Brands Create Customers

TypePad has announced widgets for its blogs. These widgets will flood like lemmings across the blogscape, but ultimately this will be a good thing. I hope the people at WordPress are cooking up something as good or better.

As widgets gain more intelligence, and more capabilities, they will enable networks of brand intelligence across blogs. Think of them as syndicated identities, offering depth, dimension and diversion from the confines of a click. We’ve written about them before.

Blogs are about to get richer. And widget creators–at least the good ones–may share in the wealth.

UPDATE:  Early stage WordPress widgets now available from Automattic.

Ed Byrne has put forth some interesting ideas on “how to de-commoditize your product.” This is something that everyone in brands has to deal with, one way or another. The commodity question always keeps coming up, and will keep coming up for the foreseeable future. It’s a major challenge for companies. And it presents a major opportunity for brands.

In a comment to Ed’s post I said:

I think what you mean is that a company’s brand must deliver value to the customer, above and beyond the product proper. As such, “building a brand” becomes a value creating process. The long term goal, at least as I see it, is to transform your brand platform into a customer platform. Once that happens, a lot of commodity worries fade away.

So, my quick answer to the commodity challenge: think platforms, not products.

For the record, here is how I currently define “brand platform” and “customer platform.” These are working definitions; I’m always interested in comments and ideas on how to make them more meaningful.

Brand Platform
The brand platform is a structure of integrated brand components architected to create focused customer growth. As a platform, it: 1) serves as a common foundation for brand program applications; 2) allows for greater efficiency in brand program development via shared elements; 3) leverages context and content across the brand; and 4) enables customers to extend the brand through bottom-up brand innovation avenues.

Customer Platform
The customer platform is the structure of resources, tools and capabilities that the customer relies on to succeed. A properly constructed brand platform can step in and support critical aspects of the customer platform, often in a 1:1 fit, freeing the customer to pursue additional objectives. In this process, the customer “adopts” the brand platform and can add value to it through customer initiative and innovation, ultimately feeding this value back to the brand.

Brand platforms and customer platforms are thus key elements in creating customers. The stronger your platforms for customer creation, the less you have to worry about commodity incursion.

One of the reasons this is a great time for brands is that digital technology makes possible the fruition of new brand models. These can offer a multitude of customer benefits far beyond what might be achieved using traditional brand structures and approaches.

One new model we like is the brand as a distributed portal. The portal model works for brands because it enables brands to be a new lens on life for customers, and to deliver multiple streams of value. If your brand is an informed gateway to the world, your customers can embrace you as they journey along side.

Of course, this is not an old-fashioned portal built like a corral. It’s a distributed portal, modular and incremental, open on all sides, one designed to move with the customer. It’s aligned along the degrees of freedom that customers need to grow.

Google and Yahoo give some indication of how such a distributed portal brand might be fashioned. Increasingly, their portal functionality is dispersed along customer vectors, where they’re happy to be your sidekick/enabler in life. Examples here, here, here and here.

What’s needed in this brand approach is both context, content and structure. Just providing another pipe or a search box won’t cut it. People will want the brightest sidekick they can find, one that’s actively engaged with their lives.

Hotels were once notorious for squeezing customers with extra telephone charges. Hotel “guests” had to put up with this because they were captive customers that had few options once in their rooms.

Of course, all that changed with cell phones, which hotels couldn’t control. Hotels adjusted by duly shifting extra charges to dial-up and broadband access, which customers also needed. (On a recent trip to Singapore our hotel charged S21.00 for 24 hr. increments of broadband, or S15.00 for 10 minutes of access in the Business Center.) With the advent of wi-fi, wireless access was also looked upon as another high-margin income stream, where guests would have to pay up.

But not everywhere. Free hotel wi-fi is now a marquee differentiator among hotel brands. Kimpton Hotels is a leader in this regard, as noted in this survey.

