Brands Create Customers

Jeff Jarvis has the story over at BuzzMachine.

The “iPod moment”

As Jeff sees it, an historic “iPod moment” occurs in the media biz when customers routinely use the iPod to access a particular form of media, instead of using the traditional branded format. Unless traditional brands can leap ahead of the customer and welcome them to new digital domains—and the freedoms they provide—the old brands don’t have a chance.

Music labels were the first domino to fall.

“Reading the news”—redefined

From Jeff’s perspective, an iPod moment is now taking shape as the new iPod iTouch, with its glorious screen, emerges as a default reader for all things news, via the iTouch’s Wi-Fi connection. This will deliver immediate, unlimited news, will save a zillion trees in the process, and will push traditional newspaper brands, with all their brand heritage, authenticity and tradition, further toward the pulp pile.

It’s a case of what can happen to legacy brands when what they deliver is now done (better) by someone else.

Changing the game by changing the customer

The iPod (and the Web in general) have redefined newspaper brands by advancing news reading citizens beyond the reach of traditional newspapers themselves. They put more news value in the hands of customers, 24/7, in ways that customers can use. The old brands are still there, but they matter less, because they have less customer in them.

Simply stated, new digital technologies like the iPod have changed the game by changing the customer.

Questions for newspapers to answer

Jeff lists the critical questions that newspapers must answer:

How do we use this wonderful device to give people the news and links whenever, wherever, and however they want it? How do we do that with incredible efficiency? How do we make it local and relevant? How do we take advantage of the two-way relationship we now have, enabling people with these gadgets to share what they know? And – here’s what everyone really means when they talk about iPod moments – how do we make money doing it?

Re-creating the news customer

In other words, newspapers have to re-create their customers. This is a brand strategy task, driven by the dynamics of growing customer capabilities instead of perpetuating the legacy constraints of paper and ink. For newspapers, trying to contain customers, or to hold them back from the Web’s promise, is the wrong brand agenda. It’s a losing battle from the get-go.

The brand challenge for news organizations

For news organizations, the key brand challenge is to differentiate their customers from ignorance, not from each other. Do that, and your customers will follow.

One way to proceed is for newspapers to identify and model the well-informed and well-connected citizen that tomorrow’s world will need. That new model is the basis for the future newspaper brand platform, one that can advance customers—and their communities—irrespective of media formats.

Beyond “commodity” news

While some aspects of the Web may have made “news” a commodity, the proliferation of available information has made insight and intelligence, and context and meaning, all the more valuable. News organizations may want to build their fresh brands around that.

Photo: mlcastle — Flickr

When a business launches with an iconic product, it may discover, sometime down the road, that the product is on the verge of icon wear-out. Business growth slows. It’s in these situations that the brand must come to the rescue. That’s because the brand (when properly conceived) includes the customer in the icon. This is a critical step, because customers are infinitely protean, proactive and (self) sustainable. They never wear out.

When your iconic product falters, it’s time to tap into your iconic customer—the one created by your brand.

The Crocs brand in transition

We can see elements of this brand transition taking shape in Crocs, the highly successful, breakout brand of colorful foam clogs. Crocs has the daunting challenge of building (and sustaining) the Crocs brand beyond its original comfy beachwear cachet. As pointed out by the Wall Street Journal, Crocs is rapidly diversifying, and none too soon. The brand is under particular pressure from short sellers who are betting that Crocs is a fad—and not a sustainable brand.

Short sellers vs. the brand

Short sellers currently hold about 20% of CROX shares. According to the Journal, holders of short positions believe that Crocs is a one-trick pony, a fashion craze that will soon crash as customers lose interest and move on. In the short seller view, Crocs are Krispy Kreme for the feet.

In essence, short sellers believe that a company’s share price has overshot its brand. They profit when a stock price falls. A typical short-seller assessment is here. (Investors with short positions can lose their shirts when a stock price rises, so short seller assessments have a vested interest in being negative.)

And Crocs imitators everywhere

The Crocs brand challenge is even more difficult because there are scads of Crocs clog imitators in the market, selling at one-third the price—around $10 in the SF Bay Area. They may lack the segment-leading Crocs design and engineering, but their ubiquity testifies to a market for inexpensive foam-clog “fun shoes.” (Crocs has aggressively protected its brand in court.)

Where does a brand go for its second act?

So, what does a company do when 20% of its shares are visibly being bet against the brand, and low-price icon-imitators are everywhere? Where does a brand go for its second act?

It usually has two choices:

1. Reach back into its marketing bag of tricks to keep its head above water.
2. Reach out to customers to change the game, and get back on dry land—in a space it can own.

Call in the Ansoff Matrix

A first marketing step is usually to fill the whiteboards with some version of the Ansoff Matrix, so a company can systematically probe opportunities in Market Penetration, Market Development, Product Development and Diversification.

Crocs seems to be doing just that.

As the WSJ article notes, Crocs is diversifying into apparel, with Crocs branded shirts, pants and jackets. (The immediate brand connection is apparently that croslite, the plastic resin from which Crocs footwear is made, will somehow be incorporated into the apparel. From the Crocs site it’s not yet clear how this will be done, or how it will add new value.)

Crocs is also doing sponsorships (Pro Beach Volleyball), folk/rock campus tours, segment licensing deals (Disney, NBA, MLB, NFL, NHL), moving ahead with customized shoe add-ons via an acquisition, and developing new footwear lines, including mammoth, a fleecy Crocs made for cold climes. There is also CroxRx for pediatric purposes, Crocs work shoes (potential markets for nurses, waiters and other service personnel), a substantial kid’s line, and new leather and canvas shoes (with croslite soles).

(more…)

Google uses video clips sent in by users to create a short, spiffy video showing how Gmail messages “actually” move around the world. It’s very inventive, and lots of fun—edited down from 1,100 videos from 65 countries.

It contains some important brand lessons, too.

Brands as an engine for discovery

The Gmail video shows what can happen when your brand is a proactive part of peoples’ lives. You want your brand to be an engine for discovery, for play, for breaking free from dull routine and repetition. After all, a brand is a joint venture—running on customer feet.

Your brand should help customers discover themselves. In this process they add value back to the brand, moving the venture forward. (Google’s You Tube is also a major beneficiary in this particular case.)

Fresh brands are plastic

Fresh brands are plastic, too, made to be shaped and molded and bent to new uses, so they can run with customers into new markets. Brands locked away in a showcase, or barricaded behind walls of lawyers, grow pale in a hurry.

Photo: cristina mingot — Flickr

The best way to build your brand is to send it forth on the shoulders of customers. They can invent new brand value, and new brand applications, moving you into markets you never imagined.

Want your company logo to activate an iPhone button? Steven Frank has done it. (Unofficially, of course.)

Partners in the iPhone brand

Apple runs a tight brand ship, but Apple’s iPhone customers know where they want the iPhone to go—and they’re not waiting for Apple. They see themselves as partners in the iPhone brand, building it out in areas not yet implemented by Apple itself. For Apple, this is an immense (if sometimes dicey) brand strength. Dell, HP, Sony or Nokia can’t even come close—at least for now.

Reining in customer enthusiasm may at times become a brand problem. There’s an art to it—enough control, but not too much. The consolation is that when it is your problem, you’ve been doing something right. To minimize the downside, you have to know your customers, and give them the right innovation context in which to beaver away.

The iPhone Dev Wiki

iPhone customers who want to innovate ahead of Apple can consult the iPhone Dev Wiki, which is chock full of development tips. It says: “This is a place for people who want to make iPhone even more awesome than it is already out of the box.”

And:

This website is dedicated to finding additional uses for the iPhone by (legitimately) enabling its potential capabilities, and is a place for the community to share ideas, discoveries and solutions.

There are legal and warranty issues here, and iPhone customers are walking a fine line by pushing the brand ahead of the company. That they would assume these risks speaks to the value of the brand, to the high-performance customers it creates, and to the innovation platform that the brand represents.

The brand exponential

In previous posts I’ve said that a good way to define brand innovation is product potential X customer potential. Think of your customer as the exponential power of your brand—your brand to the nth power. Instead of merely “selling” to customers, you join with them to advance the product, and the brand. The customer exponent can create tremendous brand leverage.

