Like the Wizard of Oz hiding behind his curtain, Procter & Gamble has for most of its history hidden behind its powerful array of consumer brands. About itself -- about the people and the practices that go into developing those brands -- it has retained a rather secretive air. Pay no attention to the corporation in Cincinnati, the company seemed to say. Instead, just watch as billions of consumers keep coming back to products like Crest, Folgers, and Tide.
But there's a new spirit of openness at P&G -- and it's most evident on the Internet. Just take a look at PG.com. A year ago, it was a stodgy, nondescript site where no one other than investors and job seekers had any reason to go. Today, when you log on to it, you see a consumer-friendly portal that proudly announces P&G's responsibility for "more than 300 brands you know and trust." On the site, you can call up a wealth of information about the history, structure, and operations of the $40 billion company; link to "tips and resources" on family, household, and personal care; and, most intriguingly, take part in P&G's efforts to create, test, and market its brands.
For P&G, brands are the chief medium through which it communicates with customers. Traditionally, that communication has gone more or less in a single direction, with P&G spending billions of dollars a year to tell consumers through bold, persistent advertising that Pantene or Pringles (for example) would reliably deliver what their hair needed or what their stomach craved. While the company has made the use of focus groups and test markets into an art form, it has kept such interaction with customers tightly under wraps. The basic model: Research secretly, and carry a strong brand.
That model is due for revision, says Greg Icenhower, 38, an associate director of corporate communications at P&G and the man who took the lead in revamping PG.com. "We've been voted the best marketer of the 20th century," he says, referring to a ranking published by Advertising Age magazine. "But that's because we were the biggest shouters. In the 21st century, we want to be the best listeners."
The relaunch of PG.com took place last September. Icenhower had put together a skunk-works team that included him and seven other P&G people, some of whom had no relevant Internet experience. While rebuilding the site, the team undertook none of the intense testing that P&G would normally insist on devoting to such a high-profile project. On the contrary, Icenhower convinced his bosses that the focus of his team's work should be on experimentation. "I told them that we wouldn't get everything right but that by making mistakes, we would start learning lessons immediately."
The PG.com team successfully pushed to include two features on the site that would have been almost unthinkable in the old, close-to-the-vest world of P&G. In Try & Buy, which has become the site's most visited section, consumers can purchase new products before they show up in the supermarket or drugstore. (In May, a Pampers gift pack was on sale through PG.com.) Previously, only customers who were on a special mailing list or in a test market had been able to enjoy such perks. And in Help Us Create, P&G conducts virtual test markets where consumers can tell the company which kinds of new products it should make, or how it might improve existing products. (Visitors who came to the site in May could offer feedback on the Olay beauty-care product line.) For a company whose tight control over product development and testing is legendary, all of this marks a big change.
But P&G has good reason to be in an experimental mode. The company stumbled badly in 2000, missing analysts' profit expectations and causing its famously reliable stock to plummet from $103 in January 2000 to $64 in June of this year. Under A.G. Lafley, who became CEO a year ago, the company is regrouping after what its leaders now admit was an overambitious change effort. This year, in a bid to focus on profitability, P&G announced that it will lay off more than 17,000 people over the next three years. It has even moved to reshuffle its product lineup, in part by putting such revered brands as Crisco and Jif up for sale.
More to the point, P&G has stepped up its experimentation because it has discovered an ideal laboratory for doing so: the Internet. Unlike many old-economy outfits, P&G is no conglomerate-come-lately when it comes to negotiating the Net. As early as 1995, it had 10 Web sites up and running, and it was also an early player in the banner-advertising game. Recently, some of P&G's biggest brands have all but given up on banner ads. But the company still operates more than 70 Web sites. And rather than give up on the Net as a whole, P&G has turned it into an arena for trying out new approaches to branding -- new ways to make the shift from shouting to listening.
