Brands Create Customers

Let’s follow the thought process that caused this train to miss the station: Microsoft’s PR agency thinks that a great way to build the Vista brand is to give loaded Acer Ferrari laptops to influential tech bloggers. The laptops come with Vista pre-installed, and Vista runs great on these super-fast machines. As the agency sees it, the bloggers will embrace the freebie, and will then rave about the coolness of Vista. In so doing they will help sell the Vista brand to the many readers who trust the opinions of this blogger elite.

Simple enough, right? It’s PR 101.

Well, maybe not so simple. A sizable PR backlash ensues, much of it about Microsoft trying to “bribe” the blogosphere rather than let Vista succeed on its merits. This rings a bell in Redmond, and apparently Microsoft now says it wants the gift machines back.

That makes it PR 101, “Full Circle Edition.”

Thomas Hawk takes the story from there. (Alternate link.)

Once you’ve got the story, read on for some notes on the relationship between brands and PR.

Brands and PR rarely mix

Truth is, brands and PR don’t have much in common. Brands are a strategy of value. PR is a strategy of persuasion. The two rarely mix. At times there can be a bit of overlap between the two, but that’s the exception. A solid brand strategy doesn’t need a lot of help from PR. In fact, heavy PR is often a sign that a brand is broken. In this particular case, over-aggressive PR has derailed the Vista brand.

Brand builders rely on the integrity of blogs

The Vista PR backlash underscores the importance of maintaining high levels of weblog integrity in the tech community. This is a vital issue for brands. These days, blogs are an important brand building tool, in large part because people trust blogs to “tell it like it is” without the compromises of paid or sponsored media. This “freedom to be objective” constitutes a key element in the integrity of the blog medium. Brands, which are forms of integrity themselves, naturally grow among the “integrity networks” of blogs. The PR effort to buy influence among leading bloggers threatens to weaken the integrity of the blogosphere, and thereby diminish its value as an organic brand building tool.

Joel Spolsky on PR, credibility and integrity

Joel Spolsky has some wise and well-chosen words on the possible negative impact of PR on credibility and integrity in weblogs. His linked post should be a must read for brand builders. (For those who don’t know about Joel: he used to work at Microsoft, has top-tier cred in the tech industry, is a smart guy, and writes a widely-read, thought-provoking blog. And he also refused one of the laptops offered in the Vista PR effort.)

Other links

See also: Marshall Kirkpatrick, and the discussion on Slashdot.

We all want our brands to look the part and to play the part, but the fact remains that fancy duds don’t do diddly in the brand trenches.

Brand wars are won or lost based on brand value delivered. If your idea of “brand value delivered” is polished helmets, white gloves, gold braid and tip-top tunics, then your brand stage is little more than a parade ground. There you may shine and troop the colors, but don’t be surprised when competitors carve out huge territories in the real world outside.

Photo: Philip Allfrey — WikiMedia

If your job is to build brands, now is the time to learn more about powerful digital platforms taking shape in the world of Rich Internet Applications (RIAs), and widgets. These two software advances are about to transform the way you build brand relationships, and the way you deliver brand experience.

In the coming years, brands that master these new platforms will be able to outpace and outflank their competitors.

RIA’s and widgets will break down barriers between you and your customers. Through them, your brands will become less mediated, maybe even “immediate”—which is exactly where brands want to be. They’ll become closer to the user. They’ll enable new realms of customer interaction that are fine-grained, flexible, personalized, data-enabled and visually engaging—on digital devices from computers to cell phones.

Click through this OpenLaszlo dashboard demo to see what’s in the works. This is a “web page” that incorporates deep interactions. It’s the forerunner of the “RIA Web” of tomorrow—where richer forms of brand interaction can take root.

RIAs put more brand in the hands of users

With RIAs, the goal is to do in a lightweight browser what is now done with traditional desktop applications. A web page or widget can behave like a mini-application. Ajax-enabled Google Maps and mashups are one example of RIAs, but current apps are just scratching the surface. For brand builders, the ultimate goal is a fluid, seamless user experience where the (brand) application empowers user intent.

The RIA brand benefit

The RIA brand benefit is that users will have more powerful and more flexible tools to get things done. The idea (and ideal) is that you just open your browser and call on lightweight, purpose-built apps (or widgets) available online. A company’s brand presence can ride along with these apps, or incarnate the apps themselves, adding “deep-tissue” brand value to a variety of activities.

