Nokia is in a pickle. Its share value is down 80%, it left the Top 100 Most Valuable brands; the hearts and wallets of millions of customers are evidently open to Apple, Samsung and Google. According to Tom Long of BMO Capital Markets, its brand is worthless: “We see little hope for a turnaround from here even with a refined strategy.”
When more than 60% of the phones on the planet are Nokia-branded and you account for more than 30% of smartphones currently sold and you’re still flailing, you need a bigger cause than, “our entire focus is on creating and selling really cool phones.” That doesn’t cut it.
Most of us know “what” Nokia is, but we’ve forgotten “who” Nokia is. In a smartphone industry dominated by lifestyle brands like Apple, Nokia lost its connection with its brand purpose, “Connecting People,” and ultimately the customer, by failing to recognize (in our transmedia world) that brand is not marketing – it’s more about defining “who” you are. That requires (re)building the four cornerstones of successful brands.
First, Nokia needs to power up the brand strategy, “Connecting People,” that’s perfect for the lower-end smartphones market. It can also act as a lens helping Nokia see choices through the smoke, be able to review business options, including partnerships, and act as a decision-making tool, for example, in innovation, a key area where Nokia struggled to produce the right goods at the right time. This has been compounded by Nokia’s marketing myopia and inability to handle multiple tactics from a single brand strategy, for example, retail.
Second, Nokia needs the leadership to demonstrate (not assert) that it can turn the hard into the possible. Given the chronic debilitation of brand value, Nokia’s leadership is perceived as groveling in a frivolous pit laden with debt. “Elop is cutting costs and hoping for a miracle, but it looks like Nokia is staying on death row,” said John Strand, founder of Danish industry consultancy Strand Consult. Therefore, Stephen Elop needs to allay people’s fears, especially partners and employees, while pursuing opportunities to fund growth by cutting costs to focus on lower-end smartphones and a Windows ecosystem.
This new focus requires senior management at Nokia to rally not just with cost reduction, but to align themselves and all partners and agencies around the strategy – leaving their egos and business cards at the door. This third cornerstone is exceptionally difficult when you have a brand deracinated by a business in free fall, eagerly watched by media in a frenzy that smells blood and a customer base that doesn’t “emotionally” hold your brand in high esteem when considering what phone to buy. Nokia urgently needs a cheap killer product – the upmarket Lumia phones won some good reviews, but not many customers.
Nokia knows word of mouth is the No. 1 influencer of purchase. To get customers engaged Nokia needs to inspire an authentic community who like Nokia and rapidly mobilize a colossal resurgence of its customer base. Elop could make it happen, but he’s the CEO, not the consumer, and it is a very large ship to turn; ratings agency Fitch said on Friday that Nokia had little time left to turn itself around. Some say cash flow is the problem right now and the writing is on the wall, but Nokia has saved themselves seven times in 147 years, and it has Microsoft in its wallet.
Nokia can be fashionable again. A reputation for solid manufacturing infrastructure and excellent risk management and supply-chain principles worked in the past to increase customer satisfaction and revenues, but they need the power of brand to save them now. “Connecting People” is one of the best brand ideas you can get, and Elop needs to empower the brand with that halo to support the new business plan (with Microsoft). For it to succeed Nokia needs a new, more revolutionary idea to whip up support from the media, inspire their customer base and spur growth. Many people retain a soft spot for Nokia and “shareability” is the new ROI – “Connecting People” would be the optimum place to start.