Young and Profiting with Hala Taha - Dave Aaker: Brand Strategies For Market Leadership with The Father of Modern Branding | Marketing | E187

Starting point is 00:00:00 You're listening to Yap, Young and Profiting Podcast, a place where you can listen, learn, and profit. Welcome to the show. I'm your host, Halitaha, and on Young and Profiting Podcast, we investigate a new topic each week and interview some of the brightest minds in the world. My goal is to turn their wisdom into actionable advice that you can use in your everyday life, no matter your age, profession, or industry. There's no fluff on this podcast, and that's on purpose. I'm here to uncover value from my guests by doing the proper research and asking the right questions. If you're new to the show, we've chatted with the likes of ex-FBI agents, real estate moguls, self-made billionaires, CEOs, and best-selling authors. Our subject matter ranges from enhancing productivity, how to gain influence, the art of entrepreneurship, and more. If you're smart and like to continually improve yourself, hit this ability.

Starting point is 00:00:58 button because you'll love it here at Young and Profiting Podcast. Today on Yap, we're chatting with branding expert David Acker. Building a strong brand is vital. It's what attracts your customers and keeps them coming back. But with so much competition, sometimes it may seem impossible to stand out and make an impact. So when I decided to release an episode about strengthening your brand to gain market leadership, I knew there was no one better to talk to than the father of modern branding himself, David Acker. David has received several awards for his contributions to the science of marketing, and he is the author of 17 books, including his latest owning game-changing subcategories. David also serves as the vice chairman of Profit,

Starting point is 00:01:45 a marketing and branding consulting firm. In this episode of YAP, we'll hear how his Acker brand equity model has helped companies create strategies that increase their brand equity for over 20 years now. We'll gain an understanding as to why the only way to grow your business, with rare exception, is to find and own game-changing subcategories. And lastly, we'll get the 4-1-1 scoop on how to build a loyal customer base and create barriers for competition. Now, let's get right into my conversation with branding expert, David Acker. Welcome to the show, Dave. Happy to have you on.

Starting point is 00:02:20 Good to be here. So you're known as the father of modern branding, and you've written over 17 books on the subject. You're also the vice chairman of Profit, a global growth consultancy. And good branding is crucial to business success. And so I can't wait to break down your branding secrets in this episode, as well as your Acker Brand Vision model. And also super excited to cover your philosophy on owning game-changing subcategories. So to warm things up, I'd love for you to share how you first got interested in the topic of branding. See, this goes back a long time from now, 30 years or so. But there was the time when everything was coming together in the late 80s. It was this sort of BCG model of strategy, which was the gross share matrix. It just said you try to expand market share, you'll get a cost advantage and you'll win. And that led people to do all sorts of dumb things like to do price promotions and destroy brands and so on.

Starting point is 00:03:20 And I actually did a conmetric study. I start off as a statistician. I did a study that showed that if you increase market share, you in fact don't increase profitability. If you analyze the data right, because what they were doing is looking at cross-sectional data, which shows that large market share companies made more money than small ones. But that doesn't mean that if you increase market share,

Starting point is 00:03:46 anything good will happen. And then what also happened during that time is the scanner data came out, which meant that for the first time, you could really tell exactly what people bought in the grocery store or the drugstore. And not only that, but you could set up a whole town where you could tap into their television sets and know exactly what they watched. So now you could run the experiments that would show, compare zero ads to two ads to four ads, compare this kind of ad to that kind of an ad. And so finally, science came to marketing. And everybody was so happy because now you could apply science to everything else. Now you could apply it to marketing. Well, what happened was that when you did these experiments, the only thing that paid off was sent out promotions or price promotions.

Starting point is 00:04:36 So they taught the consumer to several things. One, it's the only important variable is price. And two, if it's not on sale today, just wait two weeks, it'll go on sale. And so people were realizing this isn't working. And we've got to go back to basics. We've got to somehow get our brand back. And so the concept of brand equity was then introduced. At the same time, I wrote a book and I taught business strategy.