Conceptual Example: Think of a “personal trainer” fitness widget from a Nike or an Adidas that could include a personal diet regimen, your exercise goals and stats, your training charts and graphs, your weight targets, tips, and everything else you need to stay fit, updated daily. Accessible on your laptop or on your web-enabled cell phone, this app might greet you in the morning and team with you during the day, depending on the interaction you want. The first desktop steps toward such an application are now being offered.

A value stream that only you can deliver

As a brand builder, you should view RIAs and widgets as elements of a unique value stream that only you can deliver. Plan to deploy them as teams of smaller, value-rich brand applications available on the fly, used by customers to accomplish vital tasks. A brand might orchestrate a dozen or so RIAs or widgets as part of a strategic deliverable. In this manner, a brand could form whole new sets of creative connections with customers in areas of new business development, or in strategic areas of interest. The chosen deployment would depend on the type and style of brand presence a company desires, and where the brand intends to lead customers.

Brand applications on mobile devices

Because of form factor and wireless connection limitations, these new advances will be harder to achieve on mobile devices. But, they will happen. Currently, Opera has a leading mobile browser for RIA functionality.

See our recent post on mobile brands here.

Links

Here are some links to get you started:

1. RIA background from Wikipedia
2. The del.icio.us RIA tag (to keep you current)
3. Recent RIA Roundup
4. Om Malik on the widget potential
5. Our previous posts on widgets: here, here and here.

Will all brands run through Adobe?

Adobe (now with Macromedia inside) is positioned to be a powerful player in the RIA field. It’s quite possible that in the future all brands will run through Adobe. In fact, Adobe’s new cross-platform Apollo runtime (due in 2007) is a potential game changer in digital brand experience.

Photo: Opera

Saatchi gallery in London has made a splash with Stuart (short for Student Artist), a heavily trafficked online community where artists can post their portfolios and connect with other creatives. The site has become an instant magnet for young artists wanting to see and be seen. Started in May, 2006, Stuart has transformed the placid Saatchi gallery into a vibrant social place with 20,000 member artists.

Details in the New York Times article here.

Stuart is all about brand

Let’s kindly set “art” aside for a second and focus on brands. Stuart is all about brand. It represents a deep brand move by Saatchi to redefine the mission of “art gallery.” Stuart is transforming Saatchi from a conventional art gallery (and dealer) into a nexus of creativity, broadening its base, opening doors, bringing artists together, sinking deep roots into emerging artists, and tapping into the limitless energy of artists themselves to help Saatchi grow its brand in new directions.

From “gallery” to “community”

Stuart is how Saatchi is socializing its brand. Stuart is weaving the Saatchi brand presence into the social fabric of art and artists. It represents a brand transition from private gallery to social community. This is done not by “branding” Saatchi in conventional ways, but by unlocking the social context of art and providing a free, online “place” for artists to congregate under the Saatchi aegis. Through their interactions on the site, artists can support one another and jointly become a powerful indirect driver for the Saatchi brand.

The brand as “place”

Stuart means that Saatchi is designing a customer. becoming a brand platform, and using its brand as a collaboration in context. In contrast, other galleries suddenly look one-dimensional and stale. If Saatchi manages to cultivate Stuart and grow its users through increased interaction, it stands a chance of being the place for online artists to congregate and connect. This gives Saatchi a cachet and currency it could never achieve in a thousand conventional campaigns. Saatchi itself becomes the medium.

Network effects are brand effects

Of course, the technical barrier to entry for this type of brand innovation is not that high. It’s a socially-enabled website. The brand goal is to build out the network effects quickly so that your site becomes the definitive hub, a scaled-down eBay, MySpace or Facebook, but the prime segment player nonetheless. Do this right and your network effects can do double (and triple) duty as brand effects.

Through Stuart, Saatchi is building what may eventually be an insurmountable community lead in the creative arts market. One might ask: Where is the equivalent from AIGA? Where are the leading design schools? The leading design firms? Museums? If Saatchi snatches the wind from their sails, they may find it hard to catch up.

A brand lesson for all

The wider brand lesson from Stuart is that a brand can gain significant strength by enabling its base in new and different ways. Imagine your brand as a social force, not a top-down wrapper. Decouple your brand from your business silo. You can fly your brand over customer fields. Sometimes the most fertile field is not the same closed plot you and your competitors have been dutifully ploughing all these years.

Mazda has announced that it will scrap all 4,700 Mazda vehicles on the car carrier Cougar Ace that almost capsized in the North Pacific. We previously reported on the brand challenge presented by the Cougar Ace ordeal here, and here.

After its harrowing mishap at sea, the Cougar Ace was stabilized and towed to port in Portland, Oregon. Many of the Mazda vehicles on board appeared to have survived the near-disaster with little or no damage. At the time, Mazda said it was considering selling the cars as “used” if they could pass thorough inspections.

Preserving brand trust

Now Mazda has decided that protecting the integrity of the Mazda brand comes first and foremost—an option we recommended in our first post. Mazda will not release the vehicles to the public.

As we stated in September:

Brand trust is really what’s at stake here. Mazda can’t afford to lose it. Those are not just 4,700 Mazda vehicles aboard the Cougar Ace. Those are now 4,700 unknowns, and question marks corrode brands.

And now, Mazda’s decision, from BYM News:

Mazda Motor Corporation has announced that all of the U.S. and Canada-bound Mazda vehicles from the car-carrying vessel, Cougar Ace, which nearly capsized off the Aleutian Islands in late July, would be scrapped.

“After thorough testing by engineers from our North American and Japanese R&D centers, we decided the most appropriate course of action – with our customers foremost in mind – was not to sell any of the 4,703 Mazdas aboard the ship,” said Jim O’Sullivan, President and CEO of Mazda North American Operations, based in Irvine, Calif.

And:

O’Sullivan added that although some of the Mazdas aboard the Cougar Ace showed little or no visible damage from being tied-down at severe angles for an extended period, the potential for future problems led the company to reconsider its initial decision to sell any of the vehicles as used.

“We always put the customer first,” O’Sullivan continued. “This drove our decision to scrap every one of the Mazdas involved in this incident.”

Mazda News Release.

Brand leadership rescues the brand

This decision from Mazda shows brand leadership at its best. As we wrote back in September:

Mazda has greatest brand leverage if it can negotiate a full value settlement for the entire shipment from the shipper and insurers. This would enable Mazda to affirm that these vehicles were effectively “lost at sea,” and will be kept off the market to protect the customer, and the brand. The brand logic behind this strategy is that these vehicles have the taint of damaged goods. If allowed into the market they could spread doubt across the entire Mazda brand, disrupting future sales and re-sale values, even if the salvaged cars were to show no outward defects. The mere belief that random Cougar Ace vehicles are “out there” could haunt the brand for years.

Bottom line: from a near disaster at sea, Mazda has clearly and courageously rescued the brand.

Mobile devices will have a huge impact on brands in the coming decades. They will change the way brands engage the customer. Not only will these new brand engagements be more personal and more portable, they can also be more creative, offering many more levels of brand imagination. None of this will be in the form of intrusive ads, or ham-handed “branded” placements.

Perspectives in mobile context

Two recent posts shed some early light on these new directions in mobile brands. They’re not about brands per se, but they present some perspectives on “mobile context” that will get brand builders thinking. The first has a handy chart just begging to be deconstructed and repurposed.

LINKS:

1. Read/Write Web
2. Raghavendra Prasad

Device: Nokia 770

It may seem counter-intuitive, but a primary purpose of your brand is not to be seen.

It is to be seen through.

Your brand is a lens that enables customers to experience their world, and their role in it, in a richer and more complete context. You show the way.

A brand activates beyond the brand. It does not hook.

It frees.

And great brands do not sit dumbly on a shelf.

They fly.

Here’s a clever YouTube video that’s making the rounds. A guy (in Norway) can’t play the drums, or the piano, yet he crafts an amazing video where he’s a whiz at both. He makes it happen through stop motion and a massive number of video and audio edits, using his home PC. Quite fun, and eminently watchable.

His YouTube video was posted in November and has been visited over 1.5 million times, referenced by the Wall St. Journal and discussed to the Nth degree on Slashdot. Don’t be surprised if you soon see ad agencies copying the look and feel. (They know where their future lies.)

Creativity from the bottom up

While YouTube has its share of self-indulgent debris, it also hosts some fairly creative video productions (like the one above), generated at the grassroots level. These shouldn’t be arbitrarily dismissed as low-end, “user generated content.” They’re creative works from creative people now freed from a system once geared to big budgets.

The result will be more creativity, not less.

