Brands Create Customers

What should companies do with brands that still retain valuable equity, but no longer generate expected sales? A growing market for brand builders is to develop strategic revival programs for such brands. A case in point is Booz & Company, which has announced a new service to help companies regain “new life for tired brands.” It’s “a rigorous, data-driven approach to brands” that helps companies decide whether to retire a dormant brand, or try to revive it.

(I have to admit that I did a double-take at the phrase, “tired brands.” It echoes the famous “tired blood” campaigns for Geritol®, the iconic tonic of old folks. Geritol® is now kind of a dormant brand itself, but it did have its frisky moments 50 years ago.)

It’s not the brands that are tired

Of course, it’s not the brands that are tired. It’s customers who are tired. They are tired of mediocre, do-nothing brands. That’s why they ignore them. The real brand challenge is to provide new life for tired customers.

A balance of analytics and emotion

In reviving a “dormant brand” one must balance analytics (on the marketing side) with the emotional and qualitative elements on the brand/customer side—as the Booz approach recognizes. To revive a brand means to revive a customer, and that calls for a fresh look at where customers want to go, and how the company can take them there. A piecemeal “brand refresh” does little. The goal is a strategic revival with new pathways where the brand can create and grow customers. Or better yet, change the brand game.

Choosing the right brand model

In any brand renewal effort, it’s also important to select the right brand model. An inappropriate model may fail to recognize (or capture) potential brand opportunities. For example, a traditionalist (i.e., old-fashioned) approach might position the brand as a stylized sales stimulant. That’s a messaging model typically geared to produce conventional media campaigns for a passive “audience” of customers—who may soon tire of it. A more productive model would be to make the brand a customer enabler, powered by interactive and collaborative brand programs that engage customers in new dimensions.

The brand as a tool to revive customers

If you think of the brand as a tool to revive customers, and to help them get where they’re headed, you may find that customers themselves become proactive players in the revival effort—a very good sign indeed.

Photo: wallyg — Flickr

The practice of brands stands apart in the business world because brands have a strong moral dimension. Superficial brands ignore this dimension, but strong brands embrace it, and build it into competitive advantage.

For insight into the proactive dimension of the concept of “good” in business, I can think of no better place to begin than a recent essay by Paul Graham called Be Good.

Whether you’re working with for-profit or non-profit brands, this essay will help you envision a moral platform for your brand, inside and outside the company.

The monumental baggage problems at Heathrow airport’s new Terminal 5 highlight the importance of what I call brand failure points. Brand failure points are critical company operations that can potentially break the brand if they fail to perform. If they do fail, it’s the brand that pays the price, and the price can be heavy. Full recovery may take years.

Brand failure points often hide behind the scenes, far from the brand limelight. A classic brand failure point for a high-flying airline is, of course, lowly baggage. To an airline, it’s a back room job. To passengers, however, it’s front and center.

Brand failure points: off the brand grid

Brand failure points are especially dangerous because they’re typically off the brand grid. They often inhabit the least glamorous parts of a business, far from the glitz and the glamor. They’re usually not addressed in a typical brand program, especially one that lives large on symbols and fanfare. They’re often outside the direct control of the brand team, tucked away in black boxes and back rooms. Potentially, they are silent brand killers, churning and chugging away in the bowels of the business until they suddenly snap—and take the brand with them.

Failure points and points therein

In this post I’ll first discuss the nature of brand failure points, using Heathrow Terminal 5 as an example. Then I’ll suggest basic steps the brand team can take in identifying potential brand failure points, and in failure point management. The latter requires that the brand team assume a much higher profile in company operations.

Let’s begin with a review of what happened at Heathrow Terminal 5.

The potential for lasting damage

Terminal 5 is a gleaming new wing of Heathrow built at a cost of $8.6 billion on the promise to eliminate airport delays and congestion. It is run by airport company BAA and British Airways (BA) as a prime gateway to BA flights. Terminal 5 puts BA’s brand squarely on the line. Unfortunately, the seriously flawed opening is widely viewed as a brand meltdown for BA, with hundreds of canceled flights and thousands of irate fliers. As a grand opening, it was something of a faceplant.

One report called the inauspicious beginning “an absolute national embarrassment.”

From Bloomberg:

British Airways Plc canceled 54 flights today as the chaos at London Heathrow airport’s new Terminal 5 stretched into a third day.

. . .

“This will clearly go on for days,'’ said Howard Wheeldon, an analyst at BGC Partners LP in London. “The potential for lasting damage to British Airways is far greater than anything that has gone before.”

“A calamitous debut” according to the Los Angeles Times.

A passenger quoted in the Financial Times:

“What a disaster. I was always told that with the arrival of T5 everything would be better. RUBBISH! I was delayed for 1½ hours on a flight that only takes 90 minutes. I still don’t have my bag.”

Perhaps the Financial Times said it best: it will be a “long haul to restore BA’s reputation.”

