Brands Create Customers

When you’re managing a brand, you always want to know how much of your brand is signal, and how much is simply noise. This signal to noise ratio is a good indicator of the effectiveness of your brand platforms and programs. Lots of signal is good. Lots of noise is not so good.

Use the right brand model

The first step in identifying brand signal and brand noise is to use the right brand model.

Old-school brand practitioners who still model their brands as “communications”—like some kind of broadcast beam—might be tempted to send the customer a survey: “Hey, do I sound cool or crappy?”

Unfortunately, this approach has two drawbacks:

1. Brands aren’t “communications”
2. Customers won’t understand the context, and will give unhelpful responses

For our purposes, then, the traditional “message model” of brands is a non-starter.

What counts is what the customer does with the brand

For signal to noise assessments, I prefer a different brand model, as illustrated above. In my view this is much closer to the way brands succeed in the real world. As shown, the brand is the violin, and the customer is the player. (Hope you didn’t think it was the other way around! The notion of the brand “playing the customer” gets things absolutely backwards, and explains a lot of wasted brand dollars.)

What we want to discover is what the customer does with the brand. Does he or she make music, or a dreadful howl? The effective brand “signal” or “noise” comes from the customer, using what the brand provides.

The brand is a tool for customer expression

The above model comes with several sets of parameters:

1. The brand is a tool for customer expression
2. The brand has the potential to add value to the customer’s life
3. Signal vs. noise is a result of brand/customer interaction

As noted above, the value of your brand lies in what the customer does with it. If the customer consumes your brand and promptly forgets it, your brand is effectively static. If your brand is out of tune, worn out or worn down, customers will grind out a few discordant notes and stop playing, relegating you to the attic. If your brand supercharges your customer’s life, opening new avenues of expression, then your brand is really rockin’.

The brand as enabler

In this model we can see that the brand is an enabler. This contrasts with other brand models which conceive the brand as a message, a controller, a prod, a godhead, or an illusion. Being an enabler gives you tremendous freedom in leading customers where competitors can’t follow.

And since we’re modeling brand interactions, we can add several observations about the duties of the brand. Within this model:

1. It’s your job to teach the customer how to play
2. It’s your job to suggest new tunes
3. You are not so much a “conductor,” as you are a “toe-tapper in residence.”
4. The purpose of this brand/customer interaction is to attract new listeners, and new players. The point is to get them all making music with you.

The value of this model is that it makes it easy to distinguish brand signal from brand noise. You can tell how well your brand is doing by listening to the customer

It’s that simple.

Brand signal is music that makes a market

Using this model, I define brand signal as music that makes a market. It’s music that’s good for your business, not some waste-of-time ditty. And it’s good for the customer, too. The music you make with customers should send competing brands to the back of the stage, if not into the frigid alley outside.

How can you tell if what you hear is music—and not an ear-piercing screech? Well, you’re in brands because you’re smart enough to know. You’ve got creative chops. Expressive chops. And customer chops.

Photo: meganne_soh, Flickr

Just thought I’d break this out from a longer post on brands and commodities. It should be airtight, but I sense leaks. As always, comments appreciated.

Brands and commodities: two rules

1. Brand: The shortest distance between customer and company.
2. Commodity: The shortest distance between customer and price.

Rules:

1. When the brand is strong, customer and company are one
2. When commodity is strong, company and customer are done.

Coda:

If you’re in it for the money, your customers will be in it for the price.

Update: Changed “Moral” to “Coda”

(And yes, deepest apologies to Wm.Blake, RIP.)

Part of the fun in building brands is that while one half of your mind plumbs the nuanced depths of brand context, the other half peers three years out to leverage that context into new business opportunities. Welcome to “brand space,” where it’s microscope to one eye, telescope to the other.

Brand space is the realm of new business

As a brand builder, “brand space” is one of your most useful concepts. It encompasses all the territories where your brand intends a presence. Consider it your brand turf. Much of your brand space is forward focused. It contains the brand elements that will rise to the surface and nurture your business when your company launches new products and services. In fact, you will always be priming some part of your brand space for emerging markets.

There is a cardinal rule of brand space: use it, or lose it.

Let’s look more closely at brand space, and then examine an example of brand space that’s unfolding in real time.

Brand space defined

I define brand space as “an emergent customer context in which the brand takes a leadership role.” Your brand space is the potential value domain of your brand: where your brand plans to go. It’s your brand’s extended realm, or some aspect of its “manifest destiny.” Your brand space is typically far larger than the served space of your current, “operational” brand. It projects the customer and the brand forward, toward the next (higher) brand platform that’s on your brand roadmap. (And you do have one of these, right?)

A brand that’s well crafted will command a set of strategically related brand spaces that foreshadow where the customer is headed. Ideally, the brand moves the customer forward into those brand spaces essential for customer growth, and for the growth of the business. This is one reason why brand teams are also product development teams. Brand spaces assume a strong product/brand integration.

It’s important that the brand space is a “value context.” By that I mean it intends to deliver a new form of brand value for the customers to be created. Areas where you deploy brand spaces may have no current customers (virgin markets) or may have existing customers served by ho-hum brands. Your brand space needs to offer a new protocol of pleasure, protocol of performance, or protocol of whatever that will redefine customers out of the bog-like context that’s currently holding them back.

And, as shown above, the ascendant architecture of your brand platforms will dictate where your brand spaces will become fertile fields. Brand spaces are the bow waves of brand platforms.

Brand space and competitive advantage

If you want to beat competitors to the punