Brands Create Customers

It’s a mistake to think that brands are made of “intangibles.” A company’s brand is built on deliverables, and the brand is effectively “out for delivery” every second of the day. If that delivery process breaks down, in one way or another, the brand takes a hit.

Read Kottke on a brand breakdown involving Harry Potter, Amazon and UPS. The story begins with details of what didn’t happen. It will end on how the brand(s) restore their customer connections.

Weak brands promise; great brands deliver

An extraordinary event, such as the Harry Potter release, can put an enormous strain on brand connections. The resilience in those connections, built and reinforced by streams of deliverables over time, can mean that a brand bends, but does not break.

Update:  Jason Kottke received his book the following Monday (delivered by USPS rather than UPS), and received a refund from Amazon. See here.

7-Eleven has raised some interesting brand questions with its current promotion to mod a handful of its stores to look like the hilarious “Kwik-E-Mart” from The Simpsons. Kwik-E-Mart is a biting lampoon of 7-Eleven itself. Thus, we have one brand embracing its opposite. What kind of brand strategy is this? Will it work?

In this post I ask a lot of questions, probe a few answers, and toss out some impressions, mainly so I can document the many brand issues (identity, mission, strategy, innovation, customer creation) that this brand mashup raises. I haven’t had time to structure this as tightly as I’d like, so forgive me if I bounce around a bit.

Can a brand mashup advance the brand?

One might ask: How can 7-Eleven advance its brand, and its customers, by symbolically joining with Kwik-E-Mart, which satirically undercuts what 7-Eleven stands for? Kwik-E-Mart is the anti-brand of 7-Eleven. In this brand mashup, where does one brand stop, and the other begin? In other words, where does 7-Eleven draw the line between the two brands, and the two sets of customers? This is critical, because the Kwik-E-Mart customers are laughable.

These are not academic questions. If 7-Eleven can’t define the difference between itself and its brand nemesis, it risks confusing its brand identity. In turn, this can reduce its options for brand growth, and open doors for competitors.

Moving the brand in the wrong direction?

Maybe my identity triggers are set too fine, but I sense this promo as being strategically limiting for the 7-Eleven brand. Yes, the promo will build some buzz. Yes, it will attract visitors, and maybe customers. And yes, it will be declared a rousing success as “brand theater,” “art imitates life,” “the brand as a stage,” etc. But, in spite of all this, it threatens to sink the brand into its biggest weakness, and that—in the long term—can’t bode well for 7-Eleven.

First: the marketing logic

Let’s first visit the marketing logic behind the promotion. As the hard-nosed marketing voice in the back of my mind might say: “No need to worry; this is marketing 101. It’s just a limited tie-in to an upcoming Simpsons movie. It will leverage the movie pub to punch up 7-Eleven sales. There’s nothing deep or symbolic or confusing about it. Brand is not an issue. It’s just fun, in a fun context. Let’s not forget that we’re talking about a convenience store. No one mistakes it for Harvard or Whole Foods. Customers whip in for beer, cigs and snacks. Inside, the brand experience is somewhere between a Slim Jim and a Big Gulp. The aisles are meant to be the apotheosis of low-brow brands, the antimatter of nutrition facts. That’s the 7-Eleven formula, perfected over decades. It brings in the dough, and its customers love it.”

Free advertising

That marketing voice continues: “Moreover, the funny Kwik-E-Mart scenes on The Simpsons are the best (free) advertising 7-Eleven can get. They validate the brand in fictional space—which for most 7-Eleven customers is no different than real space. In truth, 7-Eleven is only giving its customers what they want: their own stage touched by fame and celebrity. Visiting a make-believe Kwik-E-Mart is like getting a mini Disney World every time you bust in for a Big Bite.

“Finally, most 7-Eleven customers think the Kwik-E-Mart dress-ups are totally cool. So how can this be ‘bad’ for 7-Eleven?”

God, I hate that voice. It doesn’t yet understand that brands run on brand logic, not marketing logic. More on this below.

What does Kwik-E-Mart add to 7-Eleven?

The staged Kwik-E-Mart’s will certainly attract curiosity seekers. People who never patronize 7-Eleven might want to see a full-size fake Chief Wiggum, and maybe contemplate the bowels of a real-life Squishee.

From the news article cited above:

The Fox/7-Eleven deal is an example of a practice called reverse product placement. Instead of just putting products prominently in a movie or TV show, fake goods move from the screen to reality.

