Brands Create Customers

In business, the company that listens best often lasts longest. The brand approach to business teaches that you don’t have to be the loudest, flashiest or most intrusive voice to build the strongest customer base. You simply have to listen to what your primary partners—your customers—have to say.

After all, they’re your brand partners. And they’re saying it for your benefit.

The New York Times has an example: Believe it or not, someone’s listening.

Listening is the province of brands

Listening is the province of brands. While marketers may lapse into sales pitch mode at the drop of a hat (full disclosure: mea culpa, mea maxima culpa), brands listen as marketers never can. That’s because brands are structured as joint ventures with customers, where listening is as fundamental as breathing. A brand is an active collaboration in context, and it is the brand’s ability to listen that keeps that collaboration alive.

Listening is the province of brands because brands are a team effort, a pursuit of shared objectives and mutual goals. Do we listen closely to our teammates? Yes we do—without giving it a second thought. Listening comes naturally to brands because it’s a basic function of teaming and working together.

Listening is part of the brand experience

Listening is a also vital part of the brand experience. Let me clarify that: how you listen to your customers is a big part of their brand experience. A “rich” brand experience is one rich in listening and conversation, where communication flows freely. The deeper the brand, the deeper the listening. (In many respects, the engine of sustainable brand growth is not the big campaign, but the many individual instances of listening and conversation along the way.)

Brands that thrive on listening

The brands that listen best are often bottom-up brands structured as platforms to advance and grow customers. These brands tend to be hands-on, direct and participative. The more they listen to customers the more they can learn, and translate that learning into innovation. While they may utilize surveys and focus groups, the ultimate goal is real-time listening through front-line employees, where company and customer forge the leading edge of the brand.

Such brands treat customers as friends and allies on a shared brand journey. They listen intently, step by step.

Image: Self portrait, Vincent van Gogh — Wikimedia Commons

General Motors has announced that it is now “reviewing” the future of its super-sized Hummer SUV brand. A 60% plunge in sales in May focused GM’s attention on the brand, which had been slipping in recent years as gasoline prices soared and social criticism of the brand became more pointed.

GM’s options

According to industry analysts, GM’s primary options are to downsize Hummer vehicles to achieve better fuel economy, introduce some sort of hybrid or alternative-fuel power plant, or sell the brand outright. The downsizing process had already begun with the Hummer H2 and H3 models. Hummer concept cars are even smaller. If GM closes its two Hummer plants in the US, the only remaining Hummer production facilities would be in South Africa and Russia. That would leave a marginal presence.

Holes in the Hummer brand strategy?

The announcement by GM was not a total surprise. The Hummer had been hurting. Why, though, did Hummer paint itself into such a brand corner in the first place? Where was the brand strategy to advance the business beyond easily foreseen challenges? Indeed, future business books may cast the hulking, gas-guzzling Hummer as a brand that fell seriously behind the customer curve, if not grievously out of touch with reality. “Hummer” may wind up as a textbook case of how not to craft a brand.

Let’s take a closer look at the Hummer brand strategy.

Brand strategy, vision and approach

As we’ve noted many times before, a brand is “company potential X customer potential.” In reviewing a brand strategy we always begin with a set of diagnostic questions about the brand approach and its objectives, as they involve the customer. The following are some of those questions:

1. Is this brand part of the solution, or part of the problem?
2. What kind of (proactive) customer is this brand trying to create?
3. Where is this brand leading its customers?
4. What’s the vision behind the brand? What is it a brand of?
5. How does this brand innovate to create more customer value?
6. How is this brand a platform for customer growth?
7. How does the brand collaborate with customers?

There’s neither space nor time to answer these individually, so what follows are some general comments.

Gross vs. green

Since its inception, the Hummer brand has been a conspicuous flash point for condemnation by “green” activists and conservation groups. They view it as a threat to the environment because of its large size, unregulated emissions and heavy fuel consumption. It’s almost as if GM invited the waves of green opprobrium as a way of differentiating the brand—as a politically incorrect, crush-all-comers beast, positioned for those who felt threatened by an eco-friendly world.

Strategically, though, why bring out a brand with so many anti-green connotations when the vast majority of world brands—and GM itself—was beginning (in the 1990’s) to go gung-ho green, with the (green) writing clearly on the wall?

This was a battle that “gross” could never win. What was GM’s brand vision? Hummer certainly seemed to be leading customers toward a dead end.

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Every brand is a journey. Through the brand, customers can discover new aspects of themselves, new strengths, new abilities, new ways of being and doing. The quality of that journey—how enlightening, how enriching, how transforming—is a function of the brand vision, and the brand imagination behind it. A superficial brand might take customers as far as the cash register. A deeply engaging brand takes customers to a whole new world.

Brand builders create the brand journey

It’s the job of brand builders to plot the customer journey that their brand provides. What truths can the brand journey reveal? What frontiers does the journey explore? What depths does it plumb? What’s the spirit? The tone? The texture? All these questions, and many more, dance across the brand builder’s palette.

The brand journey is a creative act: for the brand, and for customers.

Brand journeys are joint ventures

Brand journeys are joint ventures where brands and customers interact to advance one another. They’re dialogs tuned to new experience and to emergent truths. As they unfold they connect customers to themselves, and to one another, sometimes through the brand, and sometimes beyond it. Interesting brand journeys ask questions. Absorbing journeys take risks. Anything is possible.

Develop a “journey reel” for your brand

Thanks to recent advances digital imaging, a brand can now visually represent the kind of unique journey it offers. This takes the form of the “journey reel,” a metaphoric and interpretive expression of the brand journey using the powers of motion video, animation and digital imagery. The journey reel lays out the kinds of adventures and experiences (and mysteries) that await. The journey reel itself is part of that experience.

Not a sales pitch

A journey reel is not a promo or a sales pitch. It’s neither selling nor telling. It’s the expression of a brand’s self awareness, its culture, drive and direction, and where it might take customers. It’s the brand identity set in motion.

Visual elements of a journey reel

What might a journey reel look like? There are some themes and visual cues in this short animation demo reel by Alphonse Swinehart. I stumbled across this by accident, and it is not about brands per se, and certainly not intended as a journey reel. But its creativity is provocative. (A really brazen brand might do a flip book, but that’s another story.)

Journey reels promise to be a new art form, compact and compelling. As I come across expressive elements that might work in a journey reel context, I’ll post them here.

A series of reels rather than one

A journey reel must start somewhere, but a brand that’s going places with its customers will not let the journey reel stop. It will conceive its journey reels as a series, or as sets, building one upon the other.

The journey reel is personal, portable and persistent

I’d imagine that the best channels for journey reels would be those most intimate and personal to customers. That means an iPhone, iTouch, PDA or something similar, downloaded from the Net. A journey reel is made to accompany the customer: portable, personal and persistent. And it’s made to be shared.

Brand journeys mixed and remixed

Of course, customers can record their journeys, too. Brand journeys become customer journeys. All can be playing on digital devices around the world, shared, mixed and remixed in a matter of minutes. When your brand connects, brand journeys mingle.

Map image: Martin Waldseemuller

Contain the customer, or liberate the customer: it all comes down to the brand agenda that a company follows.

This nifty design is from a T-shirt available online at Uneetee.com for $12. Why wrestle with a brand dilemma when you can just wear it?

The brand interpretation is mine, of course. The image was just too good to pass up.

Image courtesy of Uneetee.com. Designer: Loy.

One of the first steps in building a brand is often one of the hardest: defining the brand mission. This is a strategic brand step that, frankly, can make or break a brand. It involves much more than deciding “who we are” and “what we stand for,” and it certainly demands much more than lofty phrases about brand identity, brand promise and keeping customers happy.

