Brands Create Customers

Brands change the context of things, and airlines are finding a new context for flying: offering a winged hotspot at 35,000 feet. The LA Times reports that airlines may earn $1.5 billion from onboard Wi-Fi by 2015.

About 45% of the nation’s commercial air fleet is equipped with in-flight wireless Internet, with several airlines, including Virgin America and AirTran, offering the service fleetwide, according to In-Stat.

The nation’s airlines collected about $155 million in 2011 from charges to use onboard Internet and are expected to collect $225 million this year, said Amy Cravens, a senior analyst for In-Stat.

Coming soon: Hotspot Airlines

Brands that help us be more productive and proactive have signal advantages over brands fashioned as stylized sales stimulants. In planning a trip we’ll be searching Kayak and the rest for Wi-Fi flights. We’re looking for Hotspot Airlines, no matter what the name and livery say on the side of the plane. And not just any Wi-Fi mind you, but high-speed Wi-Fi at reasonable cost with the least amount of airline baggage dumped into the connection.

Fly a lot of miles and earn a free Wi-Fi upgrade. That would be nice.

A new kind of airline brand experience

The prevalence of onboard Wi-Fi changes the nature of the airline brand experience. With affordable Wi-Fi a flight becomes an online experience more than an “airline” experience. We arrive at our destination totally refreshed, having engaged ourselves for hours on end aloft, rather oblivious to the sardine can that got us from point A to point B.

Brands of inertia are deadly for companies, and their customers. A brand becomes a brand of inertia when it’s too set in its ways to change course. The brand acts as a  one-trick, one-track monolith that sees the future in terms of the past. We typically find brands of inertia in companies that commanded an innovation years ago but now are happy to coast, fixated on cash rather than customers. They’ve become a means to extract value, rather than create it.

AOL as a brand of inertia

AOL would seem to be a brand of inertia based on this recent piece in the Economist. Its antiquated dial-up Internet service is a dead end, but AOL depends on these customers for revenue, including a “substantial number” paying for a service they don’t really need. The old AOL business is profitable, but the old brand ethos hasn’t helped AOL reinvent itself, which it desperately needs to do.

Brands of inertia aim to harvest customers, not create them

AOL would not be alone as a brand of inertia, of course. Some companies never feel the need to innovate if they think they can make easy money by freezing the brand—and their customers—in time and space. As brands of inertia they aim to harvest customers, not create them. Customers are the cash cow, and the brand is their corral.

Dialing down the brand

Brands of inertia often dial themselves down to the least demanding (or least informed) customers, those willing to pay for the same product year after year out of sheer habit (or sheer ignorance). As the Economist notes, some customers may not realize that they’re paying for a marginal product or service. They don’t know any better, but as far as the brand is concerned, that’s perfectly fine. It’s money in the bank. Brands of inertia don’t rock the boat. And they don’t like ideas that rock the boat.

A brand of inertia condemns the company to inertia

There’s a fatal downside to brands of inertia. They condemn the company to inertia, stifling creativity and innovation, especially on the customer front. Opportunities are grasped elsewhere. Good ideas go elsewhere. Innovators (and employees) go elsewhere. Eventually customers wise up and flock to better brands.

Easy:

You can do a Google image search for “Jacobs by Marc Jacobs” for more examples.

A big HT to Ken Peters, whom you can follow on Twitter @brand_BIG.

Image source: Buzzfeed

It’s always been apparent to me that brands are best understood—and best developed–as vertically integrated value. At their heart brands are methods to create value, and by making that value “vertically integrated” from company to customer we greatly enhance the potential contribution that the brand can make.

Definition of “vertically integrated value”

A brand developed as vertically integrated value is one where company, products, services and brand all operate in a singular, clear and coherent context to make the customer better off. It’s the brand that integrates the “company context” with the “customer context.” And it’s the value delivered that gives the brand real traction.

Creating vertically integrated value

How does a company go about creating vertically integrated value through its brand? We can identity four basic steps.

First, it helps to understand that “the brand goes in before the brand goes on.” We produce brand value from the vision, talents and dedication of company employees. We don’t tack on a “brand” just before the product is ready to ship. The brand is a method to create value from the very core of the business. (In the big picture, the brand is company potential X customer potential.)

Second, and most critically, we structure the brand as a customer-facing application. This helps cultivate and focus the company’s creative energies into deliverables with the desired strategic impact. (We want to create customers beyond the reach of competitors—in ways where our customers can become our most powerful competitive weapon.)

Third, we employ a value-based brand model. See here and here.