Maybe—or maybe not. What if 7-Eleven is not importing “fake goods from the screen to reality” but is instead importing the reality of satire into the live world of 7-Eleven retail, where that satire cuts to the bone? How will that build the 7-Eleven brand, other than to confirm its essence as the butt of a 15-year joke?

The Simpsons as mischievous mascots

Are the Kwik-E-Mart facades intended to persuade us that The Simpsons characters are now the endorsers of 7-Eleven, and not its satiric tormentors, thus turning reality on its head and making the satire “go away?” In other words, can the Kwik-E-Mart promos regenerate Bart, Homer and crew as playful decoration and lovable sprites, without their bite and edge? Can it reincarnate them as mischievous mascots, reducing them to a form of “packaging?” That may be part of the plan, but if so it may lead to a deeper brand problem.

Lowering customers to the Kwik-E-Mart level?

In Springfield, the usual customers of Kwik-E-Mart are dimwits and the hopelessly alienated. When 7-Eleven brings Kwik-E-Mart to life, as an alter ego of its brand, where does it draw the line between Kwik-E-Mart and 7-Eleven customers? Or is it really erasing that line?

In my view, that line has to be drawn because Kwik-E-Mart is the home of low-performance customers. Generally, they’re losers. They pinball through life and return little benefit to the brand. They’re at the bottom of the brand chain. If these same customers are the intended hard core base of 7-Eleven, then the 7-Eleven brand is forfeiting growth into attractive markets beyond that base. In effect, 7-Eleven is saying to the world: “We have seen our future, and it’s Kwik-E-Mart. Their customers are our customers.”

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If you haven’t yet read the recent post by Peter Merholz called Designing for the Sandbox, you should do so. It proposes a flexible structure for designing customer experiences, where a fair amount of leeway is given to customers themselves to shape their own meanings.

Peter writes:

People who design experiences often believe that in order to succeed they must exert complete control. And while in extremely rare instances they might be afforded the opportunity to dictate an entire environment (say, in a casino, or a theme park), when designing for the real world, for the ebb and flow of actual lives, such control is impossible.

Customer experience is connections, not control

Peter suggests that the effective richness of an experience lies in the connections it provides, not in the control it exerts:

In fact, the best thing a designer can do is dictate as little as possible. Because the point isn’t to control, it’s to connect–to weave your offering into the complexity of people’s life experiences, to allow them to figure out how to make sense of your offering within their world.

To this I’d say, “Yes, indeed.” From a brand perspective, your brand fabric is part brand, part customer and part context. It’s a living thing, too, always in the process of growing itself. Dictating your brand cannot grow your brand.

The role of the “sandbox”

The approach Peter calls “designing for the sandbox” can be part of the answer:

… I’ve been calling this “designing for the sandbox.” This acknowledges a space for content, tools, and people to interact and create their own meaningful experience. This is not a monolithic creation, that dictates how the content, tools, and people best interact. …

The sandbox and the “brand as means”

The sandbox approach meshes with what I’ve been propounding as “the brand as means,” where the brand rises from a dictated message mode to become an enabling platform for customers. The brand enables customer connections, and many levels of customer interaction. (See: Interaction design: the new key to brands.)

What’s in the brand sandbox?

I see the brand sandbox as a shared, collaborative space where the brand and customers work and play together to shape their respective futures. (Both parties benefit.) The main tools are those that facilitate interaction, initiative and innovation. Although we call it a “sandbox,” it’s an infinite kind of sandbox, with horizons for big thoughts and big actions. (For brands, every sandbox is a Sahara.)

So, to answer the question, “What’s in the brand sandbox?” I’d say the best short answer is: “a special kind of freedom.” Customers can use this freedom to grow and transform themselves, and in the process, to grow the brand. This, of course, all comes back to the brand agenda.

Blogs are a foot in the sandbox

When a company starts an interactive blog (or blogs) with customers and stakeholders, it is putting its foot in the sandbox, so to speak. As shared connections and interactions, such blogs can become productive forms of customer experience.

There’s also a good amount of “brand sandbox” in the processes I’ve described called designing customers, creating customers, and growing customers from the ground up.

And what’s in your brand sandbox?

Ironically, what makes your brand stand head and shoulders above the rest may be the sandbox you provide beneath your customers’ feet. The brand wars are also sandbox wars.

Photo: .michael.newman. — Flickr

A key purpose of your brand is to connect people to themselves, to other people, and to interesting things.

