Brands Create Customers

We don’t often think of brands as “incubators,” but incubating customers turns out to be a critical part of the brand mission. As a matter of fact, it’s strategically vital.

The logic of incubating customers

Let’s begin by observing, first and foremost, that brands are creative partnerships between companies and their customers. They’re a team effort, bottom-up as much as top-down. As such, brands have a vested interest in incubating as many energetic, diverse and free-thinking customers as possible. These are customers who can push the product envelope and the brand envelope into new forms, formats and markets. In so doing, they add value back to the brand from a dozen different directions, and help drive the business forward.

Strategic incubation

As warm and fuzzy as “incubation” might sound, brands incubate customers for reasons that are strictly strategic. The payback from incubating customers is competitive advantage. Your goal in incubating customers is twofold. You want customers who can:

1. Augment your R&D
2. Carry your business into new markets where competitors can’t follow.

The customers that your brand incubates today may drive your strategic platforms of tomorrow. By incubating customers your brand becomes a means of innovation, organically developing new contexts of product and service value.

The incubator model: an innovation platform

There’s a very specific brand vision behind the incubation process. That vision understands that customers are much more than mere “buyers” of products. They’re potential innovation partners who can pay bottom-line dividends far into the future. Thus, we employ an incubator model that’s much more than heat lamps and a comfy nest. In brands we incubate innovation, and we design the brand as an innovation platform for customers. (Brands belong in the innovation department far more than they belong in the marketing department.)

Brands as innovation tools

Brands are, of course, the premier tools to create (and incubate) customers. Brands enjoy this special status because they encompass creative, social, personal, emotional and moral dimensions. These are all potential innovation levers. This special scope grants brands a transcendent power to transform customer lives—in the right directions if the brand is morally and socially grounded.

A reference model: Y Combinator

One reference model for brand builders is that of startup incubators, the boutique companies who help fledgling entrepreneurs turn raw ideas into business. Treat your customers as brand entrepreneurs, because that’s what they want to be, and that’s you need them to be. A useful model to examine in this regard is the successful business incubator Y Combinator. Brands would do well to learn from their vision and focus.

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Back in 2003 a prominent Windows user tried to download a new Windows application to his machine. The download did not go well.

Bill Gates fired off a blistering email to top Windows honchos detailing his experience, and his frustration. You can read that email here.

“No one wants a relationship with their mustard.”

Kara Swisher uses this quote (from an ad agency exec) to begin her post, Social ads not cutting the mustard? She examines why widgets and other forms of “social advertising” haven’t (yet) lived up to their billing.

She continues:

This odd but spot-on observation was about why big packaged-goods advertisers–who are the really big spenders of the ad business–might be less than interested in leveraging social-media advertising and its promise of deep engagement with consumers.

No one wants to interact over mustard or mayo or ketchup or most products that pay the rent up and down Madison Avenue.

Brands and the big picture

In a narrow sense Kara is quite correct: we don’t need to chat with our jar of Grey Poupon, or have it update our Google calendar, or follow us around on Twitter. But no one really expects that, either. Such a focus on the jar or the tin is myopic. In the big picture of things—where brands play—relationships with products like mustard are very important indeed. They’re the essence of brands. What counts is the context of the relationship, and the ability of the brand itself to make that context sustainably engaging.

In brands, context is king

From a brand perspective, the blanket statement that, “No one wants a relationship with their mustard” is self-limiting. It precludes brand opportunities. Consumers can be open to such relationships—if they’re meaningful. Using mustard as an example, mustard brands have been designed to be very rich in relationships for decades. They certainly want relationships with their customers, beginning with brand trust and brand loyalty. And they certainly want their customers to have relationships with them—beginning with the brand experience of a consistently tasty product. These relationships are money in the bank.

A context for mustard?

The most straightforward context for mustard is to partner with customers in the discovery of taste. The brand is a guide and adventurer, rather than a mere purveyor. This opens up multiple opportunities in the desired brand journey.

