Brands Create Customers

It appears that brand builders have a powerful new process to help them build strong brand relationships. The design methodology called service design gives every indication of being a robust methodology for delivering high levels of brand value. In fact, as a method of value delivery it may be more effective than traditional brand practices based on communications and persuasion.

Service design and the evolution of brands

The service design approach meshes nicely with the process of how a brand creates customers. It also fits rather neatly into the final stage of the three-phase evolution of brands. In that model we see brands begin as marks, proprietary symbols originally branded on shipping casks. The second phase is an age of brands as media, where mass media advertising and messaging drove brand development. In the present era brands are emerging as a means, as strategic enablers that help customers (and companies) move to the next level in their planned growth.

Service design and “brands as a service”

As a design discipline, service design focuses on maximizing positive user experiences through high-value touchpoints. Brands use much the same methodology. In fact, we could design a brand as a service of value innovation, aimed to unlock more value than a product alone could provide. To be sure, every brand also needs a well-constructed identity and a command of relevant metaphors, but beyond that it’s largely a mutual value creation effort between company and customer. As a service the brand rolls up its sleeves to do meaningful work, delivering results customers can use.

The creative context of service design

At its most rudimentary levels, service design is about helping companies and organizations deliver better services. That’s valuable in itself, but conventional services are often conceived too narrowly, as little more than interactive tasks. They’re prosaic by intent, often because companies lack the vision to leverage them creatively (and strategically).

There’s no reason we can’t design services in a more creative context, in which new realms of expression and proactive behaviors open up to customers and to companies alike. We could define the service as a means of discovery. (It’s part of a shared brand journey.) A service (like a brand) is a collaboration in context. Reinvent the context. Shape it to enables the customer to be more, and to do more. Free it to deliver layers of meaning in addition to elementary function.

Service design is more strategic than traditional brand myths and symbols

Because service design is customer-focused and results-oriented, it contains more strategic potential than traditional brand myths and symbols. Brands built on symbols, myths and stories are not strategic. They’re customer dead ends. Their usual goal is to end innovation and lock customers in place. In so doing, however, they often lock the company in the same corral, creating advantages for competitors. In contrast, service design can easily incorporate strategic brand goals into its processes, advancing customers into new market spaces that competitors can’t reach.

A brand is how you experience a company

There is significant overlap between brands as enablers and the goals of service design. For instance, check out this interview with Peter Fossick, who teaches service design at the Savannah College of Art and Design.

Everything is moving toward service design. Design is becoming more intangible, less about product and more about the experience of the product. Look at Vélib’, the bicycle rental program in Paris. The technology is ancient–it’s a bicycle, after all–but the program is so brilliant thanks to the service architecture. I’m not saying we’ll stop inventing new products. I’m just saying that designing the experience of the product is becoming just as fundamental as the product itself.

Include the experience of trust in a product offering and you are well on the way toward building a brand.

Service design: creating the customer platform

Professor Fossick also makes this interesting observation about Apple:

You know, Apple really had an enormously difficult time with hardware in the nineties and earlier this decade. They seemed to be focusing too much on product, without considering the product experience. Then–whop!–iTunes, really even more so than the iPod, changes all that. That’s not a music player. It’s a design of the user’s interaction with sound.

One might even argue that in spite of the vaunted product design ethos at Apple, the core of the Apple brand is the (software) service to customers that Apple delivers–first in the Mac OS, then  iTunes and now with the iPhone and its wondrous apps. This enabling service creates a platform of customer experience that makes everything else possible.

Also see: Interaction design: the new key to brands

Hat tip: John Schneider (Twitter @johnfschneider)

Whole Foods has taken initial steps to create a personal brand application (PBA) that can strengthen its brand ecosystem and develop deeper brand relationships with customers. Potentially, it’s a PBA that can radically differentiate Whole Foods and its customers from the Safeway’s of the world, raising Whole Foods customers to a level of brand experience that other grocers can’t match.

Personal brand applications

Personal brand applications are software applications that deliver brand value on smartphones and similar digital devices. As brand applications they do things, and they’re personal, portable and persistent (always on). They enable the brand to be a partner, sidekick and mentor to customers 24/7.

(You can read more about personal brand applications here, here and here.)

Being enabled is a high-level brand experience

Personal brand applications enable customers to do more, and to be more, consistent with the brand’s vision and innovation roadmap. This sense of enablement is a brand experience. It’s proactive, not passive, the experience of a newly empowered partner and participant. It’s a tremendously powerful and often liberating feeling.

Brands that aim to amuse, flatter, entertain or otherwise “delight” customers are no match for brands with the power to enable.

