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John Beystehner , Senior Vice President, Worldwide Sales and Marketing
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Good morning.
It's an honor for Ed Buckley and I to participate in the Brand Slam.
When someone first talked to me about the Brand Slam, I thought they were inviting me for breakfast at Denny's …
But, sadly, there's not a pancake in sight.
However, I do see a room full of distinguished marketing and brand experts.
And that's good, because at UPS, we spend a lot of time examining, nurturing and promoting our brand.
Like most of your brands, ours, too, is in great transition right now.
That applies to both the scope of our business today … as well as to our efforts to get people thinking differently about UPS.
As most of you probably know, UPS has been around for a long time. 95 years, to be exact.
Ours has become an enduring … and some would say an "indelible" brand.
You see, people have come to recognize UPS for the rock-solid attributes of reliability … integrity … trust … comfort … and courtesy … they come from repeated positive experiences.
Those attributes have come to define, in the public's mind, what a successful package delivery experience is all about.
But as we expand our business to take on new capabilities that complement and grow our core business … getting people to broaden their definition of UPS is … to be frank … challenging.
And I'm certain, it's a challenge many of you, are also experiencing.
So as I address the subject of "managing the brand for strategic alignment" this morning. . .
… I'm talking about an approach that's a work-in-progress.
I also realize there may be a disconnect between the terms "strategic alignment" and "brand management." Strategic alignment typically is associated with managing the internal mechanics of an organization … while brand management is most often associated with managing external perceptions.
However, I think that one of the most overlooked aspects of brand management involves bridging both of these sides … aligning employees along with customers, investors, partners, the press and other external stakeholders behind the brand ... and the brand promise.
Managing both internal and external branding is especially important during periods of great change, when companies shed or take on new attributes … new meanings … and new promises.
Every generation likes to think it's faced with the greatest business challenges ever encountered. While personally I don't subscribe to that thinking … there is an argument that can be made that we live in times that make it harder than ever to manage a consistent brand.
Technologies like the Internet can quickly level the competitive playing field. Mergers, acquisitions and new lines of business can either muddle a carefully built brand … or suddenly introduce competition from unexpected directions.
In the midst of great organizational change, external brand messages can get out of alignment with internal realities.
Capabilities can fall behind brand promises.
And perhaps even more damaging, the brand experience can fall short of the brand promise.
Some companies … like Disney and IBM … have managed change quite well.
IBM, for instance, made sweeping organizational changes to support its transition from a hardware brand to a services and solutions brand.
Many other companies, however, have struggled to digest changes to their brand.
At UPS … where change has become a constant companion over the past few years … we're in the beginning stages of implementing a brand strategy designed to synchronize our brand messages to both internal and external audiences.
We've got a brand challenge that runs counter to a lot of companies undergoing great change.
Instead of internal capabilities falling behind the brand promise, our UPS brand is lagging behind our actual capabilities.
We're dealing with what could be called "brand lag."
Sure, people recognize our brown trucks, they love our drivers, and they think of us as reliable.
The problem is, they don't have a complete picture of our full range of capabilities.
This brand lag reminds me a little of the thunderstorms we have in Atlanta this time of year.
You can look out at the horizon and see lightning striking a few miles away … but you don't hear the thunder until a few seconds later.
That's because it takes about a second for the sound of thunder to travel one mile.
Well, at UPS, lightning has been striking.
In the past few years … particularly over the past three years … UPS has undergone more change … and added more new capabilities … than at any other time in our 95-year history.
It's just that our audiences haven't quite heard the thunder yet.
In just a few short years, UPS has gone from being an international package-delivery company … to a company that offers a broad range of information, financial and distribution services.
One of the first big extensions to our core package-delivery business came in the mid-90s … when some of our customers began asking us to do more for them.
Customers saw how we managed our own internal supply chain and started asking UPS to manage their inventory and their logistics, too. And they wanted us to do that for them … globally.
They saw our tracking-and-tracing technology and wanted to tap into our vast, multi-billion-dollar IT platform.
With our package-tracking information, they could manage their own customers' orders better.
They could see when goods reached their destination and would know when to expect payment.
UPS began handling other parts of our customers' supply chain, too … including everything from returns management to repair … fleet management … customer service … and customs clearances.
So UPS began building a logistics business that today bills more than a billion dollars a year.
Today, we do everything from repairing and shipping cell phones for Sprint PCS to managing call centers and global fulfillment operations for Nike.com.
But that's not all.
In the past three years, we've created a UPS Capital division …
and even acquired a bank … to help our customers' finance their inventories and fund their international trade expansion.
We've also added freight forwarding and customs brokerage capabilities to speed global shipments of all sizes across borders.
Just last year, we acquired Mail Boxes Etc. as a way to broaden our access to the consumer and small-business marketplace.