Work the Brand
Sometimes, of course, a powerful new approach to branding looks a lot like an old, tried-and-true approach. In Tide.com, brand managers for Tide have created a site that isn't at all shy about trading on the laundry detergent's trusted name or on the red-and-yellow bull's-eye logo that has become a Pop Art icon. Indeed, it is the brand's formidable aura that draws people to the site, which offers handy features like the Stain Detective -- a digital tip sheet on how to remove almost any substance from almost any fabric.
"Consumers told us that Tide actually had a right to be the source of information about cleaning your clothes," says Bob Gilbreath, 29, who joined the Tide team last September as an assistant brand manager in charge of interactive marketing. "People trust Tide to 'get the stains out.' "
P&G leaders didn't always think that way. Back in 1996, they created a site called "clothesline.com," which they believed would be better suited to the Web than one that blared "Tide." In the early days of the consumer Internet, the conventional wisdom of Net strategists was that the Web would be a relatively unbranded territory. But the Tide team listened to consumers -- and learned that it was okay to be, well, a brand. According to Gilbreath, Web users were typing "Tide" into their search engines, hoping to find a site that didn't exist back then. So in July 2000, the team followed its customers' lead by launching Tide.com, which carried over most of the earlier site's content, including the Stain Detective.
"Consumers have more of a bond with Tide.com than they have with something like laundry.com," says Gilbreath. "Tide has been used by families for more than 50 years. Some consumers were actually bathed in Tide as children." Users can still reach the Tide site by booting up their browser and typing in "clothesline.com" (or, for that matter, "laundry.com"), but the vast majority of hits now come from people who punch in "Tide.com."
Gilbreath and his colleagues regard Tide.com as a vehicle for reinforcing the trust that Tide has built up among consumers. Their goal is to create a surrogate for the fabric-care advice that Mom used to provide -- and a place where Mom herself (as well as Dad) can go to find such information. To solidify that bond with customers, the Tide.com team also works on improving ease of use: Visitors to the site can even download the Stain Detective to a Palm computing device.
For P&G Web strategists, the key to success on the Net may lie in the union of content and brand. "We have massive expertise behind all of our brands," says Icenhower. "The people at Pampers, for instance, know a ton about parenting." Just visit Pampers.com, and you'll see that those people are eager to share what they know -- about pregnancy, feeding, health, child development, and more.
"At first, we thought that people would rather go to a site that wasn't branded," says Todd Borgerson, 29, brand manager for corporate marketing at PG.com. "But they told us they didn't know who was behind the information that they were getting. That was a turnoff. They wanted sites that had some reason for offering advice on laundry or parenting." That insight has led P&G over the past year to put several unbranded URLs -- beautiful. com, flu.com, thirst.com -- on the auction block. At the same time, in cases where it makes sense to market products through an unbranded, theme-driven site, P&G readily follows that strategy.
The lesson here is that when you have a brand that works for people, you should work the brand. "People prefer to see some brand selling on our sites," says Greg Icenhower. "Consumers say, 'Do what you have to do. We know who you are and what you sell. But give me good content.' "
Test the Brand
Vince Hudson faced a challenge that brand managers for a well-known product like Tide rarely if ever confront. Hudson, 29, is brand manager for global new business at P&G. Two years ago, he was charged with building brand awareness not just around a new offering but also around a new kind of offering -- a tooth-whitening product called Whitestrips, which P&G introduced nationwide this past May. Part of his solution: He and his colleagues transformed a corner of the Internet into a virtual test market.
Using test markets -- auditioning a product in selected locations in order to find out what sells and what doesn't -- is old-time religion at P&G. Before rolling out a new product nationally, the company typically spends several months and millions of dollars to conduct field tests in a handful of midsize, middle-American cities. But the Internet has fostered new, more efficient ways to sound out customer attitudes toward product innovation. As A.G. Lafley told shareholders in 2000, "By doing [a] test online, we can do it for a tenth of the cost in a quarter of the time."
