with Laurier Mandin and Dr. Stan Bernard
Ever noticed that while most brands battle constantly with competitors for small gains, leaders like Apple, Tesla and Amazon play in an entirely different sphere? Stan Bernard, author of “Brands Don’t Win” believes the branding game is a lost cause. In this episode, he tells you how leaders transcend branding by creating a game no one else can win — and how to do it for your product.
A senior fellow at the Wharton School of Business, Stan Bernard taught his Transcender System to MBA students for 14 years. He’s been a consultant to top businesses for nearly four decades, and over 15,000 professionals have taken part in his “Business War Games” simulations, seminars and speaking engagements.
Stan’s new book walks you through the Transcender System’s proven and practical three steps, with case studies including Amazon, Starbucks, Nike and Tesla as well as emerging leaders like Halotop and Peloton. Join Graphos Product President and Lead Consultant Laurier Mandin for this mind-blowing discussion with Stan Bernard.
Laurier: Hey, product people. If you want to propel your product brand far ahead of the competition, you’re going to love this episode.
Welcome to Product: Knowledge, the podcast about creating and marketing products people truly need I’m Laurier Mandin, president and lead consultant of Graphos Product. How is it that while most product brands continuously duke it out with competitors, an elite few transcend that battle to own their market for decades at a time? Stan Bernard has a theory about just that.
And he built a system around it. As a senior fellow at the Wharton School of Business, he taught his Transcender System to MBA students for 14 years. He’s been a consultant to top businesses for nearly four decades, and over 15,000 professionals have taken part in his business “War Games” simulations, his seminars and speaking engagements. Stan’s new book, ” Brands Don’t Win: How Transcenders Change the Game,” takes you through the Transcender System step-by-step and teaches product businesses to design a game that only they can win, citing examples like Amazon, Starbucks, Peloton, and Tesla.
I am super pumped to have Stan Bernard as my guest on Product: Knowledge. It’s a mind-blowing discussion, and I started it by asking Stan Bernard to describe his Transcender System and what makes it “the world’s most powerful winning system for companies and their products.”
Stan: The Transcender System is all about doing one thing and that is helping companies win. Historically, virtually every company on the planet, no matter whether they were selling a product, a service, a technology, or some other offering, they all used the exact same competitive system, which was branding.
These companies would create a brand and then differentiate a brand usually based on different product features and benefits and leveraging lots of advertising, promotions and sales forces. That approach is actually 3000 years old. The ancient Greeks used branding in their marketplace. It has not changed dramatically since that time. It’s still based on the same tenets of differentiating your brand. What the Transcender System does is says, you do not have to play the exact same game that nearly every company in the world is playing because every company in the world is effectively playing brand checkers. Okay.
It’s a simple game. Everybody knows the game. Everybody plays the exact same game. And so what I did is developed a system called the transcender system, which is based on the premise that your company and your team can create and play a game only you can win. You do not have to play the branding game.
You can break out of brand jail, shake off the brandcuffs. Stop being “brandwashed.” And create and play a game only you can win.
Laurier: I love that. the Transcender System is built around what you call Agendas. How do you define an Agenda in the context that you’ve created?
Stan: Great question. The Transcender System that I built is not based on business. It’s not based on sports where I learned there’s lots of different ways to win and lots of different coaches and managers have winning systems. It’s actually based on politics, specifically, US presidential elections. In U S presidential elections, candidates such as Obama, Senator Obama in 2008 and Trump in 2016, they did not lead with their brand. They didn’t say vote Obama in 2008 or vote Trump in 2016, they led with what is typical for politicians, which is they lead with a campaign agenda and then they follow with the brand. So Obama 2008 led with the campaign Agenda, one word: Change, and his voters and constituents believed in change. Not bought into, believed in change.
Then he was the change candidate. Similarly in 2016, Trump had a forward campaign Agenda or game that he played, which was of course, make America great. Again, he didn’t leave with Vote Trump. He was a brand. He could have led with that, but he didn’t. He led with his campaign Agenda, Make America Great Again. And then he followed with his brand, of course, which is the Trump brand.
So effectively, what Transcenders do is they use a political playbook. Instead of the traditionalist product playbook. So they use this concept of a campaign Agenda, also known as the narrative in politics or what I refer to as the game. And these Transcender companies create and play, again, a game only they can win.
