Summary of "Nirm Shanbhag sees Brand Architecture from the Consumer's Perspective" – How Brands Are Built Podcast

Episode Release Date: December 7, 2020
Host: Rob Meyerson
Guest: Nirm Shanbhag, US Chief Strategy Officer at Sid Li

Introduction

In this insightful episode of How Brands Are Built, host Rob Meyerson welcomes Nirm Shanbhag, the US Chief Strategy Officer at Sid Li, an international creative company. The conversation delves deeply into the intricate world of brand architecture, exploring its significance from the consumer's viewpoint and discussing broader implications for brand strategy and societal impact.

Guest Background

Rob Meyerson begins by establishing his long-standing professional relationship with Nirm Shanbhag, tracing back to 2012 when Nirm was the Managing Director of Interbrand’s San Francisco office. Nirm’s impressive background includes:

• Education: Studied at the London School of Business.
• Experience: Worked as a planner at Mullen and McCann.
• Leadership: Held strategy and leadership positions at Interbrand for over six years.
• Entrepreneurship: Ran his independent agency, Notch Strategy, partnering with agencies such as 1010.
• Current Role: Joined Sid Li as the US Chief Strategy Officer, responsible for building their strategy practice.

Sid Li and Q Collective

Nirm provides an overview of Sid Li, emphasizing its foundation as a creative company involved in advertising, branding, motion graphics, digital, and social media. Originally founded in Montreal in 1993 as Diesel, the company was renamed Sid Lee in 2006 after rearranging the letters.

In discussing Sid Li's acquisition by Q Collective (pronounced "KYU") about five years ago, Nirm highlights that Q Collective operates more as a collective rather than a traditional holding company. This model fosters collaboration among sister companies like IDO and SY Partners, enabling Sid Li to integrate diverse talents and expertise from various backgrounds to enhance creative output.

Defining Brand Architecture

The core of the conversation revolves around brand architecture, a fundamental aspect of brand strategy that Nirm specializes in.

Rob asks Nirm to define brand architecture beyond textbook definitions.

Nirm responds:

"At its most basic, it is a way of describing the relationships between different parts of a brand portfolio. So you can have a master brand, you can have a product brand, or a multitude of them, and the way that they relate to one another is really the domain of brand architecture."
(Timestamp: 08:02)

Common Misunderstandings of Brand Architecture

Nirm identifies a prevalent misconception where many equate brand architecture solely with design systems—visual identities and naming conventions. He emphasizes that while naming and visual elements are tangible outcomes, they are rooted in a deeper brand architecture framework that provides guidelines and rules to prevent a disjointed brand portfolio.

Rob adds:

"The naming that results... those are probably the most tangible or obvious kind of manifestations of brand architecture, but they're not to be mistaken for brand architecture in and of themselves."
(Timestamp: 10:40)

Nirm concurs, noting that exercises like naming can facilitate brand architecture development but are distinct processes. He underscores the importance of a structured brand architecture system to maintain coherence and prevent brand disarray.

Importance and Business Impacts of Brand Architecture

The discussion shifts to the business implications of effective brand architecture. Nirm emphasizes that a well-defined brand architecture can:

1. Reduce Friction: Simplifies the consumer’s path to purchase by minimizing confusion and unnecessary complexity.
2. Facilitate Choice: Helps consumers navigate the brand portfolio more easily, enhancing decision-making and increasing the likelihood of purchase.

He further explains:

"A good brand architecture can reduce friction and facilitate choice... you can make a ton of money, you can unlock value that exists in the market."
(Timestamp: 13:42)

Rob elaborates on how poor brand architecture, often resulting from rapid growth or acquisitions, leads to a muddled brand portfolio that confuses consumers and dilutes brand equity.

Real-World Examples: Apple and Automotive Brands

To illustrate the concepts of friction and choice, Rob and Nirm discuss real-world examples:

Apple:

• Naming Hierarchy: From the abstract master brand (Apple) to distinct product names like MacBook, Force Touch, and straightforward components like battery and keyboard.
• Impact: This hierarchy reduces consumer confusion and aids in seamless navigation through product offerings.

Nirm humorously adds:

"You're trying to tell me you wouldn't want the Apple Pear Banana Pro."
(Timestamp: 19:38)

Automotive Brands:

• Tiered Naming: Terms like Limited, Premium, Touring help delineate product variants, simplifying consumer choices.
• Example: Subaru’s Outback Limited clarifies models for consumers without causing unnecessary confusion.

Approach to Brand Architecture Projects

Rob inquires about the methodology for addressing brand architecture issues within organizations. Nirm outlines a consumer-centric approach:

1. Orientation: Begin by understanding the consumer's journey and decision-making process rather than focusing solely on the company's internal structure.
2. Empathetic Understanding: Engage with customer-facing teams like sales and customer service to gain insights into consumer behavior.
3. Research Methods: Utilize ethnographic research, in-store observations, and quantitative simulations to map out consumer choices and preferences.

