Here are the important summary notes at the end of Marty Newmeyer's book, "Zag" which we used as the textbook for this class. It has many very interesting aspects on how to build a business, grow it, and keep it running against competitors.
1. Marketplace clutter
As the pace of business quickens and the number of brands mulitiples, it's customers, not companies, who decide which brands live and which brands die.
Today's real competition doesn't come from other companies but from the extreme clutter of the marketplace.
Fighting clutter with more clutter is like trying to fight fire with gasoline.
A brand is a customer's understanding about a product, service, or company. It' not what you say it is, but what THEY say it is.
An over-abundance of look-alike products and me-too services is forcing customers to serach for something, anything, to help them separate the winners from the clutter.
The human mind deals with clutter the best way it can-blocking most of it out. What's left, the stuff that seems most useful or interesting, gets labeled and stored in mental boxes.
For the first time in history, the barriers o competition are not controlled by companies, but by customers. The boxes they build in their minds are the boundries of brands.
The goal of brandin is simple: to delight customers so that MORE people buy MORE things for MORE years at a HIGHER price.
Customers tonday don't like like to be sold-they like to buy, and they tend to buy in tribes.
In a marketplace of me-too offerings, people choose on teh basis of tribal identity. "If I buy this product, what will that make me?"
The demise of traditional advertising has 2 causes: 10 People don't like one-way conversations, and 2) People don't trust advertisers.
What people want today are trustworthy brands. What they don't want is more intrusiveness, more empty claims, and more clutter.
In a world of extreme clutter you need more than differentiation. You need RADICAL differentiation. The new rule: when everyone zigs, zag.
2. Finding your zag
To find a zag, look for ideas that combine the qualities of GOOD and DIFFERENT.
Artists are trained to see negative space. Companies need to think like artists when they're looking for new market space, because new market space, or "white space," is the secret to finding a zag.
When you're searching for a need state, don't think so much about the unbuilt product as about the unserved tribe. Look for a job people are trying to do, then help them to do it.
3. Designing your zag
Your need to clarify what business you're in-your core purpose. Core purpose is the fundamental reason your company exists beyond making money.
The leader's job is to shape and articulate the vision, making it palpable, memorable, inspiring. True vision leads to commitment rather than compliance, confidence rather than caution.
Without a clearly drawn vision, employees tend to work at cros-purposes, often taking refuge in functional silos instead of collaborating to tranform a shared picture of teh future into reality.
The power laws that control brand leadership can be reduced to a simple formula:
first mover + popularity = leadership
When focus and differentiation are powered by a trend, the result is a charismatic brand that customers wouldn't trade for love nor money. It's the difference betweeen paddling a surfboard and riding a wave.
While virtures like being innovative, responsive, and customer-focused are admirable, zagging requires that a company define itself by what makes it UNIQUE, not what is admirable.
Brands are subject to what network theorists call "power laws"-laws that explain why succes attracts success, or why "the rick get richer."
In the world of power laws, market-share hierarchies are controlled by customers, who collectively dtermine the success order of competitors.
An "onliness" statement provides a framework for your zag: Our brand is the ONLY ___________ that ________________.
By checking any new business decision against your "onliness statement" you can quickly see whether it will help or hurt, focus or unfocus, purify or modify the meaning of your brand.
One of the most powerful principles in building a brand is focused alighment. The result of alignment is coherence; the result of non-alignment is wasted resources.
If adding an element to your brand brings you in competition with a stronger competitor, think twice. You may well end up wasting energy and confusing your customers.
A brand is part of an ecosystem in which each participant contributes and each participant gains.
Rather than trying to please everyone at the risk of pleasing no one, step right up and pick a fight. Just make sure you take on the biggest, most successful competitor you can find.
It's an ironic fact of marketing that a brand's most valuable asset is often the one given the least attention: its name. A poor name is a drag on the brand building process, and a good name accelerates it.
A name should be, 1. different than its competitors, 2. brief-four syllables or less, 3. appropriate, but not so descriptive that it sounds generic, 4. easy to spell, 5. satisfying to pronounce, 6. suitable for "brandplay," and 7. legally defensible.
