Brands Create Customers

When it isn’t, you get this.

Hat tip to tingilinde.

Laura Ries set off a mini-firestorm recently when she wrote that a company’s success depended more on its “brands” than on a company’s own products and people. Her exact words were, “Building strong brands is the key to success, in our opinion, not better products or better people.”

This is a strange, almost antediluvian view of brands. Companies and products are considered to be identical in essence and in output, no matter how they operate or how hard they innovate. Only “brands” make a difference. They’re like a value add-on. And only when a “brand” is applied do customers take notice and sales take off.

This concept of “brand” decouples brands from the real factors of company integrity, product/service quality and employee commitment. In fact, it pretty much divorces brand success from a company’s core competence, and its edge competence. The brand is thus external to the business. It’s sort of pasted on, or applied like a fancy wrapper. Basically, it can be nothing more than effective make-believe, the end-product of advertising and PR campaigns. In this view, brands are not an organic expression of the company.

Frankly, (and thankfully) brand models like this withered away decades ago. Not only do they diminish a company and its employees, they also demean customers, who are increasingly integrated into proactive brand practice.

Tom Asaker rightfully takes issue with Laura’s remarks, and his readers join in. Laura’s response doesn’t help.

As I see it, the real danger in this approach is that it pulls brands away from the core of a company. Brands are not add-ons. Brand building is a value creating process at the heart of a company, integrating R&D, design, products and customers. From the brand core come value innovation and customer creation. Both are central to a company’s mission and capabilities.

Always observant Michael Parekh offers a first-person account of the latest “Oops” beta release from Google, this time involving Google’s Web Page Creator.

The new service has been launched, but isn’t ready for service. When you try to create an account, it returns a “Google — Oops!” message. The message says: “Due to heavy demand, we are unable to offer new accounts for today. If you’d like to be added to our waiting list, please enter your email address.”

Associating one’s brand with “Oops” isn’t exactly good business practice. For Google, this is yet another instance of violating the rule: in brands, there is no beta.

These things do add up. They condition customers to be leery of first generation products, and eventually, to be leery of the company that semi-launches them.

As Search Engine Journal concluded about Google:

. . . they’re going to have to come up with a new technique of Beta testing which keeps users eager to have a chance of working with the system, but not having that system exceed capacity after 6 hours.

The question customers will ask: “Is it beta, or half-baked?”

World’s first feature film made with cell phone cameras. Soon to be in movie houses, DVD, television, online, and (naturally) on cell phones.

For a fraction of what you’d pay for a product placement, you could use this innovation to have a whole slew of mini movies made–by customers. You become their platform for expression. Let them tell your stories. Just keep the clips short, punchy, powerful. And make the awards . . . fun.

Who will be the first second BitTorrent powered brand?

Om Malik reports on the increasing use of indi-cafes in San Francisco as mobile office space for entrepreneurs. The right cafe is the perfect environment for social thinking, thought linking, wheeling and dealing.

If cafes are the cauldrons of thought, the brand team better be there, too. Brands are not after-the-fact. They are part and parcel of product innovation ab ovo.

One of our favorites is Caffe Trieste in Berkeley. (The brand team brew of choice is, of course, double espresso.)

UPDATE: If a Starbucks isn’t on your mobile office agenda, find a local cafe alternative on Delocator.

Before we talk about McDonald’s, we have to talk about motives.

Businesses typically operate by managing two complementary motives: the brand motive, and the profit motive. The two run parallel. They form the track that leads a company to its destination.

The brand motive is to do things right for customers. The profit motive is to charge what you can. Good companies align the two, through thick and thin, across changing market landscapes.

Once in a while, though, a company’s brand motive and its profit motive can get out of whack. That apparently happened at McDonald’s, which is now being sued for allegedly not informing customers that wheat and dairy products are added to French fries. The suit claims the ingredients may be harmful to persons who are glucose intolerant or lactose intolerant.

McDonald’s, of course, is no HO gauge outfit. They serve 50 million meals a day, in 120 countries. On that scale, keeping things aligned isn’t easy.

But it has to be done. We’re talking people, not patties. Or, you could look at it this way:

1. Brand motive = serving people
2. Profit motive = serving patties

At McDonald’s, the brand motive might have said to the profit motive, “Dude, listen up! Taking an extra step to take care of customers will pay dividends far in excess of any negative fallout from ingredient purists. Ingredient purists don’t eat at McDonalds’s–or any other fast-food joint–anyway.”

Bottom line: customers eat burgers by the billions, but they also crave honesty. They respect you when you serve it.

Maybe we’ll see the issue discussed in McDonald’s new blog.

McDonald’s current ingredient listing.

Ben Franklin was a man of vision and great common sense.
One of his sayings has particular relevance for brand programs.

The quote: “Well done is better than well said.”

