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Brands Make Mistakes Too- remember ‘New Coke’?

Brands are controlled and managed by humans.  As a result, brands make mistakes.   Remember Pepsi Clear and Crystal Pepsi? McDonald’s Arch Deluxe? Microsoft Zune? The XFL?  But the most notorious brand failure was New Coke.  25 years ago this month, after a fortune spent in research, testing and marketing, Coca-Cola unveiled a “new” formula of soda that was supposed to reverse its declining market share in the soda wars of the 1980′s.  The product was launched with a press conference at Lincoln Center and workers renovating the Statue of Liberty were given the first cans to take home.

Initial sales were OK.  But quickly a backlash began.  The formula was not loved despite the testing.  The new logo abandoned the decades script lettering.  The media jumped all over the story.  Widespread complaints from Coca-Cola’s core customers noted that they like Coke just the way it was.

The Change to Coke Classic

Coca-Cola did not deny the backlash for long.  In fact, they aggressively moved to un-do their error.  Within 77 days it began pulling New Coke and restoring “Coke Classic®.”  They came to understand that the brand and its connection with consumers was more important than any formula or test.  “There is a twist to this story which will please every humanist and will probably keep Harvard professors puzzled for years,” said the company President and COO at a press conference. “The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people.”

And they embraced the decision to revert once it was made.  They didn’t hide from it.  They gave the first case of Coke Classic to one of the most outspoken purists who had formed a group to lobby for the old formula.

In the end, sales rose to numbers higher than before the release of “New Coke” and the company’s connection with the hearts of its customers was strengthened based on the way the company reacted to their outpouring and reversed their decision so quickly.

The “New Coke” disaster turned out to be the best thing for Coca-Cola.  We all make mistakes.  How a brand reacts to a mistake is critical; it could spell the end, or it could lead to better brands, better connection with customers, and more sales.

Lesson: If a branding mistake is made, recovery is possible.  Don’t run and hide from the mistake — correct it and learn from it.

(C) 2010 Erik M. Pelton & Associates, PLLC. All Rights Reserved.

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To Tweet or Not to Tweet?

Social media have totally invaded our environment. It is virtually impossible to go through a day without encountering these new techniques and technologies in one way or another—whether it’s blog posts, Facebook groups, Twitter postings, YouTube videos or more.

Many individuals and businesses are using these tools to innovate, promote themselves, or to stay close to their customers. For some, the move to integrate these techniques is sensible and straightforward and they jump right in. But many others are cautious or concerned about whether it makes sense to engage in social media, and, if so, where they should start.  Still others ask if their business would suffer if they fail to engage in these new approaches.

In other words, is it ok to be anti-social?

The answer: It depends. Of foremost importance is understanding who your customers are, where they go to find information, and how you can best reach them.  If your customers are already using Facebook or Twitter, then it make sense to be there to engage with them. However, if they aren’t there now, then your time and effort are better used to reach them where they are today.

It’s simplistic to think of social media as free. True, there may be no upfront, out of pocket cost, but the time and resources required to manage a Facebook group or make regular postings to a Twitter account can be substantial. Consider not only what it will take to establish an online social media presence but resource required to maintain an effective presence. Is this something you’re ready to fully commit to? 

Finally, make sure your marketing efforts are integrated across online and offline media. Customers see you and engage with you in multiple ways. Be sure they get a consistent message and see a consistent visual identity no matter where they may encounter your company and brand.  Be sure your online identity meshes with your offline brand.

The bottom line: Just like in real life, too much oversocializing is likely to result in burnout. Use moderation and common sense to connect with your customers and win.

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Identify Untapped Intellectual Property with a Trademark and Copyright Audit

Do you know if all your business’ brands are properly used, protected, and registered?  Are you sure that each potentially valuable trademark has been identified (such as blog and website titles, re-designed logos, new product offerings)?  Have you ensured that contracts and webpages add to your protection instead of poking holes in that protection?

An annual trademark and copyright audit is the solution to stay on top of your trademark needs. Once you recognize that your company’s intellectual property is among its most valuable assets, conducting such an audit is preventive maintenance to help avoid costly breakdowns (gaps) in protections.  A trademark and copyright audit includes an in-depth review of the legal and marketing picture surrounding your businesses’ intellectual property.

A thorough audit could cover:
- proper usage of trademark symbols in advertising and packaging
- registration and renewal of all brand names, slogans and logos
- identify new brands that can be leveraged into tangible intellectual property
- placement of proper copyright and trademark notices on website
- inclusion of proper copyright and trademark clauses in contracts with employees, contractors, clients, and more
- set up free and easy monitoring of trademarks
- placement of proper copyright notice on materials
- ensure registration of essential copyrights
- review insurance policy for intellectual property coverage
- insure proper handling intellectual property created in partnership with others
- insure proper treatment of intellectual property assets purchased from others
- protection of domain names
- create usage guidelines for employees and contractors
- determine whether protection of trademarks outside the U.S. is needed

Why is such an audit so valuable?
- prevents unintended lapses in protection
- guards against unexpected liabilities for trademark situations
- guards against devaluation of trademarks
- a failure to police and enforce trademark rights can damage or destroy the value of a brand
- useful for developing or updating strategic plans related to new products or services or extensions of product lines
- allows maximization of the benefit your company receives from its trademarks and copyrights
- helps educate employees about the company’s trademarks and copyrights

Tip: If you have never had a trademark and copyright audit performed, what are you waiting for?  Contact me for details if you are interested, or stay tuned for further posts about this new service offering from Erik M. Pelton & Associates, PLLC.

Originally published in IPelton blog @ http://ipelton.wordpress.com/2010/04/07/tip-trademark-and-copyright-audit/

(C) Copyright 2010 Erik M. Pelton & Associates, PLLC. All rights reserved.

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5 Simple Ways to Protect Your Brand

[Originally published in Dumb Little Man blog here.]

Trademarks are often some of the most valuable assets of a business – legend has it that Coke® is the second most well known word in the world after “hello.” The Google® brand is estimated to be worth more than $20 billion. A trademark is a brand name, logo, or slogan that distinguishes your business’ products or services from those of competitors. Regardless of how big or small the business, the value and protection of brands is critical, particularly in the online word of today where domain names and user names (such as Facebook® and Twitter®) can be key to connecting with customers.

To help protect your brand(s), here are five basic steps to strengthening your trademark protection:

  1. Choose Wisely
    The more creative your brand name is, the greater the odds that it is unique. A more distinctive and create name or slogan is generally more capable of standing out among the competition and becoming a brand with real value. Which sounds like a more exciting brand, a more valuable brand: “Jim’s Gym” or “Vantage Fitness“? “Cincinnati Frozen Yogurt” or “fraîche”? “Joe’s Pizza” or “Pie-tanza”? “Search.com” or “Google”?
  2. Use it
    The more you use your trademarks – brand names, logos and slogans – the stronger and more distinctive they become and the more your likely customers are to remember your brand and to use it to tell others about it.
  3. Distinguish It
    Use ALL CAPS, bold or italics to emphasize your brand as often as you can. Then the customer knows exactly what your brand is.
  4. Apply to register it
    Registration with the U.S. Patent and Trademark Office, a federal agency and part of the Department of Commerce, enhances the protection and the value of your trademark assets. Registration allows use of the ® symbol, provides substantial benefits and savings if you ever have to go to court to stop an infringement, and may help stop cybersquatters from registering new domain names. See http://www.uspto.gov/teas/index.html for more information.
  5. Create Google Alerts
    An easy and free way to monitor for others copying your brand or commenting on it. If you find a possible infringement, contact the offender and if unresolved, contact an attorney. www.google.com/alerts.

These 5 steps are relatively easy – and 4 of them are free. Use them to help strengthen your brand and increase its value. Maybe someday someone will want to buy it or license it from you!

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Lessons from the College Campus

Lessons from the College Campus

Several weeks ago we had the opportunity to send our daughter off for her first semester of college.

As any parent knows, this is both an exciting adventure and a scary one – it's a very strange feeling to realize your little girl is now a full-fledged adult with all the thrills and responsibilities that entails.

If you haven't been on a college campus in awhile, let me tell you things have changed.