Fourth, we integrate the brand mission with the company’s principles of operation.

Vertically integrated value at Amazon

Amazon provides us with a current example of the brand as vertically integrated value. In this  interview of Jeff Bezos by Steven Levy we can observe how Amazon is structuring its products and services to work closely together within a singular customer context, in a tightly focused brand operation. The charts in the article are especially revealing.

Amazon’s vertically integrated brand experience

Amazon’s brand challenge is to deliver its vertically integrated value as a seamless and satisfying brand experience while constantly reinventing itself. Amazon has grown from “online bookseller” to become an online seller of everything, a hardware manufacturer of digital readers and tablets, a publisher, a digital streaming service for music and movies, a movie studio, and a digital cloud storage and infrastructure service for startups and corporations. That’s a vast territory for a brand to cover. It could have been disjointed, inefficient and clunky, but Amazon seems to have made it click.

See also:

• The simple secret of Apple’s brand strategy
• Brands as collaborative strategies

Jessica Beinecke is a brand of America. She’s 24 and from Ohio and she speaks fluent Mandarin, and her captivating “OMG Meiyu” English slang education videos have become an online hit in China. Jessica’s wide eyes and buoyant delivery open a portal to American culture, to the America that’s down-to-earth, self-directed, can-do, engaging, funny, inventive and equal. Slang expressions have a way of bringing that out.

Brands deliver new forms of culture

I call Jessica “a brand of America” because in their own small way her 70+ videos do what every brand should do. They deliver new forms of culture that free people from the constraints of the old. Yes, brands are more culture than commerce. (That’s why they don’t grow on spreadsheets.) The brand is transformative charm, wit, wisdom, insight, inspiration, innovation, sheer creativity and often sheer gumption that blasts the senses with new ways of being and doing.

A brand of possibilities

What comes across in Jennifer’s videos is much more than a clued-in urban vocabulary for Chinese students of English. It’s an engaging context of culture that offers new ways to see the world. It’s a  brand of expression, and as such, a brand of possibilities.

Across all cultures

Cultures can be ruts, too, and videos like these can work across all cultures to liven things up. US students need to open their eyes to other cultures, and the simple style of Jessica’s work may inspire others overseas to target the US with similar videos. Certainly couldn’t hurt.

Michael DeGusta has produced an informative chart showing how the mass of Android phones is not being updated with the latest Android software releases. He contrasts this with a much stronger level of upgrade support from Apple iOS, which is innovating just as rapidly. To me, the chart shows the extent of Android brand fragmentation at the end user level, where the rubber meets the road. Instead of the Android brand being a seamless user experience through upgrades and support, Android users are often stuck in older and more limited Android versions with no hope of upgrade during their contracts. Instead of briskly marching its users forward with upgrade innovations and fixes, the Android brand is stumbling and limping, and sometimes just stops.

The result: Android brand loyalty may be tenuous.

Android users deprived of an optimal Android experience

Android’s brand fragmentation deprives Android users of an optimal Android experience. At the device level it’s a piecemeal brand can’t deliver the full value behind it. At a time when both Android and Apple iOS are innovating feverishly toward a deep and wide-ranging mobile experience, a scatter-shot Android brand experience can hardly build the brand loyalty that Google needs going forward. For example, it’s not a good sign when surveys indicate current Android users prefer the iPhone over Android, or prefer the iPad over Android-powered tablets.

The Chart

Here is Michael’s chart. A larger version is on his site linked to above.

The nature of Android brand fragmentation

Please note that when I discuss Android brand fragmentation I’m not referring to the Android brand display (symbols, visuals) or to Android brand messaging. I’m referring to the Android brand experience as it’s delivered to end users. It’s hard for the brand to create customers when so many dead ends and third-party factors intervene between the brand and those whose loyalty it seeks.

A fractured user experience

To quote from Michael’s analysis of the Android data in the chart:

Other than the original G1 and MyTouch, virtually all of the millions of phones represented by this chart are still under contract today. If you thought that entitled you to some support, think again:

• 7 of the 18 Android phones never ran a current version of the OS.
• 12 of 18 only ran a current version of the OS for a matter of weeks or less.
• 10 of 18 were at least two major versions behind well within their two year contract period.
• 11 of 18 stopped getting any support updates less than a year after release.
• 13 of 18 stopped getting any support updates before they even stopped selling the device or very shortly thereafter.
• 15 of 18 don’t run Gingerbread, which shipped in December 2010.
• In a few weeks, when Ice Cream Sandwich comes out, every device on here will be another major version behind.