Since brands are programs to create value, these words hit the mark.

It’s what your brands do that counts. All else is merely show. Flash may flutter eyelids, but it’s deeds that flutter the Benjamins.

Here’s what Walt Mossberg has to say about Microsoft’s Office Live offering in his column of February 23:

Confusingly, Office Live has nothing to do with Microsoft Office, the company’s productivity software suite. It doesn’t include Web-based versions of Office programs like Word, Excel and PowerPoint.

If the way you name your products leaves customers confused, don’t expect them to line up at the sales counter any time soon. (It’s never a good sign when your own employees have reservations about a naming scheme.)

As we’ve said before, and will no doubt say again: in brands there is no beta.

And just for fun, don’t miss the web site that Walt created using Office Live tools.

Buying a car is a spiritual decision. There is some logic and lots of feel. You and that vehicle are going to be a prime package of kinetic energy busting down unknown byways, so it pays to go soul to soul before you take the plunge.

At one time, to check out new cars you’d go to a dealer, ignore the hovering salesperson, and see for yourself. It was OK, but the dealer was interested only in the sale, not in you, and probably not even in the car. You and the car could be in the same room, but the car wasn’t allowed to say much.

It was like piping Shakespeare through a straw.

Car shows were an alternative. Car shows had car people. You could learn something about the car. And car shows had concept cars, which soulfully breathed the future. Of course, there might be only one or two car shows in your area per year–or none at all.

How could you shorten that product distance between the car and you? You were on the same wavelength, but on different waves.

There are now ways that car makers can chop that product distance. Lexus is bringing their car shows to you. Concept cars, too.

It’s a new form of car talk. As a brand, Lexus is saying: “We’re an expression of you.”

It’s a small step, but it helps. The more immediate the product, the stronger the brand. It’s almost as useful as online car forums, where people and cars speak the same language.

Jeff Jarvis has some interesting thoughts on the relationship between blogs and brands, using the media business as an example. That business was once characterized by a limited number of players whose dominant brands defined what was available at the corner magazine stand. In effect, those brands were publishing. They prospered within a limited brand space.

Internet innovations and network economies are now changing that traditional media model. In particular, blogs and their online brethren have mushroomed the world of publishing. The once sheltered brands at the corner magazine stand are now exposed to the elements. The new magazine stand is your mouse, controlled by you. Through the internet, its shelves are infinite. As Jeff says, there is now no scarcity of brand space. Brand opportunities exist all across this “distributed-to-the-edge internet,” with many of these opportunities being seized by new players, working from the bottom up.

Well, what’s true for brands in media markets is also true in other markets, with an even wider horizon. Blogs are one of the factors that are irreversibly transforming the once-limited “brand space” of the shelf or the channel into wide open spaces, where new rules apply. Brand value is being generated at the edge, by new players, and by customers. This can be a superior form of value to that promulgated by companies using conventional brand practices.

Companies shackled with legacy brands will view blogs as threats, and will react accordingly. Forward-facing companies will make the most of new opportunities. Virgin brand territories await.

As we say elsewhere, “Brands of the future will not be top-down monoliths. They will be a thousand agile initiatives, loosely coupled, rich in customer texture, often sparked by customers themselves.”

We’ll write more on this in coming weeks. For now, here’s a rough listing of how blogs can help brands create customers:

1. Break down barriers between company and customers
2. Engage customers in fine-grained conversations
3. Identify needs of lead customers and others
4. Define new brand spaces
5. Tap into customer initiative and intelligence
6. Create new forms of product value/brand value
7. Open new brand innovation avenues
8. Spark new market initiatives
9. Facilitate pilot programs and prototypes
10. Form customer bonds that competitors can’t match
11. Express your passion for what you do
12. Build trust through openness
13. Focus employees on customer results
14. Extend brand building to the market edge
15. Lead by example

This site is a treasure trove of corporate design guides, guidelines and policies.

It’s a useful resource for those whose job it is to manage a company’s visual identity, signs and symbols.

Of course, a company’s performance identity is a different matter. That will largely be determined by its brand programs.

Joe Wilcox compares Microsoft and Apple on their different approaches to managing expectations, and brand experience.

Because brands play a critical role in creating customer value, they are often deeply involved in a company’s innovation process. (Ideally, they lead it.) But what is “innovation?” How does one separate feature creep and superficial enhancements from the real deal? At some point you have to define innovation so you can focus your efforts.

I define innovation as follows:

“Innovation is what you do for the customer, not what you do to your product.”

From a brand perspective, you’re looking for innovations that can advance the customer. New product “features” that replicate the old product mindset often miss the mark.

The brand team should be plugged in to the vast array of innovation that takes place across a company: process innovation, channel innovation, service innovation, etc. Every so often you can do an innovation roll-up that takes the best of these and translates them into added customer value. That’s the context where companies (and brands) can make a difference.