From the college application process through applying for financial aid to choosing courses and paying bills, everything is now done online. Gone are the old room keys and meal tickets – replaced with a single mag stripe card that does everything from let you into your dorm room and the cafeteria to allow you to make purchases at the college bookstore and ride the local buses.

Dorm rooms are now wired for both internet and cable, but not for telephones. Landlines have gone the way of the pay phone – obsoleted by the ubiquitous cell phones students carry anyway. Best of all, there’s no more need for rolls of quarters for laundry machines! A swipe of the card and your laundry charges are now handled electronically, automatically deducted from your running balance.

Still, amidst all of this technology, I was struck by how much things are still the same.

Yes, you can order your books on line, but for the most part, courses still require physical textbooks, just like the old days. Yes, faculty and students interact online and through email, but classes for the most part still require physical attendance and activities. Yes, every internet savvy college student is on Facebook, but introductory get-togethers and parties still happen in person. Yes, updates on sports activities are available on the net, but football games still attract a huge campus crowd in the stands each weekend.

I'm sure some schools are more savvy than others, and there are some that are integrating bleeding edge technology none of us have even imagined. But instead of jumping on technology for technology's sake, it appears that colleges overall have done a fairly good job of integrating new technology with the old, tried and true to create a meaningful college experience.

From a business perspective, we're often tempted to jump into new technologies to show how advanced and up-to-date we are, without knowing whether or not these tools will help us achieve our goals of revenue growth and profitability.

The lesson here is not that the end justifies the means, but rather that a variety of means – old and new integrated together – are often the best way to reach the end. Rather than throwing out the old and focusing just on the latest and greatest hottest fad, there's value in keeping the end in mind – adapting those tools and techniques that make the most sense to get you where you want to be, without throwing away the stuff that still works.

So yes, you may want to integrate Web 2.0, social media, and other techniques into your marketing program, but you also want to keep the old-school programs that are still working for you today – the ones that continue to reach your target audience and deliver your message.

Think about the marketing programs and initiatives that have gotten the best results in the past. Are they still relevant now? Can you update them by integrating new technology? Given the current economy, are you still targeting the right people? How can you make your offerings more relevant to the people who are most likely to need them in today's environment? How do you combine the best of both worlds?

After all, those middle of the night dorm fire drills still happen in real-time and real life. Students can tweet about it all they’d like, but that won’t stop them from having to stand outside shivering and cold when the bell rings. And that's part of the whole experience.

What lessons can you apply for your business? Contact us for a complimentary marketing assessment. We'll evaluate your marketing initiatives and help you create a plan that gives your organization straight A's.

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New Year, New Outlook: Why Chicken Little Should Be Cooped Up

 

We just returned from a ski vacation to Colorado. We found plenty of snow and plenty of people at the mountain and in the shops and restaurants in town in the middle of the week, too – in spite of frigid temperatures with a wind chill factor below zero.

That's pretty impressive, considering that we're in the midst of the worst recession in 100 years and lift tickets sell for nearly $100/day.

What was more impressive was that in spite of the doom and gloom you hear from the media, things seemed pretty much normal.

People were out having fun, spending money, and living their lives.

This is not to demean the horrible economic environment of the last year and a half. Thousands of homes lost to foreclosure and an unemployment rate in double digits are not to be taken lightly. Many, many people are out of work or have had to downsize their lifestyles to adapt to the new reality. But, on the other hand, the stock market finished a great year, the financial system appears to have been stabilized, and all signs indicate we're on the way to recovery.

As we usher in a new year and a new decade, let's to take a few moments to reflect on what we can learn from all of this, and how we can apply this to build our businesses moving forward.

  • If it's too good to be true, it probably isn't. For years, we thought real estate, the stock market, and the economy in general could only go up. We should have known better, and we should have been prepared for inevitable economic downturns.
     
  • Too much of a good thing is still too much. Whether it's bigger homes or cars or leveraged investments, there hits a point of diminishing returns. When that happens on a macro scale, the entire economy is out of balance.
     
  • Money is still green and people are still spending it. They may not be spending as much or as often, but consumers will still spend money on goods and services that they feel are necessary or important to them. Witness the growth in pet care products in spite of the recession.
     