A brand mission is also a far cry from a papered-up “mission statement.” Gaze for a moment at those stalwart fellows in the picture above. Are they reading a mission statement? No, they are on a mission. That’s where your brand belongs.

Most brand missions don’t go far enough

Most brands have a defined “mission.” The problem is that most brand missions don’t go far enough. In broad brush strokes, we can identify three main areas where brand missions often fall short:

1. They don’t provide strategic direction to the business
2. They’re not primary tools to create customers, and customer value
3. They’re framed as corporate communications rather than action steps to drive the company (and its customers) forward

We’ll discuss these elements in the following sections, after we first define the purpose of the brand mission itself.

The purpose of the brand mission: create the customers that will drive the business forward

In general terms, a company’s brand mission is to create the customers that will drive the business forward. Yes, the brand mission is all about creating customers. Defining the brand mission in this context means that the brand team has to set up shop at the core of business. Creating the brand mission involves pulling together a company’s vision, strategic direction, intended product development, and marketing and operations priorities. From these, we then map out the platform strategies for creating brand value and creating customers.

How to approach the brand mission

Defining the brand mission is never an exercise in wordsmithing, although that’s often as far as it gets for many brands. In our approach, here are three new ways to think about the brand mission.

1. In the brand mission process, you dial into yourself so that you and your customers can dial out to a bigger and better universe—and then go there.
2. Brands are company potential X customer potential. That X right there in the middle is the brand mission. (And that’s why brand builders are essential.)
3. The brand mission is a Harley, not a hymnal.

The brand mission pushes the limits of the company

A brand mission should push the limits of the company, because the goal of the brand mission is to take the company (and its customers) into new market spaces where competitors can’t follow. That calls for a strong sense of market direction, opportunity development, value innovation, and customer collaboration.

Effectively, the brand mission combines: company mission + customer mission + business mission. It does so using all the weapons in a company’s strategic, creative, expressive and innovative arsenal.

The brand mission sets the company’s future in motion

Defining the brand mission sets the company’s future in motion. It is casting the die: alea iacta est. In many ways, it’s the defining act of corporate vision, and courage.

Brands need a mission, not a “mission statement”

Companies may be tempted to bypass the brand mission and instead settle for a nice-sounding “mission statement” that’s formally approved then stuck in a drawer. Such brand mission statements can be dangerous, for two reasons. First, they can lull a company into believing that it’s brand mission is solid, when actually it’s vulnerable. Second, making the brand mission a “statement” can reduce the brand to a “paper brand” of words, rather than an active brand of deeds. A paper brand can regress to superficial styling, symbols, slogans and puffed up “personality” attributes. These can give a brand the strategic clout of window dressing, and place it at a competitive disadvantage.

Short and sweet, vital and visceral

The brand mission should be short and sweet, vital and visceral. It’s a way to focus energy, action and innovation within a company, and between a company and its customers.

1. A brand mission doesn’t describe; it activates.
2. It is direct, never delegated.
3. It leads by example.
4. It works as a force from within, not doctrine from above.

Employees and customers should see evidence of the brand mission everywhere. And they should feel it. It’s the shared pulse that carries everyone forward.

A framework for action

What the brand mission delivers to customers is more important than what it says in gold-lettered parchment on the wall. Your brand is what you deliver, not what you promise. The brand mission is a framework for action; it is not meant to be framed.

Generally, the less said, the better.

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Brands are special because they stand for something, but when a brand suddenly stands for less, by lowering its own standards, the brand places itself in jeopardy. By lowering the bar that it has previously set, the brand has breached a quality compact with customers, partners and its own employees. The brand pays a strategic price, too. By lowering the bar it gives up territory it once owned, and makes life easier for commodity-level competitors.

The US Army lowers the bar

Two cases of lowering the brand bar have been in the news recently. The first is that the US Army has lowered its recruiting standards in order to meet recruitment goals. As noted in the International Herald Tribune, the Army made its recent recruiting numbers “by accepting a higher percentage of enlistees with criminal records, drug or alcohol problems, or health conditions that would have ordinarily disqualified them from service.”

