it is worth spending a lot of time worrying about the competition vs. getting your message correct. Great messaging, the investors will find you since they are the ones doing the research.

  2. Vincent Vanderbent

    March 11, 2010

    In terms of the USA I think it’s brand fatigue. We need a refresh, an extreme makeover. The US is slowly but surely (and in some areas actually pretty fast) becoming obsolete. Hey, if we don’t consume enough compared to Europe, China will just go there for trade. Then again, we used to run the show all by ourselves, giving others a run for their money. I wonder if we can do that again?

  3. Howard Shore

    March 11, 2010

    In our business Trust is the most important thing. Without that we could not have any customers. We have to do everything we can to earn, develop, and maintain trust in every relationship we have. Whenever trust breaks you lose or do not get a client.

  4. Imelda McGrattan

    March 12, 2010

    I believe that some brands allowed the ego to take over and did not take seriously the longterm work ethic that needs to be invested in retaining the consumers loyalty. Consumers are more knowledgable now, direct advertising is not having the desired impact on people’s minds that it had years ago. People are now craving an experience, even if they are not fully aware of that yet ! Those brands that innovate and listen to their customers will thrive, others will barely survive.

    The EU is a force to be reckoned with and the member countries need to be very aware of the global impact and strength that they have in securing future FDI. It is by standing and working together that progress can be made.

  5. Tim Guen

    March 12, 2010

    Ed, in my opinion the deadliest of the Seven is #4 Brand Deception. Even though all seven are manifestations of brand malpractice, blatant deception is the worst because it quickest way to destroy trust. Once trust is lost, there are no easy or inexpensive ways to regain it. People will forgive incompetence a lot sooner that they will forgive infidelity.

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