Android users lag behind in apps, too

The fragmented nature of Android also makes Android users pay a price in app availability and app quality. Android’s myriad versions on myriad devices make it a pain for developers to create and test apps for so many different versions and handsets, especially when the device makers and the carriers insert their own software and tweaks. Apple’s iOS presents a much more consistent platform, even with Apple’s sometimes obscure curatorial logic.  (For a recent survey of Android developers see Fortune: “Android is a mess, say developers.”

The good news

In my recent post, Android: the dangers of a recessive brand, I outlined a number of measures Google could take to deliver deeper brand value in its offerings. Among these is establishing a canonical Android release that unifies Android innovation into a core platform that’s a more stable platform for app development and support. Android 4.0 may be that release, and that is good news, although it doesn’t directly help those with older Android-powered devices.

Chart image: © Michael DeGusta

It’s almost funny the way that Google sometimes pretends that it has no brand obligations, that Google is responsible for nothing–and accountable to no one–since its products are “free.” It’s an attitude that says, “Take it or leave it. We have no brand relationship.” That’s a risky stance in an increasingly “social” world.

Google as Soup Nazi: “No brand for you!”

Google’s attitude  brings to mind the famous Soup Nazi episode in Seinfeld with its memorable  “No soup for you!” Instead of the Soup Nazi behind the counter, though, I imagine Google back there, barking “No brand for you!” to anyone who dares question what is given.

The You Tube video can’t be embedded, but here’s a link:

Image credit: Larry Thomas

I’ve previously critiqued Google’s brand strategy (here, here and here) for what I consider short-sighted brand approaches that limit Google’s social appeal. It now appears that Google may pay an additional price for being brand timid when it could have been bold. Amazon’s new Kindle Fire threatens the Google Android brand in tablets because Google developed Android as a recessive brand. In monumental brand irony the Kindle Fire will use Amazon’s version of Android against Google itself, as the anchor of a complete brand ecosystem, potentially taking Android app developers—and Android customers—with it. Brand-wise, Amazon is positioned to take Google’s lunch and eat it, too.

How on earth could the Google brand let this happen?

A fork in the Android brand

To answer the question above we first have to examine the provenance of Android itself. Google developed Android as open source software. Google offers it essentially free to mobile device makers to spur its adoption in as many mobile devices as possible. There’s a catch, however. Software that’s open source can be–and often is–”forked.”  While Android readily lets licensees add their UI and top end elements to the base software, developers can–if they wish–forgo the official Android license and take the open source code in a new direction entirely, “forking” or branching it from its original path. The newly independent code can’t use the Android name, or Google add-on’s like Maps, Google Voice, etc., but that may not matter. The new fork has its own agenda, and is essentially a new brand itself.

The big forker is Amazon

Enter Amazon. Amazon has cleverly taken an older version of Android and developed a proprietary Amazon tablet OS with it, tightly integrated into Amazon’s market offerings. The result is the Kindle Fire, offered at a disruptive price of $199 (seriously undercutting the price points of Android’s tablet partners). The Kindle Fire is a full-function tablet that incorporates Amazon’s app store, downloads for games, music and video, books and everything else in the vast Amazon offering. It bypasses the standard Android App Market and other Android services set up by Google as part of the original Android platform. Amazon thus steps in to potentially steal revenue from Google and its Android tablet partners. It also potentially excludes Google from the valuable user information capture that’s critical to Google’s revenue model. That information capture is what Google envisioned for Android in the first place.

Android as a recessive brand

Let’s now take a close look at the nature of a recessive brand. A recessive brand does not pass its full DNA to customers as a unique and compelling context of value or brand experience. It “does a job” but otherwise keeps to the background, deferential and dumb. It doesn’t lead; it goes along for the ride. It does not procreate brand value. It doesn’t stand tall as a brand that one can interact with, get to know, and ultimately trust.

Escape from accountability

As I see it, Android was developed as a recessive brand that happily surrenders its Google identity for the sake of fast global ubiquity. Beyond that, the passive Android taps into Google’s historic un-brand ethos of not wanting to be held accountable–for anything. In other words, Google wants Android brand ubiquity without Android brand responsibility. It doesn’t want to be on the hook for OS issues, screw-ups and associated problems where it has to deal with those messy things called people. In contrast to a proactive brand that embraces customers and stands behind its product, Android needs someone else to “front” the brand and to deal with you and me. In mobile and tablets the front men are the device makers (HTC, Samsung, et. al.) and the carriers.

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