Brands Create Customers

Patent information sites like Patently Apple (which covers Apple’s patent and trademark activity) remind us that patents often point toward larger strategies, or sets of strategies, beyond the details of the patent itself. Such patent-fueled strategies can have powerful downstream effects on competing brands in the same or adjacent markets. That’s why every brand sharpens its competitive analysis at the substrate (patent) level. My rule of thumb (erring on the conservative side) is that “Today’s patents are tomorrow’s brand strategies.” From a brand perspective, a patent can mark a potential path toward a new kind of customer, in a new customer platform, in a new market.

For the patent illustrated above, see Patently Apple’s full discussion here. The comments are informative.

Which way does this patent point?

While a site like Patently Apple is no substitute for in-depth competitive analysis, it may sometimes reveal the strategic brand intent behind new patent activity. In reviewing a patent, one might ask these questions: What new kind of customer could this patent create? What’s the intended platform? What customer dots does it connect? Can it lead to a new level of customer experience?  Could it change the current customer context and in so doing change the game for current market players? What new market(s) might it create?

It’s the customer inside the patent that counts

From a brand perspective, it’s the (latent) customer inside the patent that counts. In the best of worlds, a patent would  be conceived and executed within a strategy of brand innovation, so that the patent protects a unique domain of customer creation. In effect, the patent is the legal launch of a new kind of customer.

It also should be noted that sometimes the latent customer inside a patent may not be apparent to the patent applicant. This leaves the door open for competitors with better customer vision.

Mapping patents to a customer canvas

The real challenge in a brand analysis of patents comes in mapping patents to a forward-focused customer canvas, one containing different models of newly-empowered customers that the patent(s) might create. It’s always exciting when a patent points toward a new kind of customer beyond the conventional marketing model, where the patent itself is but one tiny step in a far-reaching roadmap—or better yet, brand journey.

Image source: Patently Apple

I was going through my notes on creating customers when I came across the two entries shown below. They’re from a post I wrote two years ago, but to my mind they still do a good job of defining what “creating a customer” means, and outlining the brand framework that supports customer creation as an ongoing process.

What “create a customer” means

I define “create a customer” this way: To create a customer means to connect a customer to a larger part of himself or herself through the brand. This is a connection to that person’s potential and/or passion, within the context of the customer’s expected brand outcome. Your brand helps customers to discover themselves, unfold themselves, iterate themselves, and prototype new selves that are now latent, awaiting only the wondrous “developer” that flows through your brand platforms and programs.

And since your brand is a creative engagement, you have many, many options at hand to work your wonders. What counts is the nature, content, direction and value of your brand connections.

Brands and “creating customers”

“Creating customers” is what brands are all about. It’s where brands come into their own as a process of value creation, combining strategy, imagination, innovation and customer interaction. Yep, brands are all that, which makes brands the single most expressive—and engaging—process in business. Moreover, the process of building brands is most effective when it’s openly shared with customers. That’s one reason why brand building stands head and shoulders above most other business practices. It aims to team the best and brightest of a company with the best and brightest of customers. That combination is hard to beat.

The full post goes into much more detail, starting with my hero and yours, Peter Drucker, who said: “There is only one valid definition of business purpose: to create a customer.”

See:  How brands create customers.

As a world leader in consumer electronics, how do you intend to create customers in the 21st centry when one of your key executives believes that nothing good has come from the Internet? Yes, it’s time for another Fortune update on the travails of Sony, a company intent on capturing customers at the expense of its brand.

A doomed brand agenda

Howard Stringer has been “transforming” Sony for years, but so far all he has to show for it is the old entrenched Sony with a few younger faces. While other brands are innovating to set customers free (as with that Internet thing) Sony remains a preeminent brand of lock-in and lowered horizons. It innovates for Sony, not for you. That’s a doomed brand agenda.

The “transformed” Sony will be called Samsung

The way it looks now, the “transformed” Sony will be called Samsung. When you’re intent on capturing customers instead of creating them, you’re opening doors for your rivals.

