Brands Create Customers

Brand trust is unique. It’s the only brand experience that both companies and customers can take to the bank.

Read Eric Dinallo’s enlightening op-ed piece in the Financial Times called How we modernized ourselves into this ice age.

Key brand take-away: what made the US brand of finance the strongest in the world in the last century was its safety, security and transparency. You could trust that system with your money more than any other financial system in the world.

It was regulation that made the brand

Dinallo notes that this brand of trust was born largely of regulation–a system of very strong ground rules for how the game is played. The brand governed the players.

In effect, Wall St. was a brand of regulation–and one of the strongest brands in the world.

But as Dinallo explains, in 2000 regulations were dialed back, leading to a short-term Wall St. boom and then catastrophic trillion dollar losses, and a finance system in tatters.

Taxpayers are now being asked to re-build the brand that Wall St. wrecked.

Interesting issues:

1. The role of regulation as a builder of brand.
2. Regulators as brand builders.

Hat tip: Yves Smith.

In December, 2008 a Marine Corps F/A 18 fighter jet suffered a dual engine failure on a training flight near San Diego. En route to a Marine Corps airfield it crashed into a populated area, destroying three houses and tragically killing four members of one family.

Identity is defined by actions, not symbols

This tragedy was a test of identity for the US Marines.

The crash of a Marine fighter jet in San Diego that killed four people was “clearly avoidable” if the pilot and officers on the ground assisting him during the emergency had followed proper procedures, a Marine general said today.

…

The Marine officers relieved of duties include the squadron commander, operations officer, standardization office and maintenance officer.

Besides the four Marine officers who were relieved of duty . . .  nine other Marines have received administrative reprimands.

The plane’s pilot, who safely ejected just moments before the plane crashed, has been grounded ever since and will receive a further review to determine if he should keep his wings.

Read the full ABC News account here.

Barry Ritholtz (who should be in every brand builder’s blogroll, if not speed dial) lays out a classic case of brand vs. business in the financial services industry.

In the case that Barry cites, two portfolio managers help their clients avoid huge losses in 2008 by moving most assets into cash:

Overall, the clients do very well. In a year where the markets are practically cut in half, their clients lose about 10%. The investors are ecstatic, and while the two brokers annual compensation was schmeissed — they went from over $3 million gross to under $1 million — they have happy, referral making clients to rebuild their business upon. It’s a short term income hit that should generate gains over the long term. And, they got there by doing the right thing.

For this, their employer (rhymes with Schmerrill) cuts their compensation and stuffs them in the penalty box.

Creating brand value is the best way to create customers. A company that penalizes brand value has major problems, often right down to its core.

Sometimes the best way to help a company build its brand is to formulate the brand as a core operating principle of the business. We set aside the brand as a glossy “communication” and dial it down to a short and sweet operating brand principle. We then build it out from there.

To make this happen we first strip away the outer brand layers. We want to situate the brand in the guts of the business, not in some fabricated haze of “meaning.” So out goes the the “brand personality,” the campaign bells and whistles, the culture theory, the 10-pound identity manual, and all the programs and proclamations. The brand that’s left is keyed to the very flesh and bone of the business.

The brand as an operating principle of the business

What we’re looking for is a root form of brand commitment that will function as an operating principle of the business. As such, we want it to accomplish three goals:

1. Ground and guide employee attitudes and behavior
2. Ground and guide corporate behavior, internal and external
3. Define a mutual context that invites interactive exchange with customers, shareholders, the public, and other stakeholders

A brand principle of accountability, quality and trust

We can think of this operating brand principle as an ur principle that establishes three critical frameworks for the brand, and the business:

1. A framework for accountability
2. A framework for quality
3. A framework for trust

As you can see, our “back to basics” approach taps into the values that anchor great companies, and great brands. We are transforming the brand from a business communication to a business predicate. The latter will have far greater impact.

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Yes, “honey laundering.” A fascinating (and rather disturbing) report in the Seattle Post Intelligencer describes how large quantities of honey imported into the US are criminally “laundered” through third-party countries to evade import regulations, duties and fees. Laundering also hides those responsible for shipping substandard honey to the US. Some imported shipments have been diluted with sugar water or corn syrup. Others have been contaminated with pesticides or antibiotics.

