Archive for September, 2006

Managing the brand agenda for customer growth

Friday, September 29th, 2006

One of the first questions brand builders address when they sit down to structure a brand is: What’s the brand agenda? This is a critical issue. What, exactly, will the brand do to advance the customer?

Contain the customer or liberate the customer?

When we’re at this agenda planning point, we can call up the two brand agenda polarities for a horizon-to-horizon perspective. On a practical basis, our agenda will fall somewhere between these two theoretical end-points:

  1. Contain the customer
  2. Liberate the customer

There’s obviously a lot of brand agenda working room between these two. You may also find that it’s the rate of customer advance that has the greatest impact on your brand strategy. Innovative companies can sustain high rates of customer advance, progressively raising their customers to higher levels of accomplishment through their brands, in sync with new products coming to market.

On the other hand, companies that innovate with difficulty will tend to slow things down and build a brand cocoon around the customer, in hopes he/she won’t fly away given the slow pace of improvement. While such containment strategies are widespread, they clearly place their brands at risk from product innovation and brand innovation from competitors.

Defining your brand agenda

Every brand has a brand agenda. It’s explicit, or implicit. The brand agenda states how, and how far, the brand intends to advance the customer. It shapes everything your brand does, and how it does it.

You can analyze your own brand to determine its existing brand agenda. Once you do so, you can then do the same for competitor brands. Often, they’re quite similar. That leaves room for new brand initiatives that can make a difference.

How you define your brand agenda will have profound consequences for your brand, and your business. For starters, it will dictate how you interact with customers, and how you structure their brand experience. It will also shape how well you incorporate customer intelligence and energy into your brand.

The concept of brand agenda gives innovative companies a powerful tool in growing their customers. It also gives them potential brand leverage over companies with tired or complacent brands whose only hope is to contain customers. It does this by defining the brand in terms of value delivered to the customer, including brand pathways that enable customer growth. And significantly, it also gives customers a choice in their brand outcome: as a customer, do you want a brand that holds you back, or a brand that moves you forward?

If you’re entering new markets, or carving new space in an existing one, a brand agenda focused on liberating customers can be the cornerstone of programs to disrupt legacy brands.

Two options for the brand agenda

As noted above, there are two end points on the brand agenda spectrum.

  1. Contain the customer
  2. Liberate the customer

The direction a company takes in its agenda strategy will determine how its brand creates customers, and what the brand can accomplish, near-term and long-term. Different brand agendas will produce radically different customer outcomes, and business outcomes. Your brand agenda is also your customer agenda.

The traditional “contain the customer” approach

Brand agendas to contain the customer are at the heart of many traditional brands. In fact, “containing the customer” is still a mainstream brand approach. This approach typically manifests itself in the following brand actions:

  1. Capture customer attention with massive media campaigns
  2. Rely heavily on emotional triggers as brand drivers
  3. Transform brand experience into a spectacle or a “show”
  4. Construct elaborate myths to replace reality
  5. Use symbols, icons and images to focus customer beliefs
  6. Inculcate passive customer behavior
  7. Use rewards programs to foster brand “loyalty”

Brand strategies to contain the customer are often found in commodity markets, in mature industries, and in markets with low innovation.

The “contain the customer” paradigm

From the customer containment perspective, the whole purpose of a brand is to help catch and contain customers. Ideally, it’s to lock customers in for life, so their world view never ventures outside the brand aura. The brand becomes a virtual corral or silo, where an artificial reality keeps its subjects in thrall.

The “contain the customer” paradigm entails changing the nature of customers as well. Customers cease being market equals and potential innovation partners in a value network. Instead, they’re relegated to the status of passive “consumers,” where their consumption can be managed. This is one reason why traditional brands often devote considerable resources to brand spectacle, symbols, icons, emotional drivers and rewards. These are the artificial stimuli for kept consumers.

The high price of a customer containment agenda

A brand agenda to contain the customer comes at a price, however. It replaces brand value with brand spectacle. By ignoring customer intelligence and initiative, it also restricts the value that customers can add to the brand. In addition, it slows innovation to a crawl. The brand acts as a dam against idea flow. Internally, it holds back engineers and others whose new product ideas might “make waves” in the placid waters of containment. The omnipresent fear is that somewhere, somehow, someone will puncture the brand wall and the once-captive “consumers” will be heading elsewhere.