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

[Updated June 22, 2011. Original post July 11, 2008.)

An article that every brand builder should read is Branding Youth in the Totalitarian State in Design Observer. The article is based on Steven Heller’s 2008 book: Iron Fists: Branding the Totalitarian State.

The article raises all sorts of interesting questions about the relationships between propaganda and brands, and on the sometimes “totalitarian” nature of brands themselves. As I see it, the key questions are as follows:

1. Are brands a form of propaganda?
2. How are brands different from propaganda?
3. Are the best brands “totalitarian” in concept and in execution?
4. Is every brand builder a closet totalitarian, inventing an all-encompassing new world order for customers? (Behind every logo is a torchlight parade.)
5. What are the strategy downsides of brands conceived and executed as propaganda, or as “totalitarian?” What other brand models could disrupt them?

I’ve also discussed some of these elements in the various posts referenced  below.

Definition of “totalitarian” brand

For this discussion I define a “totalitarian” brand as follows: “A totalitarian brand is a brand that totally subsumes the customer into the brand, erasing the individual and the individual’s capacity for proactive, independent action.” In other words, in a totalitarian brand approach the brand wants to impose its will upon the customer. The customer becomes a creature of the brand. The brand intends to “own” the customer—body, mind and soul. ((And wallet.)

The customer as “true believer”

I would also suggest that a totalitarian brand approach is one that wants customers to be “true believers.” The brand seeks mindless followers—perhaps because mindful followers might see through it. I would define “true believer” as a one-dimensional person fanatically devoted to a cause, an organization or to another person. A true believer is a follower with a capital “F.” (You might also substitute “fan boy.”) In the eyes of the true believer, the leader can do no wrong. And thus, true believers add no value to the brand. They don’t interact with it to make it better. In fact, they typically magnify its shortcomings. A brand with true believers typically doesn’t innovate, or innovates narrowly, and may be its own worst enemy. True believers are not strategic.

True believers and “yes” men

It seems to me that a brand of true believers will be just as effective as a company of “yes” men. In other words, not very productive. Eventually both become an anchor, the opposite of a game-changing force. (And it may be that true believers are the products of yes men, who are simply cloning themselves.)

Two brand models: containment vs. liberation

As part of this discussion we can assess two different models of brands:  a persuasion or propaganda model, and a contrasting liberation model. A persuasion or propaganda model would try to shape customer thoughts and feelings so as to capture, contain and control customers, to keep them in place so they continue to be “loyal” to the brand and purchase the product at desired price points.

In contrast, a liberation model of brands aims to free customers to be more proactive for themselves, on the premise that greater sales will flow from a more proactive and productive customer culture, where customers are active players in product development rather than a passive audience. This model assumes that a company can gain market advantage via product and service innovations that create a more proactive culture, where customers leave behind old paradigms. It’s a method that uses customer initiative to disrupt competitors. Apple shows that it can be done, and quite profitably, too.

Some related posts along these lines:

• Some brands go medieval on their customers
• Brands as collaborative strategies
• A brand is not a lure (and customers aren’t fish)

Customers as puppets—or proactive partners?

The “totalitarian” approach to brands might also be contrasted to an “innovation” brand approach. In other words, do we want customers as puppets (controlled in the totalitarian model) or as proactive partners who move the brand forward? The puppet approach calls forth the salesman’s dream of “shooting fish in a barrel.” The drawback to the puppet approach is that it locks the brand in place and makes the brand incapable of the innovations that could take customers to the next level, leaving competitors in the dust. When the next level appears—and it inevitably will—customers move on, and the brand is left holding the strings.

Brands of puppets

Brands that position their customers as puppets eventually become brands of puppets. In terms of “total customer control” that may be a totalitarian ideal, but it doesn’t hold much future for the brand. I discussed this issue in Position the customer, not the brand. In essence, the puppeteer shares his fate with the puppet. Creating brand dependencies often means that innovation is placed on the back burner, leaving the brand further exposed to disruption.

