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Al Ries & his daughter Laura Ries have been working together as focusing consultants for 18 years. Ries & Ries was founded in New York in 1994. Three years later, Al & Laura relocated to Atlanta, Georgia. But the Ries team spends most of its time on the road consulting with top corporations around the world from Microsoft to Ford, Disney, Merck, Frito-Lay, and many others.
The dynamic duo and bestselling authors have been profiled by Business Week, Marketing News, Advertising Age, The Wall Street Journal, Atlanta Journal-Constitution, and countless other domestic & international publications. Al first rose to fame in 1972 when a series of three articles on a new concept called “Positioning” authored by Al Ries & Jack Trout appeared in Advertising Age. The positioning idea took the ad world by storm and was voted by AdAge as one of the 75 most important advertising ideas of the past 75 years.
In 1981, the Positioning book was published and has since sold well over 1 million copies. The book has sold over 400,000 copies in China alone. The two authors also wrote Marketing Warfare, Bottom-Up Marketing, Horse Sense and The 22 Immutable Laws of Marketing. More recently, Al & Laura have written six books together and have continued to rattle the establishment by breaking with traditional conventions.
You can learn more about Al & Laura at http://ries.com
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Jason Hartman: Welcome to the speaking of wealth show. This is your host Jason Hartman, where we discuss profit strategies for speakers, publishers, authors, consultants, coaches, info marketers, and just go over a whole bunch of exciting things that you can use to increase your business, to make your business more successful and more and more passive and more and more automated and more and more scalable. So we will be back with a great interview. Be sure to visit us at SpeakingofWealth.com. You can take advantage of our blog, subscribe to the RSS feed, and many other resources for free and SpeakingofWealth.com and we will be back with a great interview for you in less than 60 seconds.
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Start of Interview with Al Ries
Jason Hartman: It’s my pleasure to welcome Al Ries to the show. You probably know his name, because he is one of the founders of modern marketing, and I mean that quite literally. He has got a huge body of work. I first discovered his book positioning years ago and then I was very much a fan of his two books on the immutable laws of marketing and the immutable laws of branding. And now he’s teamed up with his daughter Laura and has some new work out. I think the latest work is The Visual Hammer, and just a pleasure to talk to him today. He’s coming to us from Atlanta. Al welcome. How are you?
Al Ries: Thank you Jason.
Jason Hartman: It’s my pleasure. So, tell us what you’re working on nowadays.
Al Ries: Interestingly enough, we do far much more work globally than we do in the United States. In America everybody thinks they know all about marketing. They say marketing is nothing but common sense, right? Nothing could be further from the truth. But outside of America, people say America is the place for marketing, to read strategy books and whatever. So we get invited almost every day to make speeches here or there, or various places around the world. And most of the time it’s just not worth our while to do so, but last month we were in Russia, a month before in Turkey, and we’re going Thursday to Honduras. And we’ve got commitments in Poland and a couple other countries I don’t remember in Europe, and that sort of thing.
So, there’s just no question that there’s an enormous interest in marketing globally as companies and countries see that their economic future belongs to building global brands. Building global brands is the secret to country’s success as well as company’s success.
Jason Hartman: Right. So when you’re dealing with these clients worldwide, are they mostly the corporate clients or are some governments? I guess your former partner Jack, he’s working on more governmental side it sounds like nowadays.
Al Ries: Well, I think that’s true. He has an arrangement with the university in Shanghai I believe, but not us. We work almost 100% with companies. We have affiliates in China and Mexico and Germany, Peru, Moscow, and a few other places. But they work with companies. They will meet with a company and get information and then they’ll work with us on the strategy, something like that.
Jason Hartman: Is it fair to say, or is this too much sounding like the ugly American, but is it fair to say that America is more advanced in this field? And when you deal with other countries it’s kind of like going to look at the basics and the beginning of… did we get this whole marketing thing decades before everybody else did? It seems that way to me, but I may be wrong.