For Hudson and the rest of his team, the Whitestrips brand lent itself particularly well to market testing via the Web. Although Whitestrips fall under the Crest umbrella, the team wanted to put some distance between the new product and the established brand. At $44 per package, the new product costs far more than any other Crest product. And Whitestrips -- pieces of thin plastic material coated with hydrogen peroxide -- require users to absorb more information than most Crest products do. The flexible, interactive nature of the Web promised to make it easier for the team to experiment with those variables.
In early 2000, Hudson persuaded Michael Kehoe, his boss's boss, to invest $2 million in creating Whitestrips.com, a site where consumers could learn about the bleaching product and then buy it. That was a huge investment -- all the more so because Hudson wanted to test the product in traditional, real-world venues as well. "It was like being an oral-care venture capitalist," says Kehoe, 44, vice president of global oral care. "I remember thinking, I'm like the guy in the IBM commercial: 'Are we really ready for this?' "
Kehoe, Hudson, and their colleagues were ready enough. In July 2000, they started selling Whitestrips through dentists' offices and through brick-and-mortar retailers in two classic test cities: Grand Junction, Colorado and Pittsfield, Massachusetts. Then, two months later, Whitestrips.com opened for business, offering the product at the same price that it retailed for in test-city stores. Over the next nine months, the site logged 1 million users and achieved a conversion rate of 12% -- quadruple the rate at which most consumer Web sites are able to turn visitors into buyers.
But as with any test market, the main goal here was not near-term sales but long-term insight. For Hudson and his team, creating Whitestrips.com was a way to get close to potential customers -- to acquaint them with the Whitestrips brand, to learn more about who they are, to listen in on their responses to the product. "We collected demographic information at the site and with follow-up research to purchasers who opted in," says Hudson. "When it comes to pinpointing our high-leverage target market, this information is incredible."
Testing via the Web enabled the Whitestrips team to build a customer base that was more diverse, and hence more reliable, than most test populations are. "We knew that we'd have an accelerated curve of adoption once we went retail," says Hudson. Traditionally, in its test-market programs, P&G has focused on putting its products in cities where the "average" U.S. household (white, two parents, two kids) is disproportionately common. But there's no longer any such thing as an average U.S. household. Using the Web, P&G is broadening the demographic reach of its research to include people of color, people from nontraditional families, and people in major urban areas.
The virtual test market also gave Hudson and his colleagues quick, useful feedback on how traditional marketing efforts were faring. During the test period, Hudson placed ads for Whitestrips in various magazines, including People -- not a publication in which P&G would ordinarily advertise that kind of product. Each ad featured a special code, and readers were offered a discount on the product in exchange for visiting Whitestrips.com and entering that code. By tracking such codes, Hudson learned that lots of hits were coming from People readers. "People was on fire," Hudson says. "We had to change the way we were buying media. The Internet was like sonar technology. It was picking up on something that we never would have heard without it."
Members of the Whitestrips team took away another, more fundamental lesson from their experiment with virtual testing: They learned that to build a new brand in a new product category, they didn't need to live off the reputation of an old brand. "We borrowed the equity of the Crest name, because it gave the product a kind of health credibility," says Kehoe. "But we knew that the Whitestrips name could live on its own -- after we started selling it on the Net."
Hide the Brand?
Could traditional branding be a kind of noise -- a form of communication that actually hinders a company's ability to listen to customers? These days, P&G is willing to entertain even that heretical notion. In its boldest experiment yet with using the Web to reach consumers, the company has invested in a site that all but conceals any association with P&G or P&G-style branding. That site, Reflect.com, lets women "brand" their own versions of makeup, perfume, and other beauty-care products. It also lets P&G begin to map what may be the next frontier of consumer-product marketing: mass customization.
"The beauty business has always been about push," says Ginger Kent, 46, CEO of Reflect.com, a startup based in the SoMa district of San Francisco. "But women are changing, and new consumers aren't loyal to the old brands. They're loyal to the brands that serve them."
