AlexC

Brand Building and "The Right to Win"

So, I’ll preface this with the comment that it’s a long post, but hopefully one that is valuable to this community. I try to be detailed enough that someone reading understands the principles of what I am saying, and then can agree or disagree, vs just giving some bullet points on what I think is right or wrong. Things are rarely that simple in my mind, and in this case, the topic is so fundamental to this industry that I felt the need to communicate my point in a long article format vs a post….If you want to skip over most of that detail, the upfront section and final two sections “The Right to Win” and “Conclusion”summarize the topline concepts fairly well.


Brand building and the Right to Win

“Brand Building” is a term that is being thrown around a lot these days. It feels like brand is starting to become a catch-all term, which would be unfortunate given the real power great brands create with brand equity. So, I’d like to start this article with a request.

Take 10 seconds and think of the three brand building activities you think are most important in building a brand in this industry...

Take your time and think about what you invest in or would like to invest in to build your brand….

Keep those answers in your mind and I will reference this question a little later.


I am sure you have heard a lot of advice on “do x, y, z and build your brand” in the wider VR/STR community these days. "Be on Instagram and FB Create a great website!" "Generate engaging content!" "Ensure you have a best in class CRM!" "Don’t forget the newsletters!"….and of course what I think is the most common activity associated with brand building, “make sure you are getting direct bookings, otherwise you cannot have a brand.”

Well, I want to dig into the marketing concept of a brand, and give my perspective as someone who has studied brand management and worked on some of the largest retail brands in the world over my career prior to running my property management company.

More importantly, I want to address an observation I’ve made on how the phrase “brand building” is being used in a way that I believe is moving away from the principles that make building a great brand such a powerful and important goal for a small business. The mischaracterization of what a brand has really meant when identified as an important asset to a company seems to be creating 2 negative trends across the industry:
  • Large amount of investments, resources, and focus are being put on developing this powerful asset known as a brand when in reality they are investing in solving for their goals on distribution, advertising, promotions, and awareness, which are very different than brand building activities. The cost of this misallocation of resources will likely be increasingly damaging to smaller operators who operate on small scale and thin margins as competition ramps up and there is more competition for profitable guests while margins compress.
  • The use of “brand” in the way I am seeing become common place is creating unnecessarily narrow parameters for how to build a real brand in this industry. It creates confusion on everything from pricing strategies to distribution strategies. All of this creates potential competitive disadvantages because the strategies and tactics that are subbing in for brand building rely on extremely high brand loyalty in an increasingly competitive environment on supply, advertising spending, and promotional effectiveness for repeat, while at the same time ignoring investment in creating true competitive advantages and capabilities to overdeliver on your value proposition to stakeholders

A good way to explain what I mean is to go back to basics and review the generally accepted 4 types of brands and how to relate them to this industry. These 4 brands are Corporate Brands, Product Brands, Service Brands, and Personal Brands. Understanding that these are all fundamentally different concepts and understanding the differences may help us find the way to build or build on your brands. So lets kick it off with Corporate brand.


Corporate Brand


What is it? Corporate brands are defined by the decisions you make as you build and develop a company and start churning out products. These brands are often reflections of things like mission statements and company values statements.

Here’s a good example of a mission statement from a VR company that popped up when I googled it:

“At HVR, we strive to provide homeowner partners with peace of mind through high standards of service and home care and to provide guests with exceptional customer service and enjoyable vacation experiences that help create lifelong memories with family and friends.
Our friendly staff and innovative management are efficient and cost effective, providing value to homeowners, customers, and guests.”

That right there is what HVR wants their brand to be and they outline those principles as core to how they approach their business, and is primarily for internal guidance for decision making and business development.

Why is it important to this community? For context on how common corporate brand principles can be the building blocks for great brands, just check out the VRMB ethos thread, which is a perfect representation of why I spend time here and not on facebook forums. Company passion and principles shine through in the corporate brand.

Just keep in mind that a corporate brand is how you perceive your company, and those brand principles should guide you to make decisions that align with your company mission.