What the Whole Foods PBA does

The (free) Whole Foods PBA is based on the iPhone/iPod touch platform. It enables customers to enjoy tasty and nutritious food by providing a comprehensive database of 2000 recipes, including nutrition information and tips for preparing meals from what one has in the fridge. As Whole Foods describes it:

Searchable by ingredient, special diets, and other elements like “budget” and “family friendly,” each recipe contains detailed preparation instructions and nutritional information, which can be copied and pasted, saved as a personal “favorite,” and emailed from within the App itself.  The App also includes an “On Hand” feature where customers can enter ingredients and get back meal recommendations.

The brand context of the PBA

At first glance this may seem like a pretty basic smartphone app that helps people chose and cook good food. However, there’s tremendous brand potential in the context of the PBA, where Whole Foods and its customers can team and collaborate in the daily process of eating healthy food and living sustainable lives. That’s a very different brand context than the traditional “grocer” + “shopper” context of supermarkets. It’s a shared context of value chock full of opportunities for personal growth and new market creation.

Whole Foods becomes more than a supermarket brand

The PBA makes Whole Foods more than a brand of organic foods and natural products. Its certainly helps raise Whole Foods beyond your basic supermarket brand. Through the PBA Whole Foods becomes a brand of healthy choices, healthy living, creative cooking, nutrition, sustainability and taste. All this happens at the personal level of the customer, via the iPhone/iPod touch. Brand and customers share and act within a unified, holistic vision, accessed on a daily basis. This shared context extends far beyond the store proper.

A PBA that builds brand trust

An added value of the Whole Foods PBA is that it can help build brand trust at the personal, interactive level. It integrates Whole Foods into a customer’s daily life as a trusted partner. And if Whole Foods ever decides to offer new products down the line, such as health insurance or life insurance, it can leverage the platform of trust created in part by its PBA.

Changing the retail future

Personal brand applications have the power to change the retail future. A retailer can combine store brands with personal brand applications to gain more brand presence (and brand clout)  with customers than packaged “name brands.”  The PBA becomes the connective tissue between retailer and customer, a low cost substitute for the billions of dollars spent by national packaged brands to advertise their goods. The PBA puts the retailer and the customer on the same page, writing it together.

Related post: Brand platform innovation at Whole Foods

Photo credit top : kalebdf – Flickr

Photo inset: Whole Foods

Ajit Jaokar explores design parameters of mobile devices and how they can inhibit, or facilitate, greater use of mobile platforms as we move forward.

This subject is relevant to those developing personal brand applications, since one of the goals of a PBA is to be the strongest customer platform possible. Device platform limitations can get in the way.

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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It’s worth remembering that real brand innovation happens at the structural level, not at the campaign level. For example, it’s a case of brand innovation when Whole Foods makes low-interest loans to local producers to help them bring new sustainable goods to market. This is a smart (and strategic) brand move, for three reasons.

1. It helps build the Whole Foods brand platform.
2. It helps Whole Foods innovate with streams of new products.
3. It raises the brand bar in ways that mainstream grocery chains can’t match.

The loan program thus conveys a strategic advantage to Whole Foods. That’s a pretty nifty brand move that competitors like Safeway (or even Trader Joe’s) may find hard to duplicate.

Let’s see how all this works together.

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As a brand platform expands, stress cracks can appear between the brand core (perhaps over-controlled by the company) and the active brand edge (a more freewheeling terrain energized by partners and customers). The brand and its innovation ecosystem may be moving in the same general direction, but they don’t always move as one. And they can move at different rates.

Brand stress cracks have to be fixed

Brand stress cracks have to be fixed. If allowed to propagate, they can seriously weaken the platform, and the brand. The issue is rarely one of “brand essence.” It’s typically an issue of process, or of brand value delivered.

A stress crack in the iPhone brand platform

Apple is currently dealing with a stress crack in its emerging iPhone platform. The issue is how Apple approves third-party applications for the iPhone, and then makes them available for sale in its online App Store. Apple hasn’t published guidance on the approval criteria it uses in the App Store, leaving developers in the difficult position of writing software that meets iPhone technical specs but may be rejected for other reasons. The fear of arbitrary rejection has dampened developer enthusiasm for the platform.

A recently rejected iPhone application has become a cause celebre.

The importance of the App Store

Apple’s App Store is the location of this particular stress crack. The App Store is as important to Apple developers as it is to Apple and the iPhone brand. It’s the sanctioned gateway to selling third-party iPhone apps, and it’s crucial to the commercial success of an independent iPhone app developer. Selling iPhone apps outside the App Store conduit is very difficult.

In many respects, the App Store is the engine of the iPhone platform. It may represent a billion dollar market. It’s so vital that Kleiner Perkins has created a $100 million fund to help startups develop apps for the iPhone platform.

