How brands create customers: Part 1

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.

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.

Continued in Part 2.

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10 Responses to “How brands create customers: Part 1”

  1. Raimo van der Klein Says:

    Great post. Looking forward to the next ones..

    Thanks!

  2. Brian Phipps Says:

    Thanks for the kind words. I just need to find the time to write the next installments.

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