Brands Create Customers

BusinessWeek reports that Microsoft has sent design guidelines to PC makers to help them create new PC designs that are worthy of Microsoft Vista, to be launched in 2007. The “how-to” kit specifies preferred design elements (”accelerated curves” and “purposeful contrast”) as well as colors: “Obsidian” black and “Ice” white. According to BW, the guidelines exhort PC makers to create computers that are “objects of pure desire.”

Brand managers at PC makers are already battling stiff currents, but Redmond’s entry into the PC design sphere will send a tidal wave in their direction. Stirring the tea leaves a bit, one can speculate what PC brand managers might be thinking when they get these design kits:

1. #@%$#&*$#%
2. These guidelines imply that Microsoft owns the customer, and that PC makers are simply . . . delivery agents!
3. #@%$#&*$%#
4. We make the box, and they provide the software, but somehow we’re the ingredient brand!!
5. If we follow these guidelines, we will create look-alike PC products
6. Look-alike products will erode what little differentiation we have left
7. Our bargaining leverage with Microsoft will be reduced
8. Our pricing leverage with customers will be reduced
9. We will become supplier brands, pure and simple
10. PC prices will decline—but at our expense, not Microsoft’s
11. Windows Vista will have a slow adoption rate, but Microsoft will blame us for the problem, citing “poor PC design” that fails to enhance Vista
12. Microsoft has a history of competing with its partners
13. Microsoft will blame us for “lack of innovation” in PC design
14. Microsoft will announce a global competition to build a “Microsoft PC” worthy of Vista
15. That PC will be built to Redmond tech specs and design specs, with brutal cost parameters
16. Our suppliers in Asia will fall all over themselves bidding on the contract, worth billions
17. Our supply chains will implode
18. The new Microsoft PC will feature a minimalist, elegant style
19. It might even be “all-in-one” with integrated CPU and monitor—a real design innovation
20. In look feel it will seem just like . . . the Apple Mac!!
21. #@%$#&*$#%

Oy.

To anyone involved in brand-building, it’s pretty clear—if not shockingly obvious—that we’re in the midst of a tectonic shift in the nature of brands. One sign of this upheaval is that slowly but surely, the glory days of the brand icon model are drawing to a close. Everywhere you look, famed icon brands are increasingly isolated, or in danger of toppling from their pedestals. Yet, while this is certainly bad news for those brands affected, it’s by no means the end of brands, or of great brands.

Icon brands point backward, not forward

What’s evident is that the icon brand model wasn’t made for the new market landscapes now emerging. For decades, the “brand-as-icon” was the ideal, the brand raised aloft to be revered, commanding rapt attention and radiating context from atop its pedestal. In today’s flattish, interactive world, however, icon brands point backward, not forward. A brand that sets itself high above customers separates itself from customer input, energy and direction. It can easily set itself up for a fall.

Note, too, that pedestals lock you in place. Thus, it’s no surprise that icon brands are now often being outpaced by customers. Customers have dozens of brand choices, and can create their own brand value via collaboration, co-creation and social networks. At the same time, once-dominant icons are being out-innovated by upstart players who thrive on customer connections. These new firms can deliver new forms of brand value in weeks, not decades.

Some icons will shatter, but most will survive

In the present seismic turmoil some notable brand icons will hit ground and shatter. But many more will realize that there’s little advantage to being perched on a pedestal in the first place. (Indeed: being on the pedestal is part of the problem.) Brands can redirect themselves in mid-air and land safely on brand platforms, a far better foundation.

From brand icon model to brand iteration model

What we’re witnessing is a monumental change in brand models and brand paradigms. Brands are migrating from the lofty icon model to a customer-grounded brand iteration model. The latter is characterized by the ability to rapidly prototype, test, and iterate new brand initiatives to deliver new forms of customer value. The brand appears as a value stream, rather than an object. Brand program iterations enable brand pacing. They also can produce multiplier effects because they’re structured as architectures of participation. They can tap into customer intelligence and energy to create new brand initiatives from below.

Brands focused on iterating customer value won’t need to preen themselves as icons. They’ll be too busy creating customers.

A dynamic platform strategy plus robust brand iteration is quite in evidence here.

More vital and less iconic

The current challenge for icon brands is to get off their pedestals and get down to business. The brand icons that manage to survive will be those that reinvent themselves to be more vital and less iconic. In fashion, Coach is pointing a way. The ultra-plaid-iconic Burberry, hit by the anti-icon “chav” embarrassment, faces a more daunting task.

On another front, Apple is vigorously reinventing itself (and its customers) out of the traditional computer business, music business, photo business, movie business and broadcast business. Ever notice how Apple seems to make things happen while its iconic competitors sit dumbly on their hands?

Maybe Apple is on to something.

Create iconic customers instead of iconic brands

As a brand builder, if you still wish to create the iconic brand (pedestal and all), be aware that iconic brand mechanisms (especially those of the top-down, command and control variety) often impede brand innovation at the customer level. The iconic approach comes with a rigid icon attitude that resists change, plus a full-body cast that minimizes customer touch.