Schmapplets are a new way your brand can make these connections online. A Schmapplet is a Google map mashup that you can readily customize for any occasion, event, journey or slice of life. In a brand world that’s soon to be rife with personal brand applications, Schmapplets and their kin can be fluid, cost-effective ways for a brand to bind with customers. If you’re thinking about what widgets and similar apps can do for your brand, Schmapplets may be worth a look.

The gallery on the Schmapplet home page has a range of examples. Your brand imagination can take it from there.

Portable Brand Connections

Don’t think of Schmapplets as desktop or laptop applications. In a few years, when everyone has an iPhone or something similar, Schmapplets and the like may be your best way of building portable brand connections—that can also be permanent ones.

Schmapplets, of course, are only one example of a mashup tool. There may be similar mashup applications on the market that also do the job for you.

Hat tip to digitalcommons

Great brands often seem to have a manifest destiny to work their magic at higher and higher levels.

The HondaJet, targeted for executive travel, is now in development and certification testing. It’s scheduled to begin production in 2010. Initial orders have been brisk.

The over-the-wing engines are a Honda innovation, and took years to develop. Their story is a brand story, from within.

Why trust a jet from Honda?

Why? Because based on brand experience it will be superbly engineered, safe, reliable, quiet, smooth, comfortable, agile, fuel efficient, great value, and replete with thoughtful touches.

The Honda brand has earned immeasurable trust for doing things right.

A great brand is a method

Honda demonstrates that a great brand isn’t built on flash or splash or noisy campaigns. A great brand is a finely-tuned and relentless method of discovering and delivering value—wherever customers roam.

Photo: HondaJet

Hat tip: Reveries

The Apple iPhone brand is on the move, shaking things up. I’ve written about the iPhone’s potential impact on wireless brands and brand strategy here and here. Now iPhones are flying off the shelves in record numbers, mostly to rave reviews. As expected, the iPhone brand is causing havoc in mobile markets. Surprisingly, it may also alter the landscape for brands in all markets, across the board.

The iPhone creates a new customer

After June 29, 2007, customers in mobile markets are a different breed. Apple has upgraded their DNA—irrevocably. The iPhone changes the “phone experience,” the context of the phone, and user expectations to such an extent that it advances the customer to a new level, breaking the traditional mobile phone mold. Because the iPhone is so new, this break currently appears as a fissure, but it has “chasm” written all over it. What the iPod was to music labels, the iPhone may be to established carriers and handset makers.

What “create a customer” means

The phrase “create a customer” means much more than simply making a sale. I define “create a customer” as follows:

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.

The initial feelings of delight, amazement and revelation that iPhone users experience are those of a new customer being birthed.

The iPhone changes the game in mobile brands

When great brands change the game they change the customer.

They redefine the customer and the customer’s world, elevating the customer to a completely new context. In this new context the old game suddenly becomes irrelevant, along with all the companies, products and brands wedded to it.

In the iPhone’s case, it changes the game (and the customer) by giving customers more fluid and more fluent access to the world of their culture. The iPhone does this through the power of a highly expressive multi-touch GUI and a version of the sophisticated Mac OS X operating system. The result is a customer liberated from conventional limitations, even in a 1.0 device. Can the carriers match this? No. Can the other handset makers match this? No. Apple has made the “iPhone experience” the new reference context for mobile devices. Everyone else is now playing catch-up, largely on Apple’s terms.

How the iPhone changes brands in general

The impact of the iPhone brand is not limited to mobile wireless markets. It affects all brands because the future of brands lies in personal brand applications that will run on digital devices . . . such as the iPhone. The iPhone is both a reference application and a reference device. It helps usher in the era of the brand as “means.”

As part of “creating a customer” the iPhone enables customers to create and share their own culture–at their fingertips. This culture-creating capacity is what sets brands apart from raw products and services. It is also what differentiates brands as “means” from traditional broadcast brands limited to symbols and signs. With the iPhone itself as an application platform, Apple enables customers to be more, and to do more, in a context they themselves create. Can your brand do that?

Whatever your brand, sooner or later you’ll be asking yourself, “How does our brand play on the iPhone?”

Will AT&T undermine the iPhone brand?

There’s been speculation that Apple’s exclusive deal with AT&T may undermine the iPhone due to the “walled garden” nature of the AT&T brand. There’s some logic to this argument because the AT&T brand is largely predicated on controlling and monetizing customers, not enabling them.

On the other hand, it’s hard to bet against Steve Jobs. He has customers, Moore’s Law, and the Internet on his side. Plus, he’s Steve Jobs. And with the iPhone he has a powerful innovation platform that can move in multiple directions, at a very fast pace. Second and third generation iPhones may make the launch iPhone look elementary and underpowered.