Companies with containment brand agendas often resemble fiefdoms or plantations in how they think, and in how they operate. And this, of course, presents great opportunities for disruptor brands.

Disruptor brands aim to liberate the customer

“Liberate the customer” is the brand agenda of companies with innovative, disruptor brands. Their aim is to undercut incumbent brands by delivering superior brand value and associated freedoms. These brands intend to free the customer from current brand dependencies and lock-ins, which can impose a virtual lock-down on the customer’s ability to move forward.

Disruptor brands are “liberation brands.”

Note, however, that not every company can sustain a brand agenda of customer liberation. Such an agenda requires a company to be highly innovative, agile and resolutely focused on delivering customer value. It also demands that a company be platform-driven, because brand platforms are the best mechanism for growing customers from one brand level to the next. Instead of imposing a brand corral on their customers, liberation brands elevate customers to progressively higher levels through a sequence of platforms in progressively richer markets.

Liberate your customers to create new value

Liberation brands may seem counter-intuitive. Wouldn’t they be giving away the customers their brands created? The answer to this question is, “No, they would not, because they operate in a totally different context than containment brands.” Liberation brands free their customers from brand backwaters so they can team with those customers to create new market value. By teaming with customers, liberation brands transcend the static “capture and contain” ethos that hobbles traditional brands. They raise brands to a context of dynamic collaboration which is rich in market opportunities.

Part of the brand logic behind customer liberation is that the brand is no longer a company-imposed veil, silo or corral. Instead, the brand becomes a form of value network that enables companies and customers to join forces for mutual gain. It is a sequence of platforms for growing customers to richer forms of living, where their new sets of needs will be met by a company’s innovation roadmap.

Elements of a brand agenda to liberate customers

In coming posts I’ll discuss the elements of a brand agenda that can disrupt traditional brands by delivering new forms of value to customers. This will be an agenda that frees customers to be more proactive, so they can add value back to the brand.


Update: the Cougar Ace brand challenge

Thursday, September 28th, 2006

Here is some updated information about the Mazda cars on the Cougar Ace. (See my original September 4 post on the brand challenges of the Cougar Ace saga for more details.)

Cougar Ace cars will not be sold as “new”

Autoblog quotes a Mazda press release that none of the Mazda vehicles on the stricken Cougar Ace car carrier will be sold as new. As stated in the release, Mazda will make a final determination on the saleability status of each car only after all the vehicles have been taken off the ship and inspected in Portland, Oregon. With almost 5,000 Mazda vehicles on board, that may take some time.

Mazda has announced that it will also publish all the VIN numbers of the vehicles, so that there will be a clear record of “Cougar Ace cars” released to market.

Steps toward brand transparency

From the Mazda release:

HIROSHIMA, Japan— Mazda North American Operations (MNAO) today announced that the Mazda vehicles aboard the car-carrying vessel, Cougar Ace, which ran into trouble on July 23, 2006, off the Alaskan coast, resulting in her listing some 60-plus degrees, will not be sold as new vehicles.

“While we do not, at this time, know the full extent of the damage to vehicles on board, none of the Mazdas will be sold as new”, said Jim O’Sullivan, president and CEO of MNAO. “Those beyond repair will be immediately scrapped. It is possible that those vehicles which are repairable would be made available for sale as used cars through Mazda’s dealer network in the U.S. and Canada. We will only be in a position to decide on any used car sales once the vessel has been unloaded and each unit comprehensively inspected.”

“In the interests of transparency and customer peace of mind, we will post a listing of all vehicle identification numbers (VINs) on our consumer Websites, and so that there is no confusion as to which vehicles were on the ship,” stated O’Sullivan.

And the reaction from Autoblog:

We’re pleased to see that Mazda is handling this the right way. Publicizing the VIN list is a great good faith measure, and doing so inoculates them from accusations of trying to pass on damaged goods to customers. In fact, we wonder if the list will actually help them close a few deals along the way (assuming some cars are in repairable condition).

Think about it: given their history, some may view the cars on board as odd collectibles — reminders of a fascinating and dramatic maritime event. In this case, the VIN list serves as irrefutable proof of the cars’ backgrounds.

Still, you won’t find us lining up for one if they show up in dealerships. We prefer cars whose trips across the ocean are more boring and uneventful.