So for instance, let me give you perhaps an example. Everybody knows Starbucks and everybody assumes that Starbucks wins because of its brand name. They would be wrong. Starbucks actually tried to win with branding for the first 16 years. The company started in 1971 in Seattle’s Pike Place Market. At that point, they were basically branding.
They had the Starbucks brand name, the brand logo, the branded cups, the branded coffee, et cetera, et cetera. But for the next 16 years, they were only adding one store per year. They were not winning. In 1987, Howard Schultz buys the company and says, “We’re not going to play this branded copy game.” He said, “We’re going to change the game.”
“We’re going to make it all about The Third Place.” Three words, the Third Place. He wanted to make Starbucks The Third Place between home and work in America. Which is why you have a Starbucks on one side of the highway on the way to work and directly on the opposite side of the highway on the way home from work.
It’s why you have Starbucks in corporate centers, transportation, hubs, malls, et cetera. It’s also why Starbucks stores are much bigger than their competitors. They do not want you simply to grab a cup of coffee, like Dunkin donuts. Starbucks wants you to grab a chair, relax, hang out, enjoy our nice music, our clean bathrooms.
Our WIFI and our hospitable baristas, and stay for a while. Come here on the way to work, maybe meet some business colleagues. Come here on the way home from work. Do your work, meet some social friends, et cetera. They basically changed the game from coffee to the coffee shop by doing that. Starbucks went over the next 20 years from adding one store per year to adding 1,350 stores per year.
That’s almost four stores a day, that became the dominant coffee chain in the world with 31,000 stores across 80 countries. And most people will recognize they do not even have the best tasting coffee. That’s an example of a Transcender company using a campaign agenda to change the game in that particular industry.
Laurier: it’s never been for Starbucks, since that point, about doing things specifically better as a coffee brand, it’s been about focusing on that Third Place and making it desirable, attractive and part of people’s lives. And that’s what’s worked for Starbucks customers.
I believe there’s often too much focus on category creation as being the holy grail of owning the market you’re in, because in application it’s something quite dangerous that very few brands can pull off. In the Transcender System, you take that category creation concept further though, and demonstrate three approaches to creation, in the case of the book, all by one company, which happens to be Apple. Tell us about that.
Stan: Many people think you have to create a category to win in business. There are certainly are examples of that. However, in the Transcender System, that is just one of several approaches to winning. So identify in the Transcender System. The first step of the Transcender System is to create the agenda or create the game that only you can win.
There’s three ways to do that, and they are Competitive Creation, Competitive Re-creation, and Competitive Categorization. Now let me make this simple, because Apple is unique in having basically created an agenda and a game for its three products using all three of those categories.
So for instance, Competitive Creation, Apple absolutely, with the iPod device, created a totally novel device. No device had ever been able to be that small and playing music and be linked to the web download songs. And then Steve Jobs called it, a thousand songs in your pocket. So that’s an example of competitive creation.
Actually, some dictionaries use the iPod as the definition of a game changer.
Laurier: Interestingly, there were a lot of MP3 players on the market at that point, but they were all focused on trying to play a few tracks that people had downloaded, usually pirated tracks or ripped from CDs, and the capacities were terrible.
The UX was terrible. And what Jobs did with the iPod was came out with a player that could play a thousand songs, basically your entire library. Carry that with you everywhere you go, put them in your pocket, and simplified the messaging down to that one deliverable so people could see it did that one thing no other MP3 player did.
And did it Apple style. So anybody could do it without a learning curve.
Stan: And linked it specifically to the iTunes store. So that was the, it was that combination that really set it apart as well as you mentioned that the incredibly small size, the functionality. Jobs could have gone on and on about the technology, which many branding companies do. They try to differentiate based on all the technical details.
Not Apple, not Transcenders.
Laurier: He created a built-in miniature hard drive that no one else had done before and put that inside of each unit. So you could have that kind of storage, but they didn’t put that in the marketing. It was all about what that could do for you. Forget about how it did it.
Stan: “Thousand songs in your pocket.” So that is an example of, again, the positioning of the product. Then the second example is Competitive Re-Creation. So the, everybody knows the iPhone was actually a re-creation or in Steve Jobs’ terminology, a re-imagining of the cell phone. Everybody had cell phones or knew about cell phones at least.
And what Jobs did is he didn’t give them what they needed. He gave them what he believed they should aspire to have. So he was trying to inspire people with the iPhone. He did that. He went way beyond what any market research could have told them. In fact, one of the differences between Transcenders and traditionalist is traditionalist will do a lot of market research, trying to find out how they can make their products slightly better or differentiated from their competitors. Not Steve Jobs.
