Brands Create Customers

As the blog fates would have it, as soon as I finish a post on Adobe I stumble upon some information that would have made the post better. Although it was right there in my feeds, I missed this interview in which an Apollo product manager spells out some anticipated use cases for Apollo. Some of these are directly applicable to brands, and they certainly hint at the broader brand opportunities from an RIA platform.

Where Apollo and brands might meet

Via cut and paste here is a generalized list from the interview, in the product manager’s words.

1. Media-oriented applications are going to be popular. Media companies will be able to create custom branded, desktop presences now. Imagine applications rich in video and audio with rich interfaces and a heavy focus on allowing users to contribute and manage their own media.
2. I think we’ll see a lot of what I call “mini apps” initially. Lightweight utilities for performing specific tasks like note-taking, project tracking, task management, etc.
3. Another market is casual games. The casual game industry is booming and they all use Flash. Now we can give them a way to install those games on the desktop and allow them to interact with the system in the form of saved data and desktop notifications. I think it could range from Texas hold-em style games to full Role Playing Games.
4. Adobe is also looking to build applications on top of Apollo. I can’t give you any specific examples right now, but we have several teams within Adobe that are building software on top of Apollo as we’re developing it. They give us some great feedback and will also give us some great examples to showcase at Apollo’s launch later this year.
5. Apollo will allow all kinds of companies to deliver software in a new way, and we think the ecosystem around it is going to be very large.

Apollo may open up the brand innovation gates

Apollo, don’t forget, is still in development, and won’t see the light of day until mid-2007, at the earliest. Still, if you want your brand to be among the first to benefit from Apollo’s (promised) powerful delivery system and features, now is the time to sign up for the beta. If Apollo can deliver on its potential, its impact on brands—and on brand innovation—can be substantial.

Over the last decade many companies have turned to digital technologies to create new brand relationships with customers, using everything from web sites to online communities to weblogs to Web-based media campaigns. This marks a major change for brands, because it means a significant part of their future will be played out on a digital stage.

What’s the optimal digital platform for brands?

For brand builders, a critical question now becomes: what’s the optimal digital platform for brands, in all their new dimensions? What technology (or technologies) can help us deliver the richest brand experience and the greatest brand value?

Adobe seems to have the inside track

At this point, it would appear that Adobe Systems might have the inside track to be the brand builder’s digital platform of choice. Either by cunning strategy or simple good fortune, Adobe seems to be putting together application platforms that can make a brand builder’s job easier. And we’re not just talking Photoshop and InDesign. We’re talking about digitally-enabled brand avenues with rich connections to customers, reaching almost every computer in the world.

The coming age of RIA’s

One of Adobe’s strengths is its innovation leadership in Rich Internet Applications (RIA’s). These applications use new programming technologies to provide online apps with much of the functionality and user experience of traditional desktop software. (It’s not quite Brand Nirvana, but it’s getting there.) RIA’s will open a whole new world of possibilities for brand builders by removing many traditional Web limitations, while enabling many more layers of customer interaction. The next few years will determine which RIA platform will emerge to define and convey the new stuff of brands.

See our previous post on RIA’s here. And this example.

What brand builders need

Before we check out what Adobe has to offer, let’s review what brand builders need for this new world of digital-based brands:

1. Digital platforms that are open, extensible, standards-based, and include as much of the world as possible.
2. Digital platforms that won’t constrain, corral or limit customers (or, ahem, brand builders).
3. Platforms open to fast innovation from the bottom-up.
4. An integrated suite of applications with voice, video, music, and dynamic action. Apps that free the brand to be the brand.
5. Full functionality for customer interaction and collaboration. Absolutely critical.
6. Apps that are cross platform (cross-OS) so they run on all the computers and digital devices out there. Let no customer be left behind.
7. Apps that are “free” to the customer, making app deployment effortless, if not automatic.
8. Apps that are easy to develop and deploy. (Helps to have an established developer base with great tools, so they doo good work without costing us an arm and a leg.)
9. Apps as light as customers want, or as heavy as customers want. Apps that are infinitely malleable.
10. Apps the customer can adopt as a second skin.
11. Apps that preserve “persistence of context” — so that brand virtues retain their presence throughout the digital experience, online and offline.
12. Apps that enable customers to add value back to the brand. (This may be the most “killer app” of them all).