Al Ries: I laugh because I would start off by apologizing; I would say look, I’m not here to tell you how we do it in America. Because as far as I’m concerned, we do it all wrong. Take General Motors. General Motors leading brand is a Chevrolet. What is the principle of positioning? Own a word in the minds! What’s a Chevrolet?
Jason Hartman: Nobody knows.
Al Ries: It’s a large, small, cheap, expensive car or truck. How can you build a brand if you sell everything under the same name? That violates marketing principle number one. General Motors used to be the largest company in the world, and of course it went bankrupt. And one of the reasons is their marketing strategy is bad.
Jason Hartman: GM doesn’t really own any word in the mind. Well, now they might own the word government motors in the mind. Well that’s a great point you bring up. Let’s maybe dive in and let’s talk about some of the immutable laws of branding and marketing if we could. Of course, we’ve got at least 33 laws here, or maybe 44 depending on how you want to slice and dice it. But give us some of your favorites, if you would.
Al Ries: Well, the most important one is the law of leadership. Invariably the first brand into the minds, not the category, into the minds, is a brand that becomes a long term winner. Coca-Cola was the first Cola 126 years ago, and Coca-Cola is still the number one brand of Cola. So, wherever you look, the first brand. Hertz was the first rental car service. Well what is the world’s largest selling rent-a-car service today globally? It’s Hertz. And as you go on down the line, almost every single case is the leading brand tends to be the first in the category. Now, let’s turn that around for a while. Now what should you do if you’re a company that’s going to launch a new brand? Here’s what you should do. You should create a new category you should be first in.
Jason Hartman: I love… I remember that lesson so well from the 22 Immutable Laws book. It’s better to be first than it is to be better, and then if you can’t be the leader in a field, create a new field and claim leadership. I believe that’s almost exactly what you taught us.
Al Ries: Look at the success of Chobani.
Jason Hartman: The yogurt.
Al Ries: See, here’s the problem. Almost every company in America focuses on being better. They want to be better than their competition. They run advertising that compares their product with the competition. “We’re better than this, and we’re better than that.” But when Chobani came into the market, they didn’t say “We’re a better yogurt”, they said “We’re a Greek yogurt”. And they weren’t actually first in the market place. Fage was first 9 years before Chobani came into the market. But Fage never promoted the idea that they were a Greek Yogurt. They just promoted the idea that they were a better yogurt. So it’s a category issue. See, the category is more important than the brand. Everybody thinks about the brand, but you should think about the category. What category does our brand stand for? What category does Chevrolet stand for? When you look at it that way, it makes no sense the way companies are marketing their products today. Chevrolet spends almost a billion dollars per year on advertising. Almost a billion dollars.
Jason Hartman: And Al, I just want you to make it clear for the listeners. Your lesson about General Motors and about Chevrolet is that they don’t really mean anything. We don’t know what those brands mean, right? When you look at BMW in contrast, that means the ultimate driving machine. And when you look at Mercedes, it’s engineered like no other car in the world. When you look at Lexus, I don’t know exactly what their…
Al Ries: Well, so take Lexus then. What is Lexus? That is the first Japanese luxury car. So listen, you’ve got many people in America that still hate the Germans, so if you’re Jewish the tendency is to buy the Lexus instead of the Mercedes. Because you don’t want to buy a German car. So you can be first, that’s first in the category of Japanese luxury car, in the same sense that the German’s were first in a luxury category worldwide. So going against, that’s a very good principle. When you go against the leader like that, what you do is you narrow the focus. And Lexus in a sense narrowed the focus to Japanese luxury car instead of global luxury car.
Jason Hartman: Right. Absolutely. Well, I’m sure a lot of people are listening right now and thinking, they’re not a giant mega fortune 500 or fortune 1000 company, but they have a business and they have a brand. Maybe they’re a home-based soloprenuer, maybe they’re an author, a speaker, maybe they’ve got a widget that they’ve created and are selling. How can this lesson apply to them? I get the lesson, but I think some people when they’re close to their brand, it’s hard for them to see how they can use it.