Third-party iPhone developers are a part of the brand

Apple needs motivated (and successful) third-party developers if the iPhone is to reach its potential as a broad-based mobile platform. Apple’s third-party developers form a critical part of the brand. Their initiative, imagination and innovation equal that of Apple’s in-house engineers, and they can spot iPhone apps in nooks, crannies and niches that Apple itself could never address. These niches can become selling points and growth avenues as the platform evolves.

The app approval process is a brand process

What’s at issue isn’t Apple’s right to exercise control over new iPhone apps. That’s a given. The issue is the transparency of Apple’s review and approval process. The App Store’s approval process is a brand process, a subset of Apple’s approach to its brand ecosystem and how it works with and nurtures its third-party developers. It’s a bit ironic that Apple should have this problem, because Apple knows this process. It was Apple who first sent out “software evangelists” to bring developers into the Apple brand 30 years ago.

The brand cannot be a bottleneck

One of the first rules of brand innovation is that the brand cannot be a bottleneck. Too much control at the top chokes off initiative and innovation, and eventually chokes the brand itself. Brand value is really a confluence of many streams, from the company, its partners and customers.

Brands that are “curated” as precious objets d’art in a temple tended by brand priests always run the risk of being bottlenecks. They’re too far from rough and tumble markets where active brands discover new forms of value.

Structuring the brand as a shared brand journey

Structuring the brand as a shared brand journey is often a step in the right direction.

A brand solution

The extent of developer angst over the iPhone app approval process indicates that a brand solution is needed. For sure, the iPhone app approval task inside Apple is challenging. There are thousands of iPhone apps that need to be vetted and tested, with a host of legal, technical, strategic and brand reasons why they must be carefully scrutinized. That said, there is a (brand) logical solution out there. Apple didn’t get this far without successfully resolving similar problems in the past.

One developer has proposed a six part solution, which begins:

Publish clear and unambiguous rules for what will be accepted and what will not. I don’t even care if this is a long and detailed document, but it needs to be The Rulebook from which both sides play.

Sometimes the brand ecosystem can lead in bringing problems to a close.

I’ve written about the iPhone brand platform challenge previously.

UPDATE: Here is one third-party developer’s step-by-step experience in getting an iPhone application approved by the App Store.  A total of 22 steps. Not a quick process, but not unreasonable given that Apple found at least one bug in the software. (Hat Tip: Daring Fireball).

Apple’s breakout success with its iPhone exemplifies how an elite company can, in rare and exceptional cases, “bet the brand” on a new product introduction and gain significant market advantage.

Betting the brand is for a select few

Most companies should never even consider “betting the brand.” They have too much to lose, and they’re generally not brand capable for such a high-stakes strategic action. For a small number of companies, however, betting the brand need not be a reckless toss of the dice. It can be a measured risk that favors the prepared brand—with the prospect of market-changing payback. It comes into play when such a company has no other choice but to leverage its brand to seize a compelling market opportunity. It either bets the brand or cedes strategic advantage to competitors.

What is “betting the brand?”

A company “bets the brand” when it risks substantial brand equity in a strategic move to unlock new customer value. In betting the brand a company believes that it can create a new kind of customer by introducing a new brand/customer context beyond the reach of incumbents. The risk in betting the brand is that a failure to achieve brand objectives may cause brand-wide collateral damage.

When a company “bets the brand” it is betting its proposed brand context against the reigning brand context of incumbents. It attempts to raise customers—dramatically—to a higher plane ofexperience. In this process it uses the “chips” of its brand equity. These “chips” are much more than “brand assets,” however, as we’ll see below.

A “bet the brand” scenario may involve changing the brand game.

Don’t bet a weak hand brand

First off, we should reiterate that it’s extremely difficult for a company with an average brand to bet the brand and win. It most likely won’t have the cards. Generally, it shouldn’t even try. Let safer strategies prevail, as discussed here and here.

This caveat would also apply to brands modeled as communications. While these may be rich in stories and images, they typically lack the platform depth (and the will) to raise customers to the next level.

How brands can stack the odds in their favor

If a brand-capable company desires to seize an opportunity with a high-stakes brand initiative, its first priority is to stack the odds in its favor. It will need to insure that its brand has definitive control of both its present context, and of the new context it intends to introduce. This means (at least notionally) that the brand evokes a superior customer model in both areas.

Fundamental steps to improve such a company’s odds include:

1. Architect the brand to create customers
2. Structure the brand as integrated platforms to advance customers in the direction you’re headed. (You want customers already on the way to your new promised land.)
3. Build the brand as an enabler for customer innovation, rather than an “asset” or static icon.
4. Adopt an extensible customer model so that the seeds of “the next big thing” are present in the customer of today.

The Key Posts section in the right column may have some useful links.

