Pets.com: Branding Goes to the Dogs
By Daniel Janal
The recent demise of Pets.com offers important points about building a brand on
the Internet for businesses of all sizes.
Let's recap their story.
Pet.com entered a crowded playing
field of startups that wanted to sell pet food, supplies and toys to
price-conscious pet owners. The field also included bricks and mortar stores,
Pets.com needed to stand out from the crowd. They did an admirable job by
creating a lovable character, the sock puppet and a catchy slogan to answer the
question of why shop at an online pet store: "Because pets can't
They spun a good PR story about the creation of the sock puppet. They said their
marketing team created a six-page bio of the character that included gender,
age, personality and other traits.
They spent a fortune on TV ads that featured the sock puppet, whose sassy style
did a great job in differentiating the company from others.
That's good branding.
As a result, pets.com was:
Yet, as the company noted in its press release "we are unable to continue
But it obviously wasn't enough.
What went wrong?
You can't build a brand on a bad business plan. Sure, a lot of people own pets
and they want to spend less money on pet food. But can any market support dozens
of companies with the same business plan? The story of Pets.com tells us a
Pets.com lost because they failed to learn an important rule:
In a product area where the retailer adds no extra value, Pets.com was doomed to
disaster the day the first wave of competitors came along.
That's because if you plan to build a company by offering discounts, you will
lose to the next company that comes along and offers a bigger discount. If the
field is crowded, go elsewhere! Your chances of winning are slim.
The cost per customer acquisition by companies like Pets.com is about $80.
There's no way you make that back when you sell a product with a paper-thin
margin - and have 10 other competitors doing the same.
It's no wonder why Wall Street has punished dot-com look-alikes this year.
Pets.com teaches us that strong brand assets can help a company gain visibility
and awareness in a crowded field. But Pets.com also teaches us that if you build
a brand on a shaky foundation (i.e. business plan), you are doomed. That's why I
predict that some toy company will buy the sock puppet assets and turn him into
a major cartoon character. Move over Barney!
The real lesson: You can only win if you add real value that customers can't get
That's the essence of building a good brand on the Internet. The clever logo,
the sassy character, the cute slogan are merely brand assets that help to build
the brand. But so are the business plan, the competition and the realities of
Build Your Business with Strong Brands
When you build trust, you build a great brand. If you can do that, then you will
build sales and create customers for life.
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Dan is an internationally-recognized
speaker and marketing expert who teaches Internet Marketing at executive
level conferences sponsored by Stanford University and University of
California Berkeley Extension. He is also the author of the definitive
guide to online branding, "Branding the Net: Your Personal Blueprint for
Profits on the Web" and several best-selling books on marketing and
the Internet. Go to Dan's site and take the psychic marketing quiz that will "freak
you out." Branding the Internet