Oh yes, and after all the above, we’d like the same platform to help us build out our brand programs, so we can use it to train our employees on our brand vision, and deliverables.

Adobe apps that set the brand stage

Given what Adobe now offers, let’s count the ways that Adobe might enable the kinds of digital-based brand connections and programs that brand builders might use to create customers.

• Video over the Internet: Adobe Flash Player video (it powers YouTube)
• Dynamic web applications: Adobe Flash + RIA
• Video on mobile devices: Adobe Flash Lite
• Mobile dynamic content Adobe Flash Lite (apps/games)
• Voice over IP: Adobe Flash player
• Cross-OS desktop applications: Adobe Apollo (mid-2007) + RIA
• Interactive web conferencing: Adobe Connect
• Interactive training: Adobe Connect
• Video presentations/tutorials: Adobe Connect

Much of this is made possible by the ubiquity of the Adobe Flash Player, which is installed on 97% of all computers, and runs on Windows, Mac and Linux. The Flash Player was Adobe’s grand prize when it acquired Macromedia in 2005.

Adobe Apollo

Many eyes are focused on Adobe Apollo, Adobe’s coming RIA platform due in mid-2007. It may emerge as the digital brand platform of choice if it lives up to its promise. Adobe is certainly making it a centerpiece of its platform strategy. Apollo may enable your brand to bring things together in unique ways that can create new customers, with vast powers for brand-driven widgets.

Late news here.

Alternatives to Adobe

Of course, you can create a top-tier digital-based brand without Adobe products and services. Google is developing slick online apps using Ajax frameworks, as are many other companies. OpenLaszlo is a powerful open source platform that competes with Adobe, and uses the ubiquitous Flash Player. Microsoft has its (still limited) WPF/E. Currently, though, Adobe’s Flash player ubiquity, application integration, RIA innovation and developer resources make it the digital brand platform to beat.

Brands from the bottom-up

If there’s any shortfall in all these software applications, it’s at the bottom rather than the top. As a brand builder, it’s nice to know that Adobe Flash Lite 3 will enable you to stream videos to customer mobile phones, plus deliver mobile video clips, applications and personalized content. These present outstanding brand-building opportunities. However, brands are more than broadcast. You also want your digital platform to flourish at the customer-to-customer level, so that your brand can also be built from the bottom-up.

This is especially important when customers re-create your brand in their own digital networks, pushing and pulling brand context to yield new value. You want your digital platform to handle these customer interactions that can lead to network effects.

It will be interesting to see how Adobe and other platform contenders extend their brand tools to address this issue.

Links

A excellent link for news on Rich Internet Applications is Ryan Stewart’s The Universal Desktop.

Check out Adobe’s new apps at Adobe Labs.

Photo: TJ-Blog — Flickr

Joel Spolsky relates how his New York software company has figured out how to do customer service right. They give their tech support staff the tools to fix customer problems in two ways: to solve the immediate problem, and then to fix the source of the problem.

This has positive brand-building consequences.

The power to build the brand

Spolsky’s company, Fog Creek Software, does not outsource customer service. They take accountability for it in-house. When a customer calls with a problem, a tech support employee first helps resolve the customer’s most pressing issue. Once that is dealt with, he or she is empowered to take steps to get the problem fixed at the source. Often, this is a code-level fix. In this way a potential class of problems can be eliminated, and with it the possibility that other customers will experience similar issues.

The result is both a tactical and strategic step forward in customer brand experience.

Call centers can erode brand value

Joel contrasts his company’s approach to that of typical call centers, where support personnel take calls day after day without ever having the tools to fix anything. The same calls keep coming back, and support personnel keep reading the same canned diagnostics on their computer screens. Customers hate it, call center morale is low, and the company wonders why its brand just can’t seem to gain traction.