Starting point is 00:05:04 And I came to believe that companies were too focused on short-term financials and they needed to build assets. And I had background in market research. I wrote a book on market research and on advertising and on strategy. and so I was sort of well equipped to focus in on branding. That's what I did. It was, I was really at the right time at the right place. So I wrote my first book on how do you define and understand brand equity? And nobody had done that before.

Starting point is 00:05:35 And I also told not only what it was, but why it was so valuable to not only the firm, but the customer. And I define it as being a visibility. and awareness and visibility. And then brand image was the second dimension, and the third dimension was brand loyalty. And nobody else had defined brand equity that way. They had always excluded brand loyalty. And that changed just everything.

Starting point is 00:06:05 When you put that in the mix, you know, no longer can brands be run by middle management, by the advertising agency. They're now strategic because it's all tied up with the customer loyalty, which is without question a long-term asset. And so that was pretty, anyway, so that hit really at the right time. Yeah, it was revolutionary. I mean, you put out your Acker brand equity model in 1996, and people are still using it today. It's still in textbooks and things like that till this day. So it was very revolutionary. So basically, you took

Starting point is 00:06:39 everybody out of this mind frame that the only way to increase your brand was to get more market share and to lower prices and things like that. And you kind of turned it on its head with your new ACR model. So let's talk about that a bit. There's a few different pillars, brand loyalty, brand awareness, perceived quality, brand associations, and proprietary assets. Could you take us through all of these different components in your ACR model? Well, first of all, my first book, Managing brand equity, defined brand equity, and showed why it was important. And then people said, okay, I'll buy into that. How do I manage it?

Starting point is 00:07:17 And I wrote a second book called Building Strong Brands, and that's where the Akra model appears. It's on how do you manage brands? And the essence of the Akra model was that the people that were running brands in those days were ad agencies and lower-level marketing managers. And the ad agencies wanted to have a single phrase to represent what the brand stands for because they wanted to create an advertising campaign, and that's what they needed. And so a brand was a single thought. And not only that, but they often, most of the agencies had a little box, maybe six boxes,

Starting point is 00:07:56 eight boxes, seven boxes. And if you wanted a brand strategy, you filled in the box. There'd be a box for personality, a box for brand attributes, a box for a box for benefits and so on. And so I basically said two things. One, a brand is not a three-word phrase. A brand is multi-dimensional. It has eight to 12, seven dimensions. And that's especially true with business to business and service brands. The second thing I said is there's no predefined boxes because every situation is different. And so what you have to do is to basically say, what do you want your brand to stand for?

Starting point is 00:08:38 And never mind any prior boxes, what are your boxes? What makes sense for you? And then you take these 10 or 12 things and you prioritize them into a core group and an extended group. And that's really the essence of what's sometimes called as the Akra model. Let's hold that thought and take a quick break with our sponsors. At Yap, we have a super unique company culture. We're all about obsessive excellence.

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Starting point is 00:11:09 when you simply add four or more mobile lines. This isn't just a deal. It's a smart way to cut your monthly overhead and stay connected. Yeah, BAM, you should definitely take advantage of this offer. It's free business internet forever. Visit Spectrum.com slash free for life to learn how you can get business internet free forever. Restrictions apply. Services not available in all areas. Well, I'd love to kind of go through some of these points because I don't think everybody who listens to the podcast is a marketer and I think it would be really helpful. So, for example, I'll tee you off. So brand loyalty. Can you explain what brand loyalty is?

Starting point is 00:11:51 Yeah. Brand loyalty is really in essence what you're buying when you buy a brand because a brand has a following. It is a business base generating a potential. potential profit flow. And that's what makes it really valuable. It's the core of it. It's the customer loyalty base. And of course, there's levels of them. There's the people that buy you and they don't think much about it, but there's no reason to change. There's the people that really like it and the people that are passionate about it and are really involved in your product. And it's part of their identity. It's part of their lifestyle. It's part of them. It defines them. So you

Starting point is 00:12:32 want to have as large a group, especially near the top of that pyramid as you can, because that represents a terrific barrier to competitors because, you know, you've got the most attractive customers and they can't access them or it would be extremely expensive to do so. And each of those customers have a lifetime value. And that's really what your asset is based on. Okay. And then another component of your ACRO model is brand awareness. So what do you think my listeners need to know about that? I've kind of expanded a redefined awareness because I've gotten real interest in what I call brand relevance. And that's tied into the subcategory stuff because it says when you create some new innovation, you win not because you're better. It's because the other people are not relevant.