What went wrong at Heathrow Terminal 5

These are some of the things that went terribly wrong at Terminal 5 as part of its grand opening:

1. Inadequate employee parking caused employees to be late to work as they searched for spaces in employee lots; slow shuttles from alternate lots caused more delays.
2. Once at the Terminal, employees could not get to their stations because not enough security personnel were deployed to screen employees before entry.
3. Baggage handlers underestimated the time it took to get bags from one part of the (huge) Terminal to another.
4. Baggage conveyor belts (10 miles of them) backed up; one belt broke down.
5. At one point, 15,000 bags were stuck in the Terminal baggage system.
6. The first seven flights of day one left Heathrow without checked baggage.
7. In all, 430 flights were canceled.

In addition, as reported by the Independent, BA misinformed affected customers on compensation for delays, and refused to provide hotel rooms for delayed passengers per ticketing agreements.

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Google is taking an innovative approach in building out its YouTube brand, moving the brand in a direction few expected. Instead of plunging deeper into a narrow video essence, it’s creating a new context for YouTube on a broader public stage. Through this brand strategy it seems YouTube aims to become an emergent video network from the citizen up, while forging a new meaning for media.

The public road to a stronger brand

One way to advance your brand is to take a leadership role on an issue of national (or global) importance. To make this strategy work, you pursue a path that’s results driven rather than merely symbolic, one that enables you to add value in clear and decisive terms. You want your brand to become a (distinctive) method for getting (important) things done. You’re after results, not just feelgood “associations.” In this way, your brand becomes an enabler of higher forms of action and understanding—and potentially, a powerful platform in creating new market spaces.

The payoff is that strategically, your brand can extend your company value, and your product value, into greenfield areas of common good. These can change customers, and change markets.

From molten Mentos to the “YouTube Debates”

A good example of this brand strategy is YouTube’s role in the ongoing “CNN/YouTube Debates.” Who would have thought that YouTube, barely out of its molten Mentos phase, would now have a signal voice in the national political process, sharing top billing with CNN, a premier news network?

On the Web the debates are often referred to as the “YouTube debates,” as if YouTube is now an accepted kingmaker on the national political scene. That’s a tremendous brand leap from YouTube’s born-in-a-basement origins a few years ago.

This new debate format is a baby step toward a more participative democracy. It’s far from perfect, and it barely scratches the surface of its digital potential. But what currently stands out is the innovative role played by YouTube, not the mainstream shepherding by CNN.

A brand of democratic engagement

To see where the YouTube brand may be headed, check out YouTube’s new political blog called CitizenTube. YouTube is on the way to becoming a brand of political engagement, and perhaps a brand of political transparency as well. The debates in concert with CNN are only a first step.

You can also see the deeper strategy here. Just fill in the blank next to “Tube” for a new area of YouTube relevance. “CitizenTube” for politics. “SportsTube” for athletics. “HealthTube” for wellness, etc. While a marketing approach would typically create these avenues as static “channels” (for passive, static “targets”), a brand approach creates them as active fields of collaboration and innovation.

How YouTube frames its debate initiative

Here is how YouTube frames its debate initiative:

The core concept behind these debates is to let real questions from real people drive the dialogue. The power of YouTube is that it lowers the barrier to entry to engage in the political process, and levels the platform for political discussion. It used to be that a voter had to live in Iowa, New Hampshire, or Florida to engage with the candidates at this stage of the campaign, but YouTube has broken down those barriers, and has brought more transparency and access to the political dialogue than ever before. We think that politics will never be the same (thankfully).

Make your brand a springboard, not a billboard

The bottom line is that you want your brand to be a springboard, not a billboard. It’s a springboard for customers and partners to break free from current constraints. That’s why we need a new definition of brand, one that’s action-oriented, collaborative and driven by initiative and opportunity.

Our own master definition of brand seems to fit YouTube’s direction rather well:

Brands are avenues of value innovation in a creative engagement between companies and their customers.

And, as we also like to say, great brands are not meant to be seen. They’re a lens on life, and meant to be seen through. A YouTube brand that enables political transparency is a definite plus.

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

If traditional mass media is headed for the grave, and with it mass market advertising, as Advertising Age columnist Bob Garfield (pdf) and others soberly predict, what will happen to the thousands of brands built on a mass media foundation? Will they crater, too?

On the face of it, one might think that the demise of mass media and mass market advertising is bad news for brands. Actually, though, it’s the opposite. It’s a tremendous opportunity for brands to be born anew, fresher and more vibrant than ever.

Truth is, brands don’t need traditional mass media to survive. In fact, they may be better brands without it. Brands are a joint venture between companies and their customers. Intermediaries can get in the way.

Bob Garfield’s “Chaos Scenario”

Bob Garfield’s recent Chaos Scenario 2.0 — The Post Advertising Age makes a persuasive case for the decline of traditional mass media and mass market advertising. It’s a follow-up to his original Chaos Scenario of 2005, in which he laid out a grim future for the advertising industry in the emerging digital world. In Chaos Scenario 2.0 Bob introduces new evidence of forces disrupting traditional advertising. He foresees a world “in which marketing — and even branding — are conducted without much reliance on the 30-second spot or glossy spread.”