To quote Joel:

Many software companies still think that it’s “economical” to run tech support in Bangalore or the Philippines, or to outsource it to another company altogether. Yes, the cost of a single incident might be $10 instead of $50, but you’re going to have to pay $10 again and again.

The customer wins and the brand wins

Joel says he invests more up-front in customer service, but gains a great deal more in downstream sales and customer satisfaction. The innovative way he structures his company’s tech support career track also seems destined to pay brand dividends.

Photo: barto — Flickr

A while back, in How to Design a Customer, I sketched some basic steps on how to design the customers that a business needs for its success. In this follow-up post I’ll discuss the steps brand builders can take to create those customers, once they’ve been designed.

“Creating customers,” of course, is what brands do best.

How this post is structured

This post will appear in several parts over the following weeks, with some related posts in-between. It will address these questions:

1. What does “create a customer” actually mean?
2. Why are brands the best mechanism for creating customers?
3. How does the “creating customers” approach differ from traditional brand approaches?
4. What methods should brands use to create customers?
5. What kinds of customers should we create?
6. What new forms of brand value, and brand/customer interactions, does “creating customers” enable?
7. What are some examples of brands that create customers—and of customers created by brands?

I’m guessing there will be three to five installments. I originally planned more, but have decided to spin off some of those segments into free-standing posts of their own. Eventually, I’ll put all the parts of this post into one document whose link can be found in the sidebar section called “Pages.”

Consider these posts to be a first draft of that eventual document. Since this is a new brand approach being explored, comments are encouraged—and appreciated.

Useful links

A key purpose of this blog is to set forth a new theory of brand as a process of strategic value creation. This entails a sharp break from many traditional brand concepts. If you’re new to this blog, here are some links to previous posts that can provide some background for what will be discussed here.

• How to Design a Customer
• Value-based brands (here and here, with more to come)
• Managing the brand agenda
• From supply chain to brand chain
• Brands at the core of business
• The end of “branding”
• Limits of traditional brand methods
• New brand models vs. old brand models

Our New Brand Glossary defines many of the terms I use. I’ve added key new terms to the brand vocabulary, and I redefine many traditional terms.

Perspective: the coming transformation of brands

First, some perspective on where I’m coming from. As I see it, brands are on the threshold of a major transformation. Brands are moving away from their traditional role as stylized sales stimulants and as communications designed to shape customer perceptions. Their future lies in becoming company-driven engines of value innovation, where they advance customers to desired outcomes—and beyond. “Beyond” means that brands have a definite leadership role to play.

Here’s my core definition of brand: Brands are avenues of value innovation in a creative engagement between companies and their customers. In subsequent installments I’ll show how this definition anchors a methodology for creating customers.

Brands: from “perceptions” to value delivered

As you can gather, what I’m describing is a major change in the nature of brands, and in brand building approach. For one thing, it means that brands will need to be developed as programs of strategic deliverables. They’re no longer a glossy wrapper or meme existing at the level of a “message,” and powered by serial campaigns. Brands of the future will be shared, two-way, live connections between company and customer—connections that create significant value for both beyond the sales transaction.

Reinvent brands to preserve brand value

In my view, this transformation in brands is necessary to preserve brand value, and to prevent the slow self-destruction of brands if traditional brand models are pursued. Brands have to find new ways to engage customers at deeper levels of value. These are the levels of delivered value where “creating customers” takes place.

Peter Drucker on “creating customers”

When we discuss “creating customers” we have to start with Peter Drucker, who said it first, and probably best: “There is only one valid definition of business purpose: to create a customer.” (in Management: Tasks, Responsibilities, Practices, p. 61 in my copy.) But what, exactly, does “create a customer” mean? Is it merely selling something? Or does it go beyond that? If so, how far? And what kind of customer do we want to create: a passive buyer one step above Pavlov’s pooch, or an active innovation partner who might help us grow new markets?

I’ll address these questions below, and in succeeding installments.

Food for thought: Companies are defined by the customers they create.

