It’s Not A “Brand” — It’s A Fundamental Principle

Here’s yet another piece I wrote some time ago and is, if anything, more appropriate today than it was then.

Not A Brand

May 20, 2008
5:00 AM CDT

Here’s an article which managed to set my teeth on edge. Former-European and now-Californian RINO Arnold Schwarzenegger tells us how he thinks the Republican Party should look:

California Gov. Arnold Schwarzenegger created shock and awe in the Republican Party when he warned years ago that the GOP was in danger of “dying at the box office” by failing to make the sale to a wide swath of voters.
And with the presidential election looming, the Republican governor of the nation’s most populous state – a decidedly blue state – has now found a chorus of agreement. The Republican “brand” – thanks to an unpopular president, a war, gas prices, foreclosures and deficit – has become such damaged goods that GOP Rep. Tom Davis of Virginia groused last week that “if we were dog food, they would take us off the shelf.”
…
“The Republican idea is a great idea, but we can’t go and get stuck with just the right wing,” Schwarzenegger said. “Let’s let the party come all the way to the center. Let those people be heard as much as the right. Let it be the big tent we’ve talked about.
“Let’s invade and let’s cross over that (political) center,” he said. “The issues that they’re talking about? Let them be our issues, and let the party be known for that.”

Leaving aside the obvious cognitive dissonance caused by an Austrian talking of “invasion”, I take exception to a political philosophy being referred to as a “brand” — because at the root of it all, brands are the invention of Marketing: they are a way to differentiate similar products, like Folgers and Maxwell House, and are kept alive by marketing and advertising, not by conviction.

But since everyone is so all-fired intent on turning a political philosophy into a soft drink, let’s examine the “brand” concept a little more closely, because I understand this stuff about as well as anyone on the planet.

When I studied this stuff, back when I was managing the customer-shopping database at a Great Big Retailer, I learned something really interesting. Most of a brand’s sales came from loyal customers, and a very few loyal customers at that. In any single supermarket, the destiny of a brand (even giant brands like Folgers or Charmin) lay in the purses of about two hundred customers. Across two hundred stores, therefore, the fate of, say, Kellogg’s Frosted Flakes lay in the hands of about five thousand housewives — out of a customer base of about four million shoppers. If something were to happen to that loyal base — if some mysterious disease were to kill all five thousand — the brand would die, within a matter of weeks.

This was as true about supermarkets as it was about packaged goods. In any single store, once again, about two thousand customers (out of a total of about twenty-five thousand customers) accounted for over 75% of sales — and about 90% of the store’s profits.

The entire enterprise, a chain of two hundred stores covering four Northeastern states, rested therefore in the hands of a few hundred thousand shoppers (out of a total customer base of 2.5 million regular customers in a regional population of well over twenty million).

Using the same logic for our company as for Frosted Flakes: had we lost that half-million or so loyal customers (our “base”), the chain would have had to shut its doors in about a month. We, or rather I knew where our bread was buttered: and I made sure that we pampered and cosseted those customers to within an inch of their lives — preferential discounts, premium rewards, and non-store services (our Platinum customers, for instance, got free long-distance phone time and free roadside assistance).

What we could not afford to do was anything which would disenchant those valuable customers. Study after study, backed by purchase data (those pesky “shopper” cards) showed us that our strongest features were the quality of our Meat department, the quality of our Produce department, and the quality of our Deli department. That “quality” feature allowed us to stock more upscale products, charge a little more, and make a decent profit. Our customer base was not as large as that of our competitors, but they spent more with us. They were slightly older: more established families with older kids, executives in their peak earning years, and wealthy retirees.

The along came a new CEO and a new management team, who decided that they wanted to “broaden” the customer base, and start going after “young families”. As a marketing idea, it made sense — sense, that is, to anyone who didn’t understand marketing, but his background was in finance, so ‘nuff said.

In vain did I argue that “young families” required not only lower prices on all our merchandise, but a change in merchandise — larger pack sizes, cheaper meat products, cheaper deli products and cheaper produce items. Even more frightening was the fact that “young families” were not loyal customers: they bought from whichever store was selling coffee most cheaply that week, bought only “sale” (i.e. not profitable) items and products, which meant that we’d have to buy their business each and every single week. And worst of all, by tampering with our brand’s quality image, our existing “base” — those finicky, quality-driven folks — would become disenchanted with us, and leave. We would become, in other words, just another supermarket.

Well, I was only a mid-level executive, and everyone thought the new CEO walked on water, so the policy was changed over my objections and I resigned in disgust.

The supermarket chain went out of business three years later.

So let’s see exactly what it is that Schwarzenegger is proposing. He wants the Republican Party to be all things to all people, even if the “right wing” becomes disenchanted, because the Republican Party is a big tent (how I loathe that expression). He wants us to become more “centrist”, more “Democrat” so we can appeal to those people who switch between parties at will, depending on which party has the most “gimmies” on offer. And in the meantime, the much-maligned Republican base — those rightwingers, those gun owners, those religious people, those… Constitutionalists, well, they’ll just have to live with the new, improved Republican brand.

In the short term, that might work somewhat. And given that politicians live from election to election — just as finance people live from quarter to quarter — you can’t blame them for thinking like that.

But we are not a nation of panderers, a nation of accountants, a nation of short-term thinkers.

We are a nation formed in the fire of a revolution, and united under a Constitution which says that our government, in all its forms, must exist with the smallest amount of power possible, limited from excess by each of its three branches, and subject to frequent recall by We The People.

We are not a nation of cafeteria customers, shopping from one party or another.

We are, mostly, a nation of conservatives: we wish to preserve our Constitution, and this nation with all its freedoms.

There are, however, some people in our nation who want to change all that. They want us to become more creatures of the state, more beholden to government, more… European.

Perhaps it’s not surprising that chief among these people is a man born in Europe, a man for whom the founding principles of this country are malleable and can be changed in order to buy the votes of other people.

Like I said, it’s a strategy which might bring short-term success. But it’s a strategy which will ensure long-term failure, of both the Republican Party and the nation.

It really is that simple.