All brand communications should emanate from a trueline. A trueline is the one true statement you can make about your brand. It's your value proposition, the reason your brand matters to customers. It can't be reduced, refuted, or easily dismissed.
The key to crafting a trueline is to focus on a single proposition. If you find yourself using commas or "ands" to write your trueline, your may need more focus.
A marketing budget based on zaggin will appear much larger than it actually is. the object is to compete where you can win.
Forget about best practices. Best practices are usually common practices. And common practices will never add up to a zag, no matter how many of them you apply.
Without good execution, a strategy is only a plan-an intention. The road to _______ is paved with good strategy.
Customers experience your brand at specific touchpoints, so choosing what those touchpoint are, and influencing what happens there, is important work.
Customer loyalty is not a program. It starts with companies being loyal to customers-not the other way around-and only becomes mutal when customers feel they've earned the loyalty they're receiving from the company.
If a brand has positive associations for customers, the company may be able to unlock value by extending it-but only it the new extensions reinforce the maning of the original brand.
While there is valuable synergy to be found in brand portfolios, they face four dangers that single brands don't-contagion, confusion, contradiction, and complexity.
CONTAGION is the dark side of synergy. If one brand has a problem, the rest of the portfolio can become infected.
CONFUSION can happen when companies extend their brands past the boundries their customers draw for them. Customers want choice, but they usually want it AMONG brands, not WITHIN brands.
CONTRADICTION can occur when a company tries to extend a brand globally. Customers in one culture may have a different view of a product or cmpany than customers in another culture.
COMPLEXITY becomes a danger as a brand portfolio growns. What began as a way to simplify the brand-building process can easily end up complicating it.
The key to buiilding strong portfolios is subtraction-pruning back brands and subbrands that don't support your zag.
4. Rewnewing your zag
As a company grows, it's attracted toward one of the three "stable states," which we can call scissor, paper, and rock. Each state has its strengths and each has its weakneses, creating a balanced cycle of competition.
A "scissors" company is a startup or small business that competes by cutting out a small area of busines from a much larger "paper" company. Its defining characteristic is extreme focus.
A scissor company grows into a "rock" company that competes by crushing "scissors" companies. Its defining characteristic is momentum.
Eventually, a rock company expands into a "Paper" company that uses its superior network and resources to smother "rock" companies. Its defining characteristic is its size.
Focus beats size, size beats momentum, and momentum beats focus.
Comapnies tend ot COMPETE counter-clockwise- paper covers rock, rock breaks scissor, scissors cuts paper.
Over time, focus grows into momentum, momentum broadens into size, size divides into focus... and the competition cycle begins again.
The spaces between teh stable states are "unstable states" - periods when change is not only possible but necessary. This is the natural time to reinvent your zag.
Seeing where you fit in the competition cycle lets you, 1. exploit your company's strengths and minimize its weaknesses; 2. exploit your competitors' weaknesses and better prepare for their attacks. 3. Use the unstable states to reinvent your zag, and 4. reinvent your zag during the stable states to block a competitive move or simply remain vital.
There's a myth that people in organizations don't like change. Actually, people do like change. What they don't like is BEING changed.
To find the leverage point in your oerganization, just ask these 3 questions: 1. What is stopping the change? 2. How is that a problem? 3. What would have to happen for it NOT to be a problem?
The central problem of brand-building is getting a complex organization to execute a simple idea.
When you find your zag, ask your people how they'll help execute it. You'll be surprised by the amount of energy you released.
The biggest impediment to high performance is short-term focus. Short-term focus is often a reaction to the demands of shareholders, who are quick to sell off non-performing stocks.
Companies that have radically transformed their brands tyhrough differentiation have enjoyed tangib le results, and stock prices have risen 250% per year as they've revived.
When a company needs to get itself from a dying market to an emerging one, the best vehicle may be a "2-stage rocket." It can use the first stage-its existing brand-to fuel the second stage-the new brand.
"Warhol's Law" is inexyricably linked with the big speedup, since constant change requires constant novelty. We're moving into an era of perpetual innovation.
The market as a whole tends to move faster than any one cmopany. In the big casino of the marketplace, the house usually wins.
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