Eight Reasons Brands Collapse

If you could take a seat in a time machine and travel back a few years, you would see a litany of brands that were once either household names or enjoyed a heck of a good run before they lost their way and died. Circuit City, Borders, Saab, Washington Mutual, Northwest Airlines, CompUSA and plenty of others are among them. And then there are brands close to extinction, living on borrowed time, such as General Motors, AOL, MySpace, Blockbuster and OfficeMax.

Each one failed or is failing. And aside from poor financial management, most brands collapse for one or more of the following reasons:

Lack of brand clarity: Every single manager, employee, intern, customer, vendor and partner must understand what is unique about your brand, why you are in business and how you are different. If they don’t, you’re a commodity.

Pulling a brand extension muscle: Think of Cadillac when they introduced their small, underperforming, uninspiring Cimarron wearing the Caddy tattoo. At the time, when most people thought of Cadillac, they thought of large, executive, luxurious, elite automobiles with a price tag that only a few could swallow – not compact, economic, affordable puddle-jumpers. Xerox lost its way for a bit when they tried competing in the personal computer market, and my favorite example is Harley-Davidson when they introduced their cake decorating kit. These brand extensions failed because in each case, the brand ventured too far outside its core.

Building brands based on external research: The traditional, unchallenged way of building brands based heavily on external research is flawed. The reason is because most competitive companies conduct similar research that produces similar results. It’s no wonder why so many competitive companies say the same things, just in different ways. e.g., Lowe’s “Let’s build something together” and Home Depot’s “You can do it. We can help.”

Poor leadership: It’s a simple fact that people who do not respect or enjoy working for their immediate boss are rarely motivated to give their best. They typically stay tight to their job descriptions and are team players only to the extent of predefined expectations. A brand will never surge to new levels under such conditions.

Copying other brands: Brands that innovate lead. Brands that copy and say “Me too!” follow. Brands that follow have lost their way and it’s an indication that they do not have, or don’t understand, how they are unique or have not done the soul-searching to realize what they are capable of becoming.

Treating brand development as a marketing initiative: Some companies still believe that “branding” is creating a stunning logo, writing a clever tagline and creating a brand guideline booklet. Brand development is the process by which a company unearths its evidence of distinction and communicates its unique selling points internally and externally, in that order.

False claims: In the throes and pressures of competition, some companies will make claims they simply cannot fulfill. And when they aren’t able to deliver, word of mouth takes over, destroying the brand, and the hill to recovery is a steep one to climb.

Distractions: If you fell off a ship and you saw your wallet floating away in the angry, rough waters, would you grab the life preserver someone threw to you? Or would you dive after your wallet?