What is it not? Corporate brand has nothing to do with distribution (direct booking or OTA marketing), advertising (ads, SEO), logos (advertising), or most of the other things that I hear most often referred to when brand comes up in the broader STR/VR community.

Hopefully you’d agree that building a corporate brand is much more about figuring out how to build your company to deliver on a mission statement like HVR’s than any of those other topics.

Product Brand


What is it? So while Apple might have a corporate brand that drives what their business does and how it does it, iPhone is a product brand. Similarly, while PM’s with multiple properties may have a corporate brand that guides what they try to deliver to stakeholders, the properties are product brands. It’s a nuanced, but extremely important distinction in this industry that I never hear talked about.


After you’ve done the work to set up what you want your guest experience to be, I believe the best way to identify what your product brand really is involves looking at your feedback in reviews. Reviews are effectively detailed word of mouth representations of your brand, and its what new guests likely look to as the key indicators of what kind of experience they can expect with your brand. So take a look at your reviews! What words or phrases show up the most often? “great communication” “Friendly” “Amazing Hosts” “great amenities” “extremely clean” are examples of phrases a strong/healthy brand should see often, while a unhealthy brand would either see very little of those phrases or, worst case, consistent bad feedback.


Why does it matter for this industry? There’s potentially hundreds of things that go into what makes a property unique and valuable to guests for the great product brands in this industry. Regardless of if your properties have a distinct brand (“The Miami Beach Hideaway” for example), the product brand is what the guest who is booking that property is buying into when they book and experience during their stay.

Importantly, how guests perceive your interactions with them and how they perceive the value of their experiences while engaging with you and your property IS YOUR BRAND.


The product brand can even be built on experiences outside the property during their stay if your engagement with them or the property location adds value to their total trip experience. I’ll say it again, because I think its really important, the perception of your guests about their experience throughout the process from pre booking to post stay IS YOUR BRAND.


Regardless of what you want your brand value to guests to be, brand value is defined by the consumer, not the company (no matter how much Coca Cola said New Coke was better than original Coke, the Coca Cola brand was defined by the consumers who rejected the attempt to re-brand).


Likewise, a VRM/STRM company does its best to build the experience for guests that create the desired brand experience, and hopefully they can consistently do so, as that is the making of a good product brand, but just because a brand owner says a brand is one thing doesn’t mean the brand is actually aligned with it from the consumers eyes.

What is it not? How a guest booked likely has very little influence on this product brand. Newsletters are unlikely to affect a guests brand experience either. Branded post its almost certainly have little to no impact on a guests brand experience either. Branded towels don’t change a guests brand experience, but folding that towel into a dove or whatever on each bed does, so there is nuance here.

I am hoping everyone would agree that building a good product brand, which will influence how guests view your company brand and have interest in other product brands in your portfolio is not done by direct marketing, and while good advertising and marketing can create brand perceptions prior to engagement with the actual product (without actually staying with you yet), you can only create true brand equity by delivering on the actual experience.


So building a great product brand goes back to delivering a great product (or in this case, guest experience)…and for insight into how strong your brand is on that level, all you need to do is check your reviews!


Service Brand


What is it? So this is tricky, because service brand and product brand somewhat overlap in this industry.


However, I feel service brand should be considered a distinct brand that is consistent across the unique value propositions of unique properties. Having Limited Edition properties means each is unique, but I believe delivering on guest engagement, communication, and hospitality could be considered as a service brand itself.

Some properties can be amazing, but the hosts are terrible, or some properties can have issues but great service. Ideally you can deliver on both, but I think focusing attention on building a service brand separately from how you approach each property (product) brand is the best way to create the best result on portfolio/corporate brand perception.

Your service brand can be seen as where “guest experience” value lives and where I think most brand development efforts and resources should go if you want to compete long term for the most profitable guests and most profitable owners (a concept I often refer to as the business results we should all be aimed at given its mostly a byproduct of doing things professionally, sustainably, and with a passion for guest experience).

Service brand is where Vacasa is investing in brand equity by assuming the consistency of service is what their target market will value above all else. However, I would argue that consistently exceeding expectations of the guest on value of their experience should be the goal for a service brand in this industry.

