Brands Create Customers

In the near future you’ll be able to build your brand with an app. No, check that. In the near future your brand will be an app. It will re-define itself as a personal brand application on a smartphone or similar device, where it can deliver unique brand value to customers 24/7. Apple’s current iPhone ad campaign, “There’s an app for that,” provides a glimpse of this brand future.

In other words, there’s a new brand game in town. Can your brand set the agenda here?

The era of personal brand applications (PBA’s)

As I’ve noted previously, we’re now entering the era of personal brand applications (PBA’s). Personal brand applications are software applications on portable digital devices that enable customers to do more, and to be more, through the brand. They represent the intersection of high technology and brands in the palms and pockets of people, everywhere, and the chance for brands to be closer than ever to customers.

Why personal brand applications are important

Personal brand applications are important because they forge a new 1:1 brand/customer relationship. Through this relationship they have the potential to create new classes of customers from the ground up, in new market spaces. In this process they can undermine traditional brands built on ad campaigns, images, messaging and mass media saturation. Most importantly, personal brand applications free brands (and the brand team) to use the full fruits of their imagination—and to use the brand to lead.

PBA’s can accelerate brand trust

As applications, PBA’s are immediate and direct. They deliver results customers can use, now, and they build core brand trust in the process. While traditional brand campaigns may work wonders in building awareness and shaping perceptions, they’re not engines of brand trust. Personal brand applications are. They can accelerate and energize brand trust, compressing what used to take years into shorter time frames.

Technology advances make PBA’s possible

Since I first wrote about the concept of personal brand applications two years ago, we’ve witnessed amazing advances in wireless technology, digital handsets, user interfaces, online services, and software systems and platforms that tie everything together. With Apple’s iPhone, App Store and iPhone developers leading the way, we’re now are seeing a first flush of innovative smartphone apps that foreshadow the personal brand applications to come.

PBA’s: the ultimate brand relationship

In many ways a personal brand application is the ultimate brand relationship, where the brand operates as both a trusty sidekick and a trusted advisor, as close as a second skin. PBA’s do more than “connect” the brand with customers. They transform the brand into a proactive customer platform of choices, directions and actions, helping the customer at a personal level to accomplish objectives and deal with life’s challenges. The brand becomes a central means (and platform) for customer growth and development.

Personal, portable and persistent

Because they operate on hand-held devices that are wireless, Internet enabled and “always on,” PBA’s are personal, portable and persistent–the critical three P’s for brands going forward. In many ways they’re the ultimate brand presence. Think of them as perpetual touchpoints where the brand plays an active role in the culture, context and creativity of an individual’s life, day in and day out.

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For brand builders, the current media frenzy about Twitter can only mean one thing: either it’s the last stage of massive fad fever before Twitter implodes, like Oprah’s latest diet, or Twitter actually enables people to enrich their lives in new dimensions–in which case brands better pay attention.

My bet is that it’s more of the latter than the former. There are revolutionary brand platforms waiting to be be built on Twitter—but only if brands take a strategic approach to Twitter, one predicated on creating customers through innovation and value delivered. This means moving beyond the routine marketing and PR uses of Twitter that make up most brand uses at the moment.

Twitter is an innovation challenge for brands

Twitter is a form of networked communications that’s fast, direct and highly granular, with the power to link individuals and groups through their immediate experiences. As such, Twitter stands as an innovation challenge for brands, which have typically been built on non-collaborative broadcast models. To leverage Twitter’s potential we’ll need to create new structures of brand interaction, new forms of brand value, new brand relationships and new Twitterized brand platforms. All this will require new brand strategies to incorporate Twitter’s unique strengths.

Don’t pour old wine into this new bottle

For brands, the last thing we want to do is to pour old wine into the new Twitter bottle. That would cripple its potential. Approaching Twitter as just another marketing, advertising and PR outlet, as a linear descendant of direct mail, email and blogs,  is poor brand strategy— as we’ll discuss below.

Twitter changes the context of brands

Twitter is important because it can change the context of brands, from one-sided inducement and persuasion (in the classic model) to a two-way street of shared experience, shared values and shared discovery. In the big picture of things, brands are collaborations in context. Twitter enables brands to create more collaboration, and more context.

Structurally, Twitter has the potential to turn brands inside out, transforming brands from symbols and icons to a seedbed of customer innovation, where what customers co-create with the brand returns more value than the purchase price. In this process, Twitter can grow customer value in a non-linear dance, which is much more agile and adaptive than regimented brand campaigns from the top.

Non-strategic brand uses of Twitter

To date, most brands have used Twitter for standard marketing, sales, promotion and publicity purposes. For the most part, this really has been putting old wine in new bottles.

1. Companies can” listen in” to Twitter via keyword scanning tools to monitor how their brands are being mentioned. Simple enough. Most companies already monitor the Internet for this purpose.
2. Brands can monitor Twitter to discover customer problems, and can respond promptly and directly, as needed. A quick, useful response can also help personalize the brand, faster than email or blogs. However, reactively chasing random Tweets across the Twitterverse is not exactly a brand building strategy. Some examples and caveats here.
3. Brands can try to generate “followers” on Twitter, stringing them along via short messages. It isn’t clear yet how such a following ever becomes a brand community. (A key question: what are “followers” actually following? And why have followers when you could have co-creators?)
4. Some brands use their Twitter connections to send out marketing and sales messages, as if Twitter were just another form of direct mail, or spam. This is counterproductive.
5. Some brands may be tempted to use fake Twitter personas to gin up publicity. This tosses Twitter authenticity out the window. Some attempts in this direction have been egregiously lame.

