Brands Create Customers

Techdirt points out that Google Maps is increasingly behaving like a wiki, allowing users to edit and annotate map information to provide more local relevance. This strategy may allow Google to play a greater role in users’ lives, creating platforms of brand innovation and brand trust that can carry over to other Google applications and services.

A series of Google videos explains how this works.

The wiki context is brand context

A wiki is no substitute for a complete brand structure and strategy, but it may be the dominant brand context going forward. Framing the brand as a wiki makes sense, because a brand is a collaboration in context and in value between a company and its customers. It’s a shared work in progress rather than an icon imposed from above. In a wiki, customer’s don’t just “buy in.” They pitch in to co-create value that the brand alone could not produce.

A wiki context also helps ground the brand in the real world of customers. A wiki keeps brands honest, sparing them the death spiral that can occur when a brand falls prey to its own limitations—or fantasies.

Brand principles behind “wiki-like” Google Maps

A map is a context. It can rise to the level of a brand context when it becomes vitally relevant to its users, like a second skin. With its new wiki-like features in Google Maps, perhaps Google understands a few brand principles that traditional brands still struggle to comprehend:

1. Your customers are your greatest competitive weapon. Enabling customers to add relevance to Google Maps makes the maps more valuable to users, and potentially makes the information on the maps more valuable to Google advertisers.
2. Brands are enablers, not controllers. The more you enable customers to embrace new freedoms and to create new relevance via your brands, the faster your brand can innovate, leaving competitors in the dust. Brands that aim to control or contain customers eventually wall themselves in.
3. A great brand aims to put more customer in the product. Opening doors to customers opens customers to new dimensions of you. Some of these may be quite valuable, and quite possibly, new markets.

Some related posts: Techdirt and TechCrunch.

Photo: Kramchang — Flickr

Today’s SF Chronicle reviews the renovated San Francisco Ferry Building and its highly positive impact on the San Francisco urban experience, five years after its grand re-opening.

Social lessons for brand builders

There are many lessons here for brand builders. Perhaps the most salient is that the social and community aspects of any place become the real backbone of its success. A place rises to the level of a brand when it becomes an extension of the community, a continuous invitation to visit, linger, explore, express. It enables visitors to make the place a part of themselves, and in so doing to extend the brand context, and the brand experience.

Re-creating a place in new dimensions

A re-created place re-creates visitors, leaving them revitalized in new dimensions. A key aspect of the renovated Ferry Building—apart from its stunning 600 ft. nave, upscale shops, diverse eateries and Bay-side location— is that it hosts a thriving farmer’s market twice a week, with a huge turnout on Saturdays. It’s a social food mecca in a food-crazed city, with a wide variety of organic produce and artisanal food products.

A few decades ago the Ferry Building was a disheveled mess in the death shadow of a stunningly egregious eyesore. At that time it would have been almost impossible to imagine what it is today. Thankfully, it was saved by the same civic spirit that rescued the cable cars in the 1950′s.

Locals pave the way for tourists

Napa’s brand new Oxbow Public Market aims to bring the Ferry Building experience to the wine country in Northern California. Built from scratch, and still in its opening phases, its first challenge is to build a sustaining community around itself. On my latest visit the Market outposts of (local) Taylor’s Automatic Refresher and The Model Bakery were bustling. As with all such public places, locals pave the way for tourists. All they ask is a context they can make their own.

Top photo: Mike_sj40 — Flickr

Inset photo: Geigenot — Flickr

Business Week reports on what makes Trader Joe’s so attractive to customers. It includes a number of examples comparing the shopping experience at Trader Joe’s vs. shopping at conventional supermarkets. Well worth reading.

Brand first, store second

As I see it, the key to Trader Joe’s success is that it’s a brand first, and a store second. The brand imparts a unique customer logic (or customer predicate) to the store, and customers interact with—and evolve—this logic, giving the store a very intimate feel, even without the usual jam-packed aisles. It’s a brand approach in which Trader Joe’s presents itself as a buying agent for customers rather than as a grocery chain trying to unload stuff from its shelves.

Private labels are the stars of the show

Trader Joe’s carries about 2000 products, and about 80% of these are Trader Joe’s own brands. At most grocery stores, such private labels maintain a secondary presence. They exist as a means to under-price selected “name” brands in certain categories. At Trader Joe’s, however, the store brands are the stars of the show. They evoke the brand logic; they forge customer connections; and they produce a much more integrated shopping experience than the brand cacophony of conventional grocery stores.

