Archive for the 'Brand Value' Category

AOL as a brand of inertia

Monday, January 16th, 2012

Brands of inertia are deadly for companies, and their customers. A brand becomes a brand of inertia when it’s too set in its ways to change course. The brand acts as a  one-trick, one-track monolith that sees the future in terms of the past. We typically find brands of inertia in companies that commanded an innovation years ago but now are happy to coast, fixated on cash rather than customers. They’ve become a means to extract value, rather than create it.

AOL as a brand of inertia

AOL would seem to be a brand of inertia based on this recent piece in the Economist. Its antiquated dial-up Internet service is a dead end, but AOL depends on these customers for revenue, including a “substantial number” paying for a service they don’t really need. The old AOL business is profitable, but the old brand ethos hasn’t helped AOL reinvent itself, which it desperately needs to do.

Brands of inertia aim to harvest customers, not create them

AOL would not be alone as a brand of inertia, of course. Some companies never feel the need to innovate if they think they can make easy money by freezing the brand—and their customers—in time and space. As brands of inertia they aim to harvest customers, not create them. Customers are the cash cow, and the brand is their corral.

Dialing down the brand

Brands of inertia often dial themselves down to the least demanding (or least informed) customers, those willing to pay for the same product year after year out of sheer habit (or sheer ignorance). As the Economist notes, some customers may not realize that they’re paying for a marginal product or service. They don’t know any better, but as far as the brand is concerned, that’s perfectly fine. It’s money in the bank. Brands of inertia don’t rock the boat. And they don’t like ideas that rock the boat.

A brand of inertia condemns the company to inertia

There’s a fatal downside to brands of inertia. They condemn the company to inertia, stifling creativity and innovation, especially on the customer front. Opportunities are grasped elsewhere. Good ideas go elsewhere. Innovators (and employees) go elsewhere. Eventually customers wise up and flock to better brands.

 

 

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Brands are vertically integrated value

Friday, November 18th, 2011

It’s always been apparent to me that brands are best understood—and best developed–as vertically integrated value. At their heart brands are methods to create value, and by making that value “vertically integrated” from company to customer we greatly enhance the potential contribution that the brand can make.

Definition of “vertically integrated value”

A brand developed as vertically integrated value is one where company, products, services and brand all operate in a singular, clear and coherent context to make the customer better off. It’s the brand that integrates the “company context” with the “customer context.” And it’s the value delivered that gives the brand real traction.

Creating vertically integrated value

How does a company go about creating vertically integrated value through its brand? We can identity four basic steps.

First, it helps to understand that “the brand goes in before the brand goes on.” We produce brand value from the vision, talents and dedication of company employees. We don’t tack on a “brand”  just before the product is ready to ship. The brand is a method to create value from the very core of the business. (In the big picture, the brand is company potential X customer potential.)

Second, and most critically, we structure the brand as a customer-facing application. This helps cultivate and focus the company’s creative energies into deliverables with the desired strategic impact. (We want to create customers beyond the reach of competitors—in ways where our customers can become our most powerful competitive weapon. Furthermore, we want to create customers who can add value back to the brand. These are customers as strategic allies and partners, not mere marketing “targets.”)

Third, we employ a value-based brand model. See here and here.

Fourth, we integrate the brand mission with the company’s principles of operation.

Vertically integrated value at Amazon

Amazon provides us with a current example of the brand as vertically integrated value. In this  interview of Jeff Bezos by Steven Levy we can observe how Amazon is structuring its products and services to work closely together within a singular customer context, in a tightly focused brand operation. The charts in the article are especially revealing.

Amazon’s vertically integrated brand experience

Amazon’s brand challenge is to deliver its vertically integrated value as a seamless and satisfying brand experience while constantly reinventing itself. Amazon has grown from “online bookseller” to become an online seller of everything, a hardware manufacturer of digital readers and tablets, a publisher, a digital streaming service for music and movies, a movie studio, and a digital cloud storage and infrastructure service for startups and corporations. That’s a vast territory for a brand to cover. It could have been disjointed, inefficient and clunky, but Amazon seems to have made it click.

See also:

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Android brand fragmentation

Friday, October 28th, 2011

Michael DeGusta has produced an informative chart showing how the mass of Android phones is not being updated with the latest Android software releases. He contrasts this with a much stronger level of upgrade support from Apple iOS, which is innovating just as rapidly. To me, the chart shows the extent of Android brand fragmentation at the end user level, where the rubber meets the road. Instead of the Android brand being a seamless user experience through upgrades and support, Android users are often stuck in older and more limited Android versions with no hope of upgrade during their contracts. Instead of briskly marching its users forward with upgrade innovations and fixes, the Android brand is stumbling and limping, and sometimes just stops.

The result: Android brand loyalty may be tenuous.

