A
Breakthrough Formula for Making Your Brand the Inevitable Choice of
Customers, Investors, and Employees
By Ron Ricci
and John Volkman
Editor's
comment: Editor's comment: It is a fortunate business that is in the position of being viewed as THE INEVITABLE CHOICE. Ron Ricci and John Volkmann have analysed this to determine how companies achieve the necessary momentum.
Ron Ricci and John Volkman have just published a book called Momentum: How companies become unstoppable market forces. This shows how companies look to achieve differentiation to achieve and maintain momentum. This is based on a study of 20,000 corporate and consumer buyers. Momentum is the single most important factor in determining business success.
A
Conversation with Ron Ricci and John Volkman
Why did you choose
"momentum" as the term to define the digital mindset?
To us, momentum is a
particularly apt term to apply to market dominance. It's frequently
used to describe stocks, politicians, and sports teams, especially
those on the threshold of success -- where success seems
inevitable. Momentum also describes hot companies, especially in the
investment community, where it has a technical definition based on a
series of consecutive quarters with increasing earnings. Perhaps most
important of all, it captures the sense of motion around digital
products.
Digital products never
seem to move in any absolute direction for more than four or five
years. It's not just the pace of technological advancement; the rapid
evolution of value points -- for example, chips, operating systems,
applications software, networking, printers, and many others --
invites swarms of companies and venture capital dollars into the
market. The digital product market is intrinsically dynamic, and
momentum comes straight from the field of mechanics and the study of
dynamic conditions. Best of all, momentum already has a formula
associated with it -- Mass x Velocity. By breaking down velocity into
its two discrete components, direction and speed, we translated that
formula into an equation that more clearly defines the dynamic digital
mindset: Momentum = Mass x Speed x Direction.
In your book, you mention
a "billion-dollar formula" for becoming a market-leading
company -- a marketing "dashboard." What is it and is it
really that simple?
Let's face it: marketing
and branding are abstract concepts, especially for digital products
that don't have moving parts or change all the time. Our work is not
just a point of view; it's an actionable game plan for managing a
brand's mass, speed, and direction -- what every brand needs in order
to be differentiated from the customers' perspective. Our
billion-dollar formula -- that we now call the Momentum Index --
does three things: it helps to measure a brand's position vis-à-vis
its competitors in customers' minds; it diagnoses the strengths and
weaknesses of the position; and it develops a plan of action that
would improve the quality of the brand's differentiation and, thus,
its perceived value from the customers' perspectives. We call our
momentum model a marketing dashboard because it has, literally, knobs
and dials that put the specific tactics of successful companies into a
broader, repeatable set of market actions that consistently produce
results with customers. Simple, yes; achievable, yes; easy, no.
Your model places a lot of
emphasis on the CEO to create the credibility for a brand's direction
with customers. Explain.
In most marketing books,
you hear a lot about brand identity and brand personality. These are
typically contrived ideas, like a race car or work of art. In digital
markets, brand personalities have come to more closely resemble the
attributes of their CEOs than some contrived personality. This is
especially important in today's environment where corporate
credibility is at a premium. Our research showed that the credibility
of brand can no longer be bought; instead it has to be earned by CEOs.
Customers -- he people who matter most -- told us that
brand direction is predicated on the ability of the CEO to communicate
to them on the future of their relationship with the brand. The
integrity of brand, therefore, depends on the CEO.
You also stress the
importance of future credibility and its contribution to achieving
brand momentum. What do you see as the most influential factors
impacting future credibility?
People's expectations of
companies and products have evolved over the past two decades,
influenced by new sources of differentiation and marketplace value. As
a result, executing a momentum- building campaign maps to the
essential nature of the way customers perceive differentiation: people
judge the superiority of a digital product or service by how well it
accomplishes something of personal or business importance. The
credibility of one brand versus another relative to these expectations
-- and the amount of value people place on a brand -- is correlated to
the sources of perceived mass: relevance of value proposition,
category leadership, and ecosystem potential.
But, like many momentum
concepts, credibility has a past, current, and perhaps most important,
future component. Future credibility -- that is, the perception that a
company can advance its superior competitive position in the future --
stems from a firm's sense of direction, specifically its management
vision and brand integrity. In tactical terms, this means that future
credibility requires not only that a company keeps its promises but
also that it has an external executive champion -- a CEO -- who
can credibly represent those promises to customers.