Mazda’s brand options

I outlined a number of Mazda brand options in my original post. The mere fact that these vehicles withstood a near disaster in the open ocean qualifies them for special status. They are a test of the Mazda brand. Given Mazda’s announced direction, the cars certainly merit a brand consideration above the humdrum category of “used.” They’re experienced, and they’re survivors. If Mazda treats them as such, and has 100% confidence in them as Mazda products, it can sell them as examples of brand strength.

The key to this process, though, is that while none of these vehicles fell overboard, Mazda itself must go overboard in supporting them, and Mazda customers, in rebuilding this corner of the Mazda brand.


H-P faces a test of brand character

Wednesday, September 27th, 2006

Great companies lead with their brand. When they fail their brand, everything else comes a cropper. H-P’s current governance crisis is a case in point.

While this ever-expanding affair is troubling for employees and shareholders, it has also become a crucial test of H-P’s brand character, with far-reaching business consequences.

Brand character starts at the top

H-P’s leaders who pushed the limits of the law to spy on company Directors, employees and outside journalists called into question the very integrity of the H-P brand. After all, they are/were among the highest level of brand stewards in the company. Their actions define the character of the brand.

H-P’s internal investigation and its recent executive actions recognize the severity of the problem, and the types of steps needed to restore H-P’s brand character to its expected level. A full resolution will take time, for this has not been a file-and-forget transgression. It’s been a brand character meltdown. Additional developments are expected.

Brand character means business

Just as an employee with character failures may be disciplined or even terminated, a brand that scores low in character can be punished or even terminated by customers. Because a brand represents the whole company, downstream ripples from brand character deficiencies can erode hard-won brand advantages in customer trust, pricing, and repeat business.

Internally, there’s also a price to pay in damage to employee cohesion, productivity and recruiting. Everywhere a brand returns a benefit, a defect in brand character means more work, more struggle and more sacrifice to re-establish a brand edge.

Brand character vs. “brand personality”

Brand character should not be confused with “brand personality.” The latter is usually a shallow fiction that (lesser) brands use as a front for sales. Brand character is not a front. It’s not make-believe, a happy face, or a charade. It’s what holds the brand together, and what comes to the fore when brand values are put to the test.

Definition of brand character

From our New Brand Glossary:

Brand character is the spine of a company. It’s evident when a company is accountable to the values that make it stand tall. This means accountability in action, not on paper. Brand character draws a line that moral weakness cannot cross.

Companies with character create brands with character. Brands with character lead.

I would add that the values that make a company stand tall are the same values that create customers. That’s the holistic unity between business integrity and business growth. Brand character is more than a gesture or a figure of speech. It’s a business essential.

The Board and the brand

H-P’s Corporate Governance Guidelines define the responsibilities of the company’s Board of Directors. They don’t mention the H-P brand—but perhaps they should, so that policy decisions affecting the brand fall under Board oversight. The H-P brand is certainly vital to the company’s business, and as a valuable corporate asset is certainly important to shareholders. One outside observer has called for a radical re-structuring of the H-P Board itself, stating, “You have a board here right now that is crippled in every way imaginable.” (WSJ, sub required.)

Character and the gold standard for brands

For many years the H-P brand was the gold standard among high-technology companies, with market valuations to match. H-P and “brand character” were practically synonymous. Nothing prevents the H-P brand from regaining those heights—once it passes its current brand character test.


How “user-generated content” got a bad name

Monday, September 25th, 2006

We’re in Paris, in June, 1912.

As the sun sets a maker of fine sable brushes sits outside a neighborhood bistro with his good friend, a master manufacturer of tubed oil paints. They meet every few weeks to have a drink and talk about business.

Just as their wine arrives Pablo Picasso walks by with a gaggle of Montmartre buddies, laughing, joking, shouting back and forth, spilling from the sidewalk onto the cobbles.

They pass, and a relative calm ensues.

“Well, how’s business?” the brush maker asks his friend.

The paint maker watches Picasso and crew disappear into the night. He remembers some of their work he saw earlier in the week. “Business is OK,” he says, “but the user-generated content is going to hell.”


Apple gets the sofa, Microsoft gets the door

Saturday, September 16th, 2006

It’s way too early to predict whose products will define the emerging “home media center,” but at its big “Showtime” extravaganza this week Apple ran across the room and boldly jumped on the sofa. It can’t claim to own the sofa—far from it—but it certainly acts like it belongs there, with its Front Row remote in hand, new full-length movie downloads from iTunes and its sleek “iTV” device streaming Pirates of the Caribbean to our widescreen TV’s in early 2007. “I think it completes the story, and shows you where we’re going,” said Steve Jobs.