Al Ries: Well here’s what happens. When you start up a small company, a start-up or whatever, your business is small. So what do you think you’ll want to do? You’ll want to expand the business. So what is the first thought about when you want to expand the business? Get into different products, different services, different this or different that. Matter of fact, the opposite strategy is the one that works. What you want to do is you narrow the focus so you stand for something specific. Look at Michael Dell. Michael Dell as a sophomore at the University of Texas, he started a mail order business in his dorm room. A company that eventually became Dell Computer, the world’s largest global leader in personal computers. He’s lost his leadership recently because he’s been expanding the business. But how did Dell build a network? At that time there were several hundred manufacturers of personal computers, including big companies like IBM, AT&T, you name it. Xerox. He narrowed the focus. He sold only to business and only direct. Direct to business period; not everybody. And he build the world’s largest personal computer company.
Jason Hartman: And for a long time Dell was an incredible company. Now, did the industry just change Al, when we talk about Dell computer, or did they water down their brand, or was it a marketing problem? Dell certainly isn’t what it used to be, as the old saying goes. Did they lose their focus?
Al Ries: When you expand the brand, you lose your focus and you lose your power. Dell got into television sets, mobile phones and dozens of other products with the Dell name. What should they have done? Launch a second, third or fourth brand.
Look at the difference between Dell and Apple. Nobody says I bought an Apple unless you went to the grocery store and bought an apple. You don’t use the word Apple. Apple is a company. You don’t buy an apple; you buy a Macintosh, you buy an iPhone, you buy an iPad, you buy an iPod. Those are the brand names: iPod, iPad, Macintosh, iPhone. So people buy brand names; they don’t buy companies unless you’re in the stock market. Then you buy a company. So the future belongs to multiple brand companies. That’s how you keep a brand narrowly focused and still expand your business. But most people want to do the opposite. They want to expand their brand instead of expanding their company by launching new brands.
Jason Hartman: Okay, so in the example of Chevrolet, or General Motors more broadly even, Chevrolet has different models of cars, but those brands don’t really resonate the way a Mac or iPad or an iPhone do. Those are much more clear. Is it that Chevy has too many models, or how is the model not the brand sometimes?
Al Ries: It’s not the number of models; it’s what does the brand stand for? In other words, BMW might have 20 different models, but they all stand for The Ultimate Driving Machine. Chevrolet doesn’t have an overall perception of anything. Their slogan is “Find new roads”, whatever that means. If you go back in history, Chevrolet when they were basically an entry level car, actually I did the numbers. 80% of their sales were entry level vehicles. Not cheap, but entry level. They had 32% of the market. Today’s Chevrolet’s percent of the market is roughly half of that; 18% or something like that. As they added more models, they actually reduced their market share. That’s not untypical, and yet that’s illogical.
People say, wait a minute now. If I add more models I should increase my market share. You should but it doesn’t work that way because you destroy what you stand for in the mind. The first car people thought of ever buying was a Chevrolet. That was the very first car people would think about buying. They don’t think about that anymore. Most of them think about Toyota. Toyota outsells. And here’s the interesting thing, can you imagine this? General Motors sells more vehicles in America than any other car company, but they don’t lead. They don’t lead in anything. Nothing. In cars, Toyota is the leader. In low price cars, Hyundai is the leader. In high price cars, Mercedes is the leader. In trucks, Ford is the leader. In hybrids, Prius is the leader. General Motors doesn’t lead in anything.
And the most strongest position in the world today is leadership. The ultimate objective of any brand is to be the leader in the category. McDonalds leads in hamburgers. Pizza Hut leads in pizza, and on and on and on. When you can be the leader in a category and be perceived as the leader, Coca-Cola and cola for example, Hertz and rent-a-cars. Hellman’s and mayonnaise. God forbid you bring a jar of mayonnaise back from the super market that’s not called Hellman’s and your wife screams at you, “Why didn’t you get Hellman’s?” right? Heinz leads in Ketchup. Those are powerful positions. And the way you establish a powerful position is by narrow focus. Not by trying to sell everything to everybody.