Over at Sandhill.com Geoffrey Moore dissects ten “innovation myths,” and then makes solid business sense of what remains on the bone.

Read his essay if you’re in brands. Innovation is what you do.

What should the brand team be doing? What’s their mission? Their charter?

The brand team plays a pivotal role in how your business creates value for customers. To clarify the team’s mission, you want a mission statement that’s brief, results-oriented and forward-focused. More often than not, the brand team is pushing the edge. They’re defining your tomorrows, not perpetuating your past. Their charter needs to give them working room, and breathing room.

Here’s how I see it:

Marching orders for the brand team:
Open eyes, open minds, open markets. Create value. Create customers.

That’s it. Short and sweet.

Is it like most conventional brand team mission statements? Nope. Not at all.

It’s aim is to lead the business through brands. That’s where the brand team belongs.

In what appears to be another instance of brands playing catch-up to technology, Microsoft watchers and MS employees are pointing to potential customer confusion between the new Windows Live brand (now in beta) and Microsoft’s established MSN brand. The two online brands overlap in many areas, and address the same set of customers.

At present, it’s not clear how the two brands will co-exist, or if the older MSN brand will be retired. Windows Live is the more dynamic platform (AJAX, software as a service), and represents Microsoft’s online business future. MSN is the brand that millions of Microsoft customers have used for an array of online programs (Hotmail, Messenger, etc.) and for online content (automotive, sports, financial).

Hotmail, Messenger and other MSN programs are being revamped and re-branded as part of Windows Live.

Other reports say Microsoft may re-brand MSN as a content-driven “Microsoft Media Network.” This would add another brand and a draw a line between online content and services. However, much of the Live platform tends to blur such distinctions through its strong focus on access and feeds.

Microsoft’s challenge is to migrate customers to a new brand context that empowers customer choice and action. For Microsoft, the question is whether the brand will add real customer value, or be a last-minute kludge that leaves customers in the air.

Potential brand confusion is a critical issue for Microsoft. The company is competing head-to-head with Yahoo, AOL and Google in a high-stakes battle for market leadership. This is a battle of brands as much as it is a battle of technologies. If you come to market without a fully-baked brand strategy (architecture, platforms, programs and identities), and without a clear idea of the customer value you plan to deliver, you run the risk of confusing customers and the market. You also leave openings for competitors.

Here’s a rule worth remembering: In brands, there is no beta.

The process of creating customers is by its very nature eclectic, wide-ranging and fluid, as it involves both companies and customers building new levels of context. It is an edge process, where innovation is the name of the game.

Chris Lawer’s Creating Positive Context offers some very helpful perspective. See especially the pdf link to his Customer Management article in his Feb. 9 posting.

As we never tire of repeating, brands are collaborations in context. That’s what makes them so exciting, and challenging, as creative engagements.

The interaction of blogs and brands in the enterprise is a huge issue these days, in large part because it represents a change to the traditional top-down brand model.

Jeff Nolan at Venture Chronicles recounts an interesting discussion on blogs and brands that took place at the recent Enterprise Software Summit. The subject was the feared damage to brands from employee blogs and related non-controlled communications:

The key issue pivoted around a legitimate question thrown out at one point, which is whether or not all this free flowing and unstructured “conversation” by employees, partners, customers, or whoever [was] potentially diminishing to brands. The premise of the question is rooted in the notion that companies actually control the conversation about their products/services/brand in the marketplace, something I reject. What this question also does not acknowledge is that the best spokespeople for your brand are in fact your employees, partners, and customers, and not the “marketing spokesperson” or the CEO.

I would strongly concur with Jeff’s point. In practice, brands are built from the bottom-up, not from some immaculate brand icon in a showcase. That is why a company’s brand programs should be structured around employees, partners and customers. They’re the ones who actually innovate on brand, and who deliver and/or grow brand value.

I would add one thing to Jeff’s comments. In my view, the CEO does play a decisive role in making the brand succeed. Brands lead by example, and the CEO sets the tone of brand leadership for the company. Employees, partners and customers sense this tone in a heartbeat.

NOTE: “Blogs and brands” raises a slew of brand model and brand strategy issues, far too big a topic for this one post. I’ll be coming back to it in the weeks and months ahead.

Meanwhile, here are some off-the-envelope guidelines for companies wrestling with brand programs and blogs:

1. If you’re hiding something, don’t blog
2. If you can’t trust your employees, don’t blog
3. If your brand success depends on keeping partners and customers in the dark, don’t blog
4. If your internal processes are so slipshod that blogs might reveal your most valued IP, don’t blog
5. If your employees aren’t too bright, and can’t exercise good judgment, don’t blog
6. If you insist that all ideas and initiative come from the top, don’t blog
7. If your brand can only survive as a make-believe image fed and tended by a few, don’t blog