I think this is a community that understands importance of a good service brand, aka guest experience, at its core because its rooted in traditional hospitality. In fact, it should be a competitive advantage. New players are coming around to understanding the importance of hospitality service, but it seems to be due to trial and error, not because their passion has been about the guest experience from the beginning, and I think that will always be a disadvantage to those types of companies and an advantage for those who approach it as a brand value not a tactic.

Personal Brand


I think a lot of confusion about branding comes from confusion about personal brands.

An interesting thing I’ve noted is that most personalities with the reach to influence the participants in this industry are building personal brands. Personal brands are often built on Instagram, on podcasts, in articles, and generally by focusing on driving as much direct engagement as possible once someone is exposed to the brand.

This type of brand is VERY different from how corporate brands, product brands or service brands are built in almost any industry, because consumption is capped at how many available unique reservations you have in your rental supply. However, an entire industry is popping up around VR/STR management content that are successful due to personal brand building as measured by engagement in content.

“Develop rich content to get your audience engaged in your brand”

Does that sound familiar in terms of marketing strategies that are often promoted in the VR/STR industry? Well I think a classical perspective on brand management would say that is NOT how a VR/STR business owner should be thinking about brand building.

Is that content potentially aligned with your corporate, product or service brand and creates an advertising channel? Sure! That may work and be a good strategy if that’s a efficient way to get in front of as many potential target guests as you can, but its not a brand building activity. However, contrary to what seems to be popular opinion, Instagram pages, website content, facebook groups, and other content creation is not a brand building exercise any more than buying a google ad is, although it IS a brand building exercise if content is what your business is based around.

The difference here is in what VRMs/PMs are selling (hospitality services and accommodations). For those who sell content, its critical to spend time and resources to get in front of as many relevant people as possible. That’s because their brand exposure is exposure to content…that’s a “purchase” or “trial” and if they are creating good content they can continue to get “purchases” and then monetize in some form or fashion (things like courses, paid masterminds, books, ect).

Again, just my humble opinion, but VR brands are not creating strong brands by spending time on content. That can be a very good advertising strategy if that makes sense as a resource spend for your business, but its advertising, not brand building (at least not on the guest side, the owner side is another story for another time). A real brand can only be created through guest perceptions, not content consumption.

I think the personal brand development many of the podcasters out there are engaging in to sell content like classes, books, coaching, systems, ect sometimes fail to realize that their personal brand building tactics are not effective tactics for building corporate, product or service brands, and as a result seem to unintentionally direct a lot of people newer to the industry towards the wrong types of brand building activities. Just a theory, but the point is this type of brand is mainly irrelevant for most PMs.


Direct Bookings Example: Direct Bookings Are Good, But Not Brand Building


So time to rile everyone up and talk about direct bookings!

I remember at a conference or two I would tell some people that I don’t brand my properties…well, as you may imagine, I have since stopped saying that because that is apparently NOT a good way to build credibility with people in this industry. Really, I should have just been more clear about what I was really saying, which was that I don’t brand my properties with logos or a name, but I believe our properties have the strongest brands in my area, as evidenced by word of mouth (reviews) and results on things like value scores (so maybe I’ll try that angle at next conference).

At that same conference I remember talking about an OTA heavy distribution strategy with no direct booking focus. Well, again, in a outcome that should surprise zero people, I did not get a warm response to the strategy. But, on that talking point, I at least got feedback that was consistent. Things like “well you’ll never build a brand on an OTA” or “You are taking a lot of risk…what if the OTA disappears or changes terms on you to make you unprofitable and your brand dies?”…

WELL, if anyone has actually read this entire thing, maybe you can see the potential flaw in these statements. There’s a difference between relying on a marketing platform like Airbnb (not usually directly related to brand experience) and reliance on your brand(s). Independence, profitability and sustainability come from having good product, service and corporate brands in this industry, not where guests book.