Personally, I think we’d all be better off if we tried to create iconic customers instead of iconic brands. That approach puts brands on the right footing.

From timeless icons to timely iteration

A timely quote from Google, brand iterator on the rise:

“We’re very, very happy with having such a strong quarter in a seasonally weak period,” Chief Executive Eric Schmidt said. “When I look at why this is happening, I see the evolution of our strategy in front of us over and over again. We start with one thing. We learn. We iterate. And that’s the hallmark of how Google operates.”

Maybe these guys are on to something too.

Top photo: Andreas Tille, Wikimedia Commons

It pays to keep an eye on legacy brands, because they can create the kind of brand vacuum that spells market opportunity for disruptor brands. Simply put, legacy brands stand tall on feet of clay. They’re fragile because they don’t cultivate the resilient customer connections that make for enduring brand strength. They may have a boat-load of high-drama symbols and a spiffy showcase sheen, but on the real terrain where customers run they don’t get much traction—and a brand vacuum is born.

Legacy brands defined

Here’s how we define legacy brands in our New Brand Glossary:

Legacy Brands
Backward-facing brands that can suck the future from a company. Legacy brands are predicated on top-down, command and control models which position the customer as a passive commodity, purely to be sold to. Legacy brands are vulnerable to competitors who create active partnerships with customers to innovate on brand, elevating customers from “commodities” to value co-creators.

Lack of brand value creates the brand vacuum

Because legacy brands focus primarily on themselves, and because they speak down to customers, they find it increasingly difficult to create new brand value. The more exuberant and ethereal their self-styled spectacle, the more they create a brand vacuum that others are sure to fill. The vacuum is a brand value void.

Icon brands take note

Companies with legacy brands are vulnerable in their markets, and on the M&A front. If your task is to husband a brand that rarely listens to customers because “icons don’t need ears,” be forewarned.

Photo: salsaboy, flickr

Brand builders sometimes want to believe that brands exist “above the fray,” insulated in a comfy media zone high above the blood-and-guts battles of the marketplace.

Sorry. Brands don’t get a safe seat. The fate of brands lies in the same raw struggle for survival. Brands disrupt, or they’re disrupted. Big teeth help, but so do big brains and nimble feet.

Disruptor brands move customers forward

Brands disrupt other brands—and entire markets—when they’re agents of customer evolution. Disruptor brands move
customers forward, perhaps subtly at first, then by leaps and bounds. They may be daring or prudent, refined or vibrant, but through them customers reach new levels of being and doing. Once customers evolve to a new plane of action, they never turn back.

Disruptor brands are adaptation engines. They help customers adapt to more rewarding forms of living, leaving established brands behind. Highly evolved customers have diverse and demanding needs that can’t be served by moribund plodders. (Disruptor brands gladly help complacent brands adapt to bedrock.)

Value delivery systems, not fabricated fluff

Disruptor brands are value delivery systems, not fabricated fluff. They raise the customer bar, and the customer. They understand that the survival game doesn’t go to the brand that looms the largest. It goes to the brand that creates the fittest customers—who will carry the brand forward.

Gone are the days when the brand ideal was to crawl from the shallows, reach a sunny spot, and bask there forever. That leads to stagnant brands in backwater markets, an ecosystem on the brink.

Disruptor brands move in with muffled steps

Disruptor brands don’t announce themselves with fanfares. They move in with muffled steps. (If you’re an ad agency in the year 2000, the disruptor brand is an ugly online search thing called Google, adored by lowly interns.) Even as they set up shop, disruptor brands rarely make a fuss. They’re too busy on new platforms for new species.

Disruptor brands know that a company’s customers are its greatest competitive weapon. Grow customer, grow the brand, grow the business.

It’s as simple as evolution itself.

Photo: WikiMedia, David Monniaux

Alas.

Hard to say who suffers most here:

1. The brands reduced to signage.
2. The building reduced to signage.

An old rule of brands says: If you can’t grace a customer, grace a facade.

Facades are the easy way out, but they’re rarely built to last.

Hat tip: Chroma

Metropolis magazine has a richly illustrated feature on Google’s new workspace. It’s well worth reading. The new Google offices are playful, stimulating and collegial.

Google wanted offices that would be conducive to innovation. The architect’s design goal was to provide the social, collaborative environments needed by problem-solving teams, yet still retain the private spaces software engineers need for heavy-duty thinking and programming.

Just looking at the photos in the article gives me an energy kick, so I can see how these zippy spaces could deliver an innovation payback. That’s a strong start toward building a Google brand (our core def: Brands are avenues of value innovation in a creative engagement between companies and their customers.)

Google’s brand challenge

The brand challenge for Google is to do more than just “innovate.” It’s to pack their innovations with customer value, and to open up their sphere of creative engagement. A “black box culture” won’t cut it. At this point (as the article notes) the Googleplex, and Google culture, is tending toward the hermetically sealed.

Anaerobic innovation is OK for a mad dash to market share, but for the long haul (vs. those dudes up north) you need the fresh air, wide open spaces and rough terrain of a true customer landscape. Otherwise, eventually, you will be run down.