And we started offering expedited mail services for high-volume mailers.
Adding to all of that complexity, UPS went public two and half years ago … which also meant another constituency … the investment community … that needed to understand and respect Brand UPS.
Hopefully, you're starting to get the picture of a company that has transformed from a package-delivery company. . into one that is … high-tech … information-intensive … broad in capabilities … and global in scope.
Now, if only everyone saw us exactly the same way.
Armed with that challenge, last year we spent six months carefully researching UPS brand perceptions among both external and internal audiences.
On the external side, we conducted in-depth interviews and focus group sessions with a variety of customers and potential customers in several regions of the world.
Participants ranged from small-office/home office personnel to shipping managers, logistics and finance managers and C-level executives.
What we found out confirmed that perceptions about UPS were lagging behind our capabilities.
Respondents said they thought of UPS as friendly, accommodating, solid, hard-working, trustworthy, reliable and conscientious.
No surprises there.
However, listen to what some of those same people listed as weaknesses of UPS:
They perceived UPS as not innovative;
complacent;
slow to move;
and conservative in ambition.
They tended to think of UPS strictly in terms of package delivery and not much else.
It wasn't just the man on the street who wasn't fully grasping UPS.
For a while, we had trouble getting industry and financial analysts to understand how services as seemingly diverse as inventory finance and air express fit together into a long-term strategy.
It's not an easy story to tell succinctly. It's like trying to explain what a supply chain is in seven words or less.
But we are making progress.
At our recent investors conference, the analysts told us that they really started seeing the pieces coming together … that light went on … and they understood our positioning in the marketplace.
Meanwhile, research with our internal audience – our employees – confirmed what we already suspected.
There's some brand lag on the inside of the company, too.
Some front-line employees, for instance, don't realize that we manage inventory … repair electronics items … and finance accounts receivable.
That's not the part of UPS they deal with every day.
Then we have those occasional long-term managers who do understand all the new developments and services … but remain skeptical about how they add value to the company.
So, even inside the company, not all perceptions have caught up with reality.
Bridging that perception gap internally is of utmost importance because at UPS, our people are the brand.
The vast majority of our 360,000 employees have actually delivered packages at some point in their careers. They understand the core business.
They have a strong perception of what the brand experience is all about.
Our challenge, again, is to update those perceptions.
Now that we know we're faced with brand lag …
We come to the bigger question: What are we going to do about it?
How do we manage the UPS brand as a strategic alignment tool?
For our external audiences, we have to make it easier to understand the UPS story.
Which brings us to yet another question: how do we simplify a complicated story about a portfolio of diverse services?
Here's how: We tell it from the customer's point-of-view.
During the last Winter Olympics, UPS unveiled a new, high-profile advertising campaign.
You've probably seen our new TV commercials and print ads. They carry our new tag line: "What can Brown Do For You?"
I've also brought a couple along with me … take a look.
The largest campaign in UPS history is designed to demonstrate what Brown – UPS – can do to make the jobs easier for a variety of professionals … from the mailroom to the boardroom.
Instead of trying to convey our capabilities from our point-of-view, we are putting ourselves in the shoes of our customers …
And literally having them ask themselves: "What Can Brown Do for You?"
We're talking about meeting specific needs rather than giving a laundry list of products and services.
In a few minutes, Ed Buckley's going to tell you a lot more about the objectives, tactics and early results of the Brown Campaign.
But let me stress at this point that the campaign is an initial first step to gain the attention of all our audiences and try to help them start thinking beyond their current perceptions of UPS … but it is just a first step.
The next step is to continue to align our organization behind the brand.
For that to take hold, our people have to continue to buy into our vision.
They have to understand the importance of integrating our worldwide delivery expertise with our new and expanded capabilities.
Our front line people … especially those 80,000 drivers you see on the streets every day … must continue to understand the branding role they play … even in areas of the business they might not touch directly.
Their service reliability gives us the credibility to expand our capabilities into areas like inventory management and customs clearance. Reliability and trust are qualities that transcend our core … but they often begin there.
For some long-time UPS managers, we've got to change their thinking in terms of "core" and "non-core" businesses … and see our capabilities instead as part of a logical continuum.
After all, that's how we want our customers to see our services.
Let me close by saying that managing a brand to align perceptions inside and outside a company is hard work.
It takes a lot of homework … and even some soul-searching.
But the payoffs, we believe, will be immense.
We know that strategically aligned businesses build market share, enhance margins and create loyal customers.
Great brands stand for great businesses.
We think we have a pretty great company. Now it's our challenge to build and manage a brand that reflects the UPS of the 21st century.
Now, Ed Buckley will tell you more about our new Brown Campaign and how it's moving our brand strategy forward.
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