Kimpton once again tops the list as the undisputed hotel WiFi kings. The brand improved their now legendary free WiFi service in the last couple of years, by extending their fast, reliable WiFi network to your upstairs room, at many hotels. Yup, at most Kimpton hotels you *can* actually sack out with your computer on the bed wireless and happy. This scenario is oft-advertised by other hotel chains, but hardly ever a reality. Kimpton doesn’t count on their lobby WiFi network to reach the top floors of their buildings, instead, at the hotels we visited, Kimpton actually had two separate WiFi networks–one for the lobby and the other for the guest rooms. Both networks are easily accessible by clicking on a standard terms and conditions. Furthermore, during our Kimpton visits, friendly staffers went out of their way to ask us if we were getting a good reliable WiFi signal in both the lobby and our room, and guess what? We were. Kimpton Hotels tend to appeal to business travelers, hip leisure travelers, and globe-trotting bloggers.

These days, one of the keys to being a good hotel is to be a good office. If your brand strategy is to grow your customers, you can find ways to enable their effectiveness even when they’re relaxed in your posh digs. Kimpton has certainly figured this out.

Here is what Kimpton said regarding its complimentary broadband and wi-fi deployments:

We are proud to be able to provide guests with complimentary Wi-Fi and Wired HSIA service,” said Andrew Furrer, Kimpton’s director of corporate IT. “Offering Wi-Fi and Wired HSIA demonstrates that Kimpton is committed to
integrating the latest technology into its amenities. Offering these services free of charge demonstrates that Kimpton is taking a forward thinking approach and taking guest service to the next level.

They will probably get more business from this simple brand strategy than from a dozen big-buck media campaigns.

This has been a tough week for Microsoft, and for the Microsoft brand. The scheduled release of Vista has been moved back from 2006 to early 2007, missing the big Christmas season. Release of Office 2007 will also be delayed until the new year. As if this wasn’t enough, the company also announced a massive re-org intended to re-align desktop and online strategies. And, at the end the week, both Dare Obasanjo and Robert Scoble cite weaknesses in emerging Microsoft brands. Dare compares new MS online brand efforts to competing Google and Yahoo brands, and finds the Microsoft brands confusing. The Scobelizer agrees.

Dare and Scoble make some good points. I’ve touched on Microsoft’s brand quandaries here, here, and here, and obliquely in my post Brands are code.

(more…)

Most people don’t realize it, but brands are code. At the core level, brands have much more in common with software development than they do with logos and product identities. In fact, brands should be viewed as an extension of the product development process rather than as a separate, multi-media “add-on” just before launch.

This is because brands are much more than symbols, slogans and promises. Brands are programs to get things done. And as programs, they’re built of . . . code.

In this snapshot, let’s take a look at some of the reasons why brands are code, beginning at the outside and working in.

Unlocking brand code

First, some interesting similarities:

• Brands have architectures.

• They have roadmaps.

• They have platforms

• They have programs.

• They have interfaces.

• Brands are executables.

• They have developers, and end-users.

• And most importantly, they have brand API’s.

Brands have a language, too. In fact, they are written in only one language. It is called CUSTOMER. It is a language that is infinitely interoperable.

What brand builders code

At a basic level, they code the customer’s needs into the product. In this process, they also code the whole customer into the company. This enables customer DNA to flow through a company, through its employees, operations and innovations. At a more advanced level, brand builders code new freedoms into the customer through the brand, enabling customers to be more, and to do more. In effect, they create a branded customer platform that advances the customer beyond what products alone can provide.

Brands as executables

Brands are not static images or frozen icons. Brands are action-oriented. They get things done. In other words, brands are executables. Every brand is a “.exe.” When you execute on brand, you raise the customer to the next level. Brands do this through value transforms embedded in the code.

How brand code works

Simply stated, brands are code for creating value. Their architectures, platforms, programs and interfaces transform the value inherent in the product into value realized by the customer. (This is no easy task.) At their best, brands do this in such a satisfyingly brilliant way that the customer leaves his or her old customer shell behind, and embraces the new brand going forward. When a great brand connects, there’s no turning back.