Jason Hartman: Very good point. One of the other big lessons that I remember from reading your books, is the concept of competition and how most people view competition as bad, but you taught me about how the best thing that ever happened to Coke was Pepsi. Because competition increases the size of the overall category. Could you tell us about that a little bit?
Al Ries: Oh sure. Because when you have a lot of brands in a category, there’s enormous publicity, there’s enormous advertising message out there. Look at the smart phone business today. If the smart phone didn’t have all the competitors out there with all the advertising and all the PR, people would forget about smart phones. But when you have a category with a lot of competitors, it really generates intense interest in the public about buying one of those things.
So having Pepsi as a competitor made more people Cola conscious if you will. Pepsi versus Coke, Coke versus Pepsi. So any category that has a lot of competitors generally speaking has a lot of promotion stuff going on out in the market place, and people get interested in the category. And I think that’s true with Cola, and that’s true currently with smart phones. And think about TV sets. A couple years ago when the movement was to flat screen television, a lot of advertising, a lot of promotion and a lot of sales. And today that’s kind of died down and their sales have died down too.
Jason Hartman: Very interesting. So there must be market places, though, that are just way too crowded. And I’ll give you an example. Let me just run a personal situation by and I think it will be a good, interesting lesson for the listeners. So I owned a real estate company years ago in the traditional real estate business. And I found it incredibly hard to compete. A very crowded marketplace with lots of brands. And I ended up selling that company to Coldwell Banker, so it was basically rolled up into one of the big brands. But then I started another real estate company, but this time I decided I was going to deal 100% with investors exclusively.
So if someone wanted to buy a house in which to live, we wouldn’t help them. We would just deal with investors. And I found that one to be incredibly successful because we narrowed the focus and specialized and we could actually claim leadership in something. But if you own a real estate business or say you’re in the real estate business as an independent broker, would it be fair to say that that market’s just too darn crowded?
Al Ries: Well, every market tends to be crowded especially when the market is starting to take off. Years ago when the personal computer market started to take off, there were literally 300 manufacturers of computers. After Red Bull came into the American market, according to one report in 4 years there was more than a thousand brands of energy drink being introduced so early on. And same with Coca-Cola. There were 50 different Cola brands early on in Coke’s entry into the market. So early on, as the category gets a lot of publicity, you have a lot of brands. But long term, we talk about duality, long term almost every category evolves in a sense to where you have two major brands and a lot of little brands.
Today, for example, Red Bull has 45% and Monster has 37% percent. The two brands together have something like 88%, something like that. And 10 or 15 or 20 of the other brands share the remaining 10%. In batteries you have Eveready and you have Energizer. In Cola you have Coke and you have Pepsi. In credit cards you have Visa, and you have Master Card and Discover is way behind. So long term, you want to be one of the two major brands.
So here’s the trick. Either you’re the leader, or how do you get to be number two? You get to be number two by being the opposite of the leader. Red Bull came out with an 8.3 ounce can. Good idea. Symbolizes energy, like a stick of dynamite. And so Monster was the first out with a 16 ounce can and had a name, Monster 16 ounce and became a strong number two brand.
Look at the internet. There are 152 blogging sites. People do blogs on and on and on. So what is Twitter? Twitter is 140 characters max, 144, 140, something like that. It’s short blogs, if you will. Just be the opposite of your traditional blogs. So the number two brand tends to be the brand that figures out a way to be the opposite of the leader, much like Pepsi Cola did with their Pepsi generation. Coke is for older people, Pepsi is for younger people who are the Pepsi generation. That’s a good strategy for any brand in a crowded category that wants to make sure they’re one of the two leaders that will be in the long term.
Jason Hartman: Why does it always come down to two brands? Why is it like that? Can the mind only kind of remember two brands? There’s Hertz and Avis? You mentioned also by the way, the Avis “We try harder” campaign. Was that a flop or was that successful?
