Brands Create Customers

Multi-threaded brands will soon be poised to succeed traditional monolithic brands, those top-down, top-heavy icons designed to radiate a company’s “essence.” Multi-threaded brands can out-perform monolithic brands because they multiply the ways that brands can connect with customers, and they greatly multiply the forms of value that a brand can deliver.

What is a multi-threaded brand?

A multi-threaded brand is a brand that’s been “microchunked”* into multiple value streams, which are then customized and delivered to strategic customer segments, with the aim of creating value networks and communities. It is a brand that’s been decentralized, distributed and democratized, becoming the context of a “value net” or a “creation net.” ** Its purpose is to grow customers from the inside out, not to hang over their heads.

Multi-threaded brands are more “social,” and less “corporate.”

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Some companies aren’t sure if they really have a brand, or if they are a brand. They associate brands with consumer goods, and their main market may be elsewhere.

Here’s a quick test I use that any company can grasp:

Do you have your customer’s back?

Companies will know exactly what this means, in a heartbeat. If they answer, “Of course, that’s why we’re here,” then they most certainly have a brand, and they are a brand. Their brand value just has to be brought to the surface.

If their answer is in the negative, then maybe they’re just a business with a name, or a label, or something else.

Photo: soldiersmediacenter — Flickr

One of the great myths about brands is that they’re supposed to be timeless, static icons. In this myth brands are fixed and immutable, casting a pure, Olympian glow from high above—or at least from the shelf.

Walk through any retail environment and you’ll note that many traditional brands still embrace this model. They’re inert, and proud of it, often reducing themselves to a symbol, slogan or promise that sits and waits for customers.

And waits.

And waits.

These days, traditional brands are doing a lot of waiting. Customers are passing them by, moving too fast to notice.

Great brands are customer wheels

Brand inertia is not the future. Newer brands have wheels. Better yet, they are wheels. They’re not icons; they’re enablers. They enable customers to get things done, to move from Point A, where things aren’t that great, toward Point B, where things are a whole lot better.

These brands grasp in a heartbeat that a worthwhile “brand experience” isn’t the package or the promise. It’s what the brand does in the real world to move customers forward. What counts is the quality of direction, the speed, and the distance that the brand delivers.

Moving customers forward

If customers can’t measure what your brand delivers—in how far and how fast they advance—your brand is one step closer to gathering dust.

A dynamic brand will enlarge a customer’s life and give him or her the tools to explore it. The best of these tools are at the tips of customer fingers and in the taps of their toes. (See photo above.) They’re immediate value, getting things in gear, popping up new horizons left and right.

Fast track brands

Online brands have a big advantage here, because they’re often enablers at the core. They’re fast track brands for fast track customers (who happen to have healthy incomes). Old brands ignore them at their peril.

(Fast track brands can cut you off at the pass.)

Facebook, Twitter, Google and Apple are all good examples, and ever more “edge-ier” brands (like Pinterest) are emerging, rapidly trying to translate new digital capabilities into new vectors of customer value.

It’s the Point B that matters most

Every brand has a Point A: it’s the brand identity and all its attributes. What matters most, however, is the brand’s Point B. For the customer, Point B is Point Better-off. So we ask: Where is the brand taking its customers? How far ahead will that be? How will that Point B be a richer realm of living compared to today’s Point A.

That’s the brand question.

Photo: iessi — Flickr

Continued from Part 1

In this installment we continue our discussion of what it means to “create a customer.” We then begin the process of shaping brand strategies to create the customers that a business needs.

The business value of creating customers

When we create a customer we are doing much more than making a sale. In themselves, sales do not create customers. Sales create transactions. Simply ringing the cash register does not forge a customer connection, nor does it mean the customer will return. When companies pursue sales at the expense of creating customers, they run into big trouble.

In other words, the purpose of your brand is not to be a stylized sales stimulant. It’s purpose is to build strong customers, who will demand what only you can provide. Your brand can do this by enabling customers to develop skills, capabilities, values, sensibilities and attitudes that are good for them, and good for you. Your brand puts you and your customers on the same page—a page that you write together.

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Joel Spolsky relates how his New York software company has figured out how to do customer service right. They give their tech support staff the tools to fix customer problems in two ways: to solve the immediate problem, and then to fix the source of the problem.

This has positive brand-building consequences.

The power to build the brand

Spolsky’s company, Fog Creek Software, does not outsource customer service. They take accountability for it in-house. When a customer calls with a problem, a tech support employee first helps resolve the customer’s most pressing issue. Once that is dealt with, he or she is empowered to take steps to get the problem fixed at the source. Often, this is a code-level fix. In this way a potential class of problems can be eliminated, and with it the possibility that other customers will experience similar issues.