Microsoft, which has powerful technology of its own in this market, doesn’t seem to be inhabiting the same room as Apple. It’s standing uncomfortably back by the door, as if still wondering how to fit its classic market control strategies into this new high-touch, high-design world of mom, dad and the kids.

Apple’s brand advantage

What we’re seeing in Apple’s initiative is how a customer-centric brand strategy can undermine the market dominance of a far stronger player. Microsoft owns most of the cards, but it’s Apple who’s picking the game, and it’s Apple who’s dealing. It can do so because:

  1. It leads with its brand
  2. It has structured its brand as a holistic expression of the customer
  3. Apple has integrated innovation into its brand, creating clear customer pathways to higher levels of value.

These three elements contrast with Microsoft’s historic strategy to control customer choice, a strategy that puts internal limits on Microsoft innovation. While Apple is just as hard-nosed as Microsoft in its business dealings, it understands that by making Apple a brand of innovation it can create market opportunities in areas Microsoft can’t easily reach. Case in point: Apple’s five-year head start between the first iPod in 2001 and Microsoft’s Zune in 2006.

Some observations:

The power of customer-centric brands

Brands can be “about the company” or “about the customer.” Apple’s brand is the latter. Its brand has a supple, sensory texture that helps customers feel more alive. Through its customer-centric brand strategy Apple appears to be your personal agent in bringing about everything you’d want in the promised land of digital innovation and digital media: convenience, performance and completeness. Apple exudes a focus on “you” with such easy, holistic confidence that you want to jump on the sofa beside them. (That, of course, is the plan.)

Brands as “the customer inside the product”

One way to think about brands is to consider brand to be “the customer inside the product.” A brand built this way will radiate a strong customer presence. It does so because your brand strategy has integrated the customer’s forward path into the product. When the customer is “inside the product” you complete the customer as you complete the product, creating a powerful brand advantage. (A contrast to note: Apple works on completing its customers; Microsoft works on completing its controls.)

Apple’s “brand path” effect

I’ve previously described the concept of “brand space” and how a company can use a brand space strategy to gather strength in new markets before its products are ready for launch. There’s a corollary to this concept that we might call the “brand path” effect. Think of the brand path as a vectored brand space infused with your brand vision and brand qualities. It’s a customer pathway paved by the brand, in the direction you are taking your customers, even though your full suite of products hasn’t been delivered. They can see it, and feel it. Apple may well have the reigning brand path in the home media center space.

Brand path is somewhat related to the “halo effect.” For the last five years marketers have debated whether an iPod halo effect would boost sales of the Apple Mac line. Well, it turns out that was the wrong place to look. The real halo effect of the iPod will be in the home media center, thanks to the brand path Apple is constructing. Apple’s brand path is the iPod scaled up to the entire house.

The real “video iPod”

In other words, in the brand scheme of things the home media center will not be a “computer.” It will have nothing to do with computers. It will be an extension of people, as laid back and as comfy as the sofa. It will be a holistic, brand-enabled media experience, the purest experience possible. It will have the simplicity and ease of use of the best consumer devices, as typified by the iPod. In more ways than one, the home media center will be the real “video iPod.”

Photo: re-ality, Flickr

Brand perspective from a Renaissance man

Monday, September 11th, 2006

Note to brand builders: Consider yourselves descendants of that fellow on the left. Leonardo lived in far different times, and he worked for popes and princes instead of global corporations, but like us he was often challenged to grasp what mattered and make it timeless.

We may not remotely approach his inventive genius, or the depth of his art, but we are, fundamentally, walking the same path. He used his gifts to grow new worlds of meaning. So do we. He was no friend of arid dictates, half-truths, doctrines, dogma and the closing of minds. And neither are we. He observed with passion, looking for revelation in life itself. That’s also where great brands begin.

Man is the measure of things—and of brands

To Leonardo, man was the measure of things. Life was a vast platform for man to enjoy, to explore, expand, engage. Five hundred years later, the same is true for brands. Man is the measure of brands. Brands are “the customer inside the product.” They add a vibrant human dimension to artifacts that would otherwise drone on, never reaching their potential—and depriving customers of theirs.