Starting point is 00:13:26 to be relevant requires awareness and credibility or visibility and credibility. So it's not enough just to have people know your brand. Your brand can be known and be what's called in what I call being in the graveyard. It means that everybody knows your brand, but they don't even ever think about it when they want to buy or use something. So it requires awareness but also credibility, which means you're an option. It doesn't mean I'm going to buy you, but you're in my consideration sense. That's the first dimension of brand equity. That's really interesting that you say relevancy, because I think that's really key.

Starting point is 00:14:03 There's lots of brands out there. Like I can think of like copier brands and things. Like everybody knows Xerox, but nobody's buying Xerox, you know, because they haven't adapted. So would you say that relevancy is really all about adapting to your customer needs? You lose relevance for a couple of reasons. One is you lose relevance because you're not. making what they're buying anymore. You're making, you know, an SUV and they're buying electric cars. And so they could love your SUV. They would never buy another SUV, I mean,

Starting point is 00:14:39 another kind of SUV. And anybody that asked you, they would recommend your brand. But they're not buying SUVs. They're buying an electric car. So it doesn't matter how much they like your SUV. So that's one way to lose relevance. Another way to lose relevance is just to lose energy. Have a sort of, you're just, you're bland, you're taken for granted, your grandfather's product, and you're fine, but there's no energy there. There's no reason to think about or talk about your brand. Oh, there's one other way you lose relevance, and that is if you create a reason not

Starting point is 00:15:20 to buy. It might be because you had a terrific product mistake. You make a cola and you had some contaminated water, or maybe you took a political view that was unpopular by some people and they created a reason not to buy. So those are the three ways you've become less relevant. Yeah, in 2022, they call that being canceled. We have a cancel culture. So your brand could lose relevancy by being canceled. Yeah, that's so true. Let's talk about perceived quality. So for my understanding, this refers to to the public's understanding of your perceived quality

Starting point is 00:15:59 of your products and services, what do you think we need to know about that one? A brand image is all the perceptions people have of you. When somebody mentions your name, what comes to mind? That's a brand image. And a brand image can be an attribute of the offering like perceived quality.

Starting point is 00:16:18 And what lies behind perceived quality is a really important factor, which is called trust. But it also can be a personality, it can be values, It can be your willingness to take on social programs. It can be sort of an application and how that links into your lifestyle. So it can be a wide variety of things. But at the end of the day, what you want something that maybe gives self-expressive benefits, it tells people who you are or it gives social benefits.

Starting point is 00:16:50 It provides a link to other people where it provides emotional benefits. it makes you feel something and it applies functional benefits. It ties you to using the brand. Yeah. Okay, cool. So let's move on to your latest book. I think it came out in 2020. It's called owning game changing subcategories,

Starting point is 00:17:11 uncommon growth in the digital age. An essential thesis of your book is that the only way to grow your business or with where exception at least is to find and own a game changing subcategories. So first of all, let's define. What is a game-changing subcategory in your own words? It's an offering that contains some must-habs. That's something that customers will insist on. It's either a new or an improved offering or advance to an old offering

Starting point is 00:17:44 that it just creates a must-have. You really must have that. So the electric car is certainly in that category, Prius, when they came out with the first subcom, it wasn't the first contact, incidentally, it was the second. Honda was the first to get it right, but they went 12 years with no competition. And they had what's a must have. It was several must haves as is usually the case. There was the design of the car, there was the functionality, there was all the modifications and improvements they added each year.

Starting point is 00:18:23 But anyway, I started off studying beer in Japan. I've been in Japan a lot. And I looked at 30 years of beer data, and only four times did the market share trajectory change, even though there was enormous market spend in each of those years, four times. And each time there was a new subcategory developed, like a Sahi Superdrive. And I looked at two dozen other categories that's always the same, computers and banks and so on. And when you see a spur to growth, it's almost always driven by a new subcategory. I'd love to kind of really go deep on this because I really want my listeners to understand this.