What “create a customer” means

I define “create a customer” this way: To create a customer means to connect a customer to a larger part of himself or herself through the brand. This is a connection to that person’s potential and/or passion, within the context of the customer’s expected brand outcome. Your brand helps customers to discover themselves, unfold themselves, iterate themselves, and prototype new selves that are now latent, awaiting only the wondrous “developer” that flows through your brand platforms and programs.

And since your brand is a creative engagement, you have many, many options at hand to work your wonders. What counts is the nature, content, direction and value of your brand connections.

Brands and “creating customers”

“Creating customers” is what brands are all about. It’s where brands come into their own as a process of value creation, combining strategy, imagination, innovation and customer interaction. Yep, brands are all that, which makes brands the single most expressive—and engaging—process in business. Moreover, the process of building brands is most effective when it’s openly shared with customers. That’s one reason why brand building stands head and shoulders above most other business practices. It aims to team the best and brightest of a company with the best and brightest of customers. That combination is hard to beat.

“Creating customers” and the brand mission

“Creating customers” is a central part of the brand mission. Your brand mission is to create the customers that will drive your business forward. This means that “creating customers” is a strategic process. Brands create customers as part of a focused program of strategic value creation. This puts the brand team at the heart of business strategy, where we’re in the thick of plans to create new value, and to gloriously disrupt competitors. In this regard, brand builders map out their customer creation process with two objectives:

1. Advance our customers beyond the reach of competitors.
2. By delivering new forms of value, make our competitors irrelevant.

I’ll have more to say on the brand team in a later installment.

To be continued in Part 2.

A visual feature of the new Rolex website is so stunning in its elegance and simplicity that it sets a standard for brands on the web—and especially for widgets that wish to convey brand meaning with a single graphic device.

Brand quality expressed as graphic quality

Go to the Rolex website, let it load (Flash) and then admire the gorgeous oblique view of the Rolex GMT II as it adjusts itself to your time—and then keeps time as if it were on your own wrist. It appears uncannily real. Everything you experience is of the utmost authenticity, right down to the minute hand passing beneath the trademark Rolex magnifying lens.

Without a single word, this tour de force visual defines the Rolex brand for what it is: uncompromising quality. Rolex could have settled for less, but didn’t. It’s Rolex. It’s not just “different,” but in a class by itself.

I’ve never seen anything like this before on the web. Have you?

Widgets must rise to the level of brands

If you’re creating widgets with brand aspirations, Rolex has set the standard. Your job is to do no less, and preferably to take it to the next level. The last thing you want to do is to reduce a brand to the level of a widget. It has to be the other way around.

Thanks to: Scott Weisbrod

Michael Urlocker deftly summarizes how the Nintendo Wii is disrupting the market-leading Sony PlayStation. The lower-priced Wii is flying off the shelves, outselling the PS3 by 60% in the U.S. Significantly, it has helped raise Nintendo earnings 43%.

Beneath the surface this is a brand story, too, but first let’s look at the six disruption lessons that Michael gleans from the Wii’s stunning success:

1. Nintendo’s market disruption is not about better technology;
2. Disruption is not about incremental improvements;
3. Disruption is about understanding where the customer experience is not good enough;
4. Disruption is about making a product more accessible;
5. Disruption is about changing the basis of competition;
6. Disruption is about a new business model.

These are all excellent points. And while it may not be obvious at first glance, most contain a strong brand element, because a key focus of brands is to put more customer in the product. Do this in the right places, and your new product can marshal the power of customers behind it—with disruptive impact.

Brands activate customers

Through brands, you’re not just selling a better-packaged product. You’re activating customers. It’s this activation that has disruptive power. The Wii raises customers off the couch and into the action sphere of the game itself, redefining game space, and redefining the very role of the player.

Brands have disruptive power

Where the above list uses “disruption” you can just as easily put “brands.” Brands have disruptive power too, if companies choose to use it. Brands can create new customers by freeing them from existing market constraints, and by then advancing customers to higher levels of experience. In this context, the strength of a company’s brand depends on how much customer the company wants to put inside the product. When you put enough new customer in, you can break the mould (and hold) of a market leader.

