Brands Create Customers

Brands are in the midst of monumental change, and a key aspect of that change is that brands are becoming digital and digitized. Brands need software developers–and good ones–or their feet will be nailed to the floor as the rest of the world moves on.

Brands in the digital era are also collaborative, thanks to Facebook, Twitter, online forums and the like, and a brand’s collaborators are also its developers. They have a hand in its future, too.

Nurturing developers to build the best brands

It thus pays for a brand to nurture its developers with capable development tools and a process that makes development (relatively) easy. For software companies–who have the inside track on brands of the future–the standard developer toolset is the SDK, the Software Development Kit. Developers need a solid SDK to create solid apps. If a software company falls short in its SDK, it risks losing its developers and potentially, its brand.

A developer’s complaint against RIM and the PlayBook

Are digital tablets important to the future of business and culture? Absolutely. It’s therefore news when a developer details a long list of factors that make developing applications for a particular tablet unnecessarily difficult. One such developer complaint surfaced this week:  “You Win, RIM! (An Open Letter To RIM’s Developer Relations).“  In it a developer cites major (and unnecessary) obstacles that block the application development path for the spiffy new RIM BlackBerry PlayBook, leaving  the developer to throw up his hands in despair.

The complaint is written with the passion that builds brands, or tosses them aside. Here’s how it begins:

You win. I concede defeat. I no longer want to attempt developing an app for the PlayBook. Are you happy now? Surely you must be. Considering how terribly designed the entire process is, from the registration right through to loading an app into the simulator, I can only assume that you are trying to drive developers away by inconveniencing them as much as humanly possible.

Brand touchpoints critical to developers

The entire complaint is worth reading for the light it shines on brand touchpoints critical to software development. These touchpoints are like building blocks. If they don’t fit together quickly and securely, building the desired app becomes problematic. RIM certainly knows this, too.

Did the RIM brand team vet the PlayBook SDK? It is certainly a brand-building document.

We’re all familiar with SWOT techniques for strategy planning, but we can also use a customer-focused SWOT approach to help us deliver greater value in our brand deliverables. I call this approach the “customer SWOT” approach. It’s SWOT with a switch, so to speak, but nonetheless quite valuable. We simply put ourselves in our customers’ shoes and apply SWOT criteria to what the brand delivers. By using SWOT criteria in this manner we can develop our brand to make our customers more strategic, so they have no need for the dead-end products of our competitors. (Think about that for a moment, please.)

The “customer SWOT” approach

What we need to do is position SWOT from the customer’s perspective. The brand, after all, is a customer benefit, and a customer tool. We judge the intended brand contribution using basic SWOT criteria from the customer’s point of view. In essence, the customer does a SWOT analysis of the brand deliverable based on how it meets his or her needs.  He or she evaluates the brand deliverable in terms of how it helps them with:

1. Strengths
2. Weaknesses
3. Opportunities
4. Threats

Since the brand is a 360° enabler, the brand deliverable must score well across these four criteria.

SWOT criteria that serve the customer

Using SWOT criteria, we can therefore design and build our brand to address the following issues critical to customer success:

1. What customer strengths does the brand provide or enable to make the customer more empowered going forward?
2. What customer weaknesses will the brand eliminate or diminish in terms of the customer’s concept of self, capabilities, or world view?
3. What new opportunities will the brand create for the customer, to help the customer do more and be more, compared to: 1) living a life of rank commodities, and 2) accepting current market conventions (and brands) designed to hold the customer in place?
4. What customer threats does the brand mitigate or remove from the customer’s life, now and forever, so the customer can advance freely in the new, enabling context of the brand?

The “customer SWOT” approach and brand disruption

The “customer SWOT” approach can be quite helpful if you’re developing a brand strategy to disrupt a major market player. Often, the incumbent’s brand strategy toward customers is one of “capture, contain and control,”  where the brand is used to extract value from customers rather than to create value with them. With the “customer SWOT” approach a disruptive brand can create deliverables that cut through existing brand myths and make-believe designed to hold customers back. In effect, you change the game by changing the customer.  The newly-empowered customer casts off the old brand like a discarded shell.