Steve Jobs did very little market research. He basically had a vision for what his customers would like. And this is classic of Transcender executives and professionals. They know better what customers will want or need than even customers.
Laurier: Exactly. He said, “I’ve got to show them what they want, otherwise they won’t know.” And that’s such a good example though, because I have a lot of friends who are Apple haters, that’ll be quick to remind you that Jobs didn’t invent any of the things that are in the iPhone.
And yet they tend to ignore that the iPhone that he created and launched over a decade ago, quickly became the gold standard. And every other phone available to this day still looks very much like that original iPhone. And still mimics almost all of its functions, with improvements since then, but Apple being a Transcender created everything that you see and everything you’re using. It reshaped the way everybody made phones from that point in. No more styluses, everything is delicate touch screens.
That’s such a great example because I can’t think of many other developments that, in one step, changed an entire industry. And not only that, took over and dominated that same industry. I still remember very well, Jobs’ original presentation talking about the small piece of the cell phone market that Apple hoped to own.
And they went from there to becoming quite quickly a dominant player because it was such an important leap.
Stan: To that point again, this is classic Transcender thinking. Transcenders. Don’t try to just come into a market to compete. They don’t come into a market to win. They come into a market to dominate. And often they come in to dominate multiple markets. So the iPhone actually not only dominated ultimately the cell phone market, but also basically the radio or I tune market, the music marketplace, the video marketplace, the GPS marketplace, on and on.
Transcenders don’t try to have competitive advantages. Competitive advantages are usually tiny and transient. My product has slightly more power than yours or my product is more powerful than your product. No. That’s not what Transcenders do. And certainly not what Steve Jobs did. They basically come with transcendent advantages, multiple revolutionary advantages, as opposed to a few incremental advantages.
So that’s classic Transcenders, which you pointed out. And then the third way is Competitive Categorization. Now most people assume you have to be the one to start the category to win. That’s not the case. In fact, in many cases, Transcenders win categories that somebody else started, they ultimately though own the category.
And that’s the difference. It’s not necessarily the first one to start the category. It’s the one that ultimately owns it. Let’s look at Apple’s iPad. The iPad basically was a device that other companies had started in by the name of tablets as many as almost 30 years earlier.
What Apple ultimately did under Steve Jobs is they own the category. They said, and again, very simply he said, this is a third category device. And he showed that it fit in the middle of iPhone and Mac. Linked into the entire Apple system, with all the capabilities of the iPhone and much more, and many of the capabilities of even a PC or Mac computer, somewhere in between. So they again did not start the category, but they ultimately own the category and that is called Competitive Creation.
So there’s three ways to create the agenda: Competitive Creation, Competitive Re-Creation and Competitive Categorization.
Laurier: Such an interesting story with the iPad too, because the iPad was actually developed in concept before the iPhone, and Jobs felt that it would be better to try launching it as a phone first. And that took off. When the iPad came out, I remember again, there was a lot of criticism, people mocked the name, even Jobs, initially at the time of launch thought he’d finally run into his first failure, yet his instincts proved to be right, and it turned out to be another product that revolutionized the market yet again, by finally introducing a tablet that people really wanted and changed the way other tablet makers designed theirs so that it became a category all the players were again involved in.
Stan: Yeah. In fact, a lot of people don’t realize the iPad was the single best launch of any Apple electronic device in history and it got 90% market share within nine months after launch its initial sales in its first year dwarf those of even the iPhone. So yeah. This was a game changing product, but again, it wasn’t their idea.
They weren’t the first to have it. There’d been over a dozen different tablet makers before that, but they basically applied the Transcender mentality and approach and ultimately own the category.
Laurier: Welcome back to Product: Knowledge, the podcast about creating and marketing products that people truly need. Today I’m talking with Dan Bernard author of brands. Don’t win.
I want to circle back to something you said earlier about, with the Donald Trump campaign, for example, with “Make America Great Again,” and how successful campaigns like that one depend on repetition. As marketers, there’s this constant pressure to freshen things up and not to repeat ourselves very often.
Yet, in the book, you cite great examples about how other campaigns have failed to have the correct repetition and fallen off the script, to their peril. Yet brands like Geico and those successful political campaigns have used constant repetition, in some cases for decades at a time, to own a specific place in the minds of their audience. You give some, oh-my-gosh examples about how others have failed through lapses in consistency. Talk a little bit about that for me, please.