The result is both a tactical and strategic step forward in customer brand experience.

Call centers can erode brand value

Joel contrasts his company’s approach to that of typical call centers, where support personnel take calls day after day without ever having the tools to fix anything. The same calls keep coming back, and support personnel keep reading the same canned diagnostics on their computer screens. Customers hate it, call center morale is low, and the company wonders why its brand just can’t seem to gain traction.

To quote Joel:

Many software companies still think that it’s “economical” to run tech support in Bangalore or the Philippines, or to outsource it to another company altogether. Yes, the cost of a single incident might be $10 instead of $50, but you’re going to have to pay $10 again and again.

The customer wins and the brand wins

Joel says he invests more up-front in customer service, but gains a great deal more in downstream sales and customer satisfaction. The innovative way he structures his company’s tech support career track also seems destined to pay brand dividends.

Photo: barto — Flickr

A while back, in How to Design a Customer, I sketched some basic steps on how to design the customers that a business needs for its success. In this follow-up post I’ll discuss the steps brand builders can take to create those customers, once they’ve been designed.

“Creating customers,” of course, is what brands do best.

How this post is structured

This post will appear in several parts over the following weeks, with some related posts in-between. It will address these questions:

1. What does “create a customer” actually mean?
2. Why are brands the best mechanism for creating customers?
3. How does the “creating customers” approach differ from traditional brand approaches?
4. What methods should brands use to create customers?
5. What kinds of customers should we create?
6. What new forms of brand value, and brand/customer interactions, does “creating customers” enable?
7. What are some examples of brands that create customers—and of customers created by brands?

I’m guessing there will be three to five installments. I originally planned more, but have decided to spin off some of those segments into free-standing posts of their own. Eventually, I’ll put all the parts of this post into one document whose link can be found in the sidebar section called “Pages.”

Consider these posts to be a first draft of that eventual document. Since this is a new brand approach being explored, comments are encouraged—and appreciated.

Useful links

A key purpose of this blog is to set forth a new theory of brand as a process of strategic value creation. This entails a sharp break from many traditional brand concepts. If you’re new to this blog, here are some links to previous posts that can provide some background for what will be discussed here.

• How to Design a Customer
• Value-based brands (here and here, with more to come)
• Managing the brand agenda
• From supply chain to brand chain
• Brands at the core of business
• The end of “branding”
• Limits of traditional brand methods
• New brand models vs. old brand models

Our New Brand Glossary defines many of the terms I use. I’ve added key new terms to the brand vocabulary, and I redefine many traditional terms.

Perspective: the coming transformation of brands

First, some perspective on where I’m coming from. As I see it, brands are on the threshold of a major transformation. Brands are moving away from their traditional role as stylized sales stimulants and as communications designed to shape customer perceptions. Their future lies in becoming company-driven engines of value innovation, where they advance customers to desired outcomes—and beyond. “Beyond” means that brands have a definite leadership role to play.

Here’s my core definition of brand: Brands are avenues of value innovation in a creative engagement between companies and their customers. In subsequent installments I’ll show how this definition anchors a methodology for creating customers.

Brands: from “perceptions” to value delivered

As you can gather, what I’m describing is a major change in the nature of brands, and in brand building approach. For one thing, it means that brands will need to be developed as programs of strategic deliverables. They’re no longer a glossy wrapper or meme existing at the level of a “message,” and powered by serial campaigns. Brands of the future will be shared, two-way, live connections between company and customer—connections that create significant value for both beyond the sales transaction.

Reinvent brands to preserve brand value

In my view, this transformation in brands is necessary to preserve brand value, and to prevent the slow self-destruction of brands if traditional brand models are pursued. Brands have to find new ways to engage customers at deeper levels of value. These are the levels of delivered value where “creating customers” takes place.

Peter Drucker on “creating customers”

When we discuss “creating customers” we have to start with Peter Drucker, who said it first, and probably best: “There is only one valid definition of business purpose: to create a customer.” (in Management: Tasks, Responsibilities, Practices, p. 61 in my copy.) But what, exactly, does “create a customer” mean? Is it merely selling something? Or does it go beyond that? If so, how far? And what kind of customer do we want to create: a passive buyer one step above Pavlov’s pooch, or an active innovation partner who might help us grow new markets?

I’ll address these questions below, and in succeeding installments.

Food for thought: Companies are defined by the customers they create.

What “create a customer” means

I define “create a customer” this way: To create a customer means to connect a customer to a larger part of himself or herself through the brand. This is a connection to that person’s potential and/or passion, within the context of the customer’s expected brand outcome. Your brand helps customers to discover themselves, unfold themselves, iterate themselves, and prototype new selves that are now latent, awaiting only the wondrous “developer” that flows through your brand platforms and programs.