Trader Joe’s scales its brands to customers

What’s also unique is that Trader Joe’s scales its own brands to customers. There’s no marketing megaphone hyping products from on high. That helps make the brands eminently social, and sociable. They are brands in the context of the customer, not brands in the context of a far-off producer, or a third-party media campaign. At Trader Joe’s, store, products and customers move largely as one.

I wrote about Trader Joe’s previously, here and here.

Howard Schultz is coming back to Starbucks, and not a moment too soon. Starbucks, one of the great brands of our time, has seemingly hit a brand wall, with no second act in sight. While the brand may have reinvented the coffee house on a global scale, and developed a distinct coffee customer and a coffee culture, the brand’s glory days appear to be mostly in the past. Does the opening of another Starbucks excite anyone in 2008?

The brand wall

Companies hit a brand wall when their brand runs out of vision and no longer advances the customer. A brand vision contains a new context of customer opportunity; a company has it when it can see the future through its customers’ eyes. Without brand vision, the brand often devolves into symbols, gestures, theatrics, decoration and self-centered fluff. These superficial measures are intended to corral and contain customers, while hiding reality from them. But, no one is fooled.

Generally, value-based brands avoid the problem of a brand wall.

The Wall Street brand trap

In recent years Starbucks has also been caught in what I like to call “the Wall Street brand trap.” This is a condition that can cause severe brand distortion unless management relentlessly innovates and stays a step or two ahead of investment analysts. It usually happens like this: Wall Street demands robust profit growth quarter over quarter. This typically pushes brands away from innovating with (seemingly risky) high quality products and services toward (surefire) rapid expansion at the lowest common denominator (10,000 Starbucks outlets and counting). It also steers a brand away from customer-focused innovation and toward higher levels of operating efficiencies, in order to wring those mandated profits from additional units produced. In effect, the brand is redirected from being a customer platform to being a stylized sales stimulant for a profit platform.

From coffee house to soda fountain

In the case of Starbucks, the famed Starbucks barista is gradually morphed into a transaction jockey. The coffee house model gives way to an easier-to-grow soda fountain model. The Starbucks brand is reduced to formulaic packaging and retailing with sugar ascendant, closer to a Baskin Robbins than the authentic, local coffee houses of its inspiration.

In many cases, the more the brand works for Wall Street, the less it works for customers, eventually hitting the brand wall. The business underperforms its brand. In that sense, the recent troubles at Starbucks are not that different from what has happened at Gap.

Creating customers for competitors

One sign that Starbucks is losing brand traction is that it’s now creating boatloads of customers for its competitors. Local coffee shops—who were supposed to flee in terror when a Starbucks opened nearby—are now doing great business by locating near an existing Starbucks. The local shops can match (or top) Starbucks in coffee quality, and can offer a combination of authenticity, coolness and community that Starbucks can’t seem to match.

Starbucks as market catalyst—for local shops

If Starbucks does not solve its brand problem, it may go down in history as a high-flying market catalyst that created a huge market for better coffee and social coffee consumption, but then like a catalyst vanished from the scene, ultimately leaving local shops to give people what they want.

From the Slate article cited above:

When Starbucks opens a store next to a mom and pop, it creates a sort of coffee nexus where people can go whenever they think “coffee.” Local consumers might have a formative experience with a Java Chip Frappuccino, but chances are they’ll branch out to the cheaper, less crowded, and often higher-quality independent cafe later on. So when Starbucks blitzed Omaha with six new stores in 2002, for instance, business at all coffeehouses in town immediately went up as much as 25 percent.

The local brand advantage

In the long run, the mom and pop coffee shops may be the real winners as local brands with authentic cultural context and community roots, where customer innovation can flourish. Such shops can be unique, idiosyncratic, rich in character, thematic, intense, pub-like in their social scene, deliriously inconsistent, and otherwise brand-rich in specialized customer contexts that Starbucks, as a regimented megabrand, can’t readily touch.

Great coffees have great character. So do great coffee houses.

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Yesterday I discussed Facebook’s troubles as it tries to monetize the social networks of Facebook users. Today I want to discuss how monetizing brand relationships with customers can put a company on the slippery slope of brand decay.

Definition of “brand decay”

To begin, let’s define “brand decay.” As I see it, brand decay is the progressive loss of brand integrity due to the weakening of essential brand elements, including respect for customers and value delivered. These generate the earned trust that’s vital to brand growth. Without them, the brand ceases to be a co-creation of value with customers, and reverts to being a standalone company projection.