Reflect is the offspring of dotcom exuberance and big-company investment. The idea behind Reflect originated in the late 1990s, when Dennis Maloney, one of the startup's founders, was working at P&G's new-ventures group. A.G. Lafley, who was then overseeing P&G's global beauty-care line, heard about the idea and decided to greenlight it. Reflect received $50 million in capital from P&G and additional capital from Institutional Venture Partners and Redpoint Ventures, both of Silicon Valley. By early 1999, Maloney, who had served as an officer on a nuclear submarine in the U.S. Navy, and Kent, who had been president of the U.S. toy division at Hasbro, were setting up shop in San Francisco.
Today, Reflect is majority-owned by P&G but operates as a stand-alone enterprise. While P&G won't say how close Reflect is to profitability, Kent emphasizes that the site garners a healthy amount of traffic. (In April, Jupiter Media Metrix ranked it as the number-one cosmetics-retailing site on the Web.)
Nowhere on the Reflect site will customers see any sign that they are in effect shopping for a P&G product. Nor will they see much evidence of branding as P&G has traditionally understood that process. "It's an antibrand," says Tim Haley, 47, a Redpoint partner and Reflect board member. A brand is essentially a promise from a company to deliver a predictable customer experience. Yet there's no predicting an experience that customers largely design themselves.
Using interactive software, visitors to the site mix and match various options -- colors, scents, skin-care preferences -- to create what amounts to their own brand. "Reflect doesn't exist until you make it," says Kent. A P&G facility in upstate New York manufactures the product, and a "concierge service" in Cincinnati handles follow-up interaction with customers. Reflect even allows customers to redesign a product as many times as they want.
But handing control of product design over to customers doesn't reduce the importance of listening to them. Using a cold, technical medium to sell products that are all about the five senses poses a challenge that only constant attentiveness can solve. Maloney spends most of his time monitoring site traffic, hoping to use what he "hears" from customers to improve the site's offerings. By that means and through usability studies, for example, the Reflect team learned that women had a keener interest in buying lipstick through the site than had been anticipated -- so the team has beefed up that part of Reflect.com. "We haven't made a single change that hasn't started from a conversation with one of our consumers," says Ranae Kline, 38, manager of the concierge service (aka "call center"). "Every meeting, every decision is driven by what we hear from them."
Recently, the Reflect team learned that being an "antibrand" will take a company only so far. People who were paying premium prices for Reflect items expressed disappointment with the thinly branded, homespun look of the company's original packaging. "The women we talked to liked the idea of Reflect," says Alice Au, 26, director of design and visual identity. "But they wanted something more, something more permanent." So this summer, Reflect is rolling out a new look that combines personalization with a strong brand identity. Like the original package design, the new one includes a customer's name, as well as the Reflect logo, but it also lets each customer choose from several jewel-shaped emblems that signal to her (and to her friends) that she has bought an upscale brand. The future of mass customization, it seems, lies less in hiding brands than in giving customers a role in shaping them.
How far could customization go at P&G? "A.G. [Lafley] sits on our board. Everything we absorb, he absorbs," says Kent with a secretive gleam in her eye. "Having something made especially for you creates a very powerful relationship." Reflect plans eventually to customize almost every product to be found in a woman's (or, indeed, a man's) bathroom. While Kent declines to comment on specific products, the Reflect project suggests that someday P&G may offer personalized versions of some of its signature brands -- perhaps even brands like Tide and Crest.
But that's a long way off. While using the Net as a listening device has yielded a huge bounty of information for P&G, the company is just starting to drive that data back into its marketing and product-development operations. Says Gay Piller, 55, digital brand manager for PG.com: "On the road from A to Z in how Internet feedback will actually change a brand, we're at about B." Meanwhile, fostering two-way communication between the world's largest consumer-products company and its 2.5 billion customers is no small achievement. "So far," says Greg Icenhower, "the biggest value of getting all of this feedback has been letting consumers know that we're listening."