And since your brand is a creative engagement, you have many, many options at hand to work your wonders. What counts is the nature, content, direction and value of your brand connections.

Brands and “creating customers”

“Creating customers” is what brands are all about. It’s where brands come into their own as a process of value creation, combining strategy, imagination, innovation and customer interaction. Yep, brands are all that, which makes brands the single most expressive—and engaging—process in business. Moreover, the process of building brands is most effective when it’s openly shared with customers. That’s one reason why brand building stands head and shoulders above most other business practices. It aims to team the best and brightest of a company with the best and brightest of customers. That combination is hard to beat.

“Creating customers” and the brand mission

“Creating customers” is a central part of the brand mission. Your brand mission is to create the customers that will drive your business forward. This means that “creating customers” is a strategic process. Brands create customers as part of a focused program of strategic value creation. This puts the brand team at the heart of business strategy, where we’re in the thick of plans to create new value, and to gloriously disrupt competitors. In this regard, brand builders map out their customer creation process with two objectives:

1. Advance our customers beyond the reach of competitors.
2. By delivering new forms of value, make our competitors irrelevant.

I’ll have more to say on the brand team in a later installment.

Continued in Part 2.

Michael Mace offers an interesting analytical framework (with diagrams) for making sense of current smartphone and mobile data markets. His analysis (presented as a snapshot) includes Apple’s new iPhone.

Michael’s approach also suggests ways that brand programs might be mapped to market segments, though with brands it’s always better (IMHO) to think of customer vectors rather than fixed locations.

Market mapping the iPhone

Here’s what Michael says about the iPhone:

The iPhone is an attempt to create a phone + media entertainment device. It’ll be interesting to see how the iPhone does in the market — it was an obvious move to combine a communicator with a phone, but it’s not as obvious that the entertainer is a natural match with a phone. The danger to Apple will be if users see iPhone as the worst of both worlds: a phone that lacks a good keypad and an iPod with very small memory.

Beware the “Zone of Death”

On one of Michael’s diagrams, the iPhone seems to be uncomfortably close to what he calls (gulp) “the Zone of Death.” As Michael defines it, this is a market area of low demand where products try to combine different feature sets without solving the key problems of a critical market segment. To use Michael’s analogy, it’s where one finds products that try to be a sportcar, minivan and tractor all in one.

We’ll have a better sense of where the iPhone is headed once it launches, and we can grasp its actual potential as a communications/entertainment platform. It’s that potential that has everyone excited. The iPhone’s true test will come after the early adopter splurge.

Photo: marble2 — Flickr

Modern brands have brilliantly grown from labels to lifestyles in their first 100 years, but along the way they’ve had the chance to pick up a few bad habits. One of the most notable is a strong dependence on the missionary position. In this approach, the brand does not lead as much as it tries to dominate, positioning customers as docile and passive subjects. The brand assumes a superior, top-down role, dispensing thrills and goodness from on high, while grateful customers are expected to swoon with desire, and rejoice.

Instead of freely interacting with customers, the missionary brand rather crudely projects itself upon them.

Slam, bam, thank you brand

To a certain extent, the missionary position of brands is every (male) marketer’s dream, which is probably why it has endured. It’s a fantasy that flatters the brand, and the presumed potency of its makers. As a fantasy it promises to put the brand in total control, keep customers “loyal” and submissive, make sales easy, and limit accountability to vague promises. It’s more male ideology than brand strategy. (As an approach, it might even be a distant cousin to this.)

Missionary shortfall

Alas, while the missionary position for brands may be a boost to the male ego, it doesn’t do much to satisfy customers—or to build the brand. To begin with, it diminishes customers by positioning them as permanently passive. This deadens customer initiative and leads to low-performance customers, who add little value back to the brand. Beyond that, it’s monotonous, unimaginative, predictable, one-sided and boring. So, in the long run, it’s not that productive for brands, either.

Brands are a joining—of equals

Make no mistake about it: brands are a joining. Of hearts, minds, bodies, bones. But they’re a mutual coupling of company and customer, joining what’s freest in both parties. A brand is never the imposition of one. For that matter, a brand that locks its customers in a passive role is only half a brand. It can only begin to complete itself when it completes its customer—in the greater mission shared.

A counterpoint to the media pulpit

For brands still dependent on the missionary position, a good first step is to stop preaching and start listening. Brands are a spiritual coupling, too. For every brand message broadcast from the media pulpit, there are ten thousand customer voices waiting to be heard, many far more dulcet and beguiling than what the missionary can conceive.

Postcard: http://www.vintagepostcards.com (used with permission)