During brand decay the brand “hollows out,” becoming more superficial and more prone to make-believe, spectacle and theatrics. The brand becomes a “show” instead of a platform for advancing customers beyond the reach of competitors.

In brand decay companies spend their own brand equity

Brand decay often appears when a company begins to burn brand trust as a source of revenue. In the brand decay process companies spend their own brand equity, without deepening customer collaboration or adding new value.

When companies take this route there’s usually not much “brand strategy” involved, except to hope that customers won’t notice. Of course, in these days of blogs and instantaneous news, customers do notice. The word gets out that something is wrong at company X.

Signs of brand decay

Here are some telltale signs that indicate the presence of brand decay:

1. Brands are reduced to tools of persuasion. They become stylized sales stimulants.
2. Brands become extensions of media campaigns (instead of being extensions of customers).
3. A company’s brand responsibilities end when the cash register sings. Brand relationships are outsourced to “customer service” in a time zone far away.
4. Brand innovation from the company grinds to a halt. Remaining innovation happens at the customer level, powered by customers.
5. Brand communities dry up, or are re-born at the customer level in efforts to “save the brand.”
6. The brand increasingly becomes a dance of empty gestures and empty symbols.
7. Companies treat their brand as a static “asset” rather than as a creative means of generating new forms of customer value.

Brand decay is usually a slow process. Major US airlines have been in a state of brand decay for decades. They now rank somewhere below a visit to the dentist.

The high price of monetizing the brand

A company can pay a high price in brand decay when it attempts to monetize its brand. Consider Tom Foremski’s reservations about Facebook’s current push to monetize its social network:

For now, Facebook works for me because it hasn’t yet started to monetize my network, it provides a lot of positive value, and very little negative value. Once it does ratchet up the negative value by trying to monetize my “social graph,” and if it does it in an offensive manner, then I will stop using it. Once I stop visiting my “social graph” on Facebook then that’s it for Facebook’s ability to monetize my network.

I think this could be the Achilles’ heel of social networks–if you push the monetization too far–you will lose your networks.

If I don’t visit my social network because the owners are trying to monetize the heck out of it, then they have lost.

Even pre-IPO startups like Facebook are not exempt from brand decay.

What causes brand decay?

Brand decay can have several causes, but the most significant is probably generalized strategy decay. A company becomes so trapped in traditional business models (and their assumptions) that it cannot create new value, or new customers, or new market spaces. Simply put, the company has lost its context to innovate. Out of desperation, it tries to extract value from customers. So it harvests its brand, and its customers with it.

Hat tip to Umair Haque, for his many pathfinding insights in these areas.

Photo: tigerweet — Flickr

Google is taking an innovative approach in building out its YouTube brand, moving the brand in a direction few expected. Instead of plunging deeper into a narrow video essence, it’s creating a new context for YouTube on a broader public stage. Through this brand strategy it seems YouTube aims to become an emergent video network from the citizen up, while forging a new meaning for media.

The public road to a stronger brand

One way to advance your brand is to take a leadership role on an issue of national (or global) importance. To make this strategy work, you pursue a path that’s results driven rather than merely symbolic, one that enables you to add value in clear and decisive terms. You want your brand to become a (distinctive) method for getting (important) things done. You’re after results, not just feelgood “associations.” In this way, your brand becomes an enabler of higher forms of action and understanding—and potentially, a powerful platform in creating new market spaces.

The payoff is that strategically, your brand can extend your company value, and your product value, into greenfield areas of common good. These can change customers, and change markets.

From molten Mentos to the “YouTube Debates”

A good example of this brand strategy is YouTube’s role in the ongoing “CNN/YouTube Debates.” Who would have thought that YouTube, barely out of its molten Mentos phase, would now have a signal voice in the national political process, sharing top billing with CNN, a premier news network?

On the Web the debates are often referred to as the “YouTube debates,” as if YouTube is now an accepted kingmaker on the national political scene. That’s a tremendous brand leap from YouTube’s born-in-a-basement origins a few years ago.

This new debate format is a baby step toward a more participative democracy. It’s far from perfect, and it barely scratches the surface of its digital potential. But what currently stands out is the innovative role played by YouTube, not the mainstream shepherding by CNN.

A brand of democratic engagement

To see where the YouTube brand may be headed, check out YouTube’s new political blog called CitizenTube. YouTube is on the way to becoming a brand of political engagement, and perhaps a brand of political transparency as well. The debates in concert with CNN are only a first step.

