Brands Create Customers

Rocky Agrawal provides an insightful analysis in TechCrunch on how deal sites such as Groupon and Google Offers can undermine local businesses and erode local brands. He describes such deal sites as a form of advertising that uses “amazing deals” and deep discounts to attract customers. Unfortunately, they can inculcate a “shop-on-price” discount mentality that’s no friend to local brands trying to deliver quality and a special experience at a fair price. When price becomes your calling card, your brand has nowhere to go.

Well worth reading.

No sooner do I relay Roger Ebert’s concerns about the content-corroding nature of Hollywood’s (profit-driven) 3-D conversions than Hollywood itself now seems to doubt the wisdom of slapping 3-D on movies as a way of charging more.

From the New York Times:

3-D Starts to Fizzle, and Hollywood Frets

Has the 3-D boom already gone bust? It’s starting to look that way — at least for American moviegoers — even as Hollywood prepares to release a glut of the gimmicky pictures.

Ripples of fear spread across Hollywood last week after “Pirates of the Caribbean: On Stranger Tides,” which cost Walt Disney Studios an estimated $400 million to make and market, did poor 3-D business in North America.

Brands are ways of adding value, not extracting value

Brands are ways of adding value that products alone can’t achieve. Brands range from the pragmatic (better warranties) to the highly creative (an iPhone platform that lets you choose from 500,000 apps.)  Unfortunately, it’s hard to see how the recent  Hollywood practice of inserting 3-D effects in movies any sort of added-value for movie-goers. It is a form of 3-D conversion where the “3-D” is added to a normally-shot movie in post-production. This is done for the express purpose of being able to charge an additional $3 per ticket. Instead of value addition, this is value extraction.

The Avatar 3-D experience vs. the marketing 3-D experience:

Award winning Avatar, the highest grossing movie of all time, was conceived, planned and shot in 3-D (with two cameras) so that the 3-D effects would be integral to the film. This was an expensive and laborious process, but it worked because it was true to the rich artistic vision behind the story.

In contrast, the current 3-D conversions are done for added profit, not for artistic merit or user experience. From the ScreenRant article cited above:

The typical conversion process costs somewhere in the neighborhood of $300,000 – $500,000. That’s a drop in the bucket compared to the overinflated multi-million dollar budgets the major films are getting. For their investment, studios can expect to see anywhere from 30- 50% increase in box office sales because of the additional cost for the “privilege” of watching the film in 3D. Studios know that not everyone is going to do their research on the technology and figure out that it is a scam, so they can be assured that opening weekend will have much higher numbers from people trying out the 3D “experience.”

 

Hollywood is a brand of . . .  what?

We’d like to think that “Hollywood” is a brand of superlative, highly engaging movie-making, where the vision of movie makers can be scaled to new heights. Avatar is a good example. However, schemes of converting regular movies to low-level 3-D as a way to increase profits take the Hollywood brand in another direction. They erect  a flashing “Caveat Emptor” atop the box office, forcing us ask if “Hollywood” can be trusted, and to wonder if the “Hollywood” brand experience is actually worth it.

From Roger Ebert:

Digital projectors have been force-fed to theaters by an industry hungry for the premium prices it can charge for 3D films. As I’ve been arguing for a long time, this amounts to charging you more for an inferior picture. The winners are the manufacturers of the expensive machines, and the film distributors. The hapless theaters still depend on concession sales to such a degree that a modern American theater can be described as a value-added popcorn stand.

If we define “brand” as a fully complete, delivered experience, i.e., what the customer takes away in his/her emotions and senses, then the emerging  Hollywood “brand” looks to be increasingly constrictive and manipulative. The movie-going “quality of experience” becomes that of a stick-up with FX.

By their very nature brands are collaborative strategies. They’re the products of companies and their customers, a joint effort. Being “strategic”they are more than stylized sales stimulants, a matter of mere messaging. Their aim is to change the game by changing the customer. At a minimum brands are collaborations in context and collaborations in productivity.

