So7 Brand Masters EP 15: Storytelling in Strategy: Unraveling the Branding Mastery with David Aaker

Have you ever wondered about the power of effective storytelling in business? Join us as we host Dave, a master in the world of branding, known for his fascinating transition from a quantitative modeler to a leading branding expert. Dave takes us on his journey, detailing his understanding of brand equity, its application in business strategy, and the crucial role of branding in addressing societal issues. Hear about his commitment to helping businesses harness the power of brand strategies and creating lasting impressions.

Dave throws light on how businesses can use signature stories to break through defensive barriers and create a strong emotional connection with their audience. Learn from the story of LL Bean, a company that effectively used narratives to communicate their brand and stand out. Dave emphasizes the significance of brand visibility, relevance, and credibility in building a solid, long-term asset, making for an insightful conversation you don't want to miss.

Additionally, we delve into branding's role in innovation. Dave shares tips to help brands differentiate themselves and the strategy behind constructing a brand portfolio. We also discuss how branding can convey a company's social purpose, further strengthening its relevance in the market. As we conclude the episode, we encourage you to explore more of Dave's work and the importance of branding in creating a lasting impact. This episode promises to enrich your understanding of branding and its power in shaping business success. So, why wait? Tune in now!

https://prophet.com/author/david-aaker/

Thanks for tuning in to this episode of Follow The Brand! We hope you enjoyed learning about the latest marketing trends and strategies in Personal Branding, Business and Career Development, Financial Empowerment, Technology Innovation, and Executive Presence. To keep up with the latest insights and updates from us, be sure to follow us at 5starbdm.com. See you next time on Follow The Brand!

Transcript

Grant McGaugh: 0:02

Welcome everybody to the Follow Brand Podcast. I am your host, grant McGall, and today I get an opportunity to speak with a legendary figure, an historical figure in the world of branding, brand messaging, brand relevance, author of over 18 different books who, when it comes to understanding how to really bring relevance to your business idea through branding, he has been instrumental in guiding others on a lot of different levels, whether it's in academia, whether it's in the business development, at the enterprise level, as well as small to mid-sized businesses, and though I'm directly involved with health care, directly involved with information technology, these are the things that allow us to communicate with one another and get true understanding of where we're going from a purpose-driven code that I have. So, david, you'd like to introduce yourself.

David Aaker: 1:05

Yeah, I'm Dave Ochre, I'm talking here from California and Grant posed an interesting question to me which was about my brand and how that evolved. And I came out of a PhD program as a statistician and I was a quantitative modeler and that was my thing. But during the first 15 or so years of my career I did a lot of quantitative and condimentary modeling but I also found myself I had interest even back then in social interest or social programs and so on. My first book was on consumerism and then I got into market research and the application of statistics there and I wrote a book with George Day on market research. And then I got into advertising, wrote a book on advertising with John Myers, and then I got into business strategy and wrote a book on that and I was doing in parallel teaching and research in all of those areas.

David Aaker: 2:19

So after 15 or so years I was about as had about as diffused and confused brand as you could possibly have Because I was a quantitative modeler. But 70% of my work was off-brand and it took me. I did a series of studies on experimental psychology. I helped create the warmth emotion and studied that. I had six articles on that and I mean that was totally off-brand. So I was a very confused person in the late 1980s and then several things sort of happened. One is that brand equity started to emerge as an interest area, because the whole concept of building market share, reducing cost, was not only failing to generate growth, it was destroying brands and jeopardizing businesses, and people realized that they needed to go back to focusing a bit on the brand equity. But nobody knew what brand equity was, and so my first book defined brand equity and my second book told people how to actually build your brands, and those two books really sort of were the most prominent in my whole career. They both stuck a chord and so forth.

David Aaker: 3:50

But at the time brand equity emerged, I was teaching and writing in the business strategy area and I came to realize that businesses were too focused on short-term financials and they needed to instead build some long-term assets to have a thriving business. And so I looked around and in fact I did a little study which illustrated that the top of the top 10 sustainable competitive advantages people were able to talk about numbers 1, 3, and 10 were around brand equity. Number one was perceived quality, number three was brand recognition and number 10 was installed customer base. So I decided if I was going to help people build assets, that would be a candidate. And then if you look at my completely all over the map, the Fuse background, it turned out that it was really almost always relevant to branding my market research, my advertising stuff, the strategy stuff and even the analytical models I did.

