Brands Create Customers

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.
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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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Brands create value networks within the vast and rich human networks that make up everyday life. Over the last decade, the Internet and its applications have totally transformed the nature of human networks, making them greater, and more intimate, at the same time. That’s one reason why brands are fast followers of Net innovations.

Internet-enabled human networks

The Human Network site has a useful series of definitions on just what an Internet-enabled “human network” involves: it’s dimensions, collaborative contours, content and connections. It’s worth a read, especially for brand builders.

A sample from Mike Arrington:

The human network has evolved from the clan to the Internet. We are all part of a flat, mega-connected hierarchy, allowing social interaction in its purest form, from the simplest emotional gasps to the most complicated intellectual debates. The human network is humanity in its purest and most beautiful form.

Brands animate networks from within

Whatever your brand, you will need a similar perspective on the network value that your brand delivers. For your brand to succeed, it will have to animate human networks from within, connecting people to new forms of value—and to other people—through the brand. Brands that can’t make this transition risk being left behind.

Brands are finally beginning to realize that their future lies in semantic and semiotic networks, where they stand to reap large benefits from the dynamics of network effects and peer-to-peer relationships.

Thus, my eyes lit up when Tom Evslin at Fractals of Change noted the growing importance of “dynamic peer clusters” as a form of social recommendation engine for purchases of music, books and related goods.

When I saw the phrase “dynamic peer clusters” my mind said: that’s exactly what brand programs should create. As our home page states (quoting this for the nth time):

Brands of the future will not be top-down monoliths. They will be a thousand agile initiatives, loosely coupled, rich in customer texture, often sparked by customers themselves.

Tom defines dynamic peer clusters as “groups of people who like the same books or movies or music or whatever as you do.” These can become “a perfect source for recommendations of new books or movies or music or whatever.”

Last.fm and Netflix are two examples of how dynamic peer clusters can help subscribers discover more items of interest and enjoyment. They provide a network effect of shared taste that gains insight and authenticity the larger it grows.

Why brands need peer clusters
In their present state most brands generate poorly formed dynamic peer clusters. As a result, they leave billions of dollars in value on the table. That value is locked away in the archaic and closed “build it, brand it, sell it” paradigm, and in traditional top-down brand campaigns. Not only could this brand value be out there “working” among customers, it could be engaging customers to create more value on their own, which could be added back to the brand.

Creating customers and creating clusters
The purpose of a brand is to create the customers that will carry the company forward. For the brand, this means engaging customers and delivering new forms of value that customers can use. Specifically, these are forms of value that free customers from a tyranny of routine, cost, diminished opportunity, or impeded growth.

The customers that your brand creates (however imperfectly) become a default peer cluster. They can be a weak cluster–no more than an uninspired, quasi-connected aggregation of “buyers”– or they can become a highly-charged nucleus that autonomically connects with other peers. A recommendation network may be one form, but an customer-driven engine to discover new forms of brand context is much more valuable. Context makes markets. If your customers actively connect one another to richer states of being, and richer states of meaning, your brand can begin to realize its potential.

Grow the customer, grow the brand, grow the business
Thus, when a company like BMW (for example) shapes its brand, it would have a fairly precise idea of the customer it intends to create, and the tenor of the dynamic peer clusters needed to grow the customer, and the brand. To design a brand/customer that does not leverage peer clusters would be a disservice to the brand, and the business.

Photo op: a peer-to-peer brand cluster.

Peer clusters and brand design
Given the importance of dynamic peer clusters to brand growth, the brand design process should be modified accordingly. It should now address these questions:

1. What kind of networked customer do we want to design?
2. How do we create this customer across the brand platform?
3. What type of dynamic peer cluster should we create with our brand?
4. How will this cluster enable our customers to grow our brand by growing themselves?

How a brand answers these questions will play a large role in how deeply it engages its customer base.

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Photo source: Clearly Ambiguous, Flickr