Brands as collaborations in context

As collaborations in context the brand and its customers work from a shared platform of vision and values. Their mutual goal is to enrich their shared context, extend it, make it more resilient, make it more creative, and ultimately make it more relevant and satisfying. The brand may lead, but it needs customer interaction and collaboration to compete the context. The brand becomes relevant when it makes its customers relevant.

Brands as collaborations in productivity

Brands are also collaborations in productivity, where the brand aims to make itself more productive by enabling its customers to be more productive themselves. The brand advances its customers beyond the reach of competitors, and as it does it relies on customer insight,  initiative, and innovation to add value back to the brand, advancing the brand in new directions. Customers benefit by no longer being held back by the constraints of mediocre companies and brands.

Historical framework

How did brands arrive at the point of collaboration? They didn’t start that way. I’ve set forth an historical framework on the evolution of brands to the current phase of brands as enablers, where collaboration strategies are paramount. You can read it in Brand evolution: from mark, to media to means.

Creating customers as a collaborative strategy

Brands create customers using collaborative strategies. Or, I should say, “Brands create the strongest and most dynamic customers using collaborative strategies.” The goal in creating customers is to:

1. Create the customers to drive the business forward
2. Create customers beyond the reach of competitors
3. Create customers who add value back to the brand

That last item requires deep collaboration between a company and its customers. A brand runs on customer feet, and customers can take a brand into fertile new territories the brand would never have discovered on its own.

You can read more about strategies for creating customers here and here.

The brand as customer-focused application

In my view, the best way to build the collaborative strength of a brand is to develop the brand as a customer focused application. In this approach the brand is not a campaign nor a “communication.” It’s a set of concepts, tools and processes that help customers do what they need to do to become more proactive and more productive in the world. I’ve described this approach in detail here and here.

Brand engagement as collaboration

Brand engagement is another form of strategic collaboration. While “brand engagement” is often defined as a means of getting the customer’s attention, or persuading the customer to buy, usually in some aspect of “messaging,” that approach is hardly strategic. It usually reduces the brand to a brand of advertising, and “messaging” leaves little room for collaboration.

In a more strategic approach the brand would engage customers to move them forward, beyond the confines of the status quo, to a market space where customers could be more proactive, and more enabled to add value back to the brand. For more details on the strategic approach to brand engagement see How to define “brand engagement.”

A “belief system” isn’t that collaborative

Brands can attempt to define and propagate “belief systems,” as if the brand were a kind of secular religion, with customers as mesmerized “believers” who blindly buy the brand. Unfortunately, this approach easily becomes a one-way form of propaganda, where doctrine and belief are the rule, and customers told what to think. There is little collaboration in this scenario. It is mostly a dead-end enterprise. I have written about the downsides of this approach in Some brands go medieval on their customers.

Writing in UX Magazine Sarah Doody recently discussed Why we need storytellers at the heart of product development. In my comments to Sarah’s insightful post I tried to take a step back (or up?) to frame both product development and storytelling in the context of brand strategy.

Here is what I said (with subheads now added for emphasis):

Product storytelling is a part of brand strategy

Sarah,

Thanks for this very informative post. What you call “product storytelling” is also part of brand strategy, and the function of “product storyteller” is usually performed by a brand strategist, or a brand developer. Just to clarify, the brand mission is to create the customers that drive the business forward. The process of “creating customers” involves leading customers on a brand journey that advances customers to richer realms of living. Customers need new perspectives and new experiences to discover these realms (through the product and the brand), hence the importance of storytelling.

Storytelling is not “spinning tales”

Of course, by “storytelling” we don’t mean “spinning tales.” Storytelling is not promotion. It’s a shared story from a shared journey, co-created between the product and customers. In the best of stories, the company and its customers are on the same page, writing it together.

The brand is an application to create value

People often assume that brands are some kind of window dressing or meta context applied when a product is ready for market. Actually, the most critical brand decisions are made during product development. The brand is an application to create value that should be fully embedded into the product from the get-go. UX is a very big part of this value, of course. A brand developer should be working side-by-side with product developers to ensure that the chosen product strategy is also the best customer strategy.