Building the brand enthusiast

Customers who use a particular mustard will often swear by it, testifying to their relationship. If they also use it for marinades, sauces and dressings, the mustard will play a significant role in their recipe repertoire and cooking lifestyle. This places the mustard in the brand Nirvana of the enthusiast, and believe me, in that space will be a relationship. Weber understands this quite well, for example. And would Weber ever think, even for a second, that people don’t want a relationship with their grill?

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The US Army seems to think so. It is establishing its own air arm, to be more responsive to tactical needs on the ground, where today’s battles are increasingly won or lost. The Army’s focus is on unmanned surveillance aircraft under control of local (Army) officers:

. . . [I]n Iraq, the Army has quietly decided to try going it alone for the important surveillance mission, organizing an all-Army surveillance unit that represents a new move by the service toward self-sufficiency, and away from joint operations.

. . .

The work of the new aviation battalion was initially kept secret, but Army officials involved in its planning say it has been exceptionally active, using remotely piloted surveillance aircraft to call in Apache helicopter strikes with missiles and heavy machine gun fire that have killed more than 3,000 adversaries in the last year and led to the capture of almost 150 insurgent leaders

Brands are about performance, not “essence”

The Army’s air power initiative illustrates the rule that to sustain a brand, you have to deliver the goods. Your iconic “essence” is immaterial. You perform, or a better brand takes your place. Sometimes, customers take matters into their own hands—as in the case of the US Army.

The task force of about 300 people and 25 aircraft is a Rube Goldberg collection of surveillance and communications and attack systems, a mash-up of manned and remotely piloted vehicles, commercial aircraft with high-tech infrared sensors strapped to the fuselage, along with attack helicopters and infantry.

Bottom line: Brands of “essence” never have a chance against brands of innovation.

Photo: Wikipedia

From today’s WSJ:

In retrospect, Microsoft’s unsolicited approach appears to have badly backfired. Instead of winning Yahoo’s huge audience and online search capabilities, Microsoft has driven its quarry into the arms of its arch enemy — Google.

Like brands merge because they can see themselves on a common platform with uncommon opportunities. But when one brand is ill-suited, stunted or malformed, the platform will be full of holes, and pitfalls. Players inside both companies can see this coming. They avoid it like the plague.

For a bit of perspective, see here and here.

Photo: zoer — Flickr

Often, a major hurdle to brand success is the actual brand model that a company employs. For example, a brand model that reduces a brand to part of the sales pitch, and sales package, can actually handcuff the brand’s ability to create customers. That’s because brands tied to the “influence model” become elements of a persuasion package, and little more. Their value to customers is limited, and their platform potential is nil.

The confluence model

A more strategic approach is that of brand confluence, where your brand enables you to join with customers in a stronger forward flow. In the photo above, imagine that the river on the right represents the customer. Your brand becomes the river on the left. You join the customer in a major confluence of forces, mixing and becoming one, stronger together than when apart. (And indivisible, too.)

In this approach the brand model is that of “value creator,” not “persuader.”

Join the customer flow

The confluence model is one of joining and teaming, rather than one of influencing.

Once your brand is “in the customer flow” many previous barriers to acceptance and adoption suddenly disappear. Instead of squaring off as “seller” and “buyer” you emerge as teammates and partners. Your brand now works from within, instead of banging on the door from without. You now have the opportunity to merge your value stream and your strategic direction with that of your customer, enabling the two of you to go where competitors can’t follow.

Confluence creates customers

How can brand confluence create customers? You’ll find a starting point here.

Image: Google Earth

In business, the company that listens best often lasts longest. The brand approach to business teaches that you don’t have to be the loudest, flashiest or most intrusive voice to build the strongest customer base. You simply have to listen to what your primary partners—your customers—have to say.

After all, they’re your brand partners. And they’re saying it for your benefit.

The New York Times has an example: Believe it or not, someone’s listening.