In short, digital innovations are providing new frameworks for companies to join with their customers, without the expense and the repetitive intrusions of mass media campaigns.

Companies are reclaiming their brands

Major brands have seen the writing on the wall for some time, and are exploring new forms of brand value, and new brand avenues to connect with customers. There’s a perception that the conventional mass media approach was beginning to hold brands back, that it was coming between brands and customers at a time when brands needed to be closer to customers than ever.

In a sense, companies are reclaiming their brands, dialing down broadcast messages and dialing up direct personal connections, to maximize interaction and value flow between company and customers.

Proctor & Gamble sets an example

One can see this thinking in Jim Stengel’s well-publicized initiatives at Proctor & Gamble. In a recent speech to advertising executives, Jim said:

Building relationships through our brands is the future of marketing. It’s not about new media models or new tools. It’s about engaging with people in a two-way relationship. It’s about seeking to understand the other person rather than trying to control their actions. Trying to control someone is no way to build a relationship—or grow market share long term. We have come to realize that at P&G.

That’s why we’re changing. That’s why we’re committed to building brands that stand for something meaningful to consumers rather than just “telling and selling.”

The end of brands as “messages”

I’d take Bob’s and Jim’s arguments a step further, and say that brands are undergoing their own radical change, and will soon bear little resemblance to the ad-driven, mass media brands that once defined brand practice. The message model of brands is on the way out. As it has evolved, it’s largely turned brands into the illusion business. This is a double trap that conditions companies to treat “consumers” as a passive audience, and then to churn out undistinguished products and rely on mass media “messaging” to make them seem special. The long-term result is the triumph of hype over innovation and value, with a loss of competitiveness, and customer trust.

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Brands and kaizen aren’t normally tied together in discussions of business practice, but they should be. The two are inextricably linked. Brands are the extension of kaizen into the realm of customers.

Continuous improvement

Kaizen is the Japanese manufacturing practice of “continuous improvement” or “change for the better.” It’s a disciplined, systematic approach that analyzes every step of the manufacturing process in order to improve quality, cut costs and reduce waste. (Kai = “change;” zen = “good.”)

Kaizen first grabbed the headlines back in the 1980’s because it explained, at least in part, why Japanese car makers were consistently turning out higher-quality vehicles than the iconic auto giants in Detroit. Toyota was the champion of kaizen, and its top-tier ranking today testifies to the worth of the practice.

Kaizen has now become a mainstream concept. It can even be applied to online businesses, where focused, incremental improvements to a sales or operational website can yield dramatic near-term benefits in customer experience, as economist Hal Varian recently noted. (If that NYT link is unavailable, a related summary is here.)

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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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One of the great myths about brands is that they’re supposed to be timeless, static icons. In this myth brands are fixed and immutable, casting a pure, Olympian glow from high above—or at least from the shelf.

Walk through any retail environment and you’ll note that many traditional brands still embrace this model. They’re inert, and proud of it, often reducing themselves to a symbol, slogan or promise that sits and waits for customers.

And waits.

And waits.

These days, traditional brands are doing a lot of waiting. Customers are passing them by, moving too fast to notice.

Great brands are customer wheels

Brand inertia is not the future. Newer brands have wheels. Better yet, they are wheels. They’re not icons; they’re enablers. They enable customers to get things done, to move from point A, where things aren’t that great, toward point B, where things seem a whole lot better.

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Joel Spolsky relates how his New York software company has figured out how to do customer service right. They give their tech support staff the tools to fix customer problems in two ways: to solve the immediate problem, and then to fix the source of the problem.

This has positive brand-building consequences.

The power to build the brand

Spolsky’s company, Fog Creek Software, does not outsource customer service. They take accountability for it in-house. When a customer calls with a problem, a tech support employee first helps resolve the customer’s most pressing issue. Once that is dealt with, he or she is empowered to take steps to get the problem fixed at the source. Often, this is a code-level fix. In this way a potential class of problems can be eliminated, and with it the possibility that other customers will experience similar issues.

The result is both a tactical and strategic step forward in customer brand experience.

Call centers can erode brand value

Joel contrasts his company’s approach to that of typical call centers, where support personnel take calls day after day without ever having the tools to fix anything. The same calls keep coming back, and support personnel keep reading the same canned diagnostics on their computer screens. Customers hate it, call center morale is low, and the company wonders why its brand just can’t seem to gain traction.

To quote Joel:

Many software companies still think that it’s “economical” to run tech support in Bangalore or the Philippines, or to outsource it to another company altogether. Yes, the cost of a single incident might be $10 instead of $50, but you’re going to have to pay $10 again and again.

The customer wins and the brand wins

Joel says he invests more up-front in customer service, but gains a great deal more in downstream sales and customer satisfaction. The innovative way he structures his company’s tech support career track also seems destined to pay brand dividends.

Photo: barto — Flickr