A creative challenge for brands

So what does all this mean for brands? Where’s the brand imagination to carry these new formats to the next level? What can brands do to make them better? (Please, please, please, not that ultimate kiss of mediocrity: product placement.)

It’s time for brands to move beyond the broadcast advertising paradigm and to reshape themselves as a creative force in their own right. In the world of online everywhere, there’s no reason brands can’t be allied with customers in creating and promulgating new forms of expression.

Waiting for the next Absolut

Thus, if you wanted your brand to be the next Absolut, you might tie it, ever so subtly, to the creation of a whole series of quirky/clever/charming and recursively over-the-top videos made by people with a fresh slant on life. Forget product placements. Just place the videos in the hearts and minds of hip people like you.

And yes, that also means your brand is the new network.

When brands are built as stylized sales stimulants, as many are, they often wind up as forms of packaging, some basic, some elegant, but all a “wrapper” around the product or company, intended to make the contents more desirable.

Beyond the wrapper

Many brands get the wrapper right, freeze themselves into icons, and then retire for life. Then they wonder why upstart brands in plain brown boxes pass them by.

In building brands you have to look beyond the wrapper. Brands command a canvas that knows no edge. As a brand builder, you use this canvas to connect customers with themselves in new and vastly better places. While fine-tuning the wrapper is important, it’s not the most important part of the brand. That distinction goes to where your brand leads the customer—in that vast and fertile canvas you provide.

A brand is the first step of a movement

A brand is a collective venture for going places. By and large, it’s customers who will advance your brand. They need a vision, platforms, programs, and a direction that is all about them, and just a tad about you. They just want you to lead.

When you build a brand, your goal is to create a movement, a self-sustaining chain reaction that expresses the customer through the brand. It’s this energy from below that drives the brand forward. The immediate physical brand is just the first step, a catalyst for more powerful reactions to come.

The winner is not the wrapper

Movement rules. In brands, the winner is not the wrapper. The winner is the flag.

See Part I here.

When businesses think of brands, they don’t usually consider brands as being part of the innovation process, right there at the cutting edge of value creation. Well, it’s time to change that perception of brands. Truth is, brands themselves can be powerful engines of innovation. They can reprogram a product that does A, B and C into one that does A through M, plus X, Y and Z. They can redefine the context of a business, unlocking new value. They can spring customers to higher levels that competitors can’t reach. Through their own platforms and programs, they can reshape markets, and create new market opportunities.

Yes, brands can do all of these things—when they’re value-based brands.

Brands as innovation engines

In this second installment of our series we’ll explore how value-based brands can contribute to the innovation process, as innovation engines in their own right, with results just as powerful as new products and services.

We will cover:

1. The brand innovation context
2. A definition of brand innovation
3. The innovation charter for the brand team
4. How brands innovate
5. Selected examples

NOTE: Brands primarily innovate in two ways: brand form, and brand value. Brand form is near and dear to every brand builder’s heart, including mine, but our discussion here is on delivered brand value.

The brand innovation context

At Tenaya Group we look upon brands as part of the innovation process. Brand builders are innovators, pure and simple. As we see it, the value that brands can deliver is far too important for brands to be limited to “communications,” symbols, sunny promises and surface sheen. Brands represent a core value connection between companies and their customers. That means brand builders must be able to innovate new forms of brand value that can advance a company and its customers. Brands that don’t innovate are soon overcome by inertia. They stagnate. And then they die.

Our master definition of brand reflects this innovation focus:

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

In this formulation, “avenues,” “value,” “creative,” and “engagement” are all critical areas where the brand builder can introduce innovative approaches, processes and deliverables.

Defining brand innovation

Our definition of brand innovation is short and sweet: Brand innovation is product potential times customer potential.

The brand builder is the X-factor in the middle. He or she grasps the potential on both sides, then adds the strategic and creative powers to bring them to life, and to make them grow.

It all adds up to what we call “the brand exponential.” Take your product, or your company, and use your brand to raise it to a higher power—through the customer. That’s your only assurance that you’ll be tuned to the markets of tomorrow. Your brand is the exponent.

As a minimum, the product value squared

The value outcome of a simple brand might be the product squared. That’s only a start. We all want to aim much higher than that. In many cases, it’s customers themselves who contribute these exponential powers.

And we never lose sight of our macro view of brands, which keeps us running during the day, and flying at night: “Brands are tools that enable customers to inter-operate with the universe. The genius of brands is that they have no limits. The value of brands is that through them, customers have no limits.”