Starting point is 00:19:04 And I think the best way would be to go through some examples of businesses dominating their own industries who won this way by having their own game changing subcategories. So why don't we give some examples? Like how about Airbnb, Etsy, Warby Parker? Do you want to talk about any of those? Yeah, those are all good examples. I mean, Etsy was sort of, I talk in the book about how to compete against Amazon, and there's about seven ways to do it. And they all involve creating must-haves that Amazon doesn't have. And Etsy is a classic example.

Starting point is 00:19:40 It talks about a passion for craft and making crafts and appreciating crafts and using craft-built stuff. And that passion, I mean, Amazon has no. no passion for anything. Amazon is amazing at delivering functional benefits. They can give you a, you know, they sell everything under the earth and all kinds of models and all sizes and they'll billiard you fast, but they have no passion. And so you have Casper that sells mattress and they're really passionate about sleep. I think Amazon sells mattress. They don't care about sleep. They just want to functionally get you a mattress. That's one of the must have that. has is a real passion and an authentic involvement in that industry that really appeals to people

Starting point is 00:20:30 and make crafts and value crafts. Usually when people are starting in business and they're interested in gaining market share, they tend to want to be the best in an existing category as opposed to just creating a new category altogether. What do you think is wrong with that thinking? It just doesn't work. There's almost no people that grew their business that way. Almost none. It's really extraordinary. Actually, one of the probably most robust truce in marketing that's been demonstrated by by dozens and dozens of really good studies is that, you know what the predictor of a success of a new product is? You know, the single most important thing? What's that? How different it is.

Starting point is 00:21:22 And study after, study after study, rediscovers that having something that's really different is the most thing. Not only does it potentially give you something that you want to buy, it gives you something that people can talk about too. It gives you visibility. I mean, why would you read an ad about something that says, I'm better than Gillette Deloitte Yoder or something instead of somebody saying, I've got something completely different? And so, and there's a definite correlation between being different and creating new must-have defined subcategories. Okay. So having must-haves really represent features or programs that other brands lack.

Starting point is 00:22:07 And you also say that brands need parity must-haves to counteract that reasoning that customers have for not buying their products. So there's must-haves and then there's parity must-haves. Can you explain that to us? Well, let's take Dollar Shave Club. They came out with some razors that they sold through e-commerce. They did a four-minute video that I encourage you to go on the internet and look at it. It's very funny.

Starting point is 00:22:33 It's this feisty on the dog that's making fun of sled making fun of the buying process. You have to go to a lock cabinet and perhaps get arrested for buying this razor. And then you can't figure out which razor you want. And so they have a system where they'll just send you blades every month and they give you a simple razor. They got 18,000 subscribers in two days. They sold their company in four years for a billion dollars to Unilever. Wow. So, but anyway, they had a problem which Warby Parker had, which Casper mattress has, is what makes you, this is probably junk.

Starting point is 00:23:13 I mean, you're selling at a low price. I can't taste it. I can't feel it. There's no drugstore guy that's going to give me a reassurance that it's good. And that's the problem. How do you reassure people that it is actually a good product? And that's a reason not to buy. So one of the challenges that Dollar Shave Club was to convince people it was actually a good product. Happy New Year, Yap, gang. I just love the unique energy of the new year. It's all about fresh starts. And fresh starts not only feel possible, but also feel encouraged. And if you've been thinking about starting a business, this is your sign. There's no better time than right now. 2026 can be the year that you build something that is truly yours, the year where you take control over your career. And it starts with Shopify. I've built plenty of my own businesses on Shopify, including my LinkedIn Secrets Masterclass. So it's a two-day workshop. People buy their

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Starting point is 00:26:51 why they don't feel confident in their work, why they feel drained and frustrated and unfulfilled. But here's the thing you need to know. It's not a character flaw that you're feeling this way. It's actually your natural wiring. And here's the thing. When it comes to burnout, it's really about the type of work that you're doing. Some work gives you energy and some work simply drains you. So it's key to understand your six types of working genius. The working genius assessment or the six types of working genius framework was created by Patrick Lensione and he is a business influencer and author.