Hat tip to Scott Berkun.

Photo: Metropolis

The BumpTop demo has been around for a while, although I only stumbled across it last week. On seeing it, my first thought was that something like this might be very useful in designing brand platforms and programs. You get a big landscape, and the power to move and group lots of bits. Imagine that the “documents” in the demo were brand elements, or specific brand programs. You could combine and recombine these and move them about as you progressively build out the customer experience that’s the focus of your brand.

A 30″ widescreen display (or maybe two or three) would be absolutely necessary, of course.

Anyone know any similar technologies? One reason brands have lagged behind marketing is that marketers have spreadsheets, and brand builders lack an equivalent killer app tool.

How can market leaders casually throw away hard-won brand value? We see it happen again and again. Companies really should know better, because brand value is strategic value.

From brand advantage to disadvantage

Case in point: Microsoft is hemorrhaging brand value through its controversial Windows Genuine Advantage (WGA) program. This is a product authentication program that validates customer installations of Windows software. It’s intended to ensure that the customer has authentic Microsoft-branded software consistent with Microsoft’s licensing requirements. Unfortunately, Microsoft developed the WGA program without thinking through the brand value consequences. The program has been widely criticized as being secretive and highly intrusive, and a privacy threat to Microsoft customers. The key issue is the software Microsoft installs to check customer computers.

A progressive brand breakdown

Brian Livingston, a leading Windows expert, considers Microsoft’s WGA validation software to fall within the standard definition of “spyware.” He cites a number of customer and privacy concerns raised by the software. From a brand perspective, they sure look like trip-points in a progressive brand breakdown. According to Livingston:

1. Microsoft didn’t clearly tell users what the software was, and what it would do, before instructing them to install it as part of a Microsoft “security update”
2. The validation software was actually “beta” software placed on customer computers
3. The validation software transmits user data to a central computer without getting user permission
4. The validation software downloads other software and morphs itself
5. The software is not 100% accurate. It can penalize legitimate users.
6. The software cannot be easily uninstalled

After several months of customer complaints, and sharply critical reviews in the tech community, Microsoft modified portions of the WGA program to be more customer friendly, although other elements of the program remain unchanged.

Brand missteps have strategic consequences

While no one questions Microsoft’s right to validate its software, its WGA effort adds up to a serious brand misstep, with strategic consequences. The way the WGA program was implemented sends the message that Microsoft is more interested in policing its customers than serving them. These types of actions erode customer trust in the Microsoft brand. That trust is strategic gold. It’s something Microsoft cannot afford to lose. Microsoft cannot take its customers for granted as it goes head to head with competitors in its next phase of market growth.

Business strategy is brand strategy

It would be ironic if Microsoft’s zeal to protect its Windows franchise so antagonized customers that it undercut potential support for Windows Live, the massive online initiative that represents the future of the company. Windows Live will face off against Google, and probably Yahoo. The three companies will have similar technology offerings. Differences in brand value will be critical. Brand trust will be a decisive factor. What’s clear is that the ultimate winner will be embraced—and extended—by its customers. Brand strategy will be business strategy, and vice versa.

The danger of “taking the brand offline”

A brand is a live network of programs and practices that streams value to customers. When a company undercuts its brand with programs that diminish or alienate customers, it effectively takes its brand offline. It dims the lights, dropping its first line of customer defense (visible value delivered). And it places one foot in a hole that can easily grow to crater proportions.

Of course, if you’re one of Microsoft’s many competitors, these are times to fire up your strategy options. Microsoft’s WGA troubles signal that its brand is a competitive weak spot. It conveys the image that the Microsoft brand is a Maginot line of customer lock-in. It’s a long line, to be sure, but it’s fixed and it’s thin, with questionable customer back-up. And, it can be flanked. Google’s AJAX-powered Panzers are already swarming through the lowlands, fueled by agile web apps.

Preventing brand incursions

As I never tire of ranting, railing, calmly pointing out, a company’s customers are its greatest competitive weapon. It’s your brand that keeps this army in shape. You want your brand logistics short and sweet, and your brand lights blazing. At a minimum:

1. Be open
2. Be honest
3. Team with customers to create value (engage, collaborate, iterate)

Microsoft’s WGA program is certainly a case where a brand evangelist might work wonders—but better before the fact than after the fact.

The first rule of business: lead with your brand

When you lead with your brand, you team with customers to extend your enterprise. Customer trust can be a vital resource when you’re making a difficult transition from one business mode to another, as all companies eventually do, and as Microsoft plans to do with Windows Live. (Witness Apple’s relatively smooth transition from Power PC chips to the Intel platform.) However, if you set your brand aside and treat your customers as commodities (purely to be sold to), you run the risk of eroding customer trust in your new initiatives.

Bottom line on the brand fallout from WGA: Microsoft, which is now making security one of its prime selling points, is thrown on the defensive, combating charges of abusing its customers. This is a brand problem, not a PR problem. The company is now in danger of ceding strategic brand advantage to competitors—including one whose motto is, “Don’t be evil.”

When you lead with your brand, these things don’t happen.

Photo: A is for Angie, Flickr