The brand team as innovation driver

In traditional brands, the brand team is closely tied to marketing and/or corporate communications, outsourcing much of the “creative” work to ad agencies and design firms. While this fits well with the traditional communication model of brands, it does not go far enough for value-based brands.

In value-based brands, the brand team is responsible for innovating brand value. They are, first and foremost, innovators. They’re key members of a company’s innovation team. They still maintain their media and communication roles, and contacts with media and design experts, but their focus is on brand innovation as part of new product development. They work hand-in-glove with engineers, programmers, product managers and customers to create new forms of brand value, and the platforms and programs to deliver them. Their mission is to grow the customer, the product, the brand and the business through new streams of brand value.

The brand team is both “in the trenches” and “over the horizon.” It’s not a job for those who seek routine and simple formulas. (See our brand builder test here for more details.)

(And FYI, being “in the trenches” and “over the horizon” is not a problem. It’s an absolute rush.)

Forms of brand value

Being the fluid, plastic and protean creations that they are, brands can convey value in a multitude of forms. Some forms are more durable than others. Some are much deeper. There can be new shapes and shades of meaning, new tools, new contexts for the product and the customer, new dimensions of product use, new associations that raise the customer to a new plane of action, new communities, and perhaps a new vision that frees customers from the dark of a cave.

What about brands built on make-believe?

What about brands that rely on make-believe, fictions, bells and whistles, fantasies, spectacle and entertainment? They can be, and are, wildly popular, and treasured by their adherents. But do they actually innovate to move customers forward?

There’s certainly comfort value in the well-trod truths they affirm, and spectacle value too: people love a good show. Their downside is that they often try to herd customers by a vigorous plucking of emotional strings. With no brand platform, and few real deliverables, such brands become prisoners of their media campaigns. They’re vulnerable to competitors who play the reality card, and who can offer their customers a taste of freedom that’s real.

How brands innovate on value

There are a number of pathways brands can take to innovate on value. Often these will be specific to a product domain or customer environment. A maker of eyewear will work with different brand value equations than a publisher of newspapers, or a software developer of widgets. A nap-of-the-earth approach will map brand innovations to potential areas (and vectors) of customer growth. Mauborg and Kim and Ulwick have defined useful baseline innovation methodologies.

In a more global context, brand innovations can accomplish the following (often in combination):

1. Free the customer from current constraints of the market
2. Enable the customer to do more with the product
3. Advance the context of the product
4. Advance the context of the customer
5. Through the brand, increase the customer’s proactive powers
6. Leverage brand experience into customer experience
7. Incorporate the customer into the innovation process
8. Leverage the brand platform into a customer platform
9. Unlock the customer’s creative powers
10. Create a community that supports the customer

Examples

Here is a sampling of brands that illustrate aspects of brand innovation:

Linux — A user-driven brand. Includes almost all of the above points.

Harley Davidson — Customers innovated by customizing the bikes as bad boy machines. Eventually, Harley followed, albeit in tepid, corporate fashion. (The “chopper” zeitgeist is a customer phenomenon of liberating the brand.)

iPod — With iTunes, forms a new brand of music that includes many of the points above. Frees customers to enjoy more music and to express themselves through their music by having more personal control over it.

Arm & Hammer — Customers found new uses for baking soda, making their lives easier and making new markets for the maker. In essence, the customers led the brand.

Costco — Increases customer access to quality goods at discount prices, while minimizing customer risk with liberal return policies. Leverages startups. Enabler of small businesses.

Patagonia — Advances context of product and customer to a unified brand of ecology, where product, customer and environment co-operate as one.

Final note

Oh yes, the chap above is Thomas Edison. I picked this image because in it Edison exemplifies the moody, mercurial, in-the-trenches and over-the-horizon “brand builder look.” It’s the countenance of a person immensely unsatisfied with the status quo, and not totally satisfied with what he’s wrought, peering through it for still deeper connections. And Edison was not the first. Albrecht Dürer captured the exact same expression 500 years earlier, here.

Amazon has always had a refreshing brand clarity about its offerings, and now I’ve found one reason why. In its software products and services, at least, Amazon builds brand clarity into its offerings by doing things backwards.

Yes, gloriously backwards, although in the Amazon context that means working backwards from the customer to the development task, before developers write code. In this process, key issues affecting the brand deliverable rise to the surface, where they can be fully addressed in the concept and design phase.