Starting point is 00:27:24 And the working genius framework helps you identify what you're actually built for and the work that you're not. Now, let me tell you a story. Before I uncovered my working genius, which is galvanizing and invention, so I like to rally people and I like to invent new things, I used to be really shameful and had a lot of guilt around the fact that I didn't like enablement, which is one of my working frustrations. So I actually don't like to support people one-on-one. I don't like it when people slow me down.

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Starting point is 00:28:18 with this model. So if you guys want to take the Working Genius assessment and get 20% off, you can use code profiting. Go to workinggenius.com. Again, that's working genius.com. Stop guessing, start working in your genius. Yeah. So basically they have their must-haves, which is like their real differentiators that make them stand out and that their customers

Starting point is 00:28:41 are kind of obsessed with the fact that there's certain things like you can get it online and it's inexpensive. But the parody must-haves is that it has to be at least the same quality as what they'd get in the drugstore

Starting point is 00:28:54 for that higher-priced razor. Is that right? Yeah. Got it. Okay, cool. So how do we go about finding the right subcategory. What is the way that a business can explore and create and define their own subcategory? Generally, it comes from one of two general directions. It either comes from

Starting point is 00:29:15 the market, sort of understanding the market and knowing that there's some kind of a need. So if you're talking to customers and so on, you find out what they're doing and the problems they're having. And And maybe they can't enunciate a need, but you know, you can probably figure out the need just by hearing what they're doing and groaning about. And that also goes to sort of understanding the market in a macro way, looking at not only your product class but other product class and looking at in general, what are they trying to get from using this product. so you're not just tied into, let's make it a little better situation.

Starting point is 00:30:00 And the other way is from your technology, your product, and you have a new technology. One of the great boons for the new subcategories, why they're more frequent and more important than ever before, is because of technology. There's the Internet of Things, there's artificial intelligence, and all this stuff has combined to make offerings and subcategories possible that weren't possible very long ago.

Starting point is 00:30:32 That's really interesting. So one of the things that you talk about in your book is that you advise that in order to be successful at this, organizations need to also create barriers for their competition that will inhibit their ability to become relevant options. So what are some of the common barrier strategies that you can name off? Well, more generally, let me take a step back. There are dozens of dozens of books on disruptive innovation,

Starting point is 00:30:59 and a lot of them are really good and really innovation. We were talking before we started about the Blue Ocean book, and that's one of them. And there's Christensen's books on disruptive innovation, and Porter, there's really good people doing great stuff, and this has been extremely influential. But if you look at all those books, including Blue Ocean, they do two things. One, they always talk about categories and how often can you create a new category, not very often, but you can create subcategories quite often. So subcategories is actually more relevant.

Starting point is 00:31:34 But more important, you look at all those books. They don't mention branding. They just don't mention. You look into the index under B. They don't mention branding. It's as if disruptive innovation can come and take over a marketplace without, not branding. In my research, and my belief is that branding is so important in disruptive innovation. You have to do four things to be successful. One, you have to create yourself as an exemplar brand,

Starting point is 00:32:02 a brand that represents the subcategory. Second, you've got to position the subcategory. You've got, like you position a brand, you've got to position the subcategory. You've got to tell people what kind of dimensions should they be thinking about when they think about sort of, sort of of some use experience or some buying experience, what really are they after? And you have to keep that in mind. And the third thing is that you've got to scale, you got to scale really fast because you got to own that market. And if you don't scale fast, somebody will come in. The fourth thing you have to do is to create barriers. And one of them is just, you know, you own the best customers because you've scaled so fast. That's a barrier. The positioning

Starting point is 00:32:46 creates a barrier because you position the subcategory in a certain way that's going to be sort of easier for you to fulfill because you own the Prius design or you own the hybrid transmission of Toyota or something. So anyway, those are some of the barriers that you can create. And they're, oh yeah, and another one, you can continuously innovate and just be a moving target. But anyway, those barriers are brand barriers. All those things require branding. And it's, to me, it's puzzling and unconscionable that all those books virtually ignore branding. Yeah. It's so true. They do ignore branding. I just interviewed Gabber Bert on Blue Ocean Strategy, and I don't think we talked about branding in that conversation. We talked about lots of great stuff,

