Brands Create Customers

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.

In its usual level-headed style The Economist analyzes the basic issues involved in managing risk and brand reputation, especially for global corporations. They address the subject as part of a special report on Corporate Social Responsibility (CSR).

This special report will look in detail at how companies are implementing CSR. It will conclude that, done badly, it is often just a figleaf and can be positively harmful. Done well, though, it is not some separate activity that companies do on the side, a corner of corporate life reserved for virtue: it is just good business.

Three layers of CSR

The Economist identifies three layers of CSR as it’s currently practiced in large corporations:

1. Philanthropy — beginning with “checks for charities”
2. Risk management — to ensure that screwups (or disasters) don’t occur
3. Strategic opportunities — to use CSR for competitive advantage

Where do brands come in? In level three, of course. Brands and CSR are a perfect strategic fit.

Beyond an antiquated notion of brands

I totally agree with the Economist’s integrated approach to CSR, where it shrugs off superficial feelgood communications and focuses on CSR operations embedded in the business. However, The Economist seems to have an antiquated notion of brands, as if we’re still living in the 1950′s, when brands were static “assets” to be kept polished and squeaky clean lest any “bad press” diminish their value. This defensive and reactive concept of brands prevents the special report from addressing proactive brand strategies that may dramatically raise the bar for both social responsibility and profits.

Brands and social responsibility

“Brands and social responsibility” is an important subject that deserves its own in-depth report. CSR requires new attention to the supply chain, and to the brand chain. It also requires new brand models, and new brand approaches. That’s more than I can manage in this post, so I’ll end with some general comments.

1. A brand is company potential X customer potential. When brands are understood in this context, the arena of “social responsibility” becomes a strategic brand opportunity, rather than a nagging and/or awkward problem.
2. Brands managed as “assets” are dead ends. The purpose of brands is to create customers. This is in itself a socially responsible act.
3. When brands are reduced to perceptions (“how the company is perceived”) they become little more than PR exercises, with a dash of design. This completely ignores a brand’s game-changing potential to create customer value.
4. The brand mission is to grow the customers that will grow the business. In general, the more socially responsible the brand, the more opportunities it creates for customer growth.
5. A brand platform is a social platform. The more socially responsible the brand, the more power it can generate through (and from) its customers.
6. “Asset brands” sit on the shelf, or hide in the vault. They’re eventually bypassed by proactive, socially responsible brands that can run (and grow) with customers.
7. The best way to be “socially responsible” is to embrace those strategies that advance customers, rather than merely aim to empty their wallets.
8. In general, a brand cannot do any more for its customers than it does for its employees. Social responsibility begins at home.
9. Brands stripped of social responsibility are low-performing brands. At the very least, they will be leaving money on the table.
10. The best way for a brand to manage its reputation is to lead customers to higher levels of value. Brands that don’t lead get stuck in the muck.

Photo: Jamison — Flickr

Earlier this year, in a post called Interaction design: the new key to brands, I laid out a method of brand building predicated on carefully structured customer interfaces and interactions, across a broad arc of customer experience. A new site, the Usability Body of Knowledge, promises to be a useful resource to brand builders creating value through customer interfaces and interactions.

The four key brand interfaces:

As I noted in my earlier post, the key interfaces for brands are:

1. Between company and customer
2. Between product and customer
3. Between customer and customer
4. Between the customer today, and what he or she wishes to become tomorrow.

And as I then added:

Interaction designers will be asked to help companies craft effective digital platforms to build their brands across the four brand interfaces noted above. This is no small challenge. These digital platforms will be expected to drive the interactions that grow the customer, grow the brand, and grow the business.

The task is complex, too. Not only are different types of interfaces involved at the digital level, there are also different customer contexts at each interface, multiple technologies at play, and many forms of brand interaction. Brand vision, roadmaps and deliverables are central to the mix.

How does “usability” apply to brands?

We don’t usually think of “usability” as an element of brands, but think it has an important brand context. I see brands as platforms and programs that make culture (or “life”) more usable for customers. Brands that cling to the box or consist of shallow symbols and slogans rate low on the usability scale. Brands that raise customers to new levels rate much higher. In other words, brand usability takes root when brands are trans-product forces that open doors and empower customers to try new things and to plumb new shapes of self. Great brands flourish as usability tools.

Conventional brands often fail miserably at this task, which is why a fresh approach to brands holds such market-changing potential.

Hat tip to the invaluable Sensorytumble.

As brand builders, we do everything we can to create “timeless” brands. In the heat of this effort, though, it’s easy to forget that the first step to becoming a timeless brand is to make time for customers. To begin this process, a brand must recognize that its customers are not external “targets” to be aimed at. Customers are part of the brand essence, just as much as the company and its products.

Factor your customers into your brand

You make time for your customers when you include their interests in key decisions you make affecting company policies, innovation, product performance, quality and trust. The time you spend factoring your customers into your brand is time well spent. Your unique brand emerges when your customers are part of you—and vice versa. In this bond, there’s no room for competitors.

A case in point: modern watches

When it comes to making time for your customers, modern watches (some pun intended) are a case in point. I’ve come across an excellent example that I’ll detail below.

Brands function on customer time

Consider the above wristwatch. With four dials, it’s a work of engineering and watchmaking art. This particular model doesn’t need batteries, nor does it need to be wound. It’s solar powered, and can run for months once it’s been charged by light. It’s a precise chronograph, yet can also operate 300 ft. below the surface of the ocean. Similar models feature perpetual calendars, alarms, and multiple time zones. As power-packed timekeeping machines such watches work all sorts of miracles—once you figure out how to set them properly.