Social media and totalitarian brand strategy

How does social media affect the concept of a totalitarian brand? Good question. Social media is bottom-up, whereas totalitarian brands are classically top-down. It certainly looks hard for traditional propaganda to work in an open social media setting. But (closed) Facebook now has 500 million members, and is becoming an alternative to the (open) Web itself. Is it possible for Facebook to be a totalitarian brand? Or is Facebook simply an all-inclusive platform where advertisers can have total access to customer data? It may be that Facebook is just the barrel, and Facebook users are the fish.

NOTE: See also the Youth under fascism site, which is the source of the poster above.

Time for another chapter in my continuing carve through traditional brand practice. Today I’ll boldly propose that a focus on “differentiating the brand” can be a misguided approach—even though it’s the primary thrust of a vast majority of brands. The problem with “differentiating the brand” is that it’s never enough. It’s a half-measure at best. What a brand really needs to do is to differentiate the customer. That’s how a brand gains traction. It’s that new and different customer that will carry the brand forward. Your brand is the endless wave that makes it happen.

Opening the brand to new opportunities

“Differentiating the customer” opens a brand to new opportunities of value creation at the edge of the brand. Instead of the brand being a top-down, hermetically-sealed means of control, it becomes a customer infusion, vibrant and vigorous, speeding forward on customer feet. A brand that differentiates its customers can tap into customer initiative and innovation to explore new brand territories and discover new markets.

Your ability to differentiate the customer can make your brand a personal ally of those ready to conquer new realms of experience.

There’s no better place for a brand to be.

The old way: differentiate the brand from rivals

In the traditional brand approach, the brand is “all about the company,” and “brand differentiation” is all about competing head-to-head against rival brands. “Differentiating the brand” in this manner becomes a major goal of the brand team. Working from an inward vision, the team does everything it can to make its brand stand out from the competition. Ergo, the conventional brand approach: a unique identity, positioning, emotional appeal, brand experience, brand personality, promise, packaging, loyalty programs, slogans, visual and audio signatures, look, feel and everything else that might give the brand special appeal.

Conventional assumptions that can limit the brand

Unfortunately, the conventional approach to brand differentiation makes critical assumptions that have can have serious brand-limiting consequences.

1. It assumes that the brand is a form of communication; it employs a media model of brands. This can reduce a brand to messaging, when customers need an enabling model of brand that delivers new customer capabilities.
2. It assumes that a brand is part of an “offering” that needs to attract customers. The brand sits on a shelf, on a screen, or at a location where potential customers interact with it, and hopefully fall under its spell. This assumption can reduce a brand to a stylized sales stimulant, with little power to change the game.
3. It assumes that the brand is the predator and the customer is the prey, the more passive the better. The customer is there to be hooked; the brand is part of the lure. The problem with this assumption is that predators don’t build communities.
4. It assumes that the brand is all about the company and the product. By minimizing innovative diversity from customers, the brand risks becoming an inbred monoculture with a single point of failure.

In general, these assumptions influence companies to homogenize customers into commodity categories such as “consumers” so they can be “targeted” with media campaigns.

Alas, you can’t differentiate customers when you view them as commodities.

Company potential X customer potential

As I’ve noted previously, a brand is company potential X customer potential. The problem with all those assumptions above is that they differentiate only one half of the brand: the company half on the left side of the X. In a whole brand strategy, you are far better off with an enabling model of brand (that seminal X ) that fully includes the customer as an active brand component. The right side of the X can produce a decisive brand advantage.

Creating a new and improved customer

In other words, the last thing we want to do is to slap “New and Improved” on the brand package and leave it at that. Through the brand, we want the customer to be new and improved. We want to move the locus of the brand from the company and the product into the customer, so customers open the brand to initiative and innovation from below, and can extend the brand beyond the reach of competitors.

This means letting go of the brand as a self-centered media object and embracing the brand as a dynamic collaboration with customers. When you create the conditions for customer success you create the conditions for brand success.