  • Innovation doesn't stop. Smart people love tough problems. Disruptive situations cause smart people to look at things differently and change the future with their innovations.
     
  • There *will* be a next new thing. We don't know what it is, but it will be here sooner than you think. And it's as likely to be invented by the people next to you in America as anywhere else in the world.
     
  • There's always opportunity – somewhere. Sometimes it might require stepping back and taking a different look at the situation. Many people on the ski slopes had discount tickets. But once they got to the mountain, they paid full price for food and drink, parking, après ski activities, etc.
     
  • Quality and value are still appreciated – at all price points. Whether it's a quick takeout menu or an expensive sit-down dinner, those who provide quality and value will always be appreciated. Conversely, cheap or low quality is not appreciated and won't be tolerated – even at a low dollar value.
     
  • The basic laws of marketing still work. To be successful, you need to offer quality goods and services to people who value your product and have the means and desire to pay for them. It's that simple. Everything else is window dressing.
     
  • Finally, the sky is not falling. The world is not ending. Armageddon is not here. The free world as we know it has not collapsed and imploded on itself. Chicken Little should be cooped up and sent away.
     

Given all of this, what are you doing to take advantage of the opportunities that will become available to you in 2010? How are you preparing your organization and your customers for the new reality? Is your marketing ready for the next challenge?

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The Double-Edged Sword of Suing a Client

Published 11/2009 in Law Practice Management Today.

When all other collection efforts fail, suing a client for nonpayment of your fees may be an unpalatable but necessary step. You must, though, tread carefully and look closely at all the corresponding dangers.

One of the most visible signs of how law firms have been hit by the down economy is the increasing number of news reports about firms suing their clients for nonpayment of bills for legal services. Recent examples among the nation's largest firms include the following:

  • A major multinational law firm sued a client, a telecommunications company, for more than $600,000 in unpaid legal bills, alleging that the company abruptly stopped paying for services provided by a lawyer it had worked with for more than 30 years—ever since the company had been a small family business.
  • A New-York based firm sued a Texas investment company for $2.8 million in unpaid bills. The client responded that it had made a good faith payment, but that it was refusing to pay further because the firm had overbilled it.
  • A Washington, D.C., firm sued a client to seek payment of more than $2 million in legal fees. Interestingly, the firm and the client had earlier resolved their differences over nonpayment by reaching an agreement that the client would initially pay one-third of the disputed amount, followed by a subsequent payment of the rest. The client, however, not only refused to honor the settlement agreement, but even intimated that it would allow legal proceedings about the bill to drag on in the belief that the firm would eventually settle for a lesser amount.
  • Management Questions Behind Payment Problems

Such litigations are perhaps made more urgent by firms' economic needs in the face of declining revenues, but they also might be more indicative of management rather than economic concerns, reflecting any number of questions. Among them, why did the firms involved allow the amounts in dispute to get so high in the first place? Were they aggressive enough in their collection efforts prior to their finding the need to sue the client? Was the work in dispute done according to a budget that was communicated to and updated for the client? The simple fact is that if clients have the ability to pay but are not paying, it is likely that they're unhappy with some aspect of the representation and have chosen to express that unhappiness by stopping the payment schedule.

As regular readers of this webzine know, I consider the client intake procedure to be the most importa nt step in the collection process. An appropriate conversation and written agreement with a client about payment of fees in the beginning of the relationship will go a long way toward ensuring payment at the matter's close. Shared expectations, effective communication and dependable follow-through by lawyer and client all define the kind of good relationship that results in collecting a higher percentage of your billings. Sometimes, however, problems do occur, even if you set up what you thought was a solid engagement and fee agreement with the client. To avoid such problems, you must stay in continual touch with the client about progress according to the budget. But if the fact remains that the client owes money and shows very little inclination to pay it, the relationship is clearly on the rocks. What should you do next?

Preliminary Steps to Take

If dissatisfaction is an issue in a client's nonpayment, find out what the client's concern is and strive to arrive at a mutual solution for remedying the problem. If that concern cannot be resolved, suing a client may be a potential next step—but only after exploring other alternatives.

