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.

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

This is because brands are much more than symbols, slogans and promises. Brands are programs to create customers. 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 between brands and software:

• Both have architectures.

• They have roadmaps.

• They have platforms

• They have programs.

• They have interfaces.

• Brands and software are both executables.

• They have developers, and end-users.

• And most importantly, they have innovation rich 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, brand builders code customer solutions into the product. In this interactive process, they also code the whole customer back 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 rise above commodities and other brands. In effect, they create a branded customer platform that advances the customer beyond what products alone can provide.

Brands as executables

Of course, brands are not static images or frozen icons. Brands are action-oriented. They work for customers, and they get things done. In other words, brands are executables. Every brand is a “.exe.” When you execute on brand, you deliver value that customers can use. Strategically, your brand should be advancing customers beyond the reach of competitors.

How brand code works

Simply stated, brands are code for creating value. Their architectures, platforms, programs and interfaces transform latent product value into value realized by the customer. (This is no easy task.) At their best, brands do this in such satisfyingly brilliant ways 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 roadmap. Yep, the operative word is “progress.” The goal of a brand is to advance customers to progressively proactive levels, so in future months and years they will be demanding all those cool innovations you have up your sleeve. Thus, your brand strategy is part and parcel of your innovation strategy.

Cultivate brand hacks

Agile brands, like agile code, call for iterative development. This is one reason why your brand should cultivate brand hacks as part of its deployment strategy.

Photo: amysphere — Flickr

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/