Listening is the province of brands

Listening is the province of brands. While marketers may lapse into sales pitch mode at the drop of a hat (full disclosure: mea culpa, mea maxima culpa), brands listen as marketers never can. That’s because brands are structured as joint ventures with customers, where listening is as fundamental as breathing. A brand is an active collaboration in context, and it is the brand’s ability to listen that keeps that collaboration alive.

Listening is the province of brands because brands are a team effort, a pursuit of shared objectives and mutual goals. Do we listen closely to our teammates? Yes we do—without giving it a second thought. Listening comes naturally to brands because it’s a basic function of teaming and working together.

Listening is part of the brand experience

Listening is a also vital part of the brand experience. Let me clarify that: how you listen to your customers is a big part of their brand experience. A “rich” brand experience is one rich in listening and conversation, where communication flows freely. The deeper the brand, the deeper the listening. (In many respects, the engine of sustainable brand growth is not the big campaign, but the many individual instances of listening and conversation along the way.)

Brands that thrive on listening

The brands that listen best are often bottom-up brands structured as platforms to advance and grow customers. These brands tend to be hands-on, direct and participative. The more they listen to customers the more they can learn, and translate that learning into innovation. While they may utilize surveys and focus groups, the ultimate goal is real-time listening through front-line employees, where company and customer forge the leading edge of the brand.

Such brands treat customers as friends and allies on a shared brand journey. They listen intently, step by step.

Image: Self portrait, Vincent van Gogh — Wikimedia Commons

Can you build a great brand by throttling your customers?

No, you really can’t—as Time Warner may soon learn.

Time Warner closes the noose on its customers

Jeff Jarvis at BuzzMachine sees a very flawed strategy behind the new usage restrictions that Time Warner is testing for its Internet customers. These new cap and “tiered pricing” measures would throttle Internet usage by imposing metered rates, and higher fees for more active users. While the caps would potentially skim more money from Time Warner customers in the short term, Jeff asks whether such a monetizing strategy is right for Time Warner in the long term:

What if, instead of a gatekeeper, they saw themselves as platforms or technology innovators or catalysts or enablers?

Precisely put. There’s no future for Time Warner as a brand of customer jail. It’s brand agenda needs to embrace customer opportunity, not customer closure.

Limiting customers limits the brand

In an era of incessant innovation and technology breakthroughs, and massive new market creation, Time Warner seems to be heading in reverse. In seeking to impose meters in place of proven flat rates it’s repeating a strategic blunder of music and movie companies who focused on controlling and milking customers, rather than innovate to create new markets. (Their loss has become Apple’s magnificent gain, and strategic brand triumph.)

Brands and innovation—the fundamental connection

Time Warner’s tiered pricing schemes are a brand issue because companies that choose the “gatekeeper” approach invariably stop innovating. When they stop innovating, they stop building value into their brands. Effectively, then, Time Warner is taking its brand off the table. It’s inviting other brands to step in and steal Time Warner customers with new platforms and new contexts of value.

And yes, brands are innovation tools. They innovate new customer contexts that leave static companies in the dust.

Brands are a method of innovating through customers

To grasp what’s happening here we have to look at brands in the big picture, beyond slogans, imagery and high-glitz campaigns. We need to envision brands as a way of innovating through customers, effectively doubling a company’s R&D power, and creating new innovation dynamics in the process.

In this perspective, a brand becomes a method of creating value, not just a series of positive touchpoints, or a well-designed identity.

Brand definitions for an innovation context

Brands crafted as stylized sales stimulants, icons, “personas”, etc. only use a small fraction of the inherent power in brand relationships. That power is a creative power executed and expressed by collaborating with customers.

Thus, the core definition of brand that I prefer:

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

And some corollaries:

1. Your brand is a method for creating customer opportunities.
2. Your brand is an enabler. It enables you and your customers to collaborate on creating new products, and new markets.
3. Your brand is a customer platform. As it grows, extends and raises customers, it elevates you.
4. Your “brand” is how you grow your customers to grow your business.
5. A really great brand grows its customers beyond the reach of competitors. (Just hink of Apple and the traditional music industry.)

If Time Warner can’t act on these brand innovation elements, its competitors surely will.