“Nokia’s days as innovator are over.” That’s TechCrunch’s blunt assessment after Nokia and Microsoft announced their agreement to make Microsoft’s Windows Phone OS the dedicated smartphone OS for Nokia going forward.

Today . . . [Nokia's] boss effectively ended Nokia’s history as an ecosystem of its own, laid down its guns, and gave in to a Windows Phone future.

Full story here.

Nokia a captive OEM for Microsoft

In effect, the February 11 deal seems to make Nokia a captive OEM handset maker for Microsoft’s smartphone software. As such, Nokia becomes a Microsoft shop. In the high-margin smartphone arena, Microsoft/Nokia (that’s the pecking order) will compete against Apple, Google/Android, RIM, and HP/Palm. Nokia’s Symbian OS will be relegated to feature-phone markets, and eventually phased out. Nokia’s MeeGo smartphone platform has been downsized to a project.

No Microsoft/Nokia phones until 2012?

When will we see the heralded Microsoft/Nokia smartphones? No Microsoft/Nokia phones were shown at the announcement. One report  states that Microsoft/Nokia phones will not be generally available until 2012. That’s a long wait. By then we may be up to iPhone 6  and maybe Android “Mascarpone.” Nokia will also be competing against Windows Phone handsets made by  HTC, Samsung and LG — unless these suppliers feel the new deck is so stacked against them that they migrate en masse to Android.

The future of the Nokia brand

In my previous post, The Nokia brand on the brink, I laid out key brand issues for Nokia prior to the February 11 announcement. I will follow up that post when I have more details on the full Nokia/Microsoft agreement. Right now–on Day 1– it certainly appears that the Nokia brand is destined to be an eventual sub-brand of Microsoft.

Also worth reading: Microsoft just bought Nokia for $0. Grim, and plausible.

Many eyes in the brand world will be focused on Nokia tomorrow (February 11) when new Nokia CEO Stephen Elop announces a long-awaited turnaround plan for the struggling mobile phone giant. The event in London is a big deal because, quite frankly, the Nokia brand is on the brink. In smartphone market share and profits Nokia has been battered and bruised by iPhone and Android. Its brand has been hammered, too, virtually knocked off the map in the US.

A big announcement to address some big brand questions

From a brand perspective, the February 11 announcement will hopefully answer a multitude of pressing brand questions: What’s Nokia’s new brand vision? What’s the new brand strategy? How will Nokia lead its customers in ways that Apple and Google can’t match? Will the brand be energized to deliver a full suite of customer value, as a complete customer experience, or will it be downsized to the brand of a supplier? The latter would signal a major step down for a visionary market leader.

This was a brand problem from the get go

In my view Nokia needs a sweeping brand reformation because its many problems (and they’re very serious problems) stem from a gradual but deep dereliction of brand. Nokia’s troubles were a brand problem from the get go. There was no overriding brand vision to overcome the device-centric silo-ism that fragmented and smothered Nokia’s own forces of innovation. Without that vision to orient R&D to strategic customer outcomes, market opportunities were missed and massive development budgets accomplished little.

Mindset problems are brand problems

A common critique of Nokia is that it suffered from an insular, “prove it to me” mindset that shot down new ideas and thwarted initiative and change, enabling Apple and Google to run away with the smartphone market. I would argue that mindset problems are brand problems. They’re a “way” of preserving operational status quo. They can pull the plug on brand vision, and they can cripple the holistic view of the customer that products need to innovate successfully. A common result is products that frustrate users.

