Brands Create Customers

In this post I’ll provide a strategic definition for “brand engagement” that addresses a major weakness in current brand engagement approaches. My goal is to re-orient and re-structure brand engagements into strategic engagements–where they can deliver maximum customer value and competitive advantage.

As part of this discussion we’ll move the brand playing field from inside the customer’s cluttered mind to the fresh air of the outside world. That’s a more strategic place where brand-driven value creation and innovation spell the difference between winners and losers.

The brand team becomes a strategic player

As an important corollary, I’ll describe how this new strategy makes the brand team a pivotal player in product innovation and new market development. In fact, brand builders assume front line roles in driving business strategy.

A new definition and metaphor for “brand engagement”

At the heart of this new approach is a new definition (and metaphor) for “brand engagement.” We all know how one gear engages another to set things in motion (see above). I’ll use the gear metaphor to help explain how brands engage customers. We’ll see that the primary purpose of brand engagement is to move the customer and the company forward. With this model of engagement we can 1) advance customers beyond the reach of competitors, and 2) create new market opportunities where the company and its customers can co-create new value. These add up to a big win-win.

Where the current approach falls short

The current approach to brand engagements falls short because it isn’t designed for strategic advantage. It’s typically a shallow persuasion approach that begins and ends with trying to sell perceptions of the brand. Parts of it seem inspired by propaganda techniques. It’s aimed to influence customer attitudes and feelings, in hopes of “winning” customer minds and generating brand “loyalty.” As a brand engagement, its world view is that very narrow space between the customer’s ears.

Commodity engagements

Unfortunately, this approach undervalues brands; it aims too low. It ignores the first principle of brands, which is that brands are company potential X customer potential. Moreover, it ignores strategies for creating new customer value. Instead, it often reduces brand engagements to commodity interactions:  easy pleasantries, token gestures or common “rewards” which have nothing special (or strategic) about them. Competitors copy the same sets of engagements, and soon everyone is back to square one in the same engagement stew.

Reducing brands to this level is is a great loss to the companies behind the brands, and to their customers.

Structural problems with the current approach

The current “feelgood” approach to brand engagements contains serious structural problems as well. As I see it, these encompass four main areas:

1. The current approach treats customers as a separate species from the company, as if they’re solely to be “targeted” and sold to. This separation warps the engagement process and precludes it from effective strategies for teaming and collaboration.
2. It positions customers as an audience of followers. This positioning limits the depth of proactive customer engagement and restricts the value customers can add back to the brand. Bottom line: less brand value, and less brand innovation.
3. It considers brand engagements as a means of persuasion, not as a means of delivering value, or of co-creating value with customers. Worst case, this approach tries to sell brand emotions as a substitute for delivering better products or services. That’s a self-delusion–and a recipe for disaster.
4. It aims to glue customers in place, contained by the company and “loyal” to it. This approach traps the company in the same dead-end corral.

What counts is how customer emotions are developed

This critique of the conventional brand engagement approach is not an argument against the emotional qualities of brands. Far from it. Breakthrough emotions are fundamental to the brand experience. As brand builders, we want customers doing cartwheels in the streets. What counts, however, is how those emotions are produced. The conventional approach falls short when it tries to manufacture customer feelings rather than deliver the products and services that in themselves and in the brand context bring out those feelings in customers at far deeper (and strategic) levels.

The gear metaphor

Let’s return to our gear metaphor for brand engagement. Note that the “customer gear” and the “company gear” are in the same gearbox, in the same vehicle. Brands and customers share the same journey. The customer gear drives the wheels which take the business forward. (Yep, they pay the bills.) In a brand engagement we advance the customer to advance the business.

The bottom line is that the brand gear delivers customers to a better place than the spot where they started. If it can’t do this, there is no meaningful “engagement.”

The brand engagement choice

As I see it, we have a clear choice in brand engagement strategies. We can try to “capture” customers by capturing their minds ( in muted shades of Pavlov and Svengali), or we can team with customers to change their world for the better, and by changing their world improve our own. One choice locks customers in place; the other moves customers forward.

It’s a brand choice between using customers and elevating them.

A strategic definition of “brand engagement”

This definition is intended to produce strategic brand outcomes that lead to competitive advantage.

I define “brand engagement” as follows:

Brand engagement is the interactive process of moving the customer forward, to a stronger sense of self, and to a higher plane of being and doing.

And this is the strategic goal of brand engagement:

The goal of brand engagement is to create the customers who will drive the business forward. Brand engagements are platform engagements. This means advancing customers into new creative realms–and markets–where they can add value back to the brand, and where competitors can’t follow.

Implications for brands and the brand team

The above definition has important implications for brands and the brand team (all of them quite good):

1. The process of brand engagement emerges as a strategic driver for the business because it’s predicated on customer growth and development. The brand team leads this effort.
2. The brand team has crucial responsibilities for innovation and market creation. Their efforts build future revenue streams.
3. Through the brand team, customers become vital allies in brand strategy and business strategy. The brand is an innovation asset. Customer growth becomes company growth.
4. The brand team finds a new home in the Innovation Department. Brands become an extension of product development instead of being a separate layer of “communications” bounced around between Corporate and Marketing.