The first of these alternatives is for the law firm to use a collection service . There are certainly ethical snares involved, but they can be avoided by disclosing to the collection service only those details that are absolutely necessary for the service to do its job without jeopardizing client confidentiality. Moreover, it is a given that such a collection effort should not be pursued without prior review of the client file to make sure there are no documented or even presumed reasons why the client would not have paid, i.e., that there was no lawyer negligence. The next step, consistent with your jurisdiction's rules of professional conduct, is to stop work for clients who do not pay. A lawyer cannot ethically cease representation when the client will be prejudiced—for example, by withdrawing within 60 days of a court date. But the ABA's Model Rule of Professional Conduct 1.16 allows lawyers to withdraw if the client has not met an obligation to pay and the lawyer has given adequate warning that representation will end. That step should focus the client's attention on the problem, thereby providing the client with a last opportunity to discuss what can be done to resolve the billing dispute. This generally should not be used as an opportunity to allow the client to negotiate a discount. However, in a collection situation, it is important to do whatever is necessary to resolve the conflict. Clients who argue about over-billing are often just angling for a discounted bill. If, after all other efforts to collect have been exhausted, the client may be merely interested in a fee discount, it may be worth doing to get rid of the matter—and the client.

The Decision to Sue

If the firm chooses not to go the latter route, suing the client may be an unpalatable but necessary step. This should not be done lightly, and not without adequate communication and careful records of the client's billing and payment performance. However, it can be effective—some statistics show that the lawyer-creditor is successful in the vast majority of litigation against a client-debtor. At the same time, there are, of course, obvious drawbacks. First is that there is an automatic loss of future business—the client who has been sued will not provide referrals or new matters to the firm. Second is the negative publicity that such litigation can bring to the firm, either in the local press or in the legal news media. Perhaps the greatest danger of all is a malpractice cross-complaint by the client. Thus, before deciding to sue a client, the firm should first and foremost review the client file to make sure there are no legitimate potential claims of malpractice. Solo practitioners should ask a colleague for peer review of the file to confirm the conclusion that no malpractice is evident. If a client can prove that it halted payment because the lawyer's representation was negligent, the result may be a state bar disciplinary action against the lawyer or firm, complete with future requirements to perform work pro bono to fulfill ethical obligations toward the client.

The Malpractice Assessment

This danger requires taking a close look at the firm's insurance situation. You need to realize that the malpractice insurance carrier has risk management policies in place and assess the effect that these may have in the event of litigation. For example, policy coverage may exclude fee disputes, or the carrier may increase future deductibles or increase future annual premiums if the firm sues and loses. Perform due diligence to uncover the position of the insurance carrier before bringing suit. Also, be aware that malpractice involves dimensions beyond the provision of legal services alone. Consider that the responsibility to protect and preserve client property and files requires precautions against the likelihood of harm to those materials. Documentation of proper file security procedures, as well as property and casualty insurance, is a must. Technology is another insidious opening for allegations of incompetency. Rules of professional conduct require that a lawyer be competent to handle a given matter, measured as the standard of care in the local community. If a small firm is not using current technology when competitor firms are, for example, that firm may be perceived as willfully less competent than the competitors—potentially both a malpractice issue and a disciplinary matter. Finally, make sure that all accounting of client trust funds is accurate and up to date. The lawyer is a fiduciary who must keep accurate accounting records of all client funds under every state's rules of professional conduct. And when dealing with fiduciary matters, every state imposes a fiduciary duty to properly account for clients' funds to prevent misappropriation or negligence. Failure to provide accurate accounting records when requested in a counterclaim can be fatal not only to the law firm's litigation, but to its license as well.

Counting the Odds

When lawyers sue for payment of fees, they are often met with malpractice claims either as an offset (counterclaim) or direct attack (cross-complaint). Of all the suits filed by lawyers to collect their fees, about half will cause a claim of malpractice. Be prepared for it. Assess where the firm is positioned from a malpractice standpoint, evaluate the risk, know the insurance carrier's risk management policies and evaluate the likelihood of winning an unpaid billing claim before filing suit. Then, define your claim, file suit and be prepared to prove your case.

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