Brands Create Customers

Moleskine.

You can learn a lot about brand building by watching the first 20 minutes of this Masterclass by Broadway legend Barbara Cook.

In this segment, Ms. Cook helps a talented opera singer free herself from operatic conventions and connect with listeners on a more intimate, emotional level.

Barbara Cook knows what she is doing. Her analysis, process and final results are eye-opening.

Too many brands aim to be high-flung arias and solos, full of formula effects and staged theatrics. They’d be much more effective as a personal, heartfelt chanson.

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(thanks to Metafilter)

The Los Angeles Times explores the notion that Microsoft has used global software piracy to help build its brand advantage. According to business analysts, piracy has helped make Microsoft the default global software brand by seeding copies of Microsoft software around the world.

Although the world’s largest software maker spends millions of dollars annually to combat illegal copying and distribution of its products, critics allege — and Microsoft acknowledges — that piracy sometimes helps the company establish itself in emerging markets and fend off threats from free open-source programs.

The gist of the beneficial piracy argument is that the retail price Microsoft charges for signature products such as Windows and Office — as much as $669, depending on the version — can rival the average annual household income in some developing countries. So the vast majority of those users opt for pirated versions.

The proliferation of pirated copies nevertheless establishes Microsoft products — particularly Windows and Office — as the software standard. As economies mature and flourish and people and companies begin buying legitimate versions, they usually buy Microsoft because most others already use it. It’s called the network effect.

And this comment from Bill Gates in 1998:

Although about 3 million computers get sold every year in China, people don’t pay for the software. Someday they will, though. [. . .] And as long as they’re going to steal it, we want them to steal ours. They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.

That “next decade” is now. The rest of the article describes how Microsoft’s loose/tight strategy is methodically converting institutional software piracy into sales of fully licensed software.

Fortune magazine has an update on Gap and its continuing struggles to regain fashion relevance. On the business side, Gap has reduced its debt and improved cash flow, but on the fashion side much remains to be done. Gap is not a fashion leader anymore. Same store sales have declined in 18 of the last 21 months. Some top talent inside the company has left. And analysts question if Gap has simply lost its customer vision.

Levi-Strauss demonstrated that rising to fashion icon status is no guarantee of permanent success. Icons can easily become relics, effectively dead, rigid and remote.

Competitors make their customers look “special”

In San Francisco (Gap’s home turf), Gap now has very visible competition from nearby H&M and Zara. Visit those stores and you’ll see what Gap could be, but currently isn’t. Both competitors flash a fashion presence that reaches out and embraces the customer right at the door. It’s as if they’re saying to the customer: “We’re here to make you look special. Everything in here is all about you.” So in you go, gazing wide-eyed at all the new self expressions you had never thought possible.

While Gap makes you look like . . . Gap

At Gap, the brand still seems to say: “We’re here to make you look like Gap. Everything in here is us.

It’s a very big difference.

Singapore outclasses Gap along Orchard Road

Having just returned from Singapore, I saw first hand just how far Gap has to travel to get back into the global fashion game. Frankly, Gap has a long way to go. The spiffy malls and boutiques on Singapore’s Orchard Road make your average Gap store look like Old Navy. At the huge Takashimaya department store, the displays, presentation, styling and variety in the different “brand boutiques” are simply stunning. Style, cut, color and detail jump out at you from every direction. The same can be said for the dazzling Esprit store in nearby Wisma Atria. Gone is the famed super-saturated sub-teen panache that characterized the classic American Esprit. Now there are carefully tailored lines of Euro-sophisticated pieces designed to be combined and recombined, capable of energizing one’s whole wardrobe. And Esprit is growing attractive sub-brands, such as the ESP “sport” line, to plumb adjacent markets.

These brands have a life to them, a vibrant immediacy, even when hanging on the racks. They aren’t just “clothes,” and they’re certainly not “inventory.” They’re an incarnation of you, inviting you to touch. It’s as if you’re surrounded by palettes of potential as you walk through the store.

Limits of the Gap look

In the end it all comes down to what a business does with its design sense. The Gap approach seems intent on creating a merchandisable look, which it wants its customers to adopt. Its competitors seem headed on a different course, creating customers who are simply more fashionable.

After a robust run of 100 years, traditional top-down brand models have passed the point of maturity. They’ve peaked, and now they’re on the down slope. Across all markets, they’re being challenged by upstart brands that march to a different drummer: the customer.

Yes, new brand models are on the rise. They work from the bottom up.

This chart highlights the differences between old brand models and the new brand models taking their place:

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Amanda Gold has written an excellent article on wine corkage and its discontents in the San Francisco Chronicle. This is a major issue in the restaurant business. For a dining establishment, selling wine from the wine list is critical to making a profit, but many California diners prefer to bring their own bottle(s). The resulting corkage fee strategies find it hard to please everyone.

Although corkage is usually considered to be a restaurant management issue, it is actually a brand problem for the wine industry. When buyers of your products cannot easily agree on how to value them, it’s up to you to provide the answers.

The “brand experience” in question is not one of individual wine labels. It is the greater experience of enjoying wine while dining out. If corkage conflicts tarnish that, the wine industry will pay the greatest price.

Doc Searls recently set forth some very interesting theses for a new market model he calls “The Intention Economy.” (Think of it as a more clueful Attention Economy.) Doc focuses on the customer’s “intent to buy,” rather than the seller’s need to persuade the customer to buy. In Doc’s analysis, this “demand side” intent to buy is what best defines the nature of a market.