Stan: In traditionalist branding, we typically have advertising agencies and marketing agencies and others that basically tell us, ” Let’s use an ad and some slogans, but we’ll only use it for a limited period of time. It may be three months, maybe at most two or three years, but we don’t want people to get brand fatigue. And so, let’s make sure we’re constantly changing our messaging.” That is a traditionalist branding approach, which fails in the Transcender world. In the Transcender world. It’s just the opposite. You basically use the same winning campaign agenda. Ultimately, ideally for years. So we know Trump, everybody literally around the world pretty much knew his campaign agenda because he repeated it so much, ” Make America Great Again,” not only did he repeat it, but he got his followers to repeat it. And then it kept getting repeated over and over again by Trump, by his followers, by the media, et cetera, et cetera. And that is the objective for transit. Is, they don’t want people to just remember their product information.
They want their, what I call Advangelicals, a combination of evangelicals and product advocates to basically keep screaming and repeating it to everyone. So as an example, Nike has basically been using the exact same campaign agenda since 1987. Over 33 years and everybody knows it.
Just do it. Perhaps the even better example is that Geico in 1999 was number five in the US in terms of US automobile insurance. State Farm was leading and playing its own game, which was very much a traditional sales game. They felt it’s all about the sales force, their sales insurance professionals, that they had the biggest effective army, so to speak, of sales professionals with over 19,200 sales professionals across the US and they overwhelm their competitors with this sales model. And the belief at that time was that you couldn’t really advertise insurance because the traditional brand advertising people thought you can’t feel it.
You can’t taste it. Can’t touch it. No, you therefore, you can’t advertise it. Geico said, “we’re going to change the game. Because we’re stuck in fifth place and we want to become number one.” They did that by coming up with a campaign agenda, four words: 15 minutes, 15%, 15 minutes, 15%, 15 minutes can save you 15% or more on car insurance.
Everyone knows that. Why? Because Geico’s been telling us that for 23 years. It’s not just that their campaign agenda has been repeated extensively, but it’s how they executed on that agenda. And I think that’s really important. It’s not enough just to have an agenda. You have to execute or champion and communicate the agenda effectively and Geico again, changed the rules of traditional advertising.
In traditional advertising, you basically stay with one set of commercials for a certain period of time with one mascot, if you have a mascot, and then you’ll switch to another set of commercials, but you’ll keep the same mascot. Geico said, no, we’re not doing the traditional advertising approach. We’re going to create our own game.
We’re going to start advertising, unlike any of our competitors. And we’re going to do it in a way that’s totally atypical or what I would call Transcender, that is, they said, “we’re going to basically use multiple different types of commercials. Play ’em at the same time, use different mascots, everything from a gecko to a caveman, to a pig, to Pinocchio, to celebrities, et cetera, et cetera. And there’ll be different commercials. But the one thing that’ll be consistent is our campaign agenda. 15 minutes, 15%, 15 minutes, 15%. By executing on that agenda and communicating effectively in a novel Transcender way. They move from number five in the U S to number two.
And they’re within two market share points and catching up to State Farm.
Laurier: Even though state farm has other types of insurance that it sells and not just the one, they’ve managed to gain that kind of ground. An important point that you make is, it doesn’t mean you can’t be interesting. It doesn’t mean you can’t change things up, but it means you have to have consistency in specific parts of the agenda in order to be able to maintain the equity and keep on gaining momentum. And there are parts of the agenda that you just don’t sacrifice in trying to achieve interest.
Stan: Yeah. It’s funny because Geico even makes fun of us. They even say, ” everybody knows that.
15 minutes, 15% everybody knows. It’s so easy a caveman can do it.” they’re literally making almost fun of us. And, but in the process, they’re repeating it over and over again.
Laurier: Well, they’re creating ways to repeat it by doing that.
Stan: That’s right. That’s exactly right.
Laurier: So in addition to Memorable, which we’re talking about now, there are three other criteria to communicate the agenda. There is Ownable, Winnable, and Alignable. Can you run as quickly through those?
Stan: So I use the acronym, when it comes to communicating the agenda, MOWA. M O W A: Memorable, Ownable, Winnable, Alignable.
Ownable: basically, you have to be the one to own it. As I said earlier, you don’t have to be the one to start a category, but you have to be the one that ultimately owns it.