An issue of brand trust

The quality and provenance of imported honey is important because 40% of the honey consumed in the US  comes from overseas. On the brand front, honey laundering has created a major issue of brand trust for the US brands that use imported honey to fill our supermarket shelves. How can those brands protect their customers from potentially adulterated, tainted, untraceable honey . . . or worse?

The risk to the public is very real, according to one  US inspector.

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This week Google launched its long-awaited Google Health, a free online service that people can use to store and manage their personal health information. Google Health marks a watershed for Google, because it is first and foremost a brand play, where brand trust—not technology—will spell the difference between success or failure.

Google Health is thus is a different breed from the usual “beta” applications that make up many of Google’s offerings. A brand is a carefully-crafted joint venture between a company and its customers. Brands are responsible. They’re built to last, with dedicated, long-term commitments. While there may be lots of “beta” in product development, there is no “beta” in brands. That’s how brands earn trust.

By all appearances, Google Health is beginning life as a somewhat reluctant brand. It needs deep customer trust in order to grow, but it doesn’t yet act like a brand that could earn that trust.

“Terms of service” in place of a brand

Brands are an embrace, full of feeling, flush with touch. At launch, however, Google Health steps forward as a lifeless “terms of service” assembled by lawyers. As a brand it leads with its terms of service—which is mind-boggling. These rather intimidating T’s and C’s are rudely inserted between Google Health and its users, as if the T’s and C’s are the essence of the brand. While they may be necessary from a legal perspective, their up-front imposition puts the brand on the defensive from the get-go, and they suck life from the brand relationship. In a worst-case scenario, they reduce the brand from a happy joining of equals to a legalistic, “you’re on your own,” “we guarantee nothing,” and “buyer beware.”

That’s hardly the way to build brand trust.

What Google Health aims to deliver

Google Health has great brand potential because there’s a great deal of value innovation in the Google Health site and service. It might be a game-changer in health management. With Google Health you could document and track your medical history, learn about your medical conditions and symptoms, and check possible prescription drug interactions. Best of all, you could import your medical records from participating doctors, hospitals, labs and pharmacies. Using Google Health you could organize all this information into a meaningful medical profile of you.

Your medical information stays in your online Google Health account, so it’s available to you whether you’re visiting Natchez or Nome or Noumea. All of this potentially adds up to a very valuable package—especially one that’s free.

A new context of health

Here is how Google VP Marissa Mayer describes what Google Health aims to deliver:

It offers users a safe and secure way to collect, store, and manage their medical records and health information online. How many of us have touched, or even seen, our medical records? In this day and age of information, isn’t it crazy that you don’t have a copy of your medical records under your control? You could use those records to develop a better understanding of your health and ultimately get better care. It’s your data about your own health; why shouldn’t you own and control it?

This is the right approach: Google positions Google Health as a new context of health, where you and I can control our health information to maximize its value to us, while using highly efficient digital tools to make the process easy, personal and portable. There’s a powerful vision here of a new kind of citizen (and health customer), one that’s better informed, more empowered and more proactive, who just might re-define health practice.

Customer privacy drives customer trust

What’s clear is that Google Health can only become a trusted brand of health information services after it first becomes a (trusted) brand of customer privacy and data security. Google must earn this trust based on its ability to keep one’s personal medical records completely secure and private, with zero chance that the records will be compromised. Thus, Google Health will need to become the paramount brand of customer privacy. And I mean bulletproof customer privacy.

Customer privacy: the defining brand issue

In many respects, the defining brand issue of the digital age won’t be “rich media,” customer interaction or “user generated content.” It will be customer privacy. This is an integrity issue that will separate the brands customers can trust from paper brands that are little more than pictures and promises.

As I noted in a previous post, :

Yes, customer privacy is a brand issue, and a critical one. Simply stated, safeguarding customer privacy is a key part of a company’s strategy for building brand trust in the digital era. Customer privacy and brand trust are deeply intertwined. As products, brand programs and customers increasingly interconnect, interact and share information, customer privacy issues will increasingly determine which brands emerge with customers on their side.