Steve Crandall has some very insightful observations on the marketing dynamics of the Apple/AT&T relationship, and how they may play out.

Photo: Apple, Inc.

How can U-Haul turn its brand around? This venerable company seems unaware that its ubiquitous brand is now bouncing toward the edge of a cliff, primed for a free-fall, with no brand programs to reverse its course. The brand just got a kick in the wrong direction from news articles linking management practices to horrific customer accidents.

Grim details that a brand doesn’t need

Last week The Los Angeles Times published a multi-part investigative series on accidents involving U-Haul customers and their rented trucks and trailers. The series focuses on U-Haul safety defects and deficiencies, and was picked up by other news outlets around the country. It documents grim details from court cases filed by injured U-Haul customers against the company.

From the Times:

U-Haul, the nation’s largest provider of rental trailers, says it is “highly conservative” about safety. But a yearlong Times investigation, which included more than 200 interviews and a review of thousands of pages of court records, police reports, consumer complaints and other documents, found that company practices have heightened the risk of towing accidents.

[…] During a yearlong investigation, Times journalists surveyed more than 200 U-Haul trucks and trailers in California and other states and found that more than half were overdue for a company-mandated “safety certification,” a check of brakes, tires and other parts typically required every 30 days.

Some safety checks were more than a year overdue.

Signs of a classic brand breakdown

The Times articles detail a case of classic brand breakdown. The signs are everywhere, writ large in customer dissatisfaction, chronic equipment troubles, problems not fixed, danger signals ignored, and a U-Haul attitude that makes customer service a low priority in practice. The brand seems notorious for bad service. (More on this below.) There’s just no evidence of proactive brand programs at U-Haul which might have mitigated on-road accidents and their high customer cost. These didn’t have to be flashy programs, or expensive ones, just focused measures to join with customers to make the rental experience safe and enjoyable.

In place of that “joining,” U-Haul’s customer interactions seemed to pivot on perfunctory warning placards and safety brochures (the latter not always distributed) and the legal language of its rental contract. These provide a very different brand relationship.

What the Times says about U-Haul and trailer safety

From the Times article:

The safest way to tow is with a vehicle that weighs much more than the trailer. A leading trailer expert and U-Haul consultant has likened this principle to “motherhood and apple pie.”

Yet U-Haul allows customers to pull trailers as heavy as or heavier than their own vehicles.

It often allows trailers to stay on the road for months without a thorough safety inspection, in violation of its own policies.

Bad brakes have been a recurring problem with its large trailers. The one Sternberg rented lacked working brakes.

Its small and midsize trailers have no brakes at all, a policy that conflicts with the laws of at least 14 states.

It relaxed a key safety rule as it pushed to increase rentals of one type of trailer, used to haul vehicles, and then failed to enforce even the weakened standard. Customers were killed or maimed in ensuing crashes that might have been avoided.

Similar concerns regarding U-Haul’s safety and maintenance practices have been raised in Canada, where U-Haul vehicles fared poorly in government inspections and independent safety checks.

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Every practice—including the practice of brands—benefits from a clear vision of where it’s been, and where it’s going. It carries a picture of its own evolution. Ideally, this is a vision that’s short and sweet and memorable, one that encapsulates past and present, and points (with some logic) toward the future.

The three eras of brands

At the present time I see brands unfolding across three eras. In broad brush-strokes, this is a progression that starts with brands as mark, makes a huge transition to brands as media, and now looks toward brands as means. These are not exclusive phases, of course. Each phase carries over into its successor, and still maintains a presence. At some point, though, the fickle finger of zeitgeist flips a switch and we find ourselves in a new epoch of brands.

What’s important for brand builders is that we’re now reaching the end of media-based brands, a storied age tied to the heyday of mass media itself. That age is winding down. It will be a monumental change from that era to the rise of brands as means, where brands serve as tools and “enablers” for customers. This will be an age of brands as personal (digital) applications.

The current transition will take at least a decade to play out. It will happen in bits and pieces. Brand marks and media-based brands will not disappear. But I think they’ll play reduced roles in the years ahead.

Now for some comments on each phase:

First Era: Brand as Mark

This was the first era of brands, beginning several centuries ago, when the defining mark was the brand. The mark was a unique and distinctive name and/or symbol originally burned into wooden barrels or boxes, identifying the maker and/or purveyor. Marks live on as trademarks, logos, labels, packaging, and certain visual and symbolic product properties, including design.