Fara Warner (email@example.com) is a Fast Company senior writer. Contact Greg Icenhower (firstname.lastname@example.org), Bob Gilbreath (email@example.com), Vince Hudson (firstname.lastname@example.org), and Ginger Kent (email@example.com) by email, or visit Procter & Gamble on the Web (www.pg.com).
Sidebar: Listening Lessons
In the 20th century, the keepers of Procter & Gamble brands excelled by being "the biggest shouters," says Greg Icenhower, associate director of corporate communications at P&G. "In the 21st century, we want to be the best listeners." Here, Icenhower and his colleagues offer insights into how P&G is using the Net to manage that shift.
Keep the old, keep the new. "The Net doesn't replace anything," Icenhower says. "It's a complement." Even as P&G conducts virtual focus groups at Pampers.com, for example, it still invites hundreds of people to its Cincinnati headquarters each year to talk about parenting.
Cast a wide Net. Using the Internet, you can extend your listening beyond the narrow confines of one or two test-market cities. "We knew how we were doing in Grand Junction [Colorado], but we also knew how we were doing in LA and Chicago," says Vince Hudson, a brand manager who worked on Whitestrips, a new tooth-whitening product that P&G market-tested via the Web.
Let a thousand brands bloom. "We try to bring order to chaos," says Icenhower. "But we don't want to change what the brands are doing." That's the spirit behind PG.com, the company's portal site. Before you can listen to your customers, you have to listen to your own people.
Make the content count. Good listeners build trust. For the people at Tide.com, that means putting a premium on the quality and objectivity of the advice that they offer on the site. Says Bob Gilbreath, assistant brand manager for Tide: "We tell you that you may have to scrub, or that there are some stains that no product [including Tide] will ever get out."
Sidebar: Girl, Interpreted
How do you talk to a 13-year-old girl about sex, boys, and growing up?
Don't mention brands. Tell her that "being a girl rocks." Create a cartoon icon that looks like an extra from Josie and the Pussycats. Give her advice on topics that matter to her, like, right now. For example: "Do boys like girls who are smarter than they are?"
Oh, and do all of that on the Net.
Welcome to the world of being a girl at the dawn of the 21st century. Private matters that most girls used to discuss with their moms or whisper about with their friends (or, worse, just ignore) are now openly chatted about, laughed at, and argued over in a virtual hangout spot called BeingGirl.com.
The brainchild of a team at Procter & Gamble that's charged with developing a Net presence for the company's feminine-care products, BeingGirl plays down branding and plays up the sense of community.
Make no mistake: BeingGirl is about getting teenage girls to buy Always and Tampax, both of which are P&G brands. But P&G has learned that to reach those girls via the Web, it must create an environment where they feel no less at ease than they do at the nearest shopping mall.
"The big keys for us are tone of voice and the nature of the content," says Derrick Tarver, 33, global brand manager for P&G Femcare Interactive. "And we always keep in mind that teens today have an acute awareness of commercialization."
So how do you get through to those teens? Just ask them, and then listen to what they say. Last year, P&G asked two groups of girls to review the teen section of its Tampax.com site. The girls said that there was some great stuff on that site -- including Ask Iris, an advice column by Iris Prager, who is now president of the American Association for Health Education. But the overt branding of Tampax.com proved to be a turnoff for the girls. P&G learned two other things about girls today: They aspire to be older than they are, and they see the Web as a place where they should be able to speak their minds without giving away their identities.
P&G drew on that research when it launched BeingGirl in July 2000. The look of the site is bold, stylish, and feminine, without being too girly. (There's not a flower or a pastel color in sight.) And the content? Well, it's pretty in-your-face. In late May, the Private Issues area addressed the problem of having more than two nipples. Another section, Girl Vine, offered an outline of "Miss Myths" and "Fem Facts" about "puberty and periods." And in Total Opinion, the characters Eric and Lisa provided a running commentary on relationship issues. So do boys like girls who are smarter than they are? Says Eric: "Most guys don't like to be around a girl who looks dumbfounded every time they say a word with more than five letters."