You can also see the deeper strategy here. Just fill in the blank next to “Tube” for a new area of YouTube relevance. “CitizenTube” for politics. “SportsTube” for athletics. “HealthTube” for wellness, etc. While a marketing approach would typically create these avenues as static “channels” (for passive, static “targets”), a brand approach creates them as active fields of collaboration and innovation.

How YouTube frames its debate initiative

Here is how YouTube frames its debate initiative:

The core concept behind these debates is to let real questions from real people drive the dialogue. The power of YouTube is that it lowers the barrier to entry to engage in the political process, and levels the platform for political discussion. It used to be that a voter had to live in Iowa, New Hampshire, or Florida to engage with the candidates at this stage of the campaign, but YouTube has broken down those barriers, and has brought more transparency and access to the political dialogue than ever before. We think that politics will never be the same (thankfully).

Make your brand a springboard, not a billboard

The bottom line is that you want your brand to be a springboard, not a billboard. It’s a springboard for customers and partners to break free from current constraints. That’s why we need a new definition of brand, one that’s action-oriented, collaborative and driven by initiative and opportunity.

Our own master definition of brand seems to fit YouTube’s direction rather well:

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

And, as we also like to say, great brands are not meant to be seen. They’re a lens on life, and meant to be seen through. A YouTube brand that enables political transparency is a definite plus.

Yesterday the Crocs stock price plunged more than 30% on indicators of slowing growth. This precipitous drop has raised questions about the future of the Crocs brand beyond its fun shoe origins.

We wrote about the Crocs brand and its long-term prospects a month ago, noting then that short-sellers controlled 20% of the stock and were primed to profit at any sudden downturn.

From vibrant to visceral

As we noted in our analysis, the challenge for the Crocs brand is to advance from a vibrant fun shoe to a more visceral brand proposition, one involving the whole customer in more than “footwear” mode. This type of brand solution is still entirely viable. An unsettled stock price may make it even more imperative.

Here we are in the year 2011, yet when we analyze current brand practice it appears that some brands behave as if we’re still in the Middle Ages, way back in the year 1011. In effect, they go medieval on their customers, treating them as a passive flock whose fate is to be told what to believe—and then to believe it heart and soul.

Medieval messaging

The medieval model of brands assumes a static, stratified society with brands on top and customers below. It puts the company on a throne, or in a pulpit, high above customers, dispensing brand doctrine to (hoped for) awestruck believers. It’s very much a one-way show of medieval messaging. And these days, it’s also a risky one.

Times have changed

It’s risky because times have indeed changed. The year 2011 is not the year 1011. When it comes to brands, the medieval approach now stands out as a potential brand weakness, for three reasons: 1) the medieval style places artificial barriers between companies and their customers; 2 it positions customers as a passive audience, who can’t add value back to the brand; and 3) it relies on closed brand doctrine, minimizing brand innovation and shared discovery.

A containment agenda

The medieval style of brands follows a containment agenda. It wants to freeze time, and to freeze customers in place—in 2011!—when customers have more to offer brands than ever before. In the medieval model, a brand that might become a joint (customer) venture with a live edge is reduced to a steady stream of preachments from on high, into a confined, compressed 2-D space without perspective or horizons—with no place for customers to grow.

Elements of the medieval model

The medieval model for brands typically sustains itself by using indoctrination techniques to instill desired beliefs and emotions in customers. It does this instead of innovating to create new brand value. Its brands are designed as messages, rather than as avenues of innovation.

The medieval model includes:

1. A belief system (doctrine) based on glorifying the company and the brand
2. A top-down process of inculcation (”messaging”)
3. A static universe untouched by innovation and change
4. Use of music, images, symbols, signs and icons to foster and fortify belief
5. Rituals and rites of passage
6. Myths and stories to make the brand appear real–and magical
7. A passive and dependent role for the customer, as a credulous believer

Medieval style brands invite disruption

As the world transitions to a digital age, leaving much of traditional mass media behind, brands that embrace the medieval style become increasingly vulnerable to brand innovation from competitors, and to brand disruption from below, where customers chart a new course for themselves. By confining customers and holding them back, the medieval model works against itself. It helps make its customers ripe for the taking.

What shape will that customer liberation take? It will be participative, decentralized, proactive and bottom-up, just like the advent of printing, the growth of cities and private enterprise and popular movements helped sweep Europe out of the Middle Ages into a much more vigorous and productive era.

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