Al Ries: That was very successful. Very successful. The reason is simple. In general, a super market for example, they could live with just Coca-Cola and not Pepsi. You know why they have Pepsi? Because every once in a while they want to have a big sale on Cola. So they go to Coke and say hey Coke. We want to have a big sale on Coca-Cola. We want you to have a two for one or one for free or whatever that is. And if Coke says no, they say okay we’ll go to Pepsi. So they play one against the other.
So every major distribution outlet always likes to have two brands on the shelf of every category. So if they have trouble dealing with the one brand, they go to the other brand. So in the retail or physical market, you have essentially duality.
Now, you always have Duracell and you have Energizer. Now here’s the irony. On the internet, that’s not necessarily true. See on the internet, you don’t have the distribution thing. You don’t have retailers wanting two brands. As a result, in many categories on the internet, you have one big brand and nobody else. Who’s second to Twitter? Who’s second to Facebook? Who’s second to Google? In all of those there are seconds but they’re teeny tiny – nowhere near the similarity of two brands in a supermarket or in a drug store.
Jason Hartman: And that’s just because the internet has such scale, and those two giant brands can just reach everywhere. Whereas, if you’ve got to distribute your Cola into super markets, that’s a lot more complicated. You’ve got to make a bunch of deals, have trucks and delivery systems and logistics, and it’s just a lot harder.
Al Ries: And also, the consumer in some categories, the second brand is the physical store. People say, I can buy it on the internet, or I can go down to my drug store or super market or department store and buy it. So the alternate to the internet is the physical store. So the customer still has two choices: go to Amazon or go to a Best Buy. That sort of thing.
Jason Hartman: Now, I know that our time is limited but I just want to cover two more topic areas with you if I can. One is the new book about the visual hammer, and the other one is the subject of personal branding. Ever since Lee Iacocca, he was kind of the founder of the idea of personal branding. But I’m sure you have something to say about how people brand themselves too. And I’d love to just cover those two areas if we can.
Al Ries: Okay, well it’s complicated, but you have two brains. The left brain and the right brain; the left brain handles verbal and the right brain handles visuals. And actually, the right brain, the visual side, is the side of your emotions. If your right brain is destroyed you’d become autistic. You’d deal with ideas and words but there are no emotions left. Therefor the best way into a mind actually is with a visual and here’s the trick. People think with words, they don’t think with visuals. So what the visual needs to do is to reinforce a verbal.
Marlboro was the first masculine cigarette, so they used a cowboy to verbalize the masculinity of the brand, and so people saw Marlboro as the masculine cigarette and most of the smokers at the time were men, and they became a powerful worldwide brand. As a matter of fact, they dominate the cigarette category. And the same thing is true with the coca cola bottle. What does that bottle say? It says it’s the authentic cola; the real thing. So the bottle reinforces Coca-Cola’s position. And the success of things like Aflac with the duck, is just enormous. It has a 90% recognition factor.
Jason Hartman: So on that note, when we talk about the visual hammer, everybody is probably thinking as I am, how do I apply this to my business? These are giant fortune 1000 companies with huge budgets that can hire great branding consultants like yourself. What do we do as a visual hammer? Most entrepreneurs go to 99 Designs and have a logo design done.
Al Ries: Look, you mentioned real estate. We work with a real estate person. He was selling luxury real estate and we said, you need a visual hammer for luxury real estate. You can’t visualize luxury real estate can you? But I’ll tell what you can visualize. You can visualize guard gated real estate. So we took his calling card and put guard gated in type and put a picture of a typical entrance to a guard gated community. So the guard gated said luxury in the same way that luxury real estate does.
