Insights EN

Why do good brands fail?

Do you remember that cosy café, around the corner, that you used to visit almost every day and made excellent coffee? Yes, that one. The now "closed for good" café. I bet it was not your first or your last one. But hey, good news, you don't have to run into despair, you have Starbucks! De Beers would hypothetically agree, Starbucks is forever.
This is a common situation, good cafés open and close their doors, that's the reality of the market, but reflecting on this kind of situations, I began to wonder why? Why are very good cafés closing their doors? At a bigger scale, why do extraordinary, original, and creative endeavours have little chance to stand out as businesses in the real world and defeat the giants in their markets? Why does the leader brand stay firm on its positions, or even more, absorb the new competitors?
I speculate that this happens because of 3 main reasons, or better put, "clusters" of reasons. First, the cause could be in the business per se, thus in the internal business operations. Second, the cause of failure could be in the brand's perception, or how the business is "seen" in its internal and external environments. Third, we could discover the cause of failure in the lack of consistency in the brand's communication, as a result of its interaction with the environment.
Reflecting on each of these clusters, I don't aim to present an exhaustive picture. My goal is to grasp something essential about each of these clusters and reveal the findings in clearer words.

1. Process & Product

First, let's look at the business's modus operandi. What is essential for a business to function properly? If we compare a business to a human being, we can assume that the business needs a mind and a body. The mind would be the driving force of the business, understood as a control and organisation centre, and the body would represent the designed mechanism that acts and moves things in the real world. This compound of two distinct but important to each other elements cannot function properly without any of them.
In my experience, I often see businesses failing because of a real cleavage between the business's internal mind and its body. It's important to understand that I don't insist that a business should have a single person acting as the mind of the business, thus animating the necessary internal processes. A business could have a single person qua its driving force, or a multitude of persons could fulfil the same role, by following the same vision.
If we dive deeper, at the fundamental level, there is always a single person that animates all the rest, which is usually the visionary, the person that came up with the idea. Nevertheless, that doesn't imply that the same person should sustain and control permanently the business's internal processes. This can be done as well by the visionary's partners, i.e., by those who have internalised his or her ideal of the business's future.
So the problems I see at the business's modus operandi level are usually rooted in the disconnection between the business's driving force and its internal work process, i.e., the created mechanisms and products. Often the visionaries fail to convey their ideas into reality because they don't set the necessary working processes that would define and sustain their ideas into finely tuned products. They tend to remain anchored in their initial ideas, thus isolating themselves from the reality of the market, including from the reality of both their financial or marketing possibilities.

2. Perception

Second, let's analyse the overall brand perception and what it means for the business. As I previously mentioned, the business can be associated with a living organism operating on a bigger scale, which makes it unique and profoundly complex. When we think of Starbucks, we don't imagine exactly the cafés around the world or their operational processes. Our "image" of Starbucks is to some extent connected to the logo of the company, but if we look closer at it, the image resembles more to an internal sensation than to a clear visual picture.
This sensation also named brand perception, is more abstract and to a certain degree, unique for each individual. It encompasses all the ways we experienced the brand, at the level of the brand's touch-points, from the real interaction with the company to its ads and word of mouth. I would like to highlight that this perception is dynamic, as it changes in time. It reflects a synthesis of various thoughts and emotions arisen at the individual level, with each new interaction with the brand.
Because of the brand's internal and external different communications, the perception can differ internally and externally. So the problems that occur at this level can have multiple causes. The brand doesn't have any specific media activity, consequently, the consumers don't form a distinct perception. The brand doesn't emphasise its benefits or its internal brand values, so it doesn't differentiate from its competitors. A problem that I often see is that the company's decision-makers rarely think of the brand's overall perception. They tend to preserve their internal perceptions of the brand as the only possible, and ignore others'. This causes a discontinuity between the internal brand perception (of its agents, management, advocates, internal stakeholders) and the external brand perception (customers, suppliers, etc.).

3. Communication

Third, for a business to succeed, these internal and external brand perceptions must be "tuned" to each other. By "tuned", I don't imply the idea that both should be identical, because it's impossible. Instead, I think they must be complementary and derive from the same brand vision. Each perception should reinforce the other one and contribute to a positive, consistent, and unique perception that moves the brand, and pushes it forward. This can be achieved only by having consistent brand communications at all levels and across levels (horizontally and vertically). So a problem that I often see is the lack of consistency in the brand's communications. Often the brand communicates in unrelated ways across channels, which damages the overall brand's image, making it chaotic and unreliable.

In brief

In brief, the causes for the potential failure of a "good brand" are to be found at the core of 3 main areas: first, in the business's modus operandi, mainly in the disconnection between the CEO's (management) vision or goals, and the "smoothness" of the real business's processes; second, in the asymmetry between the brand's internal and external perceptions; third, in the brand's communication, mainly in its lack of consistency.