Elop: Nokia must now fight “a war of ecosystems”

Elop has laid out Nokia’s challenge in his fiercely blunt “burning platform” memo to employees. (Well worth reading in its entirety.) After citing the painful details of how Nokia lost its market leadership to the iPhone, Android and other competitors, Elop concludes:

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, e-commerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyze or join an ecosystem. [emphasis added]

So that’s Nokia’s newly defined task: how to build, catalyze or join an ecosystem. I find it a bit strange, though, that customers are not included in the ecosystems described. To me, customers are the most important part.

The brand as prime mover of the ecosystem

In the February 11 meeting I’d be looking for a more customer-focused concept of ecosystem to emerge, one with fewer elements than Elop lists, and one with deeper brand relationships. As I see it, the customer is the focus of the ecosystem, and the brand is the prime ecosystem mover. It’s brand vision and values that give the ecosystem meaning and direction, and make the ecosystem productive. And I would make it one ecosystem, not many. A multitude of ecosystems creates potential conflicts and might even generate debilitating intra-ecosystem rivalries.

Keep the ecosystem simple

The Apple iPhone ecosystem is hugely successful and not complicated. It exists for the benefit of customers, to make the purchase and use of iPhones as easy and delightful as possible.  Apart from the wonderfully designed iPhone and iOS, the ecosystem is iTunes, the App Store, Apple retail stores, the developers who craft the apps, the apps, Apple customer service, and iPhone customers who provide feedback. Much of the ecosystem is embedded in the iPhone itself. The moving parts of the ecosystem are kept to a minimum. It’s through the focus and quality of the ecosystem that everything “just works.”

An alliance with Microsoft?

The latest rumors are that Nokia will announce an alliance with Microsoft to feature  Windows Phone 7 mobile OS on Nokia smartphones. This would be a sea change for Nokia, which has heretofore produced both devices and software, and desired to own the full user experience. The Nokia brand has been the Nokia handset running custom Nokia software. Nokia’s Symbian OS is used worldwide, and its new MeeGo OS was slated for upcoming smartphones.

A prediction on what to expect on February 11

Horace Dediu of the highly respected Asymco blog has ventured his predictions of what the February 11 announcement might bring.

1. There will be a multiple OS strategy
2. The US market will be the first to see a new non-Nokia OS. I would guess Windows Phone with AT&T.
3. Low end devices will remain with Symbian due to price considerations for the chipsets, components.
4. MeeGo will be phased out in phone products but development will continue for tablets

This may seem like a radical departure, but in many ways it’s not. Nokia has nothing to lose in the US as its platforms have zero traction. By maintaining Symbian for low end devices, they can still aim for differentiation where Nokia feels it still has distribution and cost leverage. This strategy will also allow speed in time to market.

I would add that in the US a Nokia/Microsoft mobile phone alliance might be considered  in last place behind iPhone, Android, RIM’s new Blackberry touchscreen OS and the new HP/Palm webOS phones and tablets.

Where does all this leave the Nokia brand?

Where does all this leave the Nokia brand? There are some serious brand implications in the above February 11 scenarios. Here are some key questions that the Nokia meeting will need to address:

1. An agreement to use Windows Phone OS means that as a brand Nokia no longer owns the complete user experience. It’s now shared with Microsoft, at least in US smartphones. Doesn’t this diminish Nokia’s brand stature?
2. A Nokia handset running a Microsoft OS is hardly a “Nokia smartphone.” It’s half Nokia, half Microsoft. Who owns the brand voice? Whose vision will lead customers?
3. By giving up the smartphone OS Nokia apparently downgrades itself to a device supplier. As such, it’s no different than HTC, Samsung, LG, etc.  Doesn’t this weaken Nokia’s potential hold on customers?
4. If Nokia adopts Windows Phone OS for its smartphones, Nokia becomes dependent on Microsoft for smartphone OS innovation. The Nokia brand could be compromised if Microsoft fails to innovate as fast as iPhone and Android, to name only the top two competitors. How does the Nokia brand handle this?
5. If Microsoft makes the OS and Nokia makes the device, who directs and manages the ecosystem? Whose ecosystem is it? For that matter, whose customer is it?