How exactly does a brand do this? First, brand building begins at the core of a company. Brands are not add-ons after the fact. Brands are a process of architecting customer progress into the product. Yep, the operative word is “progress.” The goal of a brand is to advance customers to progressively higher levels, so in future months and years they will be demanding all those cool innovations you have up your sleeve. Thus, brands are forward-focused. They are part and parcel of your innovation strategy.

Unzip your brand

So, if brands are code, how do brand builders create and deploy this code? You can find some initial guidelines in Unzip Your Brand.

A traditional rule in luxury brands is that you have to exercise strict control of both production and distribution. Quality and exclusivity are the name of the game. In fact, managing the channel is increasingly the key to success. The more you control where and how customers buy your products, the more you can control pricing, and profit.

Within limits, of course. From the Telegraph:

Glamour firms fined £32m for price-fixing on perfumes
(Filed: 15/03/2006)

Manufacturers of some of the world’s most glamorous perfume and cosmetics brands were fined by French competition authorities yesterday after it was ruled that the companies had colluded to keep prices high at the expense of the consumer.

Thirteen iconic brands, including Chanel, Yves Saint Laurent, Christian Dior and Guerlain, and three leading French retailers were fined almost £32 million between them for inflating prices between 1997 and 2000.

The French competition council said that under the price-fixing arrangement, a “price police” was set up between them to artificially inflate prices, put pressure on individual vendors and threaten reprisals against those that refused to apply the prices set by the perfume and cosmetic brands.

Philippe Nasse, the council’s vice-president, said that of 4,300 prices investigated by the authorities, 80 per cent were subject to price-fixing.

The inquiry was limited to France but investigators “found elements that showed the probability of price contagion,” Mr Nasse added, noting that French prices can affect those elsewhere in Europe.

A council statement said the brands in question “claimed the standardisation of prices was designed to defend the ‘luxury image’ of products”. Several planned to appeal.

Strategy issues affecting luxury brands

Irrespective of how these specific charges are settled, they raise interesting brand strategy questions for luxury brands themselves:

1. Are luxury brands inherently closed and defensive, with elaborate sets of barriers, restrictions, and gateways? If so, does this make them a Maginot Line of marketing, susceptible to flanking attacks? (Not by a conventional luxury brand, of course, but by higher forms of relevance.)
2. Is a “free” luxury brand feasible?
3. Do luxury brands ever compete on brand innovation? If not, are they painting them into a corner?
4. Can a well-managed luxury brand be “disruption-proof”?

http://www.trackingtraderjoes.com/

A brand roadmap can be as important to a business as a product roadmap.

Companies have long used product roadmaps to illustrate the direction and timing of new products being developed. Roadmaps show development phases, timetables, milestones and outcomes. They help decision makers understand the steps and pacing of product development, and enable them to coordinate multiple innovation efforts into a coherent strategy.

Brands need roadmaps, too

Brands need roadmaps, too, because brands are never static. Brands are dynamic relationships between companies and their customers. They need constant improvement and innovation to maintain their competitive edge.

Accordingly, brand roadmaps depict the brand steps that will create the customers to drive the business forward. Decision makers need brand roadmaps to ensure that brand innovation strategies complement the company’s product development efforts, so that the customer relationships being forged by brands will help drive adoption of new products and services.

Defining the brand roadmap

We define a brand roadmap as follows:

The brand roadmap is a visual document that depicts the development stages of a brand and its customer relationships along an explicit timeline. The roadmap shows the phases, timing, and outcomes of planned brand innovations. Its primary focus is to illustrate how the brand (and the brand platform) will advance customers in concert with new product development. The brand roadmap lays out the sequence of planned brand interactions, relationships and experiences that will advance customers beyond the reach of competitors.

The roadmap is, first and foremost, a customer roadmap. It shows how the brand will grow customers in a manner that benefits them, and is also strategically beneficial to the business. The best brand roadmaps are a march to a new market space.