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Yes, indeed. There’s every chance that brands going forward will be more like a mashed-up mutt than a pedigreed poodle. The days when the brand was paraded as a elite breed with champion bloodlines, showcased every step of the way and groomed to perfection, are drawing to a close.  Adaptable, affable companion brands that are a mix themselves, and made to mix anew, are in. We’re entering an age of sidekick brands in which a resourceful brand mutt is the best pal any customer could want.

As newspapers fold, news mashups unfold

This revelation came to me as I was reading Steven Berlin Johnson’s SXSW speech on the future of news in the Internet era. While traditional newspapers may face long odds, Steven sees news itself as expanding online at local and grass-roots levels. (He provides local examples from Brooklyn, NY.) These new brands of news are like street-savvy mutts, blends of blogs, tweets, diaries, mashups, feeds and links that add depth, relevance, meaning and context to local lives. Their forte is nap-of-the-earth texture and immediacy, and a being-there credibility.

I would add SB Nation as another example, on a grander scale.  It’s transforming sports reporting into sports communities. Its home-grown stories and commentary are deep and deeply engaging, with 290 sites and real-time content. I am totally spoiled by my local SB Nation baseball site, San Francisco’s McCovey Chronicles. It’s both an online companion to a game, the visceral vibe of what plays out on the field, and a meditation in extensis on team strategy and player development.

Brand applications: personal, portable and persistent

I see this mutt/mashup model extending to other brands in the Internet era. I’ve written previously about a new class of brands called personal brand applications. These down-to-earth enabling brands live on digital devices as brand sidekicks: personal, portable and persistent. Strategically, they are brands as applications. They go where you and I go. What they do defines who they are, and to some extent what you and I can become. Their provenance matters less than the loyal support they deliver. They may have the DNA of hundreds of  contributors, or perhaps thousands, like MetaFilter or Twitter, but that is indeed their strength. They are evolving us, not refining us.

Yes, brands will be judged by how loyal they are to you–as they should be.

Photo: ANDI2WHIPLASHEDAWAY — Flickr

Note: Updated 5/31/11.

Some companies still find it hard to grasp that brands are tools for innovation, rather than tools to contain and corral customers. In these days of rapid change, a brand that doesn’t innovate can easily be outrun by customers. Musty icons, stories and promises are soon left behind.

In fact, there are notable cases where brands that try to contain their customers actually wind up trapping themselves. One day the corral is empty. Customers have bolted to better brands.

The newspaper industry: a case study

A case in point is the newspaper industry. Every brand builder should read Clay Shirky’s trenchant assessment of how that industry failed to save its future under the relentless onslaught of Internet innovation. The industry clearly saw the threat coming in the early 1990′s. It tried vainly to perpetuate its entrenched market power in various new guises, and with various new schemes. All of these failed miserably.

Backward-facing brands

With its brands looking backward, the industry could not transform itself into a new context of value consistent with emerging markets of online technology. Customers flocked to these new markets, creating powerhouse brands in Craigslist and eBay, social sites like Facebook, and blog publishers like Blogger and WordPress. They wanted to be active “publishers” themselves, not yesterday’s passive “readers.”

Brands are a forward-focused context of value

Brands are a forward-focused context of value shared between a company and its customers. “Forward focused” means that the brand lives at the leading edge of customer value. It’s an engine of new value creation. As a perpetual co-creation, it can’t be hobbled by fossilized icons, or by business models long past their prime.

If your brand isn’t changing the world, the world will be changing you

The bottom line in the sad story of newspaper publishing is this:  If your brand isn’t changing the world, the world will be changing you.

Further reading:

Dangers of the customer containment agenda.

Brands as tools for innovation.

Ever since our revered Patron Saint laid down the rule that brand builders must be the life of the party, we’ve been on the lookout for blood-quickening quips to make others raise a glass, raise a few eyebrows, or, worst case, raise a few fists.

Here is my humble contribution: an initial set of brand-related asides, aphorisms and epigrams to heat up a corner conference room or out-of-office bacchanal.

They’re “infamous” because they contravene conventional brand doctrine–and therefore generate hope for brands themselves.

Note: See Part II here.

♣    ♣    ♣    ♣    ♣    ♣    ♣    ♣    ♣    ♣

Take the brand builder test

The brand builder test: Explain why Capuchin, Capulet and cappuccino are heaven on the lips. (Brand builders know the answer because brands are a craft of culture.)

How the brand relates to sales

If the sole purpose of your brand is sales, your brand will sell you short.

Brand positioning

What counts in brands is not how you position the company. What counts is how you position the customer.

Brands vs. marketing

Everyone wants a brand experience. No one wants a marketing experience.

Brand icons

In brands we want less icon and more innovation. Icons are dead relics. Customers can do better.

Brands that control customers

Brands that aim to contain, corral and control customers create wonderful markets on the other side of the fence.