# # #

[Now back to this blog]

The brand as story enabler

From a brand perspective, the bottom line is that the brand enables customers to create and tell their own stories. The brand isn’t in the business of telling stories as a form of persuasion. It’s a platform for customer stories, where brand experience and brand interactions enable customers to explore and share new contexts of being and doing.

Brands that lack strategy often position themselves as lures to catch customers, as if customers were fish in the sea and brands were a higher form of trolling, the perfect shiny bait with fetching face and hooks aplenty. Alas, a brand is not a lure. And customers aren’t fish.

Customers aren’t fish; brands aren’t lures

Brands fall into a strategic trap when they cast themselves as lures. Brands that try to catch customers like fish can’t create them as brand partners, and creating customers is what confers strategic advantage. Through your brand you create the customers that will drive the business forward. By developing your brand as a customer-focused application (here and here), the customers you create can help you create new markets. They return value back to the brand. By freeing customers from the hooks of mediocrity, the hooks of convention, and the hooks of competitors, your brand can turn them into the proactive partners you need so that you flourish together.

And brand touchpoints aren’t hooks

Please note that just as brands aren’t lures, brand touchpoints aren’t hooks. Brand touchpoints are discrete brand/customer interactions that deliver (or co-create) value. We carefully craft them in strategies to advance  customers beyond the reach of competitors—by delivering uniquely meaningful experience that competitors can’t match. The best touchpoints are transformative: they upgrade the identity of customers to new levels, so there’s no turning back to lesser modes of existence. Bottom line: the goal of touchpoints is to move customers forward, not to catch them with hooks. (See: How to define brand engagement.)

The mission of a brand is to teach customers to fish

The fishing metaphor is an apt one for brands, however—if we use the right context. The famous Chinese proverb gives us a clue:

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

Ergo, we use the brand to teach customers to fish. “Fish” metaphorically, of course. The brand mission is to free customers from constraints, and to advance customers farther and faster than they can advance themselves. We develop brands to enable customers to be more self-actualized, more proactive, more productive, more creative and to be more engaged with life. The more a brand enables its customers, the more the customers enable the brand.

Teaching customers to fish changes the game

When we teach customers to fish we are changing the brand game from all those mediocre brands who position customers as fish, and who design their brands as lures. Instead of the brand being a (one-way) hook, it becomes a cultural enabler. In effect, we are changing the brand game by changing the customer. Customers can repay us many times over with new ideas, experiences  and initiatives that we can fold back into the brand.

Image credit: Wikipedia

How does the Apple brand create so much value? In the last decade Apple has introduced an unparalleled stream of breakthrough products, re-defined how people engage the world with digital devices, delighted millions of new customers, built profitable new platforms and ecosystems, disrupted lethargic industries and created rich new markets. With 200 million credit card accounts in iTunes and a market cap north of $300 billion, the Apple brand must be doing something right.

The simple secret of Apple’s brand strategy

As I see it there’s a simple secret behind Apple’s astonishing success in the last ten years. It’s an Apple brand that’s operational, where core brand principles shape the Apple culture and drive the business. Apple is a classic example of the brand goes in before the brand goes on. At Apple, the brand is a systematic and integrated method to create value. It’s a method, not a message. While Apple’s cutting-edge aesthetics, exemplary taste and showstopper keynotes often draw the media spotlight, it’s Apple’s operating brand at work in Cupertino that makes Apple’s strategic success possible.

Two principles focus Apple’s operational brand strategy

From press accounts and public documents we can discern two brand principles that shape and focus Apple’s operational brand strategy. There may be more, to be sure, but these two stand out to me. They steer the Apple brand toward market-leading products and superior customer experiences.

I’ve gleaned these brand principles from comments by Steve Jobs and Tim Cook. They caught my attention because they make profound statements about the Apple brand mission and brand approach.

First, Tim Cook on the Apple brand mission:

We believe that we’re on the face of the earth to make great products . . .  in markets where we can make a significant contribution.

Second, Steve Jobs on the Apple brand approach:

We put ourselves in the customer’s shoes and ask: ‘What do we want? . . . “

Let’s now explore the brand implications of these principles.