I would say certainly Sweetgreen is an example of that, the salad store. They own their agenda. Is “connecting people to real food,” five words. Again, the reason it’s five words or fewer for agendas is that’s all people can remember today in their short-term memory.
They own their agenda. They literally vet and select certain farms near their stores. They pick the vegetables and other items from those farms. They even have the capability in some stores to identify where that particular vegetable came from in your salad. Talk about literally connecting people to real food.
And of course, they also make sure they connect people to real food by providing unusual access. So they were one of the first stores of that type to have what they call corporate outpost. They basically would have salad drop-offs at buildings for companies. So that’s an example of really owning your agenda.
Winnable: I mentioned Nike. Classic winning agenda. And I think everybody knows “Just Do It,” the campaign agenda, but what they don’t know is that Nike was actually losing, big time, in 1987. Reebok had become the hot brand; it was considered a little more stylish. So in 1987, Reebok owned 45% market share in north America.
Nike at that point had gone down to 18% market share. So Nike was getting beaten badly by Reebok, and the team got together and said, “we’ve got to change the game. We can’t keep playing this brand game.” Changed the game with three words everybody knows now. So that is our campaign agenda.
They now have 35% more market share than their next closest competitor Adidas.
Last one’s Alignable. Everything you do should align to your agenda. So the agenda is not just a saying. It’s not just a slogan. It is how you execute your business in every respect. And the best example of that is Amazon. Amazon’s agenda is two words, “customer obsession.” Jeff Bezos introduced in a shareholder letter in 1997, he said, that’s what, we’re all about.
Two words, customer session. So we led with the agenda and then he positioned Amazon as the most customer-centric retailer in the world. But again, to him, he never ever said Amazon wins because of branding. In fact, if you look at the trucks that deliver the packages to your home or to your workplace, you typically will not see even the name Amazon on the side of the trucks.
Why? Because Jeff Bezos is not playing a brand game. He’s playing his own game. It’s all about customer obsession. And everything Amazon does aligns to that agenda. So for instance, over 80% of their metrics that they use to determine how successful they are, are based on customer metrics.
That’s extremely unusual. When Jeff Bezos originally started putting book reviews up, his financiers told him do not put up these negative reviews. Why what crazy retailer would put negative reviews of their products on their website? And Jeff Bezos said, I’m not here to sell books. I’m here to empower consumers to make the right choices in selecting books.
This is another big difference between Transcenders and traditionalist. Traditionalist are all about the product transaction. They want you to buy into what they’re saying. They’re selling you. In the case of Transcenders, they want you to believe in their agenda. They want to inspire you. And if they inspire you and you believe in their agenda, then you’re more likely to buy their products.
Everything Amazon does from the CEO to the person delivering your packages, is all about customer obsession. That to me is true alignment. The fourth aspect of communicating the agenda effectively.
Laurier: So we have Ownable, Winnable, and Alignable as well as Memorable that we talked about first with regards to communicating the agenda. The third and final step in the Transcender system is to champion the agenda. And there you give us, you’re really great with these mnemonics, four A-words, Access, Advantages, Advangelicals, which you talked about, and Awareness.
Can you run us through again briefly what those mean?
Stan: Yeah, And I absolutely use alliteration and mnemonics because ultimately 20 business people have to, ideally not only remember. But recall and repeat to others, your agenda. So that’s why I use these types of techniques. I was trained in cognitive therapy of different types through med school and other aspects of my career.
Laurier: I love them by the way. I love the mnemonics because with any system like this, you have to remember the components. You have to find ways to put them together in your head. Or they’re not learned, you just moved from there to, the next shiny thing that rolls your way.
And in order to have a system that is achievable like this, it has to have tricks to help implementers remember what they’re working with.
Stan: Absolutely. So the first of the four, what I call winning A’s and these are the ways to champion the agenda, or execute the agenda effectively, is Access. So in the Transcender world, access can be of two types. It can be limited or unlimited. So an example of limited access would be, many people may or may not know Zara fashion, but Zara is the number one company in the world in what’s referred to as fast fashion, which is effectively their agenda, and they’ve become the owner of fast fashion, even though they weren’t the first to do it. They’re the number one retailer in fast fashion in the world, based out of Spain. And what they do that’s unique is, first of all, they provide over 10,000 new clothing items for women in their stores each year.