A brand powered by Apple is formidable. A brand powered by Apple and its customers may be unstoppable.

Photo: ~stevenf

A few months ago I proposed that the best way to change the game in any industry is to change the customer. We can now see this process of changing the customer unfolding at a meta level in leading social network sites, such as Facebook. As these sites offer broader and deeper communities for their members, they’re creating a new community-based “social customer” whose needs may not be met by traditional brands. Yes, new social sites are changing the customer and changing the game for brands themselves.

MySpace, LinkedIn, Mebo and Facebook are prominent social sites, but today I’ll focus on Facebook because it’s making big news with its innovative Facebook Platform. What sets Facebook apart (for the moment, anyway) is that its new platform allows third parties to develop software applications to run inside Facebook itself. It’s as if Facebook took the classic “closed portal” model and turned it inside out, giving members virtually unlimited choice of applications they might use.

Facebook as a platform of opportunity

Facebook thus becomes a platform of opportunity for three beneficiaries:

1. For Facebook members — as a richer platform for connecting with each other and sharing experiences
2. For application developers — as a potential market for innovative apps
3. For brands — as a new way to connect with customers, and to reshape brand identity.

Brands stand to benefit from Facebook’s platform approach, but they can’t fall back on “messaging” and brands-as-usual.

How Facebook is changing brands

With its new platform approach, Facebook is changing brands in three important aspects:

1. Facebook is creating a strong community context that can challenge the marketplace context where brands have traditionally flourished. In the Facebook context, the individual and his/her community are the focus of meaning; they’re at the center of the universe. Given this social centrality, traditional marketplace brands can appear as outsiders, as less authentic, and can fall to a second-tier.
2. Facebook enables a new mode of brands as personal applications, elevating brands from the static and symbolic to the functional, with new avenues to create customers. Brands can experience rapid, viral growth through Facebook communities when they’re a means of getting things done.
3. Facebook’s new platform raises Facebook itself to a unique brand presence as a network of expression, a happening “place,” and a true “relevance engine” based on users themselves. This raises the bar for brands. Brands without an innovative digital strategy (and deliverables) may simply go the way of these guys.

The Facebook Platform

As noted above, the Facebook Platform is important because it opens Facebook to third-party software applications, greatly expanding Facebook’s capability to serve member needs. A brand that provides value can gain a significant (free) presence on the Facebook platform in the form of a widget (a concise application) that enables members to do something gloriously useful and unique—in some context of the brand. Applications are integrated into Facebook’s look and feel, are intended to be shared, and can access (with permission) user data across Facebook’s 38 million members. See here and here, and especially Mark Andreessen’s comments here.

The challenge to conventional brands

To a large degree, Facebook and other social sites are in the connection business. The more they enable members to connect to (and shape) their personal networks, the more they thrive. In this process, a member’s group identity, support and social connections may ultimately take precedence over product and company connections that brands try to establish. One’s social network becomes an all-encompassing filter. In a context of strong social connections, where the individual is nourished by personal affiliations, exterior brand connections may be harder to establish, and sustain.

Let’s now explore the three game-changing areas where Facebook impacts brands. Other social sites may have similar impacts, as well.
(more…)

Nonprofit brands are definitely on the rise. Their ascent may have been a bit tentative at first, as they explored the best brand approaches for their organizations, but they’re finding effective ways to create and deliver brand value, and to build brand communities. As they move upward, they’re also bringing new fundraising options into view.

Overview

In this post I’ll discuss strategic brand approaches for nonprofit organizations. The time is ripe for such a discussion because many nonprofits have reached a “phase one” of brand development, where they’ve largely focused on building brand identities to aid in promotion and fundraising. They’re now ready to move to a more value-rich level of brand development using brand platforms and programs, and interactive brand communities. Freezing their brands at the identity level carries considerable downside risk.

