“A truly great business must have an enduring ‘moat’ that protects excellent returns on invested capital.” – Warren Buffet’s letter to shareholders in the Berkshire Hathaway 2007 Annual report.
For years, Warren Buffet has used the metaphor of a “moat around a castle” to describe a company with effective and sustainable strategic differentiation. Such firms enjoy larger profits than their rivals and are able to fend off competitors and grow market share.
But how do you differentiate effectively? Having worked with many advertising agencies over the years and observed the work of countless others, I can tell you that many marketing communications professionals can’t answer this question. An overwhelming majority of the advertising I see is designed to be funny, touching, surprising, shocking and sometimes artistic, but little of it is either memorable or effective at differentiation.
Let’s explore two different ad campaigns, one of which differentiates effectively and one of which does not. Holiday Inn Express and LaQuinta both compete in what is called the “limited service” hotel category. For a relatively low rate, you get a great location, a clean, comfortable room, a few essential services, the ability to participate in a points program and a continental breakfast.
Holiday Inn Express (HIE), which is a division of the Intercontinental Hotels Group, launched a rebranding campaign a few years ago in which they position their properties as “smart” choices for travelers. In a very memorable series of commercials, actors are portrayed doing high-risk, expert tasks like advanced surgery, calling out survival instructions to a terrified hiker confronted by a grizzly bear, etc. In each vignette, the actor displaying the expertise is asked about his credentials by another character, e.g. “Are you a surgeon?” or “Are you a park ranger?” etc., and the lead character always replies, “No, but I did stay at a Holiday Inn Express last night.”
This punch line has worked its way into the folk lexicon of the United States. In the 2008 presidential campaign, Mike Huckabee famously joked, “I may not be the expert that some people are on foreign policy, but I did stay in a Holiday Inn Express last night.” On a flight not long ago, I heard two flight attendants discussing the active ingredient in Tylenol and when I explained it contained ibuprofen, one of them asked me if I was a doctor. Guess how I replied.
The Holiday Inn Express television commercials are clever, but more importantly, they make you feel good about the brand. Obviously, no one actually becomes “smarter” by staying in a Holiday Inn Express, but they effectively make the point that it is a smart decision to be their customer. They demonstrate that they “get it”: every business person wants to be perceived as smart. This is good but what really distinguishes the campaign is how it makes customers feel about the Holiday Inn franchise: the advertising makes us want to associate with the brand because of its plucky humor, its obvious understanding of our needs and the sense that it’s fun and friendly.
La Quinta has more recently rebranded and they, too, are running a series of television commercials. In one spot, a middle-aged man in a business suit is talking to the bed as though he and the mattress just shared a “one night stand.” At the end of the spot, he turns to the camera and says, “La Quinta” with his voice replaced by that of a native Spanish speaker. All their current ads end with this verbal mnemonic (one spot uses a rabbit with the Latin voice).
Holiday Inn Express uses the slogan, “Stay Smart.” La Quinta’s slogan is, “Wake Up on the Bright Side.” The two campaigns seem to have similar objectives: appeal to the business traveler looking for a good value in no-frills lodging. But the Holiday Inn Express campaign is vastly superior the La Quinta campaign. Here’s why.
First, the HIE commercials successfully create a slogan that gets repeated and has become part of the country’s lexicon. Countless people have said, “No, but I did stay at a Holiday Inn Express last night,” because it’s a clever, funny phrase. This also means the sponsor of the commercials will be remembered: there is no doubt who created the spot or the slogan because the advertiser’s name is part of the “joke.” That’s a vitally important accomplishment and it’s both difficult and rare to achieve. For a very funny online ad spot from this campaign, click here: http://www.youtube.com/watch?v=D-PzDk_brV0. Note that this little bit of viral marketing is approaching 500,000 hits.
In the La Quinta ads, no one ever says, “Wake up on the bright side.” Instead, it’s simply superimposed on the screen at the end of the spot – the typical kind of “late ID” tactic that agencies love but plainly doesn’t work. Finally, their attempt at creating a verbal mnemonic is the unique-sounding “La Quinta” dubbed into each spot at the end. But, unlike the HIE expression, it’s not funny, it can’t be adapted into jokes and it will never become an idiomatic expression. You can see the “One Night Stand” spot I described here: http://www.youtube.com/watch?v=cfhKmr6L4u4.
Second, Holiday Inn Express hits a bulls’ eye in its attempt to build an emotional connection with its audience, while La Quinta misses the mark. In every HIE spot, the central character – who ends up saying, “…but I did stay in a Holiday Inn Express last night,” is appealing, is doing something surprising and delightful and is clearly demonstrating some unusual and unexpected form of “smartness” that makes you smile and chuckle. There is also a disarming, self-effacing quality to the creative that is very inviting and charming. All of this positive emotion is wrapped in the HIE brand, because it is both the source of the good feelings as well as the heart of the slogan that serves as the punch line.
The La Quinta spots aren’t awful – the brand did need refreshing and they do make the case that the properties offer good value – but the creative merely entertains, and it doesn’t do that very effectively. I don’t know about you, but I do not need anyone planting images in my mind of a middle-aged man having a one-night stand.
Continuing the theme of poor taste, in another ad, they superimpose the words, “You lost your company’s biggest account,” before showing silver lining, “Your boss finally remembers your name.” Apparently, this is supposed to reinforce their slogan that they help you “Wake up on the bright side,” but the thought of losing a big account is such an enormous negative that it’s really not something they should associate with their brand.
Ultimately, the Holiday Inn Express ads successfully create positive emotion around the brand, they are highly memorable and the sponsor is firmly and clearly tied to the message. The fact that their slogan is part of the nation’s lexicon highlights the brilliance of the campaign. They make you feel good about staying at one of their properties because they are a brand you like to include in your life. The La Quinta ads are yet another attempt to make funny advertising that doesn’t send an effective or cohesive message and that doesn’t include an effective emotional hook. It’s a more-or-less textbook example of an ad agency demonstrating that it can be clever without understanding how to make advertising that actually sells something.
As you may be aware, 2008 was horrific for the hospitality industry. The skyrocketing fuel prices followed by the current recession crushed many players in the travel sector. Against this backdrop, Holiday Inn Express grew their revenue per available room. Since La Quinta is a privately-held company, I don’t have access to their numbers, but I’d be very surprised if they performed as well. Until they develop a better approach to differentiating their brand, I believe they will be stuck with mediocre performance.
If you want to learn how to differentiate your brand effectively, I encourage you to read our latest white paper: The Ultimate Guide to Brand Positioning and Differentiation. In this document, you’ll learn about “laddering,” a proven approach to constructing advertising messages that create the kind of emotional hook in the Holiday Inn Express campaign. We explain how several great brands, like Jif and Duracell have built huge market and margin advantages through effective positioning. It’s an indispensable guide to any one trying to build a competitive advantage.
Source by Ian Heller