Who builds the brand roadmap?

The brand roadmap is the responsibility of the brand team. They create it, get necessary buy-ins and approvals, and keep it up to date. They also manage it so that brand development commitments are met.

What’s in the brand roadmap?

A brand roadmap will be customized to the strategic needs of a company. In general, though, one would expect a brand roadmap to include (depict or reference) the following:

1. Axes showing: 1) timeline/timetable; and 2) customer growth/brand depth
2. Discrete brand programs or applications to be developed
3. The brand platform and platform strategy
4. The brand model
5. The customer model
6. The customer growth model and development path (via delivered brand value and brand experience)
7. The brand innovation strategy
8. Markets to be created
9. Brand initiatives developed with customers (i.e., bottom-up)

Updated August 14, 2007

In a post called “The role of anti-marketing design” Robert Scoble argues that deliberately being ugly has its virtues. His post is worth a read to understand how non-designers often approach design. He also offers up a unique perspective on brands.

For Scoble, “anti-marketing design” is bare-bones design that’s a heartbeat from engineering, and isn’t “pretty”. You just throw it together. His prototypical example is a Canadian dating site that looks like a stripped down body shop, and according to Scoble, has “passionate users.” Heh.

Scoble’s own site is a better case study.

Scoble doesn’t want design to interfere with function. And I totally agree. I think “pretty” sucks, too. But Scoble writes for an audience whose idea of Incunabula is last week’s O’Reilly Radar. They pay a price for literal paradigms.

Regarding brands, he goes on to say:

Why does anti-marketing design work? Well, for one, big companies will never do a site that doesn’t look pretty. Why? Cause of the prevailing belief that great brands need to be beautiful. Look at what corporate branding experts study. Apple. Target. BMW. Everything those guys do is beautiful. Aesthetic. Crafted by committees of ad marketing department experts.

Target?? Please!! Target is Wal-Mart with lipstick. And both BMW and Apple have had their share of design dogs. And “crafted by committee” never creates anything of beauty, or of excellence. “Committees” and “aesthetics” are never on the same page, ever.

Here Scoble seems to be confusing appearance with design, and “looks” with brand value. Great brands do need to be beautiful, but brand beauty is not some refined aesthetic purity breathed down from the white-space deities. It’s a matrix of many different values, some of which include aesthetic appeal, but many more that touch on customer-based qualities such as functionality, usability, simplicity, character, and even virtues like “charm.”

All that said, I read Scoble every day. He’s a large part of the Microsoft brand–often the best part.

The WSJ had an interesting article on January 11 (sub required) about Coca-Cola’s reaction to the growing popularity of Mexican-made Coca-Cola in the US. The article touches upon fundamental questions about the nature of a brand, and who ultimately drives it: the company that launched it, or the customers that embrace the brand, sustain it in the brand ecosystem, and pay its way.

For Coca-Cola, the problem with Mexican Coke is that it’s sweetened with cane sugar, like the Coke of old, and threatens to capture customers from the modern day Coke sold in the US. Coke enthusiasts say the taste of Mexican Coke is superior to that of modern US Coke, which has been sweetened with high fructose corn syrup since the 1980’s. To them, Coke hecho en Mexico is Coke the way it used to be.

Except that it’s illegal. Coca-Cola prohibits Mexican Coke from being imported into the US. The Journal details how the company and its bottlers try to intercept Mexican Coke before it reaches US retail outlets.

Mexican Coke is nonetheless duly bootlegged into US markets, and is in such demand that it fetches a price premium, about $1.25 per 12 oz. bottle. Much of it is sold to Mexican immigrants, who yearn for the familiar taste, but it also has devotees among US citizens who are unabashed Coke fans. They praise it as the “real” Coca-Cola, especially since it comes in classic Coke bottles.

Taste test
High fructose corn syrup is an inexpensive, engineered sweetener. Coke claims the decision to switch from cane sugar in the 80’s was made for economics, and that consumers can’t tell the difference between the two.