“Working backwards” at Amazon

I know this because “working backwards” is the process that Amazon CTO Werner Vogels has established for his software development teams to follow. In his words:

To ensure that a service meets the needs of the customer (and not more than that) we use a process called “Working Backwards” in which you start with your customer and work your way backwards until you get to the minimum set of technology requirements to satisfy what you try to achieve. The goal is to drive simplicity through a continuous, explicit customer focus.

Werner doesn’t mention “brand” in his description, but the Amazon process is actually brand building from the inside out. The goal of a brand is “to put the customer inside the product.” The Amazon process does exactly that, building brand value in at the core.

Amazon’s “backwards” steps

Here are Amazon’s key “backwards” steps for software development. They’re fairly counterintuitive for developers:

1. Start by writing the press release
2. Write a Frequently Asked Questions document
3. Define the customer experience
4. Write the user manual

Be sure to read Werner’s account of how the development team approaches each of these tasks. When these steps are completed, the real code crunching begins.

To me, taking these steps at project initiation means the project team is building a solid brand foundation.

When we talk about brands it’s important to define the type of brand model we’re discussing. Yes, there are different kinds of brand model. Some are far more productive than others. In fact, using the wrong brand model can be worse than having no brand at all.

The value-based brand model

In this overview I’ll discuss key points about the value-based brand model. In my view, value-based brands constitute the top-tier brand model, standing head and shoulders above all others. As I see it, value-based brands are the only brand model that can unlock the strategic potential of brands. Moreover, they’re the only form of brand that can deliver maximum traction to both companies and customers.

This is a working paper, with more installments to come. Once I’ve assembled all the pieces I’ll produce a finished paper with tighter logic and (hopefully) some helpful diagrams. This is new territory for brands, and any and all comments are welcome.

Value-based brands defined

Let’s start with a definition: Value-based brands deliver value that customers can use. This is value beyond that of the product proper. Their intent is to sink brand roots into the customer base, and to grow the customer in ways that can grow the business. Value-based brands do so by using integrated brand platforms and programs to advance customers to richer forms of living and higher levels of achievement. In short, their job is to make customers become better off through the brand.

The importance of the brand model

As noted above, value-based brands are a distinct brand model. The brand model you chose dictates what your brand can accomplish, tactically and strategically. Here’s how we define “brand model” in our New Brand Glossary:

Brand Model
As critical as the business model. While the business model defines a company’s profit logic, the brand model defines a firm’s customer logic: the structure and meaning of the brand program, its internal and external engines, and how, when, where and why it creates and sustains customer value.

Most current (mainstream) brands employ the communication brand model. While this is the traditional approach, supported by a huge media infrastructure, it has serious shortfalls. In this post we’ll compare that model briefly with the value-based brand model. We’ll provide extended comparisons in later posts. For earlier discussions of how these two models compare, see here and here.

Aren’t all brands “value-based”?

“Wait a second,” you might say. “Aren’t all brands value-based? At least they get attention. And they add some pizzazz to a product.”

The answer is No. Attention and pizzazz is a not a basis for customer value, and neither is glitz, glory, flash and spin. They might blitz a few eyeballs, but they don’t have what it takes to grow and sustain customers.

In fact, many highly visual brands are little more than stylized sales stimulants, not much deeper than a veneer of packaging. Their goal is to deliver a sales pitch, not value. And like most pitches, they tend to be short-term, and emotion-based. Thousands are on display at your local supermarket. (They are one reason we like to say: “If you want to make your products fly off the shelf, give wings to your customers.” Value-based brands are those wings.)

Value-based brands are fueled by organic, customer-generated emotion, rather than artificial campaign-generated emotion. (More on this in a subsequent post. It’s a big issue.)

Building blocks of the brand ecosystem

Value-based brands are the building blocks of the brand ecosystem. Through the value they deliver they create the customers who can add value back to the brand, thereby increasing a company’s competitive advantage. They do this through brand API’s that enable customer brand initiatives, and via brand-centered value networks. In action, they’re collaborations in context between companies and their customers, a blend of the practical and the pragmatic, business realities, strategy, and sheer customer-focused creativity.