The power of perspective

Brand builders and Leonardo share another strength: an infinite regard for perspective. Leonardo helped discover and develop the power of perspective in Renaissance art. It was a revolutionary new way to articulate reality, to render three-dimensional scenes on flat, two-dimensional surfaces. Thanks to perspective, landscapes could breathe, prosaic tableaus blossomed into wondrous glory, and paintings became a deep visual and emotional experience.

Brand perspective: human depth and dimension

Brands do for business what Leonardo did for art. They articulate a new customer reality that opens things up. Business needs brand perspective because companies usually conceive products in only two dimensions: cost and quality. The resulting products are often culturally thin. They can easily fall flat.

Brands change this equation because they provide a third, human dimension that adds depth to the company, to the product and to customers themselves.

Products are 2D. Brands are 3D.

You can think of it this way: perspective opens the eye; brand perspective opens the customer. Products are 2D. Brands are 3D. A 2D world only takes you so far. Move up to 3D and you and your customers have the world at your feet.


How an enabling brand works

Friday, September 8th, 2006

I missed this when it came out late last year, but this three-minute animated promo from Google shows an enabling brand at work. Simple, direct and effortless, as brands must be.

You don’t go to college. You go to Google.

The real trick in creating customers, as this animation charmingly shows, is to let customers create themselves—through the brand. Students go off to college, but they live, socialize and study inside Google. Thus: you don’t go to college; you go to Google.


Brand signal vs. brand noise

Thursday, September 7th, 2006

When you’re managing a brand, you always want to know how much of your brand is signal, and how much is simply noise. This signal to noise ratio is a good indicator of the effectiveness of your brand platforms and programs. Lots of signal is good. Lots of noise is not so good.

Use the right brand model

The first step in identifying brand signal and brand noise is to use the right brand model.

Old-school brand practitioners who still model their brands as “communications”—like some kind of broadcast beam—might be tempted to send the customer a survey: “Hey, do I sound cool or crappy?”

Unfortunately, this approach has two drawbacks:

  1. Brands aren’t “communications”
  2. Customers won’t understand the context, and will give unhelpful responses

For our purposes, then, the traditional “message model” of brands is a non-starter.

What counts is what the customer does with the brand

For signal to noise assessments, I prefer a different brand model, as illustrated above. In my view this is much closer to the way brands succeed in the real world. As shown, the brand is the violin, and the customer is the player. (Hope you didn’t think it was the other way around! The notion of the brand “playing the customer” gets things absolutely backwards, and explains a lot of wasted brand dollars.)

What we want to discover is what the customer does with the brand. Does he or she make music, or a dreadful howl? The effective brand “signal” or “noise” comes from the customer, using what the brand provides.

The brand is a tool for customer expression

The above model comes with several sets of parameters:

  1. The brand is a tool for customer expression
  2. The brand has the potential to add value to the customer’s life
  3. Signal vs. noise is a result of brand/customer interaction

As noted above, the value of your brand lies in what the customer does with it. If the customer consumes your brand and promptly forgets it, your brand is effectively static. If your brand is out of tune, worn out or worn down, customers will grind out a few discordant notes and stop playing, relegating you to the attic. If your brand supercharges your customer’s life, opening new avenues of expression, then your brand is really rockin’.

The brand as enabler

In this model we can see that the brand is an enabler. This contrasts with other brand models which conceive the brand as a message, a controller, a prod, a godhead, or an illusion. Being an enabler gives you tremendous freedom in leading customers where competitors can’t follow.

And since we’re modeling brand interactions, we can add several observations about the duties of the brand. Within this model:

  1. It’s your job to teach the customer how to play
  2. It’s your job to suggest new tunes
  3. You are not so much a “conductor,” as you are a “toe-tapper in residence.”
  4. The purpose of this brand/customer interaction is to attract new listeners, and new players. The point is to get them all making music with you.

The value of this model is that it makes it easy to distinguish brand signal from brand noise. You can tell how well your brand is doing by listening to the customer

It’s that simple.

Brand signal is music that makes a market

Using this model, I define brand signal as music that makes a market. It’s music that’s good for your business, not some waste-of-time ditty. And it’s good for the customer, too. The music you make with customers should send competing brands to the back of the stage, if not into the frigid alley outside.

How can you tell if what you hear is music—and not an ear-piercing screech? Well, you’re in brands because you’re smart enough to know. You’ve got creative chops. Expressive chops. And customer chops.

Photo: meganne_soh, Flickr