David Aaker: 5:08

I did some things relating brand equity to stock return and so everything. I sort of had 60% or 70% of my first two books already written because of my writings and thinking in there. So I was just at the right place at the right time and so I've sort of been able to ride the race since then. And so my first four books looked at some fundamental issues, not only what brand equity is, how it's defined and I defined it. It's brand relevance, visibility and credibility. It's brand image. It's brand loyalty.

David Aaker: 5:59

And the the thing about my definition that was unique was the brand loyalty inclusion. If you put in brand loyalty into your definition of brand equity management, you can no longer delegate it to the agency. It's no longer just a word as an image, it's brand loyalty and that affects everything in the organization. That was really pivotal. Then in my building strong brands I just had a couple of fundamentals. That was that, unlike the advertising agency, approached brands are not of three-word phrase. They're multi-dimensional. Also, you can't pre-specify the dimensions. Not every brand needs a personality. Not every brand has shared values. Not every brand is connected to the values of the company. You pick what works for you in that context and that becomes your brand pillars. Those were the fundamentals of my building strong brands book. After these books appear, I now became finally firmly positioned.

David Aaker: 7:13

The rest of my career is really. I wrote a book on brand portfolio strategy that showed how to manage brands as a portfolio instead of a single brand. But after those three books I've really spent most of my time applying brand to major management arenas that here to four have not seen much branding. I wrote a book on disruptive innovation, which I noted that branding is crucial to success with disruptive innovation. It doesn't appear in any of those books Blue Ocean, the Christensen books and so on. They never mentioned branding at all. But you need branding to position the whole subcategory. You needed to scale the subcategory, you needed to build barriers around the subcategory. All branding jobs are never mentioned by the core literature. Then I lately turned it into the problem of solving societal problems With my book the Future of Purpose-Driven Branding, and in there I said again branding has got to play a key role here, because if you have an enormous effort it consists of grants, voluntary energy goals, esg reports all that is impossible to communicate.

David Aaker: 8:38

What you need is branded signature programs and to carry the flag, to communicate what you do, to inspire, to guide. Then I also said there's another brand involved. You've got to use these signature brands to enhance the business by building the business brand, by giving it an energy lift, an image lift and an engagement lift. When you do that, the business now can view your program, whether it's internal or external. You can move your program as a partner, something that doesn't have to justify its funding each year, something that's really going to become part of your business strategy and therefore it will grow and thrive and be more healthy in the long term.

Grant McGaugh: 9:28

I love how you found your voice, just listening to you, because so many people you don't just jump out of bed and I'm going to author 18 books. You have to go through a journey and experience. You have to find some things. You started in research and I've heard a lot of brandy people. They got into research, quantitative analytics, studying demographic, psychographics all these different things, even almost from a scientific lens. Now we're in this world of extreme business intelligence, artificial intelligence, things that are impacting our world, I mean rapidly. Ai has now become so widely adopted. It is the most widely or quickest adoption of a technology in human history. In your book, you stress the importance of businesses having a serious and impactful social effort to stay relevant. Could you expand on why you believe this is critical and why you believe that today's AI driven age of branding and business intelligence?

David Aaker: 10:44

Well, yeah, there's several reasons. At the top is the fact that society needs business to jump in and be involved, because business has a lot of approaches that just doesn't exist in government. Business has agility, business has knowledge, all kinds of IP and a lot of it localized that government can't access, it doesn't have. And business has resources. They have advertising budgets, they have product development budgets, they have the ability, they have distribution, they have communication channels, they have an installed base of customers. They have enormous assets that can be applied to solving social problems.

David Aaker: 11:34

And the second reason is that business can get this energy, engagement, this image lift from social programs and in business often desperately need that. And if you're making widgets or hammers or milk, it's really hard to gain an energy and image lift and engagement. It's just hard. But if you make soap, it's a bar soap. I mean, who can do that? But if you're a life boy and you have a program Help a Child, reach Five, as they developed in India and spread elsewhere, they had a video that displayed this program in three villages that got 44 million views. Now you can't get that kind of exposure and visibility and so on by talking about bar soap.

Grant McGaugh: 12:33

Right.

David Aaker: 12:33

You just can't do it, and so it can really help businesses when it does. That again is a feedback loop, because it makes the business it has been sent to to make sure that the social program thrives and grows.

