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Musings on Best Swiss Brands

What makes a brand strong? Well, if a brand is the embodiment of a specific value proposition, then there would be two main aspects influencing brand strength: How well the trademark-owning organization performs in shaping the value proposition internally, and, in turn, how well this value proposition is perceived externally. Let's dissect. 

Strong brands start with clarity

Everyone and everything communicates, and everyone in the organization is a spokesperson— whether they recognize it or not, and even if they don’t say a word.

If anyone, from the CEO to the sales representative, is not clear on what their organization stands for, their messages to the outside world will be confusing to external stakeholders.

Clarity is at its strongest in small companies where the founder is still active. Luxury manufacturers are also good at this. I doubt anyone at Rolex doesn’t say something about “achievement”—a term built into the brand’s lexicon—when asked what Rolex stands for.

Clarity without commitment is not enough

Everyone working for a company may be clear on what that company stands for. However, if it doesn’t help them sell, they will find other ways, tell other stories, create other experiences to make those sales. These mixed messages will confuse customers, in time diminishing business potential. Clarity about the brand must be supported by a shared commitment to communicating the value proposition.

Commitment is normally high within luxury companies, but it’s more refreshing to find it in other industries—insurance, for example. Die Mobiliar has achieved somewhat of a “cult” status in Switzerland by bringing humor into insurance advertising. The company remains committed to its approach, continuing to invest, and seems to have started a trend followed by other (larger) players too.

Governance, the dream of order in chaos

If the brand lives in stakeholders’ minds, what is there to govern? You cannot rule what they think, feel, or perceive (people have tried—it doesn’t end up well). But you can organize your company in such a way that you maximize your potential to influence these factors (people have tried, and it works).

Getting your people, processes, and tools consciously aligned makes the best of the opportunities you have to project the desired image of your value proposition. Fast-moving consumer goods companies are generally good at this, relying on decades of experience. Keep in mind—the more trademarks you have, the more difficult it gets. Typically, the army behind a flagship brand is well-drilled, aligned, and effective—as in the case of Nescafé. Does that mean the same recipe can be applied at discretion with all brands in the portfolio? No. And what about the master brand? Welcome to Nestlé‘s challenge—it’s one that the company is among the world’s best at coping with, and there still is room for improvement.

Responsiveness, the winner’s disease, the struggler’s cure

Lack of responsiveness is the winner’s disease—it’s human nature to “not fix something that ain’t broken” and to carry on with the actions that brought success in the past. But the pace of disruption has tumbled entire value chains on their heads, even pushing brand behemoths beyond the brink of obsolescence in just a few years (it hurts me when I write this, Nokia).

Trouble, however, sometimes brings out the best in people. Swiss retailers are losing customers to cross-border shopping, especially after the significant appreciation of the Swiss Franc last year. Whether it was a coincidence or not (they may have planned to jump on the hipster-esque, “local made” trend even before), Coop’s investment in locally sourced products, supported by strong communication is right on the money. Plus, this has the collateral effect of keeping startups at bay, which ought to have ogled the same niche. Defense is the best offense in marketing warfare.

Authenticity: credible and genuine, with a bonus for heritage 

If Swiss brands excel at one thing, it’ s being authentic. Swiss watches are the watch industry. Swiss private banks are the private banking industry.

Transparency is key to authenticity, and by recently opening their books (which made valuation possible in the first place), Pictet ticked off that box as well.

That being said, these companies need to be mindful of disruption: the way to challenge authentic players is to change the game to such an extent that it makes them seem obsolete. Smart watches and fintech companies are trying to do just that. 

No relevance, no gain

Giving people what they want sounds trivial, but in an age of rapidly shifting preferences, keeping production capabilities in line with consumer preferences is quite a feat. The next step is, of course, giving people what they want, even when they don’t know what they want.

Lindt is among the happy few that know pretty well what people want, and it’s not too complicated: delicious chocolate in a fine package. And boy, is it delicious.

No differentiation, no brand

Thesis: There is no “one brand” in a given industry. There are either two, or none. True or false? Opinions welcome

While differentiation assumes competition, companies that manage to carve their own niche within a given industry—a niche which they occupy alone for as long as possible—are the ones truly banking on differentiation.

There is no other watch company that has turned the industry upside down quite like Swatch. The Ikea of watches (or is Ikea the Swatch of furniture?) has been making smart watches since the year 2000 (seriously, what better name for a smart watch than Swatch?). Swatch’s smart watches, however, have just one function each. How will the brand differentiate in the smart watch era—once it comes, if it comes? I’m all eyes and ears.

Consistency in brand-building keeps people from jumping off

Consistency is something that won’t win you a prize for originality, but can jeopardize the business if not done well. A touchpoint blunder is like a hole in the ship: if it happens, it’s better to be well above water level.

With today’s touchpoint landscape getting more and more complex, it is rare that a company can drill through a coherent brand-building experience on its own, without partnering with either its peers or with its customers.

Nespresso still does it. But what about the Millennials, Gen Z, and all the rest who want to create their own mecosystems? Will Nespresso be able to keep up with them and retain its composure? Time (and maybe apps) will tell.

To have presence, or not to be

Having a store at almost every corner helps with sheer physical presence. Today, physical presence is not enough though—you have to be talked about. For that to happen, you have to either create controversy or provide content that people want to share, and proactively engage your stakeholders. Swisscom does all of the above: It dominates the telecommunications market like few other players in liberalized countries.

Tell me, and I’ll forget; show me, and I may remember; engage me, and I’ll understand

If there is one area in which Swiss companies tend to underperform, it is engaging customers in innovative ways. Take the watchmakers—almost all of them—at Baselworld. Show a few watches, provide rooms for purchasing, and expect people to flood in and buy. I guess it works, for now, but there is so much more room to connect, to include, to fascinate, and to ask me what I think.

Companies in Switzerland are quite busy talking about themselves. Me, me, me. That’s not engaging. And it’s too bad, as engagement creates positive memories and engenders loyalty.

Migros talks about itself quite a bit, too—but it also does a lot to engage customers on various levels. Be it at the Klubschule, via Generation M, their migipedia crowd-sourced products, or those uncannily addictive collectibles, the company does put customers at the center of many brand-building experiences.

Addressing these ten factors of Brand Strength is quite an undertaking: Not one of the Top 50 companies behind the most valuable Swiss brands excels at every single one—but what a boring world that would be. With a strong currency in an uncertain economic climate, Swiss brands are some of the most valuable assets this country has. At the moment, they are buying Swiss organizations the time they need to rearrange and to keep fulfilling their ultimate promises.

Check out Best Swiss Brands 2016 at: http://www.bestswissbrands.com/de/

Contributors

Director, Brand Valuation