Tim Cook on the Apple brand mission

We believe that we’re on the face of the earth to make great products . . .  in markets where we can make a significant contribution.

I’ve adapted this principle from Tim Cook’s remarks in a 2009 conference call on Apple earnings. (It is two phrases made into one principle.) From a brand strategy perspective, Cook does three things in this principle.

A singular, elemental mission

First, with “We’re on the face of the earth to make great products“ Cook makes great products the singular mission of Apple and its employees, with pursuit of greatness an elemental (face-of-the-earth) calling. This positions the Apple brand to reshape the world. In fact, it demands it. And it’s a context that’s unkind to excuses.

Setting a high standard for the brand

Second, with the mission of “great products” Cooks sets a high standard for the brand. Apple is not in the business of producing “market offerings.” It makes “great products.” There’s a difference. For some implications, see The Apple doctrine.

Is “great products” mere rhetoric? Ask these folks. Or check this chart.

Apple’s brand goal: make a significant contribution to culture

Third, Cook shapes the Apple mission when he states Apple’s goal is “to make a significant contribution.” A contribution? Interesting choice of words! Does Dell demand that its products make “a contribution”? Acer? Asus? HP? The implied Apple brand goal is to make a contribution to culture. Thus, Apple’s brand mission is cultural:  judge us by our contribution to the fabric of human endeavor. (This sets another high standard, and a decisive one in high technology.) Given how Apple has advanced design, music, telephony, computing and publishing, and may help usher in advances in learning via the iPad, the company’s brand intent to contribute to culture would seem to have made a difference. For additional reference, there’s also this picture.

Apple’s cultural context

Within Apple’s cultural context the Apple brand enables customers to engage the world in more meaningful ways. This is a cultural achievement based on what the brand does rather than on what the brand is.

Steve Jobs on the Apple brand approach

“We put ourselves in the customer’s shoes and ask: ‘What do we want? . . . ’”

I have abstracted this principle from a famous 2007 Steve Jobs  Q&A (audio file) in which Jobs was asked why Apple did not slap stickers on its products like other PC makers. His comments end with the quote above, which I have slightly abridged.

This is a profound brand approach. The maker places himself or herself in the shoes of the user, and asks, “What would satisfy me?” The brand identifies with the user, empathizes with the user, looks ahead for the user (brand vision) and wants what’s best for the user within the realm of the product or service. A brand that lacks these abilities won’t get far. It will “target” customers with netbooks instead of changing their lives with touchscreen tablets and a new ecosystem of engagement.

A brand puts itself in its customers’ shoes so customers can run faster and farther, leaving competitors behind.

It’s a strategic act when a brand puts itself in its customers’ shoes. A brand puts itself in its customers’ shoes so customers can run faster and farther, leaving competitors behind. While this is simple in concept it’s difficult in practice. You need deep vision, sharp, unrelenting focus and the talent to make it all work. To it’s credit, Apple does.

In Apple’s case the result is a brand strategy that positions both Apple and its customers to win—with a “secret” that’s in plain sight.

Photo credit: Wikimedia Commons

Just to riff a bit on my post, The brand goes in before the brand goes on, it seems to me that great brands really begin with great brand discipline. They’re an unwavering commitment to certain core principles and processes. Before the brand can flower into a delightful and transformative experience for customers, with lasting emotional power, it must pass through the disciplined process of defining the vision, maintaining standards, craftsmanship, endless iteration, all-nighters, solution-searching, soul-searching, loose ends, dead ends, never settling for second best, and the iron focus to ship a product or service worthy of the art.

A brand precept: discipline before emotion

Thus, this brand precept:

To create great brand emotion you must start with great brand discipline.

Evidence in the field

There’s certainly evidence in the field that many great brands exemplify a disciplined approach that sets them apart. Great brands of automobiles, watches, wines, luxury goods, restaurants and fashion distinguish themselves by great attention to detail—a discipline itself. To compromise would break the brand.

High tech products may not always show an outward brand discipline, especially when they are mass-produced in the millions, but it’s certainly there in the software that makes them satisfy. In software products and services it’s really the brand discipline that holds all those electrons together. If that fails it’s brand over.