Grant McGaugh: 12:55

This is interesting because we're getting into where I believe in my years I've watched development and change through the 60s, 70s, 80s, 90s, non 2000s. We've got dramatic cultural and environmental shifts that are happening rapidly in American culture in which if you continue the brand that you've always you know, brent or you've marked the way you've always done business the way you've always done it, you may be missing the mark very, very quickly because of the dramatic shifts. And what is important, what I found from a lot of people now is like they want to know what does your brand stand for? What it's human impact, what is, what are you doing in the world? Yes, you want to make money, but is that, is that your brand is just a profiteer, or are you actually making a difference in the human struggle? How would you answer that?

David Aaker: 14:06

Well, I think that's exactly right.

David Aaker: 14:08

I think now the people that feel that way and act on those beliefs might be relatively small, but even a relatively small group can mean the difference between struggling and thriving.

David Aaker: 14:22

If you're a business but probably the most important stakeholder is the employees, and companies where the supply of talent is limited really struggle if they can't demonstrate there's a social purpose to their business as well as a business purpose.

David Aaker: 14:49

And that's especially true with young employees. There's young employees that simply are not interested in working for a company whose only goal is to increase profits, and so there's a lot of motivation to move in this direction, and I have to say that companies have done so. I mean, it is hard to find a major company or a minor company or a medium sized company that doesn't have a social program and people are spending real resources, but again they're doing it in such a way that it's not really helping their business that much. Even employees can't enunciate what their social purposes or what their program goals are, because it's all diffused over grant programs, volunteer programs, energy goals and ESG reports, and nobody can articulate from that mass of ad hoc, sort of diffuse programs what there's a stand for socially and what they're contributing socially. So that's where signature programs come in the Help a Child, reach Five, the Real Beauty program and so forth.

Grant McGaugh: 16:11

No, I love how you pointed out, Help a Child, Reach Five, and you get into true, significant stories, not just making something up or you don't know. That sounds great. There's an emotional intelligence here, but I believe that. And then you see some of the brands that really have made stride. They've had disruptive innovation because they're reaching into the actual pulse and the stride of its human counterpart. It's finding its rhythm with where society is moving into.

Grant McGaugh: 16:55

So, if you can be able to articulate a story so I've seen these advertisements now it's not about the car per se. It's about what you can do with the car, what the car is an able to do to enhance your human experience Really, really like this. I think we need to hone in on that because that's the purpose. That is a great purpose. So you don't have to. Yes, you want to give money, you want to do some donations, you want to do some charitable things. Think about how your brand, your product and service actually enables the human being, the human family, the human culture, the human society to advance and then have brand messaging around that. What are your thoughts around on those things?

David Aaker: 17:47

I wrote a book called Creating Signature Stories, in which I made the point that people in general are just not interested in descriptions of your product or they're not interested in facts. What they are interested in is stories. Stories break through. There's all sorts of defensive barriers that are set up against processing information that's not really of interest to you. Even if you get through that barrier, there's a lot of skepticism, there's a yeah, but you're just trying to sell me something. So there comes the rule of stories. Stories break through.

David Aaker: 18:37

Stories can tell a message and I like to say that businesses and parts of businesses ought to have their own signature stories. These are stories that will break through and that can be founder. Stories like LL Bean is how they invented the first sort of boot that shielded you from water and how they made the first hundred and they were defective, so they took them all back and replaced them. That story remains to this day, is emblematic of the way they innovate and the way they stand behind their products. You just have to mention that story and the people that work with or at LL Bean. They just they. It registers. You just mentioned the story.

David Aaker: 19:40

Remember the boot and you don't have to say we make high quality products and we innovate and dot dot dot. People aren't interested in that, but the story they are interested. And so I encourage people to use stories. And there's two kinds of firms. One is that almost all of us buy into the basic idea but they can't find the right story. And then there's like the B2B firms that have hundreds of stories because they have all these case studies about how wonderful the product are, but all these stories are dumped down, all the emotion is taken out, all the tension is taken out and they just say you know, our customer said we are great people and that's our story and anyway. So it's not easy.

Grant McGaugh: 20:34

I've learned.

David Aaker: 20:35

I've learned over since I've written that book that I'm just sort of more convinced than ever that that's really an important element in communicating today, and I become even more convinced than ever how hard it is. It just sounds easy Just do your story and, as I say, I've got the consulting firm, I'm bound with profit. We have a hundred stories, but they just have all written to be on one page and they're descriptive and they talk about how wonderful our customers think that we are. But you know, during the course of whatever the subject was, there was a lot of tension, a lot of emotion, a lot of high fives and so on. But that just gets dumped down, in part because they're sensitive to the client and the client really doesn't want people to know how dumb they were at the beginning and they don't want to have their competitors learn how you can fix yourself, and so there's a lot of reasons. But anyway, yeah, I'm a big believer in stories.