(more…)

There’s a sober brand lesson behind the recent announcement that The Sharper Image has filed for bankruptcy protection. If your brand has no idea of the customer that it needs to create, every new product you introduce can actually undermine your brand, leaving you vulnerable to death by a thousand brand cuts, all of them self-inflicted.

Brand cuts—and why they sting

The act of creating customers builds a strong customer context for the brand. Without this context, new products can appear as random events, cluttering the brand and masking brand value. Each new (random) product cuts into the brand, unintentionally to be sure, but a cut nonetheless. Instead of deepening customer relationships, the new products create more distance between a company and its customers. In time, the brand is shredded from within. Customers lose interest, wondering why the company lost interest in them.

No coherent brand strategy

The Sharper Image is an example of what happens to a company without a coherent brand strategy. “Coherent” in this sense means that the brand has to include the customer. And more to the point, the brand must have a definite customer in mind that it desires to create, a proactive customer type that will drive the business forward and add value back to the brand.

A seller’s brand

Unfortunately, The Sharper Image brand never really included its customers. As a brand, it was all about The Sharper Image. It was a prototypical seller’s brand, rich in merchandising and marketing, but one that could never conceive of its customers as anything other than passive “targets.” It never managed to create a customer context and a customer culture, two critical elements that fall into place during the customer creation process.

A brand of novelty, not innovation

Although The Sharper Image liked to posture itself as a brand of innovation, it was really a brand of novelty. It was a novelty store featuring electronic and digital gadgets. It promised and delivered novelty, although in later years, with items such as Trump Steaks, the novelty itself seemed rather forced.

Compared to Abercrombie & Fitch

It’s productive to compare The Sharper Image brand with that of Abercrombie & Fitch. The Abercrombie & Fitch brand knows how to create a customer. For many customers, the brand is liberating; it enables breakout behaviors. The brand points customers in a certain direction. It opens doors they could not open by themselves.

What new customer freedoms does The Sharper Image brand enable? What doors does it open? In what key direction does it point its customers? What new holistic truths does it reveal, or evoke? How does it promise to change it’s customers? These are key questions the brand never answered, or didn’t answer well.

The health angle bottomed out

For a while, The Sharper Image appeared as a brand of healthy living thanks to its many air purifier products featuring ionization technologies. But the company’s health claims for these products were debunked by Consumer Reports, and later became the subject of a major class-action lawsuit, which the company lost settled. It never seemed to recover after these blows.

The dangers of excluding customers from the brand

Some might consider The Sharper Image as simply a “1980′s company” that had outlived its usefulness, ultimately done in by real innovations on computers, the Internet, cell phones, instant messaging, etc. No doubt there’s some truth to that. Yet, had the company actively created its customers during its heyday, it would have had some valuable help in its time of need—and perhaps even before then. By excluding customers from its brand, it ultimately excluded them from its future.

Photo: Henthorn — Flickr

Boeing is offering airlines new brand touchpoints in its advanced Boeing 787 Dreamliner passenger planes—in the form of new seating layouts. For a “premium economy class” on the airplane Boeing has designed a new three–two–three arrangement (see above) intended to be “more efficient at making people more comfortable.” Boeing also offers a more traditional two–four–two configuration.

Space to relax: a critical brand touchpoint

Customer research by Boeing led to the new three–two–three layout. Says Boeing:

In economy, if you get an empty seat next to you, it feels like you’ve won the lottery. With a triple, for every empty seat two passengers benefit, whereas with doubles and quads it only makes one passenger more comfortable.

So far, reaction from airlines has been “mixed.”

Flightglobal has the story, and more details.

Brand dividends from subtle changes

Airlines that are brands of flying comfort and convenience may find that these simple geometry changes can pay significant brand dividends. The subtle differences between them might transform a brand experience from a cramped ordeal to a restful flight.

I always wonder how many innovations from Boeing and other aircraft makers never make it into the cabins of passenger planes, since it’s the airlines who make the final call. More than a few, I’d guess.

Illustration: Boeing, via Flightglobal