Starting point is 00:33:42 but to your point, don't really talk about branding. So let's talk about the digital revolution, how has this made the subcategory growth that you talk about more wider, shorter, and frequently traveled? How did the digital age really change all this? Or how did it impact it? First of all, the whole idea of disruptive innovation and new subcategories have been around forever. And they're always the force behind spurts of growth. But it's really quite amazing. or 20 years, the incidence of these have multiplied maybe by an order of magnitude. As I said, it's all this technology. The Internet of Things, for example, have permitted amazing new categories to develop

Starting point is 00:34:32 that didn't exist before because now you can embed these chips in cars and clothing and people, and you can do so many things you couldn't do before. You can do the same things you did before, but so much better. And then there's artificial intelligence and the ability to have a more pleasant interaction with some voice from the sky that's not frustrating. And somebody that can do that first and do it better and do it well is might have a must have in some category. And then, of course, the high-speed Internet and all that surrounds it,

Starting point is 00:35:15 And then e-commerce. Of course, we just didn't have e-commerce not too long ago. And we didn't have social media. So now you can, it used to take nine months and an ad agency and $20 million to introduce a new subcategory. And it would take three years to force yourself into retail stores that weren't interest in carrying your stuff. But now in two days, Dollar Shave Club was in the marketplace.

Starting point is 00:35:42 Yeah, it's so true. Like the easiest way to create a subcategory is just take something that's brick and mortar and put it online. And then you have a subcategory, right? Yeah. All right. So my last question before we wrap this up is really talking about higher purpose. You say that more and more organizations are elevating a higher purpose that's driven by things like environmental or social programs. Can you explain why having a higher purpose is becoming more important than ever?

Starting point is 00:36:11 Yeah, that's the subject of my book. I've just finished and it'll be out in the fall. There's five reasons. First of all, there's been a battle between the sort of Milton Freeman view of the world that all you have to do is satisfy shareholders and you're successful. And that's increasingly lost favor. You have to worry about all stakeholders, including the community and society needs and the planet. Second of all, there's these problems that we have, especially the problems that so do with global warming and environmental pollution and the issues around inequality are so now promonts, they're so scary, they're so visible, they're so sort of in your face that people are really petrified and motivated to do something.

Starting point is 00:37:06 The third thing is that firms are well suited to help. I mean, they can't do it all by themselves. There's got to be a government involved, but they're well suited to help. Firms, unlike the government, are very agile. They're often tuned to the local needs and local partners. They're part of the local community. Even global firms have offices everywhere. And they have these incredible skills and assets.

Starting point is 00:37:33 They know how to do stuff that might be relevant. And if they don't know how to do stuff, they know how to communicate stuff that can be part of the solution. And they have a lot of resources. And they have a lot of customers they can leverage. And they have a lot of relationships they can leverage. So they're really well suited to help. Another factor is that a lot of firms sort of need a little lift. They need an energy lift.

Starting point is 00:38:03 They need an image lift. They're boring. their bland, they're functional. Their purpose is not exciting. It's not inspiring. It's not uplifting. Some of this is just what they make. But others is kind of their perceived attitude.

Starting point is 00:38:20 They can benefit front or maybe desperately need. The kind of burst of energy and the kind of image lift that associations with a program can mean. And one of my beliefs is that it's not just to do stuff. you've got to have a signature program or programs that are focused, that are branded, that are managed to have real impact and that become visible. And because most programs have sort of ad hoc grants, they have volunteering, they have energy reduction goals, but they're like everybody else.

Starting point is 00:38:58 They don't stand out. People don't view them as people that are committed or firms that are committed. Yeah. It's so interesting. I interview like two people a week and it seems like every year there's like a new theme that everyone's kind of talking about. And this year, almost every interview I have brings up this idea of business purpose, conscious business, conscious leadership, you know, having something aside from profits as your business goal, impacting the environment or society in a positive way. And that's like a huge theme this year across all of my interviews. So, just so interesting how almost everybody I speak to you has some layer of this in their perspective. There was one fifth dimension I didn't mention, and that is employees really insist on it. And so do investors and consumers and others, but employees really. This is employer, employees choose firms and they choose to stay with firms because of a feeling that this firm has some heart and social responsibility.

Starting point is 00:40:03 Yeah, it's no longer just about that paycheck. It's about how am I impacting the world and do I feel fulfilled? And if so, then I'll stay. If not, I'll go become an entrepreneur. I'll go do my own thing or a freelance or whatever it is. So I think that's all really important points. So let's wrap this up with two questions that I ask all my guests. The first one is, what is one actionable thing that my listeners can do today to become more profitable tomorrow?

Starting point is 00:40:29 Well, I think that there's really important to have meaning in your life, out of purpose in your life. And I think that you have to kind of take stock and ask yourself whether you have meaning. And if not, how can you get it? And what direction will give you satisfaction in a sense that what you're doing is worthwhile? And what is your secret to profiting in life? Well, I've been really fortunate. I've fallen into this branding thing, and I've been at it now for three decades. And so I've been really lucky that I really love what I do.

Starting point is 00:41:08 And there's so much vitality and interest and so forth in the subject matter that I don't get tired of it. And so if anybody can stumble onto something like that, then I think they're very lucky. But I have a friend that talks about his advice, and which, which I think has some merit, is you shouldn't do what you like to do or what you want to do. Instead, you should do what you're good at and what people value. And if you do what you're good at and what people value, you'll probably end up liking it. But even if you don't, you're going to have a lot of options. Yeah, I love that advice.

Starting point is 00:41:50 Dave, where can everybody go learn about you and everything that you do? Well, the profit.com, P-R-O-P-H-E-T, has my website. And you also get there by Davidawker.com, my blog. But most of what I know and so on are in my books. So if my kind of role is to look at different problem areas and put a branding lens on it, like I did with disruptive innovation and with higher purpose programs, and which I've done in other areas. Awesome.

Starting point is 00:42:25 Well, thank you so much, Dave. Well, thanks for having me. Great conversation. Well, there you go, Yap, fam. Another episode in the books with a legendary expert, this time around the father of modern branding, David Acker. Before we say goodbye, I did want to spend some time on some key ideas. There's two that I specifically want to touch on.

Starting point is 00:42:46 That's brand equity and game-changing subcategories. So let's start with brand equity. This is a perceived value. of your brand in the market. And this is a pretty new idea in business, surprisingly. It gained traction first in the late 80s. And David was a pioneer in this space and his tools like the Acker Brand Equity model are still used today over 20 years later. To build brand equity, a company must first start building brand awareness to achieve brand recognition, then they deliver a high quality product, and then they create a positive experience for the customer to

Starting point is 00:43:18 establish brand preference. With strong brand equity, a business, has an easier time retaining customers, charging a premium for products, and also launching new products. So let's dig into this a little bit. Let's talk about loyalty first. When customers like your brand, they are loyal. That means repeat business and making sales without having to constantly convince new customers to buy your products or without having to spend thousands on advertising. After all young improfitors, it costs five times more to acquire a new customer than it does to retain an existing one. So you always want to try to retain your customers and have a loyal customer base rather than churn and having them churn one after another and having to always

Starting point is 00:44:00 get new customers. And remember, it theoretically costs the same amount for businesses with and without brand equity to bring a product to market. But a business with brand equity can charge much more for the same products and gain higher profit margins. So let's take a real example. that we all know about to kind of put this into practice and make it stick, so to speak. Let's use Tylenol, since it has incredible brand equity. So a study at the University of Chicago showed that even though Tylenol is physically homogeneous, meaning identical with generic brands of acetaminophen, consumers without any expert knowledge, end up choosing Tylenol almost 30% more than its less

Starting point is 00:44:47 expensive generic counterpart. That means people are choosing Tylenol, even though it's the exact same of something cheaper. And that's the power of brand equity. Brand equity is also super valuable for product launches as well. A business with brand equity has a much easier time expanding its product line than a business without brand equity, because people are more likely to purchase an unfamiliar product from a familiar brand. So let's take Tylenol again. They've launched many successful products under the Tylenol brand like Tylenol Extra Strength and Tylenol cold and flu. Companies with brand equity like Tylenol will sell their products under a single brand name, while companies without brand equity will sell their products under multiple brand names.