Alas, consumers say they can. According to the Journal article, Coke loyalists say the classic, cane-flavored Coke has a cleaner taste than the high fructose version, with sharper flavor notes and a more refreshing mouth feel. Some even say it maintains the fizz better because of the traditional thick Coke bottles.

Driving the brand
Now back to the headline question: Who drives the Coke brand? The automatic answer is, of course, Coca-Cola. They own the brand, they grew it into a worldwide icon, and they spend millions a year on continuing brand development. The brand is Coke’s intellectual property. They drive it as they see fit.

Or maybe not.

Let’s not forget Walter Landor’s dictum: “Products are made in the factory, but brands are created in the mind.” If so, this may be a case where a brand created and nurtured by customers threatens to leave the factory behind. The yearning for Mexican-made Coke is a customer initiative.

This could be a case where the iconic substance of the brand has migrated from the company to its customers. Customers see themselves as the effective brand stewards, maintaining the original, authentic flavor against legal odds. (Hmmm . . .  sounds like Harley.)
In normal times, avid enthusiasm for a brand would be a brand manager’s dream. For Coke, though, enthusiasm for Mexican-made Coke sold in the US is defined as a problem, not as an opportunity. Instead of reconfiguring its brand to create and grow new customers, even into price-premium markets, Coca-Cola has decided to rein them in.

There’s always risk when a brand problem is not allowed a brand solution.

Perhaps on some sultry Caribbean isle an entrepreneur is planning to cash in on this demand with a back-to–basics cane sugar cola, authentic as all get out, to be sold in thick, scuffed bottles that hint of wild adventures in parts unknown.

Anyone for Cola Libre?

Today’s article in the SF Chronicle says it up front:

Consumer Reports, the magazine some potential car buyers scrutinize for hours before making a decision, dealt a blow to the U.S. auto industry Wednesday when it said that, for the first time, all 10 vehicles on its “Top Picks” list are made by Japanese companies.

No matter that some of the vehicles are designed and built in the United States. The latest Consumer Reports list is another reminder that the U.S. auto industry, particularly the profit-challenged General Motors and Ford Motor Co., is in dire straits.

This is what happens when you transform your brand from a badge of quality into a pseudo brand and a stylized sales stimulant. The Detroit brand model has crashed and burned, like an Edsel dropped from 10,000 feet.

If you work in brands, you have to be excited about the brand potential of widgets and gadgets. These are the live, highly visual icons that reside on your desktop and do important things for you. They are quick to access, and persistent. They are little friends, always there when you need them.

Widgets and gadgets are icon-like, mini-applications designed to provide information, lookup, and functionality via a quick glance or click on your computer screen. They can be designed to receive live data from the Web, increasing their power. Current examples deliver basic information, such as weather, time, news headlines, RSS feeds, computer system performance, and specialized information such as local team schedules. Using their rich visual interface, they also provide a slew of functions: calculator, radio station tuners, live charts, news readers, etc.

By design, widgets and gadgets are fairly easy to develop. Examples can be found here, here, and here.

Widgets and gadgets are brand interfaces.
Widgets and gadgets are new. Currently, they give only a faint hint of their potential power as brand interfaces. Most are geeky and one dimensional. Given a decent shot of brand imagination, however, they can open up a multitude of new connections, many of which can extend far beyond the product. The context of widgets and gadgets is a wide open field. On a basic level, they are interfaces to the brand. On a deeper level, they are interfaces through the brand. It’s at this deeper level that widgets and gadgets can build real brand connections.

Widgets and gadgets are tools for brand innovation.
Think of them as mini-platforms, bundles of relevance that can advance your customers through your brand. In a year or two, I’d fully expect that all new cars will come with a package of widgets. Download them to get basics such as service information and reminders, owner’s information, driving tips, mileage calculators, etc. Beyond that, it’s left to the brand to initiate any type of relevant, persistent connection that the customer can use. The widget is a portal of relevance with a customer power far greater than its diminutive size.