I generally believe direct bookings require you to have a good brand, because repeat indicates you are delivering a good brand experience. However, good brands embrace competition, because brand equity stagnates if demand for your brand doesn’t increase (i.e. you only get repeat guests). In that sense, I think we should all consider our brands and brand building from the perspective of being capable of winning demand in any marketplace your target guests shop. Surprisingly, I see very little of that mentality, but I am betting the companies that are most successful at building great brands and sustaining profitability will be the ones that focus on true brand building around corporate, product and service brands (which is what I call a right to win, and I will cover in more detail next).

So to circle all the way back, why do I say that booking direct isn’t a brand building activity? Well, because you aren’t creating a brand where the value proposition is in the booking experience. That’s what OTA brands do, not VRM/STRM brands.


The Right to Win


The most important concept to remember about brand building is that strong brands by definition are brands that can win demand in competitive environments against other brands. Therefore, risk is lowest and independence is highest when your brand is strong because unless demand simply disappears along with your preferred marketing channel (i.e. people stop staying in VRs/STRs all together), the strongest brands will win wherever they are distributed and/or advertised.

And so I finally get to the term referenced in the article title: The Right to Win.

This is a concept I picked up as a key principle while working on the Pantene brand at P&G back in the day. Its stuck with me every since in slightly different terms (I usually call it winning demand), but the phrase used as a question is one of the most powerful brand building exercises out there….ask yourself, Does My Brand Have the Right To Win?

If guests truly understood what you were offering and compared it to what everyone else is offering, SHOULD your brand win that guest demand? The beauty in the term is that its internal and external at the same time, indicating control over your brand and its value proposition, but ultimately its success is determined by external perception of your brand value proposition. If you have the right to win, then all you need to do is get your brand and brand messaging in front of your target audience, which should actually be the easy part!

If you truly ask yourself if are you offering target guests a better value proposition than competitors, you may find the answer is no, and then its time to invest in delivering your brand promise in a differential and impactful way that gives you the right to win.


Conclusion


Brands are important in this industry. Focusing on building great brands is very important to sustainability and independence. And hopefully some of the brand management principles I covered that are tried and true will help someone out there focus their thinking and resources around areas where brand building opportunities truly are.

So what were your answers in the beginning about what you think your most important brand building activities are? Were direct advertising using CRMs in there? What about direct booking strategy? Website content? Social media presence? How about logos or good branding on items you give to guests?


I’d argue that a successful brand building strategy in this industry doesn’t require any of those tactics. And if none of your answers were focused on how to improve you capabilities to overdeliver on guest experience, then I hope you’ll consider how much you are investing in those other activities and think about how some of those dollars, time or other resources (not all of them though) might be allocated to some brand building that gives you the right to win.

Spending a lot of money on direct marketing campaigns? Well how about spending a month or two’s budget on adding some guest valued amenities like a bigger TV or creating a new space in the backyard? Thinking about paying for a fancy logo? Maybe spend that money on new high end kitchenware instead. Want to buy some branded post it notes? Well, don’t do that and use it for subsidizing guest tours or really do anything but buy branded post it notes…well, I am sure you get the idea.



Best of luck to everyone out there working to build a brand they believe in!
 
Thank you for a well-thought out article! I have often felt a little guilty for not spending money on branded mugs, etc. as gifts for guests. I have chosen to spend the money I would have on those gifts in making from-scratch homemade muffins of the guests' choice and providing a bowl of fresh, seasonal fruits.

I am on the board of directors for two organizations where their mission statements are very important and they are featured prominently on their websites, in emails, etc. I don't know why I never thought to do that with my business, but I will now!

My reviews validate that I am doing something right for my guests, and I do have many new guests tell me they read the reviews before booking. It is funny, the muffins are mentioned in most of the reviews!

I really liked the comments about your beliefs in the About author section! Thanks again!
 
Thank you for a well-thought out article! I have often felt a little guilty for not spending money on branded mugs, etc. as gifts for guests. I have chosen to spend the money I would have on those gifts in making from-scratch homemade muffins of the guests' choice and providing a bowl of fresh, seasonal fruits.

I am on the board of directors for two organizations where their mission statements are very important and they are featured prominently on their websites, in emails, etc. I don't know why I never thought to do that with my business, but I will now!

My reviews validate that I am doing something right for my guests, and I do have many new guests tell me they read the reviews before booking. It is funny, the muffins are mentioned in most of the reviews!

