Brands are vertically integrated value

It’s always been apparent to me that brands are best understood—and best developed–as vertically integrated value. At their heart brands are methods to create value, and by making that value “vertically integrated” from company to customer we greatly enhance the potential contribution that the brand can make.

Definition of “vertically integrated value”

A brand developed as vertically integrated value is one where company, products, services and brand all operate in a singular, clear and coherent context to make the customer better off. It’s the brand that integrates the “company context” with the “customer context.” And it’s the value delivered that gives the brand real traction.

Creating vertically integrated value

How does a company go about creating vertically integrated value through its brand? We can identity four basic steps.

First, it helps to understand that “the brand goes in before the brand goes on.” We produce brand value from the vision, talents and dedication of company employees. We don’t tack on a “brand”¬† just before the product is ready to ship. The brand is a method to create value from the very core of the business. (In the big picture, the brand is company potential X customer potential.)

Second, and most critically, we structure the brand as a customer-facing application. This helps cultivate and focus the company’s creative energies into deliverables with the desired strategic impact. (We want to create customers beyond the reach of competitors—in ways where our customers can become our most powerful competitive weapon. Furthermore, we want to create customers who can add value back to the brand. These are customers as strategic allies and partners, not mere marketing “targets.”)

Third, we employ a value-based brand model. See here and here.

Fourth, we integrate the brand mission with the company’s principles of operation.

Vertically integrated value at Amazon

Amazon provides us with a current example of the brand as vertically integrated value. In this  interview of Jeff Bezos by Steven Levy we can observe how Amazon is structuring its products and services to work closely together within a singular customer context, in a tightly focused brand operation. The charts in the article are especially revealing.

Amazon’s vertically integrated brand experience

Amazon’s brand challenge is to deliver its vertically integrated value as a seamless and satisfying brand experience while constantly reinventing itself. Amazon has grown from “online bookseller” to become an online seller of everything, a hardware manufacturer of digital readers and tablets, a publisher, a digital streaming service for music and movies, a movie studio, and a digital cloud storage and infrastructure service for startups and corporations. That’s a vast territory for a brand to cover. It could have been disjointed, inefficient and clunky, but Amazon seems to have made it click.

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