Brands Create Customers

Brands are finally beginning to realize that their future lies in semantic and semiotic networks, where they stand to reap large benefits from the dynamics of network effects and peer-to-peer relationships.

Thus, my eyes lit up when Tom Evslin at Fractals of Change noted the growing importance of “dynamic peer clusters” as a form of social recommendation engine for purchases of music, books and related goods.

When I saw the phrase “dynamic peer clusters” my mind said: that’s exactly what brand programs should create. As our home page states (quoting this for the nth time):

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.

Tom defines dynamic peer clusters as “groups of people who like the same books or movies or music or whatever as you do.” These can become “a perfect source for recommendations of new books or movies or music or whatever.”

Last.fm and Netflix are two examples of how dynamic peer clusters can help subscribers discover more items of interest and enjoyment. They provide a network effect of shared taste that gains insight and authenticity the larger it grows.

Why brands need peer clusters
In their present state most brands generate poorly formed dynamic peer clusters. As a result, they leave billions of dollars in value on the table. That value is locked away in the archaic and closed “build it, brand it, sell it” paradigm, and in traditional top-down brand campaigns. Not only could this brand value be out there “working” among customers, it could be engaging customers to create more value on their own, which could be added back to the brand.

Creating customers and creating clusters
The purpose of a brand is to create the customers that will carry the company forward. For the brand, this means engaging customers and delivering new forms of value that customers can use. Specifically, these are forms of value that free customers from a tyranny of routine, cost, diminished opportunity, or impeded growth.

The customers that your brand creates (however imperfectly) become a default peer cluster. They can be a weak cluster–no more than an uninspired, quasi-connected aggregation of “buyers”– or they can become a highly-charged nucleus that autonomically connects with other peers. A recommendation network may be one form, but an customer-driven engine to discover new forms of brand context is much more valuable. Context makes markets. If your customers actively connect one another to richer states of being, and richer states of meaning, your brand can begin to realize its potential.

Grow the customer, grow the brand, grow the business
Thus, when a company like BMW (for example) shapes its brand, it would have a fairly precise idea of the customer it intends to create, and the tenor of the dynamic peer clusters needed to grow the customer, and the brand. To design a brand/customer that does not leverage peer clusters would be a disservice to the brand, and the business.

Photo op: a peer-to-peer brand cluster.

Peer clusters and brand design
Given the importance of dynamic peer clusters to brand growth, the brand design process should be modified accordingly. It should now address these questions:

1. What kind of networked customer do we want to design?
2. How do we create this customer across the brand platform?
3. What type of dynamic peer cluster should we create with our brand?
4. How will this cluster enable our customers to grow our brand by growing themselves?

How a brand answers these questions will play a large role in how deeply it engages its customer base.

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Photo source: Clearly Ambiguous, Flickr

This entry was posted on Thursday, April 27th, 2006 at 4:45 pm and is filed under Creating Customers, Brand Networks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.