So, when you search for a visual hammer, you first have to search for a word or a concept that can be visualized. Most words are useless. High performance, low maintenance, high quality, you name it. You can’t visualize those. So you’ve got to jump on something like driving… BMW could have said performance, but you can’t visualize performance. But you can visualize driving, so the ultimate driving machine worked because of the TV commercials showing people driving their cars around the winding roads and looking like they were having a lot of fun. So the visual hammer is the hammer, but the word is just as important.
Jason Hartman: So in other words the word is sometimes a proxy for the concept? Kind of like the guard gated.
Al Ries: It’s the nail. The hammer drives the nail into the mind, it’s the nail that does the work, and the hammer is the thing that drives the nail into the mind. You could build a house without a hammer, right? But it’s awfully hard to put those nails into that wood without a hammer.
Jason Hartman: Yeah, absolutely.
Al Ries: But after the house is completed you don’t need the hammer anymore, do you?
Jason Hartman: Right. Very interesting. Okay, any thoughts on personal branding before you go?
Al Ries: Yes. The best way to build a personal brand is to hook yourself to something else. Not to try to do it yourself. How did Steve Ballmer get to be Chief Executive Officer of Microsoft?
Jason Hartman: Well he was probably Bill Gate’s friend.
Al Ries: He was his roommate at Harvard. So the next time you go to Harvard, pick your roommate, you know?
Jason Hartman: Right.
Al Ries: And the same thing is true with the public. Look, when kids go out looking for jobs, what job do they take? The one that pays the highest. That’s a mistake. Take a job with a company that has the best, strongest brand on the market. Take a job with a leader, not with a number two company. So to brand yourself, you want to look outside of yourself. You want to hook yourself to something. Some idea, some concept, some company, some friend, some person, some relative. It’s amazing, for example, look at a politician today. Many, many successful politicians are relatives of other successful politicians. You think Hillary Clinton would have a ghost of a chance at being president if she didn’t marry Bill Clinton? Sorry Bill, I want to marry John over here. He’s a plumber but he’s got a really nice personality.
Jason Hartman: Sure. I could tell you a great joke about that but we don’t have time. What did Bill Clinton hook himself to? Since he started that chain, what did he do?
Al Ries: When you’re president of the United States, your famous forever.
Jason Hartman: Well of course you are. But what I’m asking is, when he was starting, he must have done that. I mean, maybe we don’t know. But he must have done it somewhere back in Arkansas. He hooked himself to something and developed a brand. I don’t know. He has this sort of folksy…
Al Ries: Obviously, I met Clinton once in Arkansas when he was governor and I have to tell you, he’s a super person in terms of being other directive. His conversation is always about you, never about him. And he’s always glad to meet you, never says a word about him. And he’s got a super personality. Most people don’t have the personality of Clinton, but with his personality it was easy to be a good politician. But there again, he didn’t stand out by being president. He stood out as working his way up to governor and then working his way up to president. So you have to move up the ladder. But anyhow, the best thing to think about is aligning yourself with some other thing, some other product, some other whatever it is. That’s the thing that makes you successful. Not necessarily just because you’re good in yourself. You can be the most terrific person in the world, but if nobody recognizes it, you’ll never get anywhere in the world.
Jason Hartman: Very good points. So hitch your wagon to a star, if you will, as the old saying goes. Right?
Al Ries: Yep. Ralph Waldo Emerson.
Jason Hartman: Uh huh. Fantastic. Well, Al Ries thank you so much for joining us today. Give out your website if you would, and tell people where they can find out more about you and get your books.
Al Ries: It’s a simple website. Ries.com.
Jason Hartman: Al Ries. One of the founders of modern marketing. Thank you so much for joining us today.
Al Ries: Oh thank you Jason.
Narrator: This show is produced by the Hartman Media Company, all rights reserved. For distribution or publication rights, and media interviews, please visit www.HartmanMedia.com or email [email protected] Nothing on this show should be considered personal or professional advice. Please consult an appropriate tax, legal, real estate or business professional for individualized advice. Opinions of guests are their own, and the host is acting on behalf of Platinum Properties Investor Network, Inc. exclusively.
Transcribed by Ralph
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