Twitter’s “celebrity mode” certainly won’t last long.  Nielsen reports high rates of Twitter defection after initial celeb-fueled excitement. Twitter’s value lies deeper than the glitterati.

For an overview of standard marketing and PR uses of Twitter, see two Mashable posts here and here.

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A while back I set forth a three-phase history of brands, as an evolution from mark, to media, to means. I noted that the end of the “media” era was at hand, and that the days of mass market advertising and mass market brands, where brands were little more than stylized sales stimulants, were drawing to a close.

The current recession may have accelerated this process.

The recession impacts traditional marketing and brands

David Armano has some great diagrams and analysis of how the recession is upsetting traditional advertising and marketing models. This sea change is also impacting the traditional concept of marketing-driven brands, where brands were often developed to manipulate customer behavior in a credit-fueled economy. That era is also fading into the past.

Brand culture replaces sales culture

In my view, the current recession leaves brands in a perfect position to supersede the sales culture of marketing with a value culture of innovation and personal relationships. This is brand culture instead of sales culture. Instead of being part of a persuasion package, driven by advertising, brands can become a means of personal growth and expression, with brand platforms creatively designed to transform the personal growth of customers into value added back to the brand. A creative culture of brands is a far more productive environment than the often cynical and exploitative selling culture of advertising.

And, as I said previously, everybody wants a brand experience. Nobody wants a marketing experience.

Brands as a context of opportunity

All this means we have to re-think brands, of course–which is the very purpose of this blog. Going forward, brands are re-conceived as a shared context of value between a company and its customers. Their purpose isn’t to sell, but to unlock customer growth, innovation and opportunity. These deliverables are then networked back to the brand, raising its value and expanding its innovation horizons.

Brands as personal applications

What makes this possible is the advent of always-on digital technology. Think of the iPhone, and its successors. Thanks to digital technology, brands can take the form of “applications,” interactive enablers that are personal, portable and persistent. Instead of being creations of mass-market media, brands become enablers, as a second skin.

Goodbye consumer, hello customer

The current recession may also accelerate the end of the “consumer” era. That “era” was invented to justify a relentless sales culture based on ever-expanding credit. Thinking of fellow citizens as “consumers” treats them as little more than sheep with credit, and now the credit is gone. A “consumer” mindset also depersonalizes company innovation, lowering standards and making breakthrough innovation increasingly difficult, if not impossible.

Creating customers, on the other hand, is the springboard of innovation, and of business strategy. And that’s where brands come in.

Some companies still find it hard to grasp that brands are tools for innovation, rather than tools to contain and corral customers. In these days of rapid change, a brand that doesn’t innovate can easily be outrun by customers. Musty icons, stories and promises are soon left behind.

In fact, there are notable cases where brands that try to contain their customers actually wind up trapping themselves. One day the corral is empty. Customers have bolted to better brands.

The newspaper industry: a case study

A case in point is the newspaper industry. Every brand builder should read Clay Shirky’s trenchant assessment of how that industry failed to save its future under the relentless onslaught of Internet innovation. The industry clearly saw the threat coming in the early 1990′s. It tried vainly to perpetuate its entrenched market power in various new guises, and with various new schemes. All of these failed miserably.

Backward-facing brands

With its brands looking backward, the industry could not transform itself into a new context of value consistent with emerging markets of online technology. Customers flocked to these new markets, creating powerhouse brands in Craigslist and eBay, social sites like Facebook, and blog publishers like Blogger and WordPress. They wanted to be active “publishers” themselves, not yesterday’s passive “readers.”

Brands are a forward-focused context of value

Brands are a forward-focused context of value shared between a company and its customers. “Forward focused” means that the brand lives at the leading edge of customer value. It’s an engine of new value creation. As a perpetual co-creation, it can’t be hobbled by fossilized icons, or by business models long past their prime.

If your brand isn’t changing the world, the world will be changing you

The bottom line in the sad story of newspaper publishing is this:  If your brand isn’t changing the world, the world will be changing you.

Further reading:

Dangers of the customer containment agenda.

Brands as tools for innovation.

A substantial brand shock is about to hit the frothy world of Anheuser-Busch, MillerCoors and other US  beer makers whose business is driven largely by media campaigns. They’re about to receive a hard lesson in hops and malt from a new line of high-quality and extremely affordable craft beers, a line that will require virtually no advertising itself.

These new microbrews will come from a national retailer precisely geared for high volume sales. And did we mention that this retailer already has enormous brand loyalty–built from the ground up over decades of direct brand experience?