Grant McGaugh: 21:53

I believe in stories too. I believe in your story. What I got out of your story. When you're talking about you're trying to find your rhythm and you finally found it because it was right timing my story of timing is a lot, and you talked about disruptive innovation. It's a lot of people innovating to try to make something different, but timing is everything. I heard an earlier interview in which you were talking about. You know you don't have to be always the first to market, but you have to be the best at marketing, whatever this new widget product service may be, in order to scale, and to scale quickly. Market timing wow, I mean. Can you ascertain that from raw data, from intelligence? How do you get to a point where you feel that the timing is right, the story you talked about is right and the product and service is well positioned to take off? That has got to be masterful.

David Aaker: 23:02

Well, in the high tech world, you know it's matching the problem with the stage of technology. You know Steve Jobs gets a lot of credit for his disruptive innovations, but they were all based on timing. There was an iPad two years before Apple's. There was an iPhone two years before Apple's. There was an iPod before Apple's. In fact, sony came up with two of them two years before Apple did, but the timing wasn't right because they couldn't hold enough music and so on. And Steve's Jobs genius, I think more than anything else was he knew when the time was right and then he did get it right.

David Aaker: 23:55

But in other arenas, where there's not a technology road that you have to enter at the right time, what we've learned is test, and learn is really powerful. It's always been there, but something called design thinking has really prompted it. Design thinking is based on the fact that designers of products of other things as well programs have always been skilled at test and learn. They put out something that's really premature and then they learn and improvement and they come out another thing and another thing and then finally they get it right. And one of the things that the digital age has given us, like e-commerce, social media and so on. You can test and learn very cheaply, very quickly, and so that's one way to deal with the timing issue.

Grant McGaugh: 25:07

I think that's so important. I think the time is right. A lot of my audience right now that are listening are in the healthcare field. Digital transformation is taking storm in the healthcare world, where they have to innovate now Going taking a world through a pandemic, being able to pivot through technologies like telemedicine, remote patient monitoring, wearables. There's a huge human technology factor that's taking place Now. This is different from the healthcare world because they've never really had to brand themselves as a part, or I would say, in the technology innovation world. They've always granted great patient outcomes, patient experience, but that experience now has a huge technology component. So now they're gonna find ways to do things that they've never had to do. So I have found others are now seeking people out like yourself.

Grant McGaugh: 26:15

As a brand strategist, like here we are, I've been an entity for maybe 50, maybe 100 years. I've had a brand messaging model that really hasn't tweaked or changed tremendously over the last two or three decades. Now I'm forced into this. My budget doesn't really have it. I'm brushed up against metrics that have caused me not to have enough investment dollars to put directly into technology at the same time, because I'm managing the risk portfolio that I'm working with. How would you take a look at that situation and help our C-suite executive understand the business strategy and where the brand strategy kind of falls in to that situation that they're finding themselves in right now.

David Aaker: 27:21

Well, I think that one of the suggestions I make is to get an innovation that really has legs. You should brand it. Too often it is lost by some copycat that comes along and pretty soon the arena is kind of confused and you no longer own something that you've developed. Or you can take a development of somebody else but improve it and brand it, even though you are the first. You might be the one that can get the most credibility and owning it. This is an example.

David Aaker: 28:15

You take unique clothing. The Japanese clothing retailer that has developed some fabrics that were unique. One of them was able to keep heat in In the wintertime. If you wore this fabric with it's called heat tech, they branded it heat tech. If you have a heat tech fabric, when you got worn you stayed worn In the summertime. They have a fabric called Erison there, if you cool off, you stay cool off. It helps you cool down in the summertime. They made a huge mark with these two branded fabrics and they have clothes around each of them. All the other retailers and all the other clothing brands were scrambling to try to match that. There's only one heat tech. There's only one Erison. If you want the best stuff, you go to unique clothes. In fact, they're probably not aware that others have matched those things. They just know that there's something called heat tech at unique clothes. They don't realize there's 12 other manufacturers of clothing and 10 other retailers that have already matched that.