Doc says:

The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don’t need advertising to make them. The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets.

And he later adds:

The Intention Economy is built around more than transactions. Conversations matter. So do relationships. So do reputation, authority and respect. Those virtues, however, are earned by sellers (as well as buyers) and not just “branded” by sellers on the minds of buyers like the symbols of ranchers burned on the hides of cattle.

This raises an excellent question for those of us in brands: What would be the proper role of brands in an Intention Economy? No one in their right mind uses the term “branding” anymore, or advocates “branding” programs, but what are the constructive options?

Happily, there’s no need to develop a new theory of brands that can support the Intention Economy. We already have one, as outlined here.

Creating Customers
What we need to do is find ways to align brand practice with the intentions of customers. Brands that deliver customer freedoms, and that enable customers to achieve more, and be more, will have a head start. In fact, if the purpose of your brand is to “create customers” (sounds like a blog title to me!) you are already geared to go. And your brand practice doesn’t have to wait for customers to overtly signal their intentions before you act. You can use your creative juices to lead customers into areas they might otherwise never discover. You can help them develop latent potential, or latent modes of value.

Consider yourself the customer’s “intention antenna.”

For reference, here’s our core definition of brand:

Brands are avenues of value innovation in a creative engagement between companies and their customers.

To that we can add this corollary for the Intention Economy:

Your brand is how you intend to advance the customer.

I’ve stated previously that every brand builder’s mind should burn with the question, “What is holding our customers back?” The above definition of brand as customer-driven intent frames the answer to the brand builder’s question. (It assumes, of course, that you intend your brand to advance your customers. A few brands do the opposite, to their own detriment.)

Brand Intent

Your brand intent will determine the scope and structure of your brands and the content of your brand programs. It will shape your internal and external operations. And it will determine, to a large extent, what you can achieve in concert with your customers. Going it alone, in traditional marketing fashion, is no longer an option.

Customers will judge you by your brand intent.

They will sense it the minute you step into the room. No matter how many symbols, slogans and personas you have at your disposal, your brand intent can’t be masked. Bells and whistles? Pffft. Lofty vows? Pffft. Blockbuster image campaigns? Another pffft.

In the Intention Economy, brand intent is an equalizer. You get credit for what your brand is trying to do for the customer, even if your product (for the moment) falls a bit short. Customers can sense the brand benefit beyond the product proper. They know intuitively that the brand intent mirrors their dreams. Open source software is a prime example. The humblest and homeliest open source program that’s intended to grant users more control over their lives can rack up levels of loyalty that a traditional software house could never achieve while spending millions in conventional marketing campaigns.

The spectrum of brand intent covers a wide range, from positive to negative. Here is a sampling:

Types of Positive Brand Intent

1. Free the customer to do more, and to be more
2. Grow the customer to a more proactive state
3. Sharpen customer perceptions
4. Intensify customer sensations
5. Spark customer imagination

Types of Negative Brand Intent

1. Control customer behavior
2. Restrict (dumb down) customer thinking
3. Create passive “consumers”
4. Replace reality with make-believe
5. Create customer dependency

We’ve noted elsewhere that the essence of brand is collaboration with customers. If you design your brands along those lines, the Intention Economy, or any similar model, should open a world of opportunity.

For more perspectives on Doc’s Intention Economy check out Stowe Boyd, Phil Windley and John Hagel.

REVISED 4.6.06 TO FIX FORMATTING IN IE

They called it ChevyApprentice. It’s become more like the Sorcerer’s Apprentice.

It’s hard to discern the brand-building strategy behind GM’s current ChevyApprentice social media/advertising gambit. This initiative enables people to create their very own Chevy Tahoe ads online. And boy, do they. But instead of singing the praises of GM and Chevy, many participants have ruthlessly ravaged, mocked and derided GM and Chevy Tahoe brands in dozens of user-generated spots, for the entire world to see. The spots portray the Tahoe as gas-guzzling, anti-social, dangerous and eco-irresponsible. One begins: Don’t Buy Me.

For half a week, the Net was ablaze with such spots trying to outdo one another in jabs at GM, the Tahoe, and SUV’s in general.

Additional samples here.

Of course, GM isn’t showcasing these negative ads on its own site. They’re now spread across the World Wide Web, like a GM strain of brand flu.

GM knows there must be thousands of potential customers in the “social media space” that it can’t reach via traditional media channels. The only problem is that it doesn’t have any noteworthy cars that appeal to these people. You can engage the web generation in a creative partnership to deepen your brand (and help sell more cars) only if you have the right kind of cars to deliver.

A GM official stated: “We anticipated that there would be critical submissions. You do turn over your brand to the public, and we knew that we were going to get some bad with the good. But it’s part of playing in this space.”

Why turn over your brand to the public? Your brand is supposed to lead, not be a plaything, or a doormat. The goal of a brand is to engage customers across many dimensions and to advance them toward new forms of value—in GM’s case, outstanding motor vehicles. There are many effective ways to do this within the realm of social media. Tossing the brand into a digital playpen is not one of them. It only means the brand will come back blackened, if not busted.

If tomorrow GM announces a 30mpg SUV that runs on biodiesel, is 100% recyclable, fits into compact parking spaces and erases its tracks through the wilds, then the negative brouhaha over the Tahoe ads will have been worth it. GM will have built the buzz and primed the pump for a blockbuster “you spoke, we listened” triumph.

Let’s see what happens.