Choose your brand model carefully

You might call brands such as these, “disruptive brands,” but it really comes down to the brand model you employ. Brands that liberate their customers from boring, low-level experience may find they have a new market to themselves without trying to be “disruptive” at all.

With the right brand model, brands can free customers to disrupt a market for them.

Unlocking brand value

What’s especially evident is that brands can exert disruptive power without out-spending or out-shouting their competitors. Brands are able to do more with less because they can capture value from customer experience. The Wii does not have the super high tech profile (and cost) of a PS3. It simply frees customers to experience gameplay in exciting new dimensions. It creates market value by unlocking experience value—that’s been bottled up inside the customer.

Nintendo’s brand vision

I’d also say that Wii’s success is testimony to the quality of Nintendo’s brand vision. We define brand vision as a company’s ability to see its future through its customers’ eyes. That’s not always easy, but that’s what Wii seems to do rather well.

Photo: Jeronimo Palacios — Flicker

TechCrunch and other sites are reporting that Google is working on an online presentation app aimed to disrupt Microsoft’s ubiquitous PowerPoint at the low end. Dan Farber and Larry Dignan add some market perspective. If real, this application may initiate a brand battle royal between Google and Microsoft.

Disrupting PowerPoint

A Google presentation app has been long rumored as a final step in completing Google’s emerging online office suite as an alternative to Microsoft Office. PowerPoint, of course, is one of Microsoft’s crown jewels, and deeply entrenched in U.S. business culture. Making a dent in PowerPoint would be a huge coup for Google.

In the spirit of speculative brand building, let’s see where Google might take such a new presentation application. As part of its brand strategy, Google would want to do two things:

1. Create a new customer
2. Invest the app with the power of a platform

Microsoft’s brand vacuum is Google’s gain

Google’s challenge is made somewhat easier because Microsoft has often neglected real brand building in its era of market dominance. Microsoft’s market power has blinded it to the value of brands. It has tried to contain its customers as much as possible, assuming that what was good for Microsoft was always good enough for users. The result is a huge PowerPoint application that often overshoots its market, leaving a brand vacuum where a smaller, user-friendly application might fit. That’s a vacuum that Google is happy to fill.

A new Google app for a new customer

An online Google presentation app won’t be as slick as PowerPoint, but it doesn’t need to be. Its job would be to create a different model of “presenter” who would do more with less, aided by a different presentation cachet. The cachet would probably be cross-platform ease of use and collaborative efficiency. (And, OK, free.) Instead of trying to “wow” you with a special effects extravaganza, the Google presenter may be more of a team lead who uses the presentation format to share ideas and concepts. He or she would factor in contributions from those present in person and online, and re-assemble the pieces to speed the team forward. It’s more of a workflow model than a broadcast model.

With the new Google app, presentations could arise out of group meetings, spontaneously produced from available documents. (There’s evidence that the Google app will allow users to convert documents into presentations, and vice versa.)

Redefine “presenter” and “presentation”

In short, Google’s brand approach would be to redefine the context of “presenter” and the context of the presentation itself. It would create a new context for both of these that undercuts the traditional world of PowerPoint. It would shift the context of the presenter from the individual to the team. It would shift the context of the presentation from a one-man “show” to project-based workflow.

Bells and whistles out, results in

I’ll further speculate that Google’s presentation app will focus less on bells and whistles and more on translating ideas into products. From a brand perspective, Google might want to target some important (coin-operated) reference groups as early adopters. Students, entrepreneurs and venture capitalists come to mind. If VC’s were to embrace the new app as a no-nonsense presentation format that they want from entrepreneurs, the app could gain immediate traction.

Positioning will be critical

A Google presentation app might be best positioned as a special form of collaboration, as opposed to the top-down, broadcast model of PowerPoint. Thus, it becomes a working platform for project teams. Its aim would be to help the group focus its priorities, rather than to bend the group to a presenter’s point of view. Its essence is the social and the shared, vs. the conventional “mine” and “me” of PowerPoint. It’s an app made for teams and team players.