Android users deprived of an optimal Android experience

Android’s brand fragmentation deprives Android users of an optimal Android experience. At the device level it’s a piecemeal brand can’t deliver the full value behind it. At a time when both Android and Apple iOS are innovating feverishly toward a deep and wide-ranging mobile experience, a scatter-shot Android brand experience can hardly build the brand loyalty that Google needs going forward. For example, it’s not a good sign when surveys indicate current Android users prefer the iPhone over Android, or prefer the iPad over Android-powered tablets.

The Chart

Here is Michael’s chart. A larger version is on his site linked to above.

The nature of Android brand fragmentation

Please note that when I discuss Android brand fragmentation I’m not referring to the Android brand display (symbols, visuals) or to Android brand messaging. I’m referring to the Android brand experience as it’s delivered to end users. It’s hard for the brand to create customers when so many dead ends and third-party factors intervene between the brand and those whose loyalty it seeks.

A fractured user experience

To quote from Michael’s analysis of the Android data in the chart:

Other than the original G1 and MyTouch, virtually all of the millions of phones represented by this chart are still under contract today. If you thought that entitled you to some support, think again:

  • 7 of the 18 Android phones never ran a current version of the OS.
  • 12 of 18 only ran a current version of the OS for a matter of weeks or less.
  • 10 of 18 were at least two major versions behind well within their two year contract period.
  • 11 of 18 stopped getting any support updates less than a year after release.
  • 13 of 18 stopped getting any support updates before they even stopped selling the device or very shortly thereafter.
  • 15 of 18 don’t run Gingerbread, which shipped in December 2010.
  • In a few weeks, when Ice Cream Sandwich comes out, every device on here will be another major version behind.

Android users lag behind in apps, too

The fragmented nature of Android also makes Android users pay a price in app availability and app quality. Android’s myriad versions on myriad devices make it a pain for developers to create and test apps for so many different versions and handsets, especially when the device makers and the carriers insert their own software and tweaks. Apple’s iOS presents a much more consistent platform, even with Apple’s sometimes obscure curatorial logic.  (For a recent survey of Android developers see Fortune: “Android is a mess, say developers.”

The good news

In my recent post, Android: the dangers of a recessive brand, I outlined a number of measures Google could take to deliver deeper brand value in its offerings. Among these is establishing a canonical Android release that unifies Android innovation into a core platform that’s a more stable platform for app development and support. Android 4.0 may be that release, and that is good news, although it doesn’t directly help those with older Android-powered devices.

Chart image: © Michael DeGusta
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Your brand is your killer app

Monday, July 11th, 2011

Companies often dream of producing a game-changing “killer app” that can wow customers, create new markets and vanquish competitors. What most companies don’t realize is that they already have a potential killer app in house, under their control, ready to be launched. Their potential killer app is their brand—if they choose to use its formidable powers as an application to create customers and open new markets.

Brands as applications

Yes, brands are applications. As applications they can apply the full context of a company’s products and services—practical, creative, emotional, moral and spiritual— to lead customers to richer realms of living. Brands developed as applications (in the real world) are far more productive than brands developed as communications in the make-believe worlds of media campaigns. Instead of relying on symbols, slogans, gestures and promises, brand applications roll up their sleeves and help customers get to where they’re going. Applications get things done. They’re methods of creating customer value, direct and focused, fully integrated to produce strategic customer outcomes. Current sales is one of those outcomes, but platform hegemony with an exclusive new class of customers is the goal.

Creating the brand as killer app

To create your brand as a killer app I suggest you start with two previous posts in this blog:

  1. Brand strategy: Create your entire brand as a customer-focused application
  2. FAQ: Creating your brand as a customer-focused application

They will get you started with the right framework and strategic view.

Developing the full context of your brand

Developing the full context of your brands means that you have to envision how your brand can create (and co-create) value in multiple dimensions: practical, creative, emotional, moral and spiritual. Chances are, you already have some ideas about what these dimensions are. Of course, it pays to think big. (Brands never think small.) With your brand as a killer app you will seriously re-position the customer to win. You will also change the game by changing the customer. Yes, the full context of your brand means a newer and fuller context for the customer.

Practical steps

As practical steps, you might begin by asking yourself these questions:

  1. What is holding our customers back?
  2. Where do they want to go—and how can we help them get there?
  3. How can our brand advance customers beyond the reach of competitors?
  4. How can we create customers that add value back to the brand?
  5. How can our customers become our strongest competitive weapon?

The above questions are from my post called Strategy for an “immersive” brand. Killer apps are immersive.

 

 

 

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How deal sites can erode local brands

Saturday, June 11th, 2011

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.

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The Hollywood “brand” at work

Wednesday, May 25th, 2011

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.

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A brand is not a lure (and customers aren’t fish)

Thursday, April 7th, 2011

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
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Brand precept: to create great brand emotion you must start with great brand discipline

Monday, March 28th, 2011

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.

 

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