The set-up is the rub

Alas, the set-up is the rub. Brands function on customer time. A brand of powerful watches that doesn’t embrace customers as part of its brand essence is effectively taking its product off its customers’ wrists. From a brand perspective, the greatest feature of any watch is the customer who wears it. That person sells the brand ten times over by showing everyone what a great piece of gear it is.

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If you haven’t yet read the recent post by Peter Merholz called Designing for the Sandbox, you should do so. It proposes a flexible structure for designing customer experiences, where a fair amount of leeway is given to customers themselves to shape their own meanings.

Peter writes:

People who design experiences often believe that in order to succeed they must exert complete control. And while in extremely rare instances they might be afforded the opportunity to dictate an entire environment (say, in a casino, or a theme park), when designing for the real world, for the ebb and flow of actual lives, such control is impossible.

Customer experience is connections, not control

Peter suggests that the effective richness of an experience lies in the connections it provides, not in the control it exerts:

In fact, the best thing a designer can do is dictate as little as possible. Because the point isn’t to control, it’s to connect–to weave your offering into the complexity of people’s life experiences, to allow them to figure out how to make sense of your offering within their world.

To this I’d say, “Yes, indeed.” From a brand perspective, your brand fabric is part brand, part customer and part context. It’s a living thing, too, always in the process of growing itself. Dictating your brand cannot grow your brand.

The role of the “sandbox”

The approach Peter calls “designing for the sandbox” can be part of the answer:

… I’ve been calling this “designing for the sandbox.” This acknowledges a space for content, tools, and people to interact and create their own meaningful experience. This is not a monolithic creation, that dictates how the content, tools, and people best interact. …

The sandbox and the “brand as means”

The sandbox approach meshes with what I’ve been propounding as “the brand as means,” where the brand rises from a dictated message mode to become an enabling platform for customers. The brand enables customer connections, and many levels of customer interaction. (See: Interaction design: the new key to brands.)

What’s in the brand sandbox?

I see the brand sandbox as a shared, collaborative space where the brand and customers work and play together to shape their respective futures. (Both parties benefit.) The main tools are those that facilitate interaction, initiative and innovation. Although we call it a “sandbox,” it’s an infinite kind of sandbox, with horizons for big thoughts and big actions. (For brands, every sandbox is a Sahara.)

So, to answer the question, “What’s in the brand sandbox?” I’d say the best short answer is: “a special kind of freedom.” Customers can use this freedom to grow and transform themselves, and in the process, to grow the brand. This, of course, all comes back to the brand agenda.

Blogs are a foot in the sandbox

When a company starts an interactive blog (or blogs) with customers and stakeholders, it is putting its foot in the sandbox, so to speak. As shared connections and interactions, such blogs can become productive forms of customer experience.

There’s also a good amount of “brand sandbox” in the processes I’ve described called designing customers, creating customers, and growing customers from the ground up.

And what’s in your brand sandbox?

Ironically, what makes your brand stand head and shoulders above the rest may be the sandbox you provide beneath your customers’ feet. The brand wars are also sandbox wars.

Photo: .michael.newman. — Flickr

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.

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As I discussed in a previous post, companies are increasingly turning to digital brand platforms, programs and applications to augment brand interactions and brand experience, and to deliver new forms of customer value. In this post I want to focus on a new type of digital brand application which I call (in my best generic English) personal brand applications.

[UPDATE] See new post: Building your brand — there’s an app for that

Also see:

• NPR creates a personal brand application
  Personal brand applications: conceptual examples
• A personal brand application from Whole Foods

What are personal brand applications?

Personal brand applications are software applications that deliver unique brand value to customers in ways that are personal, portable and persistent. Their intent is to form a brand partnership with the customer, with a depth of interaction far beyond conventional channels of brand communication. They become the customer’s virtual sidekick, mentor, confidant and guide. They watch the customer’s back, they go where the customer goes, and they are “always on.”

As a complement to other brand programs, personal brand applications are a new way for brands to connect with customers 24/7. They are 1:1, direct and immediate. They have the potential to forge deep brand connections that can transcend the influence of advertising, packaging, “branding” and similar old-school brand modalities.

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If we ask ourselves to identify the current movers and shakers in the world of brands, we would probably end up with a short list of design firms, ad agencies, brand consultants, celebrated product designers—such as Jonathan Ive at Apple—and a handful of top-tier corporate brand wizards.

Interaction designers: the new rock stars of brands?

They will soon have company. The emerging rock stars of brands may well be interaction designers. As brands move to digital platforms to help create customers, interaction designers will play a key role in determining which brands thrive, and which fall by the wayside. This will be especially true as more companies migrate to personal brand applications and multi-threaded brands.

Brands are interfaces and interactions

The ascent of interaction design to a critical role in brands is largely due to the changing nature of brands themselves. The new reality of brands is that they’re programs to deliver value through customer interfaces and interactions. They’re no longer the realm of top-down symbols, slogans and promises. In their new mode, brands are more social and cultural than “corporate.” They’re collaborative expressions of companies and their customers, formed in a structured process that builds the brand from the customer up.

Some definitions:

1. A brand interface is where the brand works with customers
2. A brand interaction is how the brand works with customers

Yes, brands work with customers. The brands that count are working brands, not display brands. They’re brands that roll up their sleeves and team with customers to get things done.

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