Google: the brand of innovators?

If you’re working at the cutting edge of innovation, cranking out fast prototypes, iterating new models and concepts as part of a team, the hierarchical broadcast model of PowerPoint just might divide your efforts, and slow your team down. What you need (as Google might say) is a cross-platform presentation tool to share visualization and ideation, to speed the prototyping and innovation results that can take you to the next level.

In other words, through its presentation app Google may want to become the brand of innovators. Think of all those entrepreneurs working on web-based applications, like the mashup crowd. Or small businesses that want less process and more production. Or any team-based, skunk works operation.

Weakness of the Windows Live brand

Of course, Microsoft might announce a competing online presentation app in an attempt to blunt Google’s initiative. Redmond has strong online capabilities in its Windows Live offerings. But Microsoft’s shaping of the Windows Live brand has been notoriously confusing. As a brand it seems more tuned to the machinations of Microsoft divisions than the needs of customers, a compromise solution rather than a focused brand approach.

This is where all those years of brand neglect exact their pound of flesh from Redmond.

The PowerPoint customer model is getting old

A generation ago, PowerPoint helped Microsoft create a new kind of customer, the incipient manager who used PowerPoint to stand out from the crowd and pave his/her career up through the ranks of the large corporation. That was a major accomplishment for Microsoft, but that customer model is now getting old. Businesses have changed. Work has changed. Unfortunately, Microsoft has kept the old model going in order to sustain the Microsoft Office franchise. In so doing, it has paid a high price in brand innovation: today the Microsoft brand looks backward and inward instead of forward and outward. PowerPoint has become a platform for office routine—and often the most boring routine. It’s hardly the platform of movers and shakers.

Google’s brand opportunity

And thus we have Google’s brand opportunity. Google’s online apps are emerging as a lightweight platform for innovation and project teams, where information is meant to be gleaned from the network and the cloud, shared and iterated, molded into pilot projects and prototypes, and sent back richer. Others see the same opportunity. Where Microsoft has become the platform of status quo, Google may become the platform of innovation. Google’s online apps might even become the “way” of a seamless and free-flowing innovation culture.

Awaiting the real world test

Well, so much for speculation. We’ll see how all this works out in the real world. Google first has to launch an online presentation app with useful capabilities. To make PowerPoint “irrelevant” Google will need to create a new context for the “presenter,” and for the presentation itself. Finally, just being “good enough” won’t be good enough. The new app will have to be the presentation platform of choice for high performance people.

Photo: Ianuiop — Flicker

Michael Mace offers an interesting analytical framework (with diagrams) for making sense of current smartphone and mobile data markets. His analysis (presented as a snapshot) includes Apple’s new iPhone.

Michael’s approach also suggests ways that brand programs might be mapped to market segments, though with brands it’s always better (IMHO) to think of customer vectors rather than fixed locations.

Market mapping the iPhone

Here’s what Michael says about the iPhone:

The iPhone is an attempt to create a phone + media entertainment device. It’ll be interesting to see how the iPhone does in the market — it was an obvious move to combine a communicator with a phone, but it’s not as obvious that the entertainer is a natural match with a phone. The danger to Apple will be if users see iPhone as the worst of both worlds: a phone that lacks a good keypad and an iPod with very small memory.

Beware the “Zone of Death”

On one of Michael’s diagrams, the iPhone seems to be uncomfortably close to what he calls (gulp) “the Zone of Death.” As Michael defines it, this is a market area of low demand where products try to combine different feature sets without solving the key problems of a critical market segment. To use Michael’s analogy, it’s where one finds products that try to be a sportcar, minivan and tractor all in one.

We’ll have a better sense of where the iPhone is headed once it launches, and we can grasp its actual potential as a communications/entertainment platform. It’s that potential that has everyone excited. The iPhone’s true test will come after the early adopter splurge.

Photo: marble2 — Flickr