A fresh look at “brand equity”

To understand the process of betting the brand we need to extend the concept of “brand equity.” I define brand equity as a company’s strategic ability to create customers. This is an activist concept of brand equity. It is quite different from an accountant’s view, where brand equity mirrors share value, or the conventional concept that brand equity consists of a company’s many “brand assets.” In my view, these conventional concepts are too static. They often exclude customer initiative, and they can constrain brand innovation by ignoring the creative and qualitative elements that can make customers come alive (which is the purpose of brands in the first place).

I prefer to consider brand equity as a force, not an asset. It is the strategic firepower of a brand. And it is primarily composed of brand platforms for changing markets.

As I see it, a billion dollar brand may have multiple portfolios of brand assets, but if those assets are not configured into platforms for creating customers—and changing markets— their strategic value is limited.

Brand platforms power brand bets

A brand is vertically integrated value. When property constructed, a brand is a customer-creating machine made up of platforms of integrated brand elements, all geared to advance the customer through a singular brand vision. (Apple is a good example here, BTW).

Brand platforms give a company the greatest possible leverage in the event it makes a strategic brand bet. In this regard, the best brand platforms are customer platforms. They enable customers to advance themselves, and to add value back to the brand in the process. Proactive customers create more brand equity than passive ones, a crucial advantage when the chips are down. (Note how the iPod brand increases Apple’s market leverage, while Microsoft’s Zune brand, with a retrograde customer model, does nothing for Microsoft.)

The iPhone example

The weblog counternotions does a nice job of enumerating the major challenges that Apple faced in bringing the iPhone to market. (It lists 15 high-stakes issues.)

For Apple, bringing the iPhone to market was one gutsy move: a bold stroke to carve out a strong, sustainable position in a mature market controlled by powerful handset makers and entrenched (dominant) carriers known for their choke-hold on the industry. Apple’s only real option was a blockbuster product that could change the mobile paradigm—with a new brand context of the user.

Apple’s brand bet with the iPhone

It’s fair to say that Apple was betting the brand with the iPhone. An Apple mobile phone was widely expected, with speculation rampant. Anything less than a breakthrough innovation would be grounds for disappointment. Because the iPhone occupies a prominent plank in the strategic customer platform developed by Apple (integrated hardware, software, OS, user interface, applications, services and a new model of digital user), an iPhone failure would be far more profound than that of a single device that simply didn’t pan out. It would have serious repercussions for Apple’s ability to create new customers in the direction it’s heading.

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Don’t be too surprised if in five or ten years the US educational establishment runs on Google, from the neighborhood school to the college campus. Google teams are hard at work making Google the digital platform of learning. Through these efforts, Google is positioning itself to be a preeminent brand of education. You may physically attend Harvard or Yale or PS 27, but you’ll spend most of your time there inside Google applications. In practice, you’ll be going to school in Google.

A Google brand play

The elements of Google’s emerging education brand are set forth in Google for Educators. This initiative is a Google brand play, taking shape before our very eyes. (A brand, let’s not forget, is a collaboration in context that creates new customers and new customer value.) Google is building programs to create customers in teachers, and in students. To build its brand it doesn’t need glitzy campaigns, high-octane messaging, costly Super Bowl ads, celebrity endorsers, iconic symbols, or throbbing slogans. This is a Google brand built from the bottom-up, through customers themselves and their communities.

A brand of deliverables, not promises

Significantly, Google is building its education brand through what it delivers, and by what it does, rather than by what it says or promises. Bands are deeds, not words, and brands rich in deliverables have the inside track to be recognized as brands of integrity and trust.

In education, integrity and trust are fundamental.

Google in the classroom

To see what Google is up to in the education market, look at the links in the above-noted Google for Educators site:

• Tools for your classroom
• Classroom activities
• Classroom posters
• Google Teacher Academy
• Teacher Community

Building the integrated brand

One way to describe a brand is to call it “vertically integrated value.” Google already offers a broad scope of integrated tools for learning, incorporating Google search, Google Docs, and many other applications. These are the building blocks of an integrated brand. Basically, Google is covering everything a student or teacher would want to do in the collaborative learning process, made available from single drop-in cloud.

Students can take notes in Google, write essays, share and collaborate, create special projects, and communicate with blogs, podcasts and videos. Eventually, they will take their tests in Google, too, with stealthy algorithms to keep things honest.

And yes, there will soon be “Google Certified Teachers” who successfully complete the Google Teacher Academy.

A Google brand platform for education

What Google is building with its education initiative is a brand platform. Here is how I define that term:

The brand platform is a structure of integrated brand components architected to create focused customer growth. As a platform, it: 1) serves as a common foundation for brand program applications; 2) allows for greater efficiency in brand program development via shared elements; 3) leverages context and content across the brand; and 4) enables customers to extend the brand through bottom-up brand innovation avenues.

You can see how all these pieces are being fitted together. And you can foresee the pieces to come.

Photo: jisc_infonet — Flickr