David Aaker: 29:46

The brand does what a brand does it helps you communicate and connect. You can brand services, you can brand features, you can brand endorsers. When you stumble onto something that really is a breakthrough, that has legs, that's going to be around for a while, that you're going to invest in, then brand it. You don't want to brand something that you're not willing to stand behind for a long time and invest resources in. You do if it's really worth it. When you brand it, all sorts of things happen. For one thing, everybody realizes that you branded it. They realize you're not going to brand something that's not very good. You're going to brand something that's really good they're going to apply because it's branded. There must be something there. Then, when it comes to communicating, you teach people what it's all about. Then they remember the brand name. They might not even remember exactly what the brand does, but they have this vague feeling in their mind. I process that, I memorize that it must be a reason I did that. There must be something there. Then it gives credibility to any facts, any stories that might be associated with the brand. I think that there's a big opportunity for people to look through things you're branding.

David Aaker: 31:40

You got to worry about over-branding. You also have to worry about, then, the brand portfolio and the roles brands as a team play. Which are endorsers, which are branded energizers, which are branded differentiators? Which is a source of brand credibility. What role does this thing play In? The right branded feature can be a silver bullet for the business brand. Just think of what HeatTech does for the brand Uniclo. Uniclo can say we're innovative and we can do things that this can all day long. All they have to do is talk about HeatTech and now they automatically get credit for that. Absolutely.

Grant McGaugh: 32:34

I'm looking forward to seeing this change in the consumerization of healthcare and how it's going to change. We've got so many innovations coming out just from our IT world. We've talked about a number of these things. You've seen, over your tenure of time, a lot of change, evolution, yet you've seen a lot of things that are still you would call the foundational aspects or principles that do not change. That we cannot forget. I love how you talked about human factors. You've always been here, but sometimes I think we get lost and focused around human factors. I applaud you for bringing that back around as we put together our entire holistic views on everything that we're looking to do from a brand perspective, from a business perspective. This has been wonderful. If you can let our audience know, you've got a lot of books out there, but your latest book you talked about social impact. Are you working on any new project that we should be aware of?

David Aaker: 33:46

I'm really spending my time right now Instead of starting a new book. I'm really trying to get some traction for the book, which I could have should have shot branding and disruptive innovation, but it's actually called owning game changing subcategories, Because I think it's the only way to grow. My brand is better and your brand is not a route to growth. With the AI and digital world we live in that you've mentioned, disruptive innovation is no longer an occasional thing. It's happening much more frequently, much more frequently, with much more impact.

David Aaker: 34:34

There's a lot of reasons for that. To come out of the digital world, then I'm trying to use the ideas and the future of purpose-driven branding to help non-profits and to help businesses understand where social programs should fit and the importance of signatures programs that are branded and can communicate their social effort and social purpose.

Grant McGaugh: 35:03

I want to let you know this we're going to get ready to conclude here. I'm very proud of you that you bring out these particular conversations that need to be had and you put them together with purpose and you've been doing this now for four to five decades that you are a game changer. You are an insightful profit, as they say, not since you're and I do that because I know you have some association with the company profit, which I think is awesome but the fact that you're still staying on the pulse of where we at this is 2023. You go back in time. You think about your first books and where you're doing quantitative analytics, and where you are now, are you proud of yourself?

David Aaker: 35:59

Well, I think that I set off maybe 30 years ago to try to help people understand brand strategies and use that as an asset instead of a tactic, and, yeah, I am proud of the progress that's been made in my role in it, but I'm still a little bit humble because we're not there yet. As you know from your work in healthcare especially, there's gaps and there's times that we especially when there's financial stress on a business there's times we backtrack, and so it's a never ending sort of a set of opportunities.

Grant McGaugh: 36:46

Awesome. This has been wonderful. I'm gonna encourage the entire audience. They can go to your website. You get all your information at davidakercom so you can take a look at what he's got there. If you wanna get any of his books, you can go to amazoncom. You can just type into Google very simply David Acker. That's A-A-K-E-R and I. Plethora of information will come out and I'm sure you'll be able to get some ideas and some insights. And, as you see, you're very, very approachable and, as I stated, I'm very, very proud of the work you've done. Glad you're doing the work. It gives us all an opportunity to grow and expand and evolve. So thank you very much for being on the follow of our brand podcast.

David Aaker: 37:30

Well, thank you, and thank you, grant, for your work in bringing brands to the world of medicine and other areas as well.

Grant McGaugh: 37:42

Absolutely. You take care of yourself.

David Aaker: 37:45

Okay.