Topics I’ll discuss include:

1. Moving beyond brand identity
2. The brand strategy imperative
3. Building value-based brand programs
4. The importance of brand context
5. Brand partnership opportunities
6. Leveraging the brand community

Three strategy areas for nonprofits

In general, nonprofit strategies fall into three areas:

1. Strategies for mission effectiveness
2. Strategies for fundraising
3. Strategies for partnering and opportunity development

A nonprofit’s brand strategy can favorably impact all three areas. Historically, nonprofit brand development (as identity) has often been geared to fundraising, PR and publicity. This is probably the weakest use of brand and brand value. Brand programs produce their greatest results when they’re integrated into mission effectiveness (as collaboration tools) and into partnering and opportunity development (as value innovation.)

Moving beyond brand identity

In the nonprofit world the term “brand” has often been understood rather narrowly to mean “brand identity.” In this approach, nonprofits that seek to “build their brand” usually seek only an identity package designed to set them apart and make them more attractive to potential donors, sponsors or partners. This will typically include a memorable name, a distinctive logo or mark, a design guide to insure visual, symbolic and thematic consistency in all communications (including a website high in donor appeal), and perhaps a punchy slogan or tag line for positioning.

Once a nonprofit has its identity package in hand it usually considers its brand “done,” and is off and running with promotional campaigns.

(more…)

Everywhere around us, the expanding digital universe is rapidly transforming the world of brands, with new digital tools pushing aside yesterday’s symbols, slogans and “timeless” icons. In place of conventional top-down “branding” campaigns we’re seeing breakthrough brand innovation from below, with small companies, not big corporations, reinventing brands and re-defining brand building itself. They’re growing brands as organic, 1:1 collaborations in context, and in value, across multiple customer fronts.

Digital brand leverage: the shape of brands to come

It appears likely that the future of brands will be driven by digital brand leverage—in the form of direct links between value creators (or content creators) and customers, bypassing intermediate brand structures, and middlemen. What makes this possible are two recent developments: 1) digital technologies that facilitate close interaction between companies and their customers; and 2) collaborative brand practices that unify companies and customers through a shared vision and mission.

(more…)

Companies are often a bit unsettled when I tell them that brands are mostly interfaces.

They prefer to think along traditional lines, with brands as a promise, a persona, identity or symbol, or even a company’s reputation.

No, I tell them, brands may possess all of those elements, but basically brands are interfaces. In fact, they’re interfaces along three distinct fronts:

1. Company and customer
2. Customer and customer
3. Customer and customer’s future

In the big picture of things, brands help people interoperate with the universe. That is the Big Interface, and that’s where great brands shine. Why would your brand aspire to anything less?

A closer look at three brand interfaces

But for now, let’s look at these three, workaday brand interfaces.

Company and customer: your brand is the interface that helps you put more customer in your company. That pays dividends up and down the line. Instead of chasing customers, you join them.

Customer and customer: your brand is the interface that brings your customers together, creating that critical mass of you-in-them that rushes forward on customer initiative and imagination. Customers can help build your brand, if you let them.

Customer and customer’s future: this is the most important brand interface of all. This is where you create and grow your customers, connecting your customer with his or her potential. The customer you grow today will be the customer that desires your products of tomorrow, when he or she is further removed from commodity-land. If your interface is merely an ad campaign, or inventory dressed as a store, chances are your customers won’t go far.

And what about Brand APIs?

A Brand API is an application program interface that enables your brand to connect with customers, to involve them in their future and yours, and to deliver to them the freedoms they need to grow. It’s a set of tools, links and platforms that invite customers to join with your brand to grow.

Brands as applications

In days gone by, brand programs were largely considered to be communication programs. That led to legions of look-alike, do-nothing brands that were locked in their labels. In 2006 and beyond, with competition from every quarter, a brand has to function as an application program that helps customers get where they want to go. The brand does so within a company’s overall Brand Operating System (Brand OS). (See our New Brand Glossary for more details.) The Brand OS consists of Brand Platforms, and these contain the many brand programs that I call Brand Applications. The Brand API is the multi-function portal that opens all these applications to customer interaction.

The key benefit of a Brand API is that it enables access, teamwork, collaboration. It enables 360-degree initiative. It’s the hand you hold out to customers as you yell, “Grab on!”

If customers like where you’re going, they’ll fasten their grip.

For a more detailed discussion, see:  Interaction design: the new key to brands

Note: updated August 13, 2007