Brand integrity

The brand is never the face of a company. Faces fib. The brand is the spine.

Brand thinking

Brand thinking begins by asking these three questions:

1. What is holding our customers back?
2. How can we advance our customers beyond the reach of competitors?
3. How can our customers add value back to our brand?

Brands and illusion

♣  Brands made of make-believe fool the company more than they fool customers.

♣  When the brand’s a charade, finances soon follow.

Brands that change the game

If you want your brand to change the game, start by changing the customer.

Brands of emotion

Brands focus on customer feelings when they have no strategy to deliver customer freedoms.

Brand theater

If you design your brand as theater, plan to sell tickets.

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Be picky. Better yet, cook your own.

Meanwhile, there’s Short of the Week. And check out their resources.

Photo: Cheekybikerboy — Flickr

The Skype Think Book, and the Skype Brand Book.

Brand values, brand approach, brand identity.

Via Dustin Curtis.

Hat Tip: Hacker News

Interesting new series from Salon called the Brand Graveyard. Salon says, “The Brand Graveyard is where brands go to die.”  In the intro piece they give last rites to The Rocky Mountain News, Fortunoff, Mervyn’s and Circuit City.

I might quibble on a few points.

Strictly speaking, a brand graveyard is where brands go to be buried, not to die. Brands die in the marketplace.

The brand dies first, then the business

Most brands are effectively dead long before the business is buried. They’re zombie brands: ad campaigns on the outside, stone cold on the inside. They lurch; we listen. But we don’t care. Macy’s is a dead brand, but the company still announces mega/micro/mini/nano sales every other day. Lawyers and banks will keep it lurching until the feet fall off.

A company can have loads of cash and still be a dead brand

Companies with billions in the bank can be dead brands. Microsoft is a dead brand, but Redmond will slog on for decades, maybe centuries. (If you’re a monopoly, brands don’t matter–including your own.)

Customers are the immortal soul of brands

Strangely, the Salon series overlooks the vital role of customers in building brands, and in keeping brands around after their corporate host expires. Brands are half company, half customer. A company may croak, but if its brand made life meaningful for customers, expect customers to keep it alive–as only customers can.

Image: Salon

Have you noticed that those pre-fab neon OPEN signs (above) seem to be just about everywhere these days? I sure have–and I’m convinced they’re bad for local brands, and ultimately, bad for local business. I would even say this : the best way to kill a local brand is to stick one of these neon OPEN signs in the window.

The most commanding visual feature of the store

I’ve witnessed a slow invasion of these signs in local storefronts in the small city where I live. The signs are typically from Costco or Office Depot, and they pretty much look the same. The newer ones are actually LED. They’re bright, and they all seem to wind up being mounted at eye-height in the middle of storefront windows. In many cases, they’re the most commanding visual feature of the store.

The neon OPEN sign eclipses store identity

Shopkeepers may swear that these signs are the cheapest way to attract customers, but the signs can actually work against a store’s best interests. When you walk or drive past a block of stores tagged with the generic neon OPEN, the identity of each store recedes behind the sign. You see the sign, not the store. The potential brand depth of the store disappears.

Along a street, what grabs dulls the eye is the one-dimensional monotony of sign after sign: OPEN, OPEN, OPEN, OPEN. The line of signs can eclipse the store identities themselves.

Strong local brands don’t need neon OPEN signs

From my own observations, strong local brands rarely display these off-the-rack OPEN signs. Strong brands don’t need them. In fact, they’re stronger without them. You visit these stores because of who they are and the experience they deliver. You don’t need a garish OPEN to point the way.

Strong local bands typically command a price premium and legions of loyal customers. They are knit into the fabric of local life. A face-full of neon OPEN would erode their customer bond.

The brand message of the generic neon OPEN sign

The generic neon OPEN sign signifies a weak brand identity. It tells potential customers that the most important aspect of the business is that it’s OPEN–as if the state of being “open” is all that customers are looking for.

The neon OPEN sign carries these brand connotations:

1. We’re OPEN. What more do you need to know?
2. This is a business of transactions, not relationships.
3. Lower your expectations. (We’ve lowered our expectations of you.)
4. Our OPEN sign is what brings you in, and will bring you back.
5. Imagination is not valued here.

A visual language of commodity

If these store-bought neon OPEN signs represent any particular visual language, I would say it’s the language of commodity. The signs speak to a commodity ethos: commodity goods for commodity customers.

When a business becomes a brand of OPEN

The worst consequence of generic neon OPEN signs is that they condemn many local businesses to a being brands of OPEN. Brand identity, quality, ambiance, customer interaction and other value-creating brand relationships are obliterated by the neon gaze.

The generic neon OPEN sign cheapens customer experience. It says, “This is a place of commodity, not character.” Sadly, the customers who return are those who will do the least to make the business grow. Even worse, a generic neon OPEN sign condemns a store to a future of competing on price. It may never reach the brand take-off point.

Photo: John Charlton — Flickr