Moving customers beyond the reach of competitors

One of the key benefits of value-based brands is that they initiate a customer ramp-up, or an upward spiral, that moves customers beyond the reach of competitors. They do this in a way that positions customers to adopt the next sequence of a company’s planned innovations. In other words, value-based brands are both a customer defense and a strategic innovation driver. Their job is to push the customer curve so that creative companies can feed their innovations into robust markets. (Brands have many more resources to push the customer curve than bare products on their own.)

Not your typical media-based brand

Value based brands are not your typical media-based brand. They are in-sourced, rather than outsourced. Instead of being whipped up as campaign creations, they’re working brands that link a company and its customers through many levels of interaction, in a nap-of-the-earth earth process that creates shared value for both parties. Their streams of interaction take the place of classic media campaigns.

Why brands as communications fall short

Communication-based brands restrict themselves to messages and message elements, aimed at persuading customers to perceive a company and its products in a certain way. They are forms of persuasion rather than instruments of building customer value. They deliver little of substance. In fact, their one-way broadcast model keeps customers at arm’s length and actually inhibits customer collaboration.

Simple brand identities don’t leverage brand value

Some brands may exist as simple, one-dimensional marks: a name, symbol or logo that affirm an identity, with no programs or platforms to add value. These are typically under-leveraged brands; without a brand value strategy, they certainly don’t do much to leverage their customers.

Please note that there is nothing “wrong” with these non-value approaches cited above. They’re the basis for most brands today. They can all be made to “work,” if enough money is spent. They just can’t create the kinds of strategic customers that value-based brands can generate.

Value-based brand strategy

Value-based brands are designed to create strategic customer value. They enable customers to do more with their lives through the brand, and in the process add value back to the brand and the company through innovation, collaboration, social networks or new market creation. The value-based brand approach recognizes that your customer is your greatest competitive weapon. The operative strategy is: “Grow the customer, grow the brand, grow the business.” By “grow” I mean strategic nurturing through brand leadership.

Value-based brands are holistic

A value-based brand strategy is holistic, aimed at giving full expression to the whole company, and aimed at developing the whole customer. It works on two levels. First, it addresses customer potential: what the customer might be in a different/better/higher context, as conceived by the most creative minds at the company (i.e., the brand team.) For example, Starbucks amps the context of coffee drinking and delivers more brand value than Folgers. Starbucks has elevated you and me beyond the reach of Folgers, forever.

Value-based brands take the long view

Second, value-based brands work across time. The customer of the value-based brand is not just today’s “buyer.” He or she is also the customer you will want three, five, seven and 10 years out. That customer will be a more proactive piece of work than the customer of today. You can create him/her with value-based brand strategies, or you can leave the process to chance (and to your competitors.)

Cultivate brand hacks

The key to the holistic approach is to open your brand to customer initiative and participation, to tap into customer intelligence and sensibilities. These help grow and diversify the brand organically, where the rubber meets the road. Value-based brands do this by recognizing that half of brand value is produced by customers. Thus, they rigorously cultivate brand hacks, to evolve their brand at the edge to meet changing market conditions.

More to come

I’ll be adding more installments to this series in the next few weeks. Among them: value-based brands and innovation strategy, the new role of the brand team, and how to build a value-based brand.

Part II is here.

If you want your brand to innovate, you need to make it hackable. You have to cultivate brand hacks. Make your brand so your customers can grab it, bend it, and extend it, adding their initiative and intelligence to develop new forms of brand value.

Brands, culture and customers

Donna Bogatin has a nice post on how customers “configure culture” by altering product offerings—or inventing their own products—to meet their needs.

Donna cites a Radar Research report that lists these elements as typical of “configurable culture:”

1. Instantaneous
2. Editable
3. Global
4. Networked
5. Multi-sensory
6. Interoperable
7. Archival
8. Customizable
9. Hackable

These are also the qualities of a brand on the move.

How to cultivate brand hacks

The easiest way to cultivate brand hacks is to invite customers into your brand. Make it a team effort: a partnership instead of a one-way, top-down stylized sales stimulant. Make your brand a method for solving a common problem. That puts you and your customers on the same page, writing it together.

Hack the context to create new value

When you develop your brand as a platform for brand hacks, the hacks you aim for are new contexts for your brand and your business. In other words, brand hacks are ways that customers can extend the scope of your business, by finding new applications and contexts of value. Through brand hacks, customers become your allies in innovation. And innovating a new context can be just as valuable as innovating a new product—and sometimes more so.

Brands are code

We should never forget that brands are code. The more programmers you can enlist, the stronger your results will be.