Elon Musk, the main focus of my blog on brand capitalisation, is a perfect fit for my latest topic.
The news hit just a few days ago:
With an estimated personal fortune of $188 billion, Tesla’s CEO Elon Musk has overtaken Amazon’s Jeff Bezos and, according to the Bloomberg Billionaires Index, is now the richest man on earth.
Imagine two car companies. Company A sold eleven million new vehicles around the world last year and its sales figures are rising year on year. Company B sold 367,500 cars in the same period, i.e. around 30 times fewer. Prize question: Which of these two companies has the greatest market value? You can probably guess the correct answer from the way I framed the question (B). But how can this be? First, let’s reveal the identities of our two companies and garnish our example with some astonishing (and true) figures. Company A is VW and Company B is Tesla, which has a current market value of $180 billion. Tesla is not only worth more than VW, it is worth about $20 billion more than Germany’s three automotive giants (VW, Daimler and BMW) combined. Incidentally, these market values are calculated by multiplying each company’s share price by the number of shares in circulation. Stock market professionals call it market capitalisation. I prefer to call it brand capitalisation.
An extraordinary year is drawing to a close: 2020 will most likely be remembered by us all as the historic year when Covid-19 struck the world. A year that became a real test of endurance for people and business leaders all around the world and that showed us how abruptly private and professional equilibrium can be disrupted, how vulnerable we are and how ill-prepared we are for real worst-case scenarios.
Question. Who are you more likely to trust? Company A, which tries to lure you into their stores with unbeatably low prices in the middle of the pandemic (assuming the area you live in is not under lockdown) in order to really get the cash registers ringing – or Company B, which advises you to stay at home for the time being, even when their stores are open, and suggests that you order online to best protect yourself and your family? The answer is not difficult, even if I have to admit that the question is somewhat suggestive. Be that as it may.
I would like to start this blog by inviting you, dear reader, to help me conduct a little experiment. Do you think you can guess a brand from just three little words? Let’s give it a try. Spectacle, risk, can. Are you now thinking of Red Bull and complaining “well, that was a bit too easy”? But was it really that simple? Think about how little information you had. You knew nothing about the industry, and I didn’t tell you the company’s famous slogan. On the basis of just three relatively frequently used words, you identified the unique association to a brand that has clearly achieved something unparalleled in a hard-fought and highly competitive market. And you have “honoured” the marketing department of a company that, for more than two decades, has been implementing one of the most remarkable and successful marketing strategies the world has ever seen.
Have you ever heard of Singles’ Day? It was initiated at the University of Nanjing in China, which in 1993 chose 11 November (each number 1 symbolises a single) as the day when young single Chinese people should meet to cultivate new relationships and bid adieu to singledom. The idea caused a sensation and over the years has mutated into the world’s most popular online shopping day, thanks to the Chinese eCommerce giant, Alibaba.
“Das ist die perfekte Welle. Das ist der perfekte Tag. Lass dich einfach von ihr tragen. Denk am besten gar nicht nach.” (“This is the perfect wave. This is the perfect day. Just let it carry you along. Don’t even think about it”).
If you follow German pop music, you’ll probably remember the upbeat chorus of the debut single from Juli, a German speaking pop-rock band. In autumn 2004, the song’s happy, life-affirming message helped the band storm to number 2 in the German charts. A few weeks later, on December 26, 2004, the day of the devastating tsunami catastrophe in the Indian Ocean, most radio stations stopped playing this joy-filled song. Overnight, the image of “the perfect wave” had become inextricably linked with death and suffering. The song and its message were overtaken by a new reality.
“If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea”: Antoine de Saint-Exupéry, cult author (The Little Prince). “Anything that man can imagine is possible”: Wernher von Braun, pioneer of rocket and space technology. These are two of my favourite quotations of all time, and I make no apologies for combining them here.
I know, it‘s not the done thing. But I have to do it. I have to ask you a somewhat political, but above all deeply personal question. A question that makes it clear to me where you stand, what ethical, socio-political values you represent. Ready? Here is the question: Are you a Trump fan or do you take a knee when you hear your national anthem?
Announcement: “Dear passengers, I would like to welcome you aboard the transformation express en route to corporate success. We are delighted that you have chosen to join us on our dedicated real estate train. We will be calling at the following stations: ESG/sustainability, employer branding and digital marketing leadership. We wish you a pleasant and informative journey”.