That is multiples more than any of their competitors. And not only do they do it on a quarterly basis or a half year basis, like their competitors, but they actually do it every week or two. They come out with hundreds of new fashions in their stores, get them to their stores.
So it’s almost unlimited number of fashions, but then they limit how long those particular items are available. So it’s the scarcity principle. You might only see an item in a store up to two to three weeks. So therefore, when you’re in the store, you better buy it then, because It may not be there tomorrow or two weeks from now.
So that’s both limited and unlimited access. Another example is Google provides unlimited access to information virtually and their agenda is basically access to the world’s information, five worlds access to the world’s information. So that’s an example of Access.
Laurier: It can also be access to community, for example, Facebook or what Peloton does giving you access to a community of like-minded athletes or people training and those celebrity trainers you get with Peloton. I’m a Peloton rider, so that one resonates with me.
Stan: Yeah, absolutely. So this is why access actually is more important than price and the Transcender world and the traditional world. We talked a lot about price and price points and this and that. No, in the Transcender world, it’s all about access because with the access, you can actually provide much more value, with your items. So you mentioned Peloton. Absolutely. Peloton is not just a stationary bike. It offers all these different accesses. As you said to all these different types of instructors. It offers you access to this whole social media world, where you can interact with other riders. You can high five them, you can blow past them. And it offers access at home as opposed to you having to go to a fitness center or cycling studio. So that’s one example of where Peloton actually offers so much more value into terms of access than the price would indicate. Another example, make it very simple. Starbucks coffee cup. Starbucks typically does cost more than say Dunkin donuts or McDonald’s or some of these other coffee shops, but it gives you so much more access and gives you access to that third-place experience.
And this is what many Transcender companies do, is they’re not just giving you a product. They’re giving you a product experience, a unique corporate transcendent experience. So that’s where access is so valuable and so important, even more so than price.
Secondly, Advantages. You obviously want to have advantages in any type of competitive marketplace, but in the Transcender world, you want to have multiple advantages. It’s not enough to have just one or two competitive advantages, you want to have a multitude or numerous competitive advantages. For instance, Tesla, doesn’t have just one single advantage to push their agenda which is, ” transition to sustainable energy.” That is their agenda.
They’re not about selling cars. That’s not what Tesla is trying to do. They’re trying to get you to believe in sustainable energy and that they offer compelling mass market electric vehicles, which is their positioning of their company.
Laurier: It’s exactly what I was going to say. To me, advantages is positioning. So it doesn’t have to be a plethora of advantages, but it has to be something that significantly differentiates you and puts you far ahead of those competitors. And that becomes what your advantages are.
Stan: Yeah and in the case of Tesla, Tesla has so many advantages. I refer to them as the “S” advantage is again, an easy way to remember it for me and others. So they’re all S’s. So first and foremost, savings; we all know Tesla cars save energy. That’s really a key component of their agenda: “transition to sustainable energy,” but they also have Savings in other ways.
Not only are they saving the planet, but they also provide cost Savings, in terms of gas, paying for gas in terms of maintenance costs, again, Savings there. Very few maintenance costs and they even offer less expensive insurance to California drivers. And they’re rolling that out to others. So Savings is one “S”. Then you have, of course the Sales model, their sales model is unique at the time in the industry, which is basically you could buy a Tesla online in less than five minutes without ever going to the showroom, without test driving it, without ever talking to a salesperson. Total reversal on the way that people have always bought cars, right? It’s always been a lengthy, very salesperson oriented, process where the salespeople are the ones who hold all the information and you can’t possibly choose the right car without them. Tesla really turned that entire thing around and essentially eliminated
That’s right. And this is again, what trans centers do they play by their own roles? And they force competitors to do the same thing. Competitors are now having to react. They’re having to figure out how do we sell our cars online? How do we reduce the amount of time that people have to spend in our showrooms?
Because Tesla’s basically created this whole new level of sales, and new model of sales. You can go on and on with their S’s. There’s Software. The fact that you basically feel like you get a new car the next morning, because it gets updated regularly. The Safety, I mean, their 2018 model S was considered the safest mass market car ever made, it got a 4.6 out of a rating of four.
They have multiple advantages. They’re not trying to differentiate their brand. Differentiation’s too small. It’s too minimal. It’s transient. It’s tiny changes. These are revolutionary changes.
