A Conversation with Ron Ricci and John Volkmann

Why did you choose “momentum” as the term to define the digital mindset?

To us, momentum is a particularly apt term to apply to market dominance. It’s frequently used to describe stocks, politicians, and sports teams, especially those on the threshold of success—where success seems inevitable. Momentum also describes hot companies, especially in the investment community, where it has a technical definition based on a series of consecutive quarters with increasing earnings. Perhaps most important of all, it captures the sense of motion around digital products.

Digital products never seem to move in any absolute direction for more than four or five years. It’s not just the pace of technological advancement; the rapid evolution of value points—for example, chips, operating systems, applications software, networking, printers, and many others—invites swarms of companies and venture capital dollars into the market. The digital product market is intrinsically dynamic, and momentum comes straight from the field of mechanics and the study of dynamic conditions. Best of all, momentum already has a formula associated with it—Mass x Velocity. By breaking down velocity into its two discrete components, direction and speed, we translated that formula into an equation that more clearly defines the dynamic digital mindset: Momentum = Mass x Speed x Direction.

In your book, you mention a “billion-dollar formula” for becoming a market-leading company—a marketing “dashboard.” What is it and is it really that simple?

Let’s face it: marketing and branding are abstract concepts, especially for digital products that don’t have moving parts or change all the time. Our work is not just a point of view; it’s an actionable game plan for managing a brand’s mass, speed, and direction—what every brand needs in order to be differentiated from the customers’ perspective.

Our billion-dollar formula—what we now call the Momentum Index—does three things: it helps to measure a brand’s position vis-à-vis its competitors in customers’ minds; it diagnoses the strengths and weaknesses of the position; and it develops a plan of action that would improve the quality of the brand’s differentiation and, thus, its perceived value from the customers’ perspectives. We call our momentum model a marketing dashboard because it has, literally, knobs and dials that put the specific tactics of successful companies into a broader, repeatable set of market actions that consistently produce results with customers.

Simple, yes; achievable, yes; easy, no.

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Your model places a lot of emphasis on the CEO to create the credibility for a brand’s direction with customers. Explain.

In most marketing books, you hear a lot about brand identity and brand personality. These are typically contrived ideas, like a race car or work of art. In digital markets, brand personalities have come to more closely resemble the attributes of their CEOs than some contrived personality. This is especially important in today’s environment where corporate credibility is at a premium. Our research showed that the credibility of brand can no longer be bought; instead it has to be earned by CEOs. Customers—the people who matter most—told us that brand direction is predicated on the ability of the CEO to communicate to them on the future of their relationship with the brand. The integrity of brand, therefore, depends on the CEO.

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You also stress the importance of future credibility and its contribution to achieving brand momentum. What do you see as the most influential factors impacting future credibility?

People’s expectations of companies and products have evolved over the past two decades, influenced by new sources of differentiation and marketplace value. As a result, executing a momentum-building campaign maps to the essential nature of the way customers perceive differentiation: people judge the superiority of a digital product or service by how well it accomplishes something of personal or business importance. The credibility of one brand versus another relative to these expectations—and the amount of value people place on a brand—is correlated to the sources of perceived mass: relevance of value proposition, category leadership, and ecosystem potential.

But, like many momentum concepts, credibility has a past, current, and perhaps most important, future component. Future credibility—that is, the perception that a company can advance its superior competitive position in the future—stems from a firm’s sense of direction, specifically its management vision and brand integrity. In tactical terms, this means that future credibility requires not only that a company keeps its promises but also that it has an external executive champion—a CEO—who can credibly represent those promises to customers.