Second Era: Brand as Media

Powered by mass media (newspapers, radio and TV), this was the era of brands as messages and communications about the product, reflecting the belief that such communications often deliver more brand value than the product itself. Media-based brands ran circles around marks that could not create new layers of meaning (and emotion) beyond their symbols and signs. What counted in this era was the “brand idea” and its attributes communicated to the passive “consumer.” As mass media now begins to fall apart, hugely talented ad agencies strive to resolve inner contradictions to keep the old model afloat.

Third Era: Brand as Means

In the emerging “means” era of brands, brands become personal applications that enable customers to do more and to be more. They’re product potential X customer potential. Brands will run wild with digital innovation. Through digital technology they’ll be smaller, faster, more powerful, more portable and more personal, a combination of second skin and sixth sense. There are glimmers of this era in Apple’s iPod and iPhone, in the build-out of Google’s online applications, and in the Web itself. In the era of brands as means, customers are no longer a passive audience. They’re part of the brand team, as innovators and collaborators.

What about “brand experience”?

Brand builders today go to great lengths to optimize brand experience, so one might ask how and where “brand experience” fits into my formulation. Here’s my current answer: If a brand experience treats the customer as an audience, then that experience is part of “media.” However, if a brand enables customers to experience things on their own, then that experience is part of “means.” In other words, passive experience (audience) is “media;” proactive experience (participation) is “means.”

A few months ago I proposed that the best way to change the game in any industry is to change the customer. We can now see this process of changing the customer unfolding at a meta level in leading social network sites, such as Facebook. As these sites offer broader and deeper communities for their members, they’re creating a new community-based “social customer” whose needs may not be met by traditional brands. Yes, new social sites are changing the customer and changing the game for brands themselves.

MySpace, LinkedIn, Mebo and Facebook are prominent social sites, but today I’ll focus on Facebook because it’s making big news with its innovative Facebook Platform. What sets Facebook apart (for the moment, anyway) is that its new platform allows third parties to develop software applications to run inside Facebook itself. It’s as if Facebook took the classic “closed portal” model and turned it inside out, giving members virtually unlimited choice of applications they might use.

Facebook as a platform of opportunity

Facebook thus becomes a platform of opportunity for three beneficiaries:

1. For Facebook members — as a richer platform for connecting with each other and sharing experiences
2. For application developers — as a potential market for innovative apps
3. For brands — as a new way to connect with customers, and to reshape brand identity.

Brands stand to benefit from Facebook’s platform approach, but they can’t fall back on “messaging” and brands-as-usual.

How Facebook is changing brands

With its new platform approach, Facebook is changing brands in three important aspects:

1. Facebook is creating a strong community context that can challenge the marketplace context where brands have traditionally flourished. In the Facebook context, the individual and his/her community are the focus of meaning; they’re at the center of the universe. Given this social centrality, traditional marketplace brands can appear as outsiders, as less authentic, and can fall to a second-tier.
2. Facebook enables a new mode of brands as personal applications, elevating brands from the static and symbolic to the functional, with new avenues to create customers. Brands can experience rapid, viral growth through Facebook communities when they’re a means of getting things done.
3. Facebook’s new platform raises Facebook itself to a unique brand presence as a network of expression, a happening “place,” and a true “relevance engine” based on users themselves. This raises the bar for brands. Brands without an innovative digital strategy (and deliverables) may simply go the way of these guys.

The Facebook Platform

As noted above, the Facebook Platform is important because it opens Facebook to third-party software applications, greatly expanding Facebook’s capability to serve member needs. A brand that provides value can gain a significant (free) presence on the Facebook platform in the form of a widget (a concise application) that enables members to do something gloriously useful and unique—in some context of the brand. Applications are integrated into Facebook’s look and feel, are intended to be shared, and can access (with permission) user data across Facebook’s 38 million members. See here and here, and especially Mark Andreessen’s comments here.

The challenge to conventional brands

To a large degree, Facebook and other social sites are in the connection business. The more they enable members to connect to (and shape) their personal networks, the more they thrive. In this process, a member’s group identity, support and social connections may ultimately take precedence over product and company connections that brands try to establish. One’s social network becomes an all-encompassing filter. In a context of strong social connections, where the individual is nourished by personal affiliations, exterior brand connections may be harder to establish, and sustain.

Let’s now explore the three game-changing areas where Facebook impacts brands. Other social sites may have similar impacts, as well.
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