Raise a glass to Kirkland Signature craft beers

Yep, it’s a line of craft beers from one of the today’s best brand innovators:  Costco. Costco’s  brand strategy is to push the price/quality envelope beyond the reach of conventional marketing approaches. Those approaches  typically view brands as stylized sales stimulants, as commodity wraps to help boost sales. They rarely innovate to deliver new value–and that’s where Costco shines.

Tastes great, less billing

Costco will initially be offering Kirkland Signature pale ale, amber ale, hefeweizen and lager beers. A 24-pack will set you back $17.99. The SF Chronicle says that’s about what you’d pay for 12 bottles of a premium microbrew at Safeway. The Costco beers are said to be brewed by Gordon Biersch, a well-known maker of craft beers.

Bud and Miller: reaping what they’ve sown

Truth is, while Bud and Miller were focused on brewing ad campaigns, American beer drinkers developed a taste for beers with character–in the beer itself, not on the tube. The result was a flourishing microbrew revolution, and–ultimately–a barrel-sized opening for Costco in the fast-growing microbrew segment.

From one observer:

It is increasingly obvious to a substantial segment of the population that neither Bud nor Miller tastes great. The production of high volume, high quality Costco-branded beer will only magnify that realization and could be a serious challenge to the market dominance the large breweries have enjoyed for several decades.

And another:

The big brewers have fretted that decades of copycat, chucklehead advertising has reduced their biggest-selling brands to indistinguishable commodities in the eyes of many consumers. Now they may be reaping what they’ve sown.

Costco’s next step: some design innovation

At some point, Costco will have to come up with a more refined Kirkland Signature mark for premium lifestyle products such as Kirkland Signature wines and craft beer. The current blocky mark is fine for utilitarian goods, but when you pour or drink an outstanding wine or beer the label is part of the experience. Design-wise, it should captivate the eyes,  stimulate the palate, and go down smoothly.

Image: Costco

If you want to change the game in a market, one of the best ways is to use your brand to change the customer. Your brand can raise the customer to a whole new level, far above the status quo, and far beyond the reach of competing technologies or practices.

Take a look at what’s happening this summer at the Google Teacher Academy.

Going to school will mean “going to Google”

Google is on its way to becoming a dominant brand of education. As we’ve said previously, in the near future a student may “attend” Harvard or Yale or Michigan State, but that student will likely spend most of their time “in” various Google applications.

Going to school will mean “going to Google.”

When you are the “enabler,” your brand has arrived

Another way of looking at Google’s strategy is to consider how Google’s sets of online applications are becoming a standard “enabler” of learning. Being an “enabler” is the highest form of brand. It means that the value that you deliver is precisely what your customers need to get ahead.

Brands are interfaces to new ways of being and doing, and brand builders always keep an eye out for new advances in interface technology.

Here are 10 futuristic user interfaces for your consideration. These are for the emerging age of brands where brands will be personal, portable and persistent. Of course, they’re not specifically intended for brands. It’s up to brand builders to seize their potential.

Brand interfaces that intensify user participation

For my money, I always look for interfaces that deepen and intensify user participation, where a (creative) brand can be an enabler of new forms of experience, expression and insight.

The above image is from the future of internet search series at petitinvention, a good source of visionary interfaces.

We don’t often think of brands as “incubators,” but incubating customers turns out to be a critical part of the brand mission. As a matter of fact, it’s strategically vital.

The logic of incubating customers

Let’s begin by observing, first and foremost, that brands are creative partnerships between companies and their customers. They’re a team effort, bottom-up as much as top-down. As such, brands have a vested interest in incubating as many energetic, diverse and free-thinking customers as possible. These are customers who can push the product envelope and the brand envelope into new forms, formats and markets. In so doing, they add value back to the brand from a dozen different directions, and help drive the business forward.

Strategic incubation

As warm and fuzzy as “incubation” might sound, brands incubate customers for reasons that are strictly strategic. The payback from incubating customers is competitive advantage. Your goal in incubating customers is twofold. You want customers who can:

1. Augment your R&D
2. Carry your business into new markets where competitors can’t follow.

The customers that your brand incubates today may drive your strategic platforms of tomorrow. By incubating customers your brand becomes a means of innovation, organically developing new contexts of product and service value.

The incubator model: an innovation platform

There’s a very specific brand vision behind the incubation process. That vision understands that customers are much more than mere “buyers” of products. They’re potential innovation partners who can pay bottom-line dividends far into the future. Thus, we employ an incubator model that’s much more than heat lamps and a comfy nest. In brands we incubate innovation, and we design the brand as an innovation platform for customers. (Brands belong in the innovation department far more than they belong in the marketing department.)

Brands as innovation tools

Brands are, of course, the premier tools to create (and incubate) customers. Brands enjoy this special status because they encompass creative, social, personal, emotional and moral dimensions. These are all potential innovation levers. This special scope grants brands a transcendent power to transform customer lives—in the right directions if the brand is morally and socially grounded.

A reference model: Y Combinator

One reference model for brand builders is that of startup incubators, the boutique companies who help fledgling entrepreneurs turn raw ideas into business. Treat your customers as brand entrepreneurs, because that’s what they want to be, and that’s you need them to be. A useful model to examine in this regard is the successful business incubator Y Combinator. Brands would do well to learn from their vision and focus.

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