Nirm emphasizes:

"Understand the decisions and the key points and stages that they have to navigate through, then align your portfolio with how they navigate and choose."
(Timestamp: 28:02)

Brand Architecture Outcomes and Tools

Effective brand architecture can lead to various outcomes, including:

• Portfolio Simplification: Reducing the number of brands to eliminate clutter and confusion.
• Cost Reduction: Lower marketing costs by supporting fewer brands.
• Enhanced Consumer Satisfaction: Easier decision-making leads to increased satisfaction and loyalty.
• Revenue Growth: Streamlining the brand portfolio can unlock significant financial value, as illustrated by Nirm’s example of a technology client realizing a billion-dollar profit increase through portfolio simplification and tiered branding.

Nirm states:

"When you align brand architecture with consumer needs, it works for everyone involved— the company and the consumer."
(Timestamp: 38:39)

Measuring Success in Brand Architecture

Nirm highlights the importance of measuring the effectiveness of brand architecture changes by tracking:

• Consumer Satisfaction: Assessing purchase and product satisfaction before and after implementation.
• Brand Loyalty: Monitoring changes in customer loyalty as a result of improved brand coherence.
• Economic Metrics: Evaluating financial performance indicators to gauge the impact of brand architecture adjustments.

Branding Philosophy: Good or Bad for Society?

Rob poses a philosophical question about the societal impact of branding. Nirm responds by comparing branding to a tool, which can be used for both positive and negative purposes:

"Brand isn't inherently good or bad. It can be used as a tool to benefit us all or for less noble purposes."
(Timestamp: 43:02)

He provides examples of brands driving positive change, such as Protect Our Winters, and acknowledges that branding can also be employed for harmful objectives.

The Role of Purpose in Branding

The conversation shifts to the modern emphasis on brand purpose, a trend that encourages brands to have a deeper, often socially responsible, mission. Nirm acknowledges that while purpose can enhance internal engagement and influence consumer decisions, not all brands require a profound purpose, especially for basic, everyday products like paperclips.

"Do consumers really care about our purpose? If the answer is yes, then it makes the cut. If no, then it doesn't belong there."
(Timestamp: 43:43)

Recommendations and Influential Books

When asked for book recommendations, Nirm suggests:

1. "The Experience Economy" by Pine and Gilmore: Explores the shift from trading goods to trading experiences, highlighting its relevance in today's market.
2. "A Brief History of Time" by Stephen Hawking: Offers insights into perspective and the scientific process, emphasizing the importance of adaptable viewpoints.

Advice for Aspiring Branding Professionals

Nirm shares valuable career advice for those pursuing a path in branding and strategy:

1. Listen More Than You Talk: Emphasizes the importance of understanding client and consumer needs through active listening.
2. Define Problems Clearly: Focus on identifying and articulating problems concisely to facilitate effective solutions.
3. Maintain a Separate Creative Outlet: Encourages having creative pursuits outside of work to foster innovation and prevent burnout.

"Echo chambers are the worst place for brands to be born. They have to have perspective."
(Timestamp: 50:03)

Conclusion

The episode concludes with Rob expressing gratitude to Nirm for the engaging discussion on brand architecture and its profound impact on both businesses and consumers. Listeners are encouraged to explore more about Nirm and Sid Li through their website and LinkedIn, as well as check out Nirm's articles on Notch Strategy. Rob also promotes the recommended books and invites listeners to rate and review the podcast on Apple Podcasts to support the show.

Notable Quotes with Timestamps

• Nirm on Defining Brand Architecture:

  "At its most basic, it is a way of describing the relationships between different parts of a brand portfolio."
  (08:02)

• Nirm on Common Misunderstandings:

  "What they mean is a design system... requires something that provides some rules and guidance."
  (09:31)

• Nirm on Reducing Friction and Facilitating Choice:

  "A good brand architecture can reduce friction and facilitate choice."
  (13:42)

• Rob on Apple's Naming Hierarchy:

  "Apple is an abstract name... the battery and the keyboard are straightforward."
  (19:38)

• Nirm on Starting Brand Architecture Projects:

  "Orient yourself not from the perspective of the business... but instead the consumers."
  (26:46)

• Nirm on Measuring Success:

  "Satisfaction should go up after the brand architecture has been implemented."
  (39:17)

• Nirm on Brand Purpose:

  "Do consumers really care about our purpose? If the answer is yes, then it makes the cut."
  (43:43)

• Nirm's Career Advice:

  "Listen more than you talk... Define the problem clearly... Have a creative outlet distinct from your work."
  (50:03)

This comprehensive summary captures the essence of the conversation between Rob Meyerson and Nirm Shanbhag, providing valuable insights into the intricacies of brand architecture, its impact on consumer behavior, and strategic approaches to building effective brand portfolios. Whether you're a branding professional or simply interested in understanding how brands are structured to influence consumer choices, this episode offers a wealth of knowledge and practical advice.