I really liked the comments about your beliefs in the About author section! Thanks again!

Thank you for sharing!

What a perfect example of great brand building!

To summarize: You prioritized your resources on something customized and meaningful to guests (amazing sounding homemade muffins and seasonal fruits) vs. buying some branded merchandise with your logo on it and thinking that was how to build your brand. The result of prioritizing something that improves the uniqueness and quality of the guest experience then shows up in most of your reviews as word of mouth brand endorsements, which potential new guests read and then, based on the brand value proposition communicated by you and word of mouth from last guests, leads to new guests. Couldn't ask for a better example than that to demonstrate the true power of good brand building decisions!

Your instinct toward guest experience is the instinct I think many VRMB Community members have, and why I spend my time in this community vs elsewhere. There are lots of folks in the broader industry that don't seem to have that instinct, which is concerning because the thoughtfulness you put into your guest experience gets substituted for other activities that are more like the branded merchandise, yet are still considered brand building. Hopefully the success of companies like yours can be great examples to others on how to think about these things, and the industry as a whole can improve together.
 
Interestingly, I can make the argument that this writer is making the exact same mischaracterization of the "brands' consumers are buying as I am describing as a root of a lot of confusion out there. Hopefully its not a stretch, but here's my thinking on where the writer was wrong in that article:

First, lets take a look at what he said right before that quoted last paragraph:

"(hotels are coming back to semi normal patterns, so)...we now get the rhetoric about short-term rentals being "all about the experience" and standards changing to ensure the "market is focused on delivering a first class experience to its guests.

In one swish of the marketer's pen, short-term rentals have now fallen into line with hotels, which - let's face it - have talked up the "experience" of staying at a property for as long as anyone can remember.

Sure, some might support the idea that there is something unique and special about having a property all to yourself, with all the mod-cons and privacy, set in a wonderful location."

So I think this series of statements demonstrates a misunderstanding between a true brand (defined by the guest) and advertising/marketing communication on brand messaging. Marriott Premium Classic Hotels has a couple good value propositions they communicate:

Marriott Classic hotels "Provides sophisticated spaces and experiences that keep the mind balanced, sharp and inspired."

Sheraton Hotels is "At the heart of hundreds of communities around the globe, we invite you to gather and share experiences anywhere you go."

Now go poll some folks walking out of the airport Marriott and see how many mention the sophisticated spaces and experience that kept their mind balanced, sharp and inspired...

Now read the reviews of some of the most expensive VRs in your area that have good review scores. Here's a nice recent one on one of our listings:

"Everything about this listing and description is as advertised, and even better. We are frequent travelers and renters, and can appreciate all the extra attention to comfort, details, and helpful information about the property and the area. The location may be unbeatable, the property manager was very responsive, and the property itself was unique, the rooftop deck so much fun, and the layout offered privacy for multiple couples or families."

Here's google review of a recent 5 star stay at the San Antonio Riverwalk Marriott: "Very pleasant stay -- staff friendly and helpful. Elevator system was SUPER! Would recommend 1 bottled water in the room (gratis) and coffee in the lobby for mornings. You didn't even provide coffe make in room :( Overall enjoyed my stay"

Ok, so that was a little bit of cherry picking there, but the point is that great VRs/STRs are not generally competing in the same category of brands. If a guest is trying to figure out if they want to stay in a 4 bedroom container home with a rooftop patio and skyline views, amazing kitchen and awesome hosts that will try to deliver a local experience or 4 rooms at the Marriott hotel downtown, well I think thats a very confused guest and an outlier. I bet the first decision on a decision tree for potential guests is hotel or VR/STR because they are not the same thing and have very different brand categories if you ask guests.

Finally, if they are sustainable, I don't believe either hotels or VRs get to assign the "value" of their "wares," because as I mentioned, the value of a brand at the end of the day is determined by the consumer. They don't have to figure out much other than am I getting good reviews at these price points to determine brand values, and I have a feeling those two accommodations options couldn't be further apart on value when the VR/STR side is doing great brand building activities.
 

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