As I also noted, brands that lead in safeguarding customer privacy can create significant market opportunities and gain strategic advantage as strong privacy platforms.

Google’s three-part brand challenge

For Google Health, protecting customer privacy is essential to building brand trust. Without that trust there won’t be many users—even if the underlying Google technology is strong. In this sense, Google Health ushers in a new era for Google, one in which brand values come to the fore, leapfrogging bits and bytes.

As I see it, Google Health’s brand challenge is threefold:

1. Elevate the Google brand beyond the search and online application technology that’s taken Google this far. Google Health needs a strategic brand context that’s several steps beyond “user + computer.”
2. Craft a context of customer privacy and privacy protection that’s a league above boilerplate privacy common to online sites. Google Health must lead in protecting customer privacy, to the point that its privacy protections become a major element in its brand differentiation.
3. Transform the Google brand itself from an inanimate bot to a flesh-and-blood body. Trust is a feeling between people. Users of Google Health will need a personal Google presence to trust. They will certainly need more of Google as a person.

In other words, Google Health cannot be just another “line of business” for Google. It’s a brand, and it’s destined to play by brand rules.

Media analysis of Google Health’s Terms of Service

Media outlets are scrutinizing Google Health’s Terms of Service and its Privacy Policy for possible weaknesses that may affect user privacy and trust. For example, PaidContent.org points out that Google is not governed by the same federal law that protects patient health records:

Google is not a “covered entity” under the Health Insurance Portability and Accountability Act [HIPAA] of 1996 and therefore, the provisions of that law do not apply to what Google does with your info. That means if you disclose details such as whether you have AIDS, HIV or any sexually transmitted disease, have been treated for drug an alcohol abuse, have had an abortion, or have a genetic predisposition to any diseases, you just have to trust Google to keep that information secure.

Google Health makes it very clear that it is not covered by HIPAA regulations, but implies that its privacy and security policies are adequate. As a brand, however, there’s nothing stopping Google Health from adopting provisions equivalent to those of HIPAA, if that’s what it takes to build brand trust. After all, the purpose of a brand is to reduce customer risk, not to dodge it or shift it to the customer.

As one commenter remarked regarding the lack of HIPAA protections:

All I can say to this is YIKES! I work in the medical field and I can’t imagine having my data housed anywhere that HIPAA rules don’t apply. Just look at the nightmare of financial data which is either stolen or inappropriately shared by corporations. Why would anyone risk their medical data in the same fashion?

Additional privacy concerns

The Washington Post cautions its readers to hold off on Google Health because of “serious privacy risks,” one being that Google Health employs the same login name and password that one uses for Gmail and other Google services. Thus, “anyone you’ve ever sent e-mail already has the username, and would only have to guess your password to gain access to all your health records stored in the service.”

Another concern (from CNet) is that as Google Health expands it will have only limited control over the applications and services provided by its thousands of partners. User health information may be shared with these partners. However, as things now stand there will be only limited legal remedies for users if privacy or security breaches occur downstream. This raises the question of whether Google Health can become a coherent health ecosystem. Becoming such an ecosystem would be a goal of the Google Health brand.

Trust comes from the brand, not the terms of service

During the Google Health launch event an executive was quoted: “I don’t want anyone using the service unless they’re completely comfortable using it.” That’s perfectly fine, but it’s the perspective of a lawyer building walls against possible lawsuits, not the perspective of a brand builder paving the way for rapid customer growth. The brand builder would remove obstacles between the business and the customer comfort zone.

In other words, trust comes from the brand, not the legalities.

Brand solutions

There are brand solutions to the above “trust” concerns that can advance both Google Health and its users. The bottom line is that if Google Health desires a fast rate of adoption it will need to do more on the brand front, intensifying its customer engagement and pushing its terms of service into the background.

This is not a matter of superficial brand hype or theatrics. It’s a matter of building brand value into the product, and into the customer relationship.

“Trust us” is not a brand strategy

Google Health has created a highly innovative foundation for health information services, one that should be every bit as robust and satisfying as other Google applications. However, just saying “trust us” to users won’t be enough to build its brand, and its business.

“Trust us” is not a brand strategy.