Laurier: An interesting thing Tesla did through all that is they overcame their barriers, their disadvantages through the advantages. They had some pretty big quality control issues. They had issues in being able to deliver the vehicles, in terms of, the reliability of Teslas, they had some serious disadvantages that nobody even talks about and everything else they did just kind of blows right over all that, because it’s so powerful.
Stan: In fact, in 2020, they had the highest satisfaction ratings of any mass market car. The same year, they also had the highest defect rate of any mass market car. The traditionalist manufacturers are saying we would never put a car out there like that with this many defects.
Laurier: How can that be? Toyota can imagine what just happened there.
Stan: But what Tesla owners basically were saying is we understand that you’re continuing to make this car better and better. And we’re willing to put up with some of these so-called defects, because we believe in your agenda. We believe in what you’re doing, how you’re moving us forward to a much more sustainable energy world.
We believe in your cars. And this has never happened before. But this is the way Tesla plays the game and they have Advangelicals, which brings us to our next “A”.
They have these, what I call passionate proselytizers they go way beyond product advocates. Tesla owners, many of them actually go to these clubs and they will do free training for Tesla owners on their software on how to drive the cars.
They’ll have all these different clubs they go on and on about how wonderful their Tesla is. Which is why, at one point in time, Elon Musk, the CEO of Tesla said, we don’t have a marketing budget. We just let these Advangelicals speak for us, our cars advantages, speak for us.
You’d said you’re a Peloton, user you ask any Peloton user, you just say, “Do you have a Peloton?” And you don’t have to say anything else. Right away, they go on and on about the Peloton experience. I have a friend that’s a former professional cyclist who will tell me, not only how great the bike is, but how he can determine what his competitors, what gear they’re in and what he should be in.
And he talks about his metrics, and goes on and on about how great, the experience is, how he loves interacting with other people, other riders. He has certain instructors he loves, and this is typical Advangelicals.
Laurier: Companies like Tesla and Peloton, I think for them, the Advengelicals and the Awareness, those tie together, and probably outweigh access and advantages in terms of the value that they have, because that’s what blows the entire market open. You need those other things need the Access and the Advantages in order to fuel the Advangelicals and awareness, but having all those things together, it just becomes a fiery explosion of good things.
Stan: Exactly. That’s why you need all four A’s ideally as a Transcender. And if you look at it, Peloton actually this year said to analysts, “we’re cutting back on marketing and advertising because we don’t need to do it as much. Our Pelo-verse,” their Advangelicals, their cult-like following, which is the biggest in the industry, “is doing so much to push our agenda and ultimately, therefore our brand that we don’t need to spend as much on advertising promotions.”
I talked about Elon Musk doesn’t use as much advertising promotions as competitors. He’s not even close to what GM and some of the other car manufacturers use in terms of advertising promotions.
The branding model is dying. Over time, you’re going to see less emphasis on branding. And more emphasis on transcending.
Laurier: What advice do you give to businesses who want to implement the Transcender System, but know they’re going to have an uphill battle setting out to be so unique and to adopt what you refer to is a “winning mindset.”
Stan: The first thing is honestly, is if they read this book. They will see that it’s actually a very straightforward, very practical approach to winning with the Transcender System. And so what I do is I recommend they start simply by using step one, come up with your own agenda, create the agenda five words or fewer for what you want to use as your game.
So that you force your competitors to react to you. Five words or less. Don’t use the elevator pitch. The elevator pitch is too long. It’s 30 seconds or whatever. A bunch of sentences on an elevator. No, use the elevator close: four words. ” Wait, hold that elevator,” is what I call the elevator close.
If you only say five words or fewer to someone on an elevator about your company, your product, what would it be? That’s where I recommend starting. And it will really force companies and executives and their professionals to really think about what is it we stand for? How are we going to inspire people? Not sell people.
People don’t want to be sold anymore. They want to be inspired, just like they want politicians to inspire them. They want companies today to inspire. So that’s where I’d start. Create the agenda. That’s the first step.
Laurier: That’s it for this episode of Product: Knowledge and my conversation with Stan Bernard, author of “Brands Don’t Win” and president of Bernard Associates.
Find out more about Stan Bernard and the Transcender System at DrStanBernard.com, that’s D R Stan Bernard dot com, and buy the book at Amazon. You’ll find links in the show notes. Be sure to also visit GraphosProduct.com, where you’ll find all the podcast episodes with transcripts, and get insights from our blog.
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Thanks for listening. I’m Laurier Mandin.