Starting point is 00:45:31 This is because once a company has established brand equity, the success of one branded product can translate to other products under that same brand name. And so companies will often put out multiple brand names until one sticks and gains brand equity and then they'll launch multiple products under that brand name. The moral of the story, Young and Profiters, is that if you prioritize shaping how customers think and feel about your brand, you're going to set your business up for long-term success. Okay, so we've got brand equity down. Now let's dig into the subcategory concept for a little bit.

Starting point is 00:46:07 You guys know that I'm a real marketing nerd, so apologies if this outro is a little longer than usual. I just wanted to give you guys some concrete examples and make sure that the, the main takeaways really stick for you. Traditional views of disruptive innovation say that you need to invent a whole new subcategory to be successful. But David argues that massive growth occurs more often these days by creating something new within an existing category.

Starting point is 00:46:32 And this has to do as much with innovative branding strategies as it has to do with innovative products within an existing category. Let's use Chobani this time as the example. Chobani won yogurt and gained market share from Yolprite and DioPlate and Danin by marketing Greek varieties as healthier than the thin, sugary competition. Chobani essentially created the Greek subcategory of yogurt. Instead of a my brand is better than your brand approach based on marginal improvements or being the cheaper option, Chobani entered the market with multiple new benefits.

Starting point is 00:47:04 This is what David refers to as must-haves. For Chobani, their must-haves were that it was thicker and creamier than traditional yogurt. It was more filling. They had the same calories as other yoghaves. yogurts, but twice as much protein and half the carbs and sugar. It appealed to people with high protein diets and those who were trying to lose weight. They also created a new package design.

Starting point is 00:47:26 Their cup was shorter and fatter and that provided a symbol of a new subcategory that helped customers recognize which option was Greek on the supermarket shelves. So take a page from the Chobani Playbook, Yap, bam, develop offerings that are so innovative that they create subcategories making competitors are relevant because they lack a must-house have feature or benefit. That's all for now, Young and Profiters. If you want to learn more about this and read more examples, I highly recommend you go grab David's game-changing subcategory book. Thank you so much for tuning into another episode of Young and Profiting Podcasts. If you guys learned anything from this episode, give your feedback. Drop us a five-star review on Apple or

Starting point is 00:48:05 your favorite podcast platform. We're actually getting a ton of Apple reviews lately. They're so much fun. I'm actually going to go hop on over to check out my reviews and give a couple of you guys a shout out here, especially if you're listening all the way to the end. You're probably some of my most die-hard listeners, the type of listeners that drop us in Apple podcast review. And we've been getting so many lately. I think I get like 10 a day these days, which is a lot for a podcast. You know, it takes a lot for people to actually write a review. It means they really love your show. Let's start off with some recent reviews. So this one is from Kevin Wascom from the United States of America and he says it's like a free MBA amazing content from top level business

Starting point is 00:48:49 leaders giving insights that can take you to the next level in management of people and business in general. Thank you so much, Kevin, for your awesome five-star Apple podcast review. I am fiercer from the United States says expert questions for experts. Hala dives deep into the expert lines of work and you really get great information from each podcast. I feel like I'm learning something new every day from our content. I just listened to number 186, your customers, love your customers with Fred Reicheld yesterday, and I enjoyed the idea of creating entrepreneurship within a company. Using your ability to innovate new ideas and approaches, it's what can push the company much further into the future. I loved that episode, Love Your Customers, with Fred Reicheld. He created

Starting point is 00:49:33 the MPS survey. I agree. Amazing episode. Thank you so much. I am fiercer for your amazing review. And thank you for listening to this podcast. And thank you to my Yap team. I couldn't do this without you guys. Love you so much. This is your host, the podcast Princess herself. Halitaha, signing off.

Young and Profiting with Hala Taha - Dave Aaker: Brand Strategies For Market Leadership with The Father of Modern Branding | Marketing | E187

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