This is no trifling matter. In the referenced IHT article, Senator Carl Levin states:

“While quantity is of course important, quality must remain the highest priority. … The army must continue to uphold high standards - moral, intellectual, and physical - for new recruits, to ensure that these young men and women are capable of handling the great demands that they will face. We must find a way to both increase the size of the army and to maintain its standards.

The honor system behind the brand

To get the drift of what stands behind the (original) US Army brand, one can go right to the famed Honor System at West Point.

Honor, as it is understood by the Corps of Cadets, is a fundamental attribute of character. Honor is a virtue which implies loyalty and courage, truthfulness and self respect, justice and generosity. Its underlying principle is truth. It is not a complicated system of ethics, but merely “honest dealing and clean thinking.” If a cadet is true in thought, word, and deed, there is no question about his meeting the standards of the Corps. On the other hand, quibbling, evasive statements, or the use of technicalities to conceal guilt are not tolerated at West Point.

The US Army as a brand of honor

It seems to me that the US Army is fundamentally a brand of honor: “a virtue which implies loyalty and courage, truthfulness and self respect, justice and generosity.” At the other end of the military spectrum, mercenaries and death squads can be brands of brute force and mayhem, invoking fear and passive acquiescence, but they do so without honor. They are horrible brands because they are neither a platform for public trust, nor peace.

As a brand of honor, the US Army can also be a brand of public trust, and of constructive peace. Both are fundamental requisites in this age of new warfare where armies and citizens are co-mingled, and where “battlefields” quickly spill over into communities and public services.

Brands and the moral edge

One of the major strengths of brands is that they can develop a moral edge. They can embrace and encapsulate “good,” and this can become a significant advantage in business and in war. Guerrilla armies claim a moral edge because they’re fighting for “the people,” but these claims are often not realized in fact. As the armed force of a major democracy, the US Army should benefit from a profound moral edge—if its soldiers embody requisite virtues and values.

The question for Army recruiters, then, is this: Which way are you taking your brand? And how does your recruiting strategy help build your moral edge?

Lowering the bar in the cockpit

In a second example of lowering the brand bar, US regional airlines (which account for half of all US airline flights) have been lowering their hiring requirements for pilots.

Traditionally, most regional carriers required 1,500 total flight hours before an aspiring pilot could apply for a job. These days, the flight hour minimum has been reduced to 500 hours, with one airline going as low as 250, before raising it back to 500. Regional airlines say they can’t afford to maintain their previous flight hour standards because there aren’t enough pilots with those hours available for hire—at least at the starting wages that the regionals currently offer.

Wages and conditions

As the quoted article notes, highly qualified pilots are generally not attracted to regional airlines. They can typically find better wages and conditions at executive aviation firms, discount airlines, cargo shippers and foreign airlines. A starting pilot at a regional airline, flying the maximum number of hours allowed, would earn approximately $22,000 per year.

The brand challenge for regional airlines

Thus the brand challenge for regional airlines: how you you build your brand when the major carriers keep off-loading schedules to you in part because your flight crews are cheaper? To get the flight crews you need, you lower your traditional standards, resulting in less experience in the cockpit. You may meet safety requirements with additional training and supervision, but your brand is now traveling a slippery slope. It’s more reactive than proactive.

Two possible courses of action

At first glance there are two possible courses of action that regional airlines might take. The first is really an accommodation, not a solution. It is for regional airlines to take their brands off the table, and to operate as anonymous adjunct carriers. They agree to compete on price, not on brand, because it’s low price that brings in the business from major carriers. In essence, the regionals agree to become commodity carriers. They reduce their brands to the lowest possible profile—the operating names painted on the plane. (This, of course, is exactly what the major carriers prefer, because it eliminates regional airlines as potential competitors.)

A more ambitious course

A second course is more ambitious, and more brand positive. It would aim to solve the regional pilot shortage by creatively teaming with airline pilot organizations to develop solid career paths, with wages, conditions and training that would attract more qualified pilots to regional airline cockpits. It would attempt to make regional airline cockpits positions of envy and esteem, rather than positions of commodity. It would aim to transform what is now a brand weakness into a brand strength.

In many ways, regional airlines are much closer to their passengers than the national carriers. This is an inherent brand advantage, which should be tapped.

Hat tip: tingilinde

When a business launches with an iconic product, it may discover, sometime down the road, that the product is on the verge of icon wear-out. Business growth slows. It’s in these situations that the brand must come to the rescue. That’s because the brand (when properly conceived) includes the customer in the icon. This is a critical step, because customers are infinitely protean, proactive and (self) sustainable. They never wear out.

When your iconic product falters, it’s time to tap into your iconic customer—the one created by your brand.

The Crocs brand in transition

We can see elements of this brand transition taking shape in Crocs, the highly successful, breakout brand of colorful foam clogs. Crocs has the daunting challenge of building (and sustaining) the Crocs brand beyond its original comfy beachwear cachet. As pointed out by the Wall Street Journal, Crocs is rapidly diversifying, and none too soon. The brand is under particular pressure from short sellers who are betting that Crocs is a fad—and not a sustainable brand.

Short sellers vs. the brand

Short sellers currently hold about 20% of CROX shares. According to the Journal, holders of short positions believe that Crocs is a one-trick pony, a fashion craze that will soon crash as customers lose interest and move on. In the short seller view, Crocs are Krispy Kreme for the feet.

In essence, short sellers believe that a company’s share price has overshot its brand. They profit when a stock price falls. A typical short-seller assessment is here. (Investors with short positions can lose their shirts when a stock price rises, so short seller assessments have a vested interest in being negative.)

And Crocs imitators everywhere

The Crocs brand challenge is even more difficult because there are scads of Crocs clog imitators in the market, selling at one-third the price—around $10 in the SF Bay Area. They may lack the segment-leading Crocs design and engineering, but their ubiquity testifies to a market for inexpensive foam-clog “fun shoes.” (Crocs has aggressively protected its brand in court.)

Where does a brand go for its second act?

So, what does a company do when 20% of its shares are visibly being bet against the brand, and low-price icon-imitators are everywhere? Where does a brand go for its second act?

It usually has two choices:

1. Reach back into its marketing bag of tricks to keep its head above water.
2. Reach out to customers to change the game, and get back on dry land—in a space it can own.

Call in the Ansoff Matrix

A first marketing step is usually to fill the whiteboards with some version of the Ansoff Matrix, so a company can systematically probe opportunities in Market Penetration, Market Development, Product Development and Diversification.

Crocs seems to be doing just that.

As the WSJ article notes, Crocs is diversifying into apparel, with Crocs branded shirts, pants and jackets. (The immediate brand connection is apparently that croslite, the plastic resin from which Crocs footwear is made, will somehow be incorporated into the apparel. From the Crocs site it’s not yet clear how this will be done, or how it will add new value.)

Crocs is also doing sponsorships (Pro Beach Volleyball), folk/rock campus tours, segment licensing deals (Disney, NBA, MLB, NFL, NHL), moving ahead with customized shoe add-ons via an acquisition, and developing new footwear lines, including mammoth, a fleecy Crocs made for cold climes. There is also CroxRx for pediatric purposes, Crocs work shoes (potential markets for nurses, waiters and other service personnel), a substantial kid’s line, and new leather and canvas shoes (with croslite soles).

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How do great brands change the game? One thing is certain: they don’t start with the game. They understand, perhaps intuitively, that the current game has reached its limits. The rules constrain the players—both the customer, and the brand. Stick to those rules and you’ll be bound to the same few moves, on the same hard bench, in the same small park, for a long time to come.

To change the game, change the customer

Great brands change the game by changing the customer. They redefine the customer and the customer’s world, elevating the customer to a completely new context. In this new context the old game suddenly becomes irrelevant, along with all the companies, products and brands wedded to it. It isn’t the new brand that spells the difference as much as it’s the new customer that the brand creates. He or she is delighted to leave the old game behind.

If you want to really change the game, you can liberate the customer.

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Michael Urlocker deftly summarizes how the Nintendo Wii is disrupting the market-leading Sony PlayStation. The lower-priced Wii is flying off the shelves, outselling the PS3 by 60% in the U.S. Significantly, it has helped raise Nintendo earnings 43%.

Beneath the surface this is a brand story, too, but first let’s look at the six disruption lessons that Michael gleans from the Wii’s stunning success:

1. Nintendo’s market disruption is not about better technology;
2. Disruption is not about incremental improvements;
3. Disruption is about understanding where the customer experience is not good enough;
4. Disruption is about making a product more accessible;
5. Disruption is about changing the basis of competition;
6. Disruption is about a new business model.

These are all excellent points. And while it may not be obvious at first glance, most contain a strong brand element, because a key focus of brands is to put more customer in the product. Do this in the right places, and your new product can marshal the power of customers behind it—with disruptive impact.

Brands activate customers

Through brands, you’re not just selling a better-packaged product. You’re activating customers. It’s this activation that has disruptive power. The Wii raises customers off the couch and into the action sphere of the game itself, redefining game space, and redefining the very role of the player.

Brands have disruptive power

Where the above list uses “disruption” you can just as easily put “brands.” Brands have disruptive power too, if companies choose to use it. Brands can create new customers by freeing them from existing market constraints, and by then advancing customers to higher levels of experience. In this context, the strength of a company’s brand depends on how much customer the company wants to put inside the product. When you put enough new customer in, you can break the mould (and hold) of a market leader.

Choose your brand model carefully

You might call brands such as these, “disruptive brands,” but it really comes down to the brand model you employ. Brands that liberate their customers from boring, low-level experience may find they have a new market to themselves without trying to be “disruptive” at all.

With the right brand model, brands can free customers to disrupt a market for them.

Unlocking brand value

What’s especially evident is that brands can exert disruptive power without out-spending or out-shouting their competitors. Brands are able to do more with less because they can capture value from customer experience. The Wii does not have the super high tech profile (and cost) of a PS3. It simply frees customers to experience gameplay in exciting new dimensions. It creates market value by unlocking experience value—that’s been bottled up inside the customer.

Nintendo’s brand vision

I’d also say that Wii’s success is testimony to the quality of Nintendo’s brand vision. We define brand vision as a company’s ability to see its future through its customers’ eyes. That’s not always easy, but that’s what Wii seems to do rather well.

Photo: Jeronimo Palacios — Flicker

Well, to answer this question right at the start, the answer is “yes.” In fact, a lot of mainstream brands have already gone over the falls, but their demise has been shrouded in mists of mismanagement, buyouts and bankruptcy. But make no mistake about it: they were brand failures first. The other things happened when they had already let themselves drop over the edge.

The mainstream brands that are still afloat are somewhere upstream, in the middle of the flow, enjoying the serene drift. Perhaps they can’t hear the deafening thunder of their fate, but they’re surely coursing toward it.

What makes a mainstream brand?

Mainstream brands are defined by their assumptions:

1. They assume brands are all about shaping perceptions, rather than delivering value.
2. They assume the sole mission of brands is to push the product. In their view, brands are “the salesman on the package.”
3. They assume customers are only valuable as one-dimensional “consumers,” and that customers can add no value back to the brand, or to the business.
4. They assume that the only way to build their brands is through top-down media campaigns.
5. They assume that brand success means corralling and containing the customer—under lock and key if at all possible.
6. They assume that brands are a substitute for innovation. Get people to believe in “the brand” and you can stop innovating and preserve the status quo, forever.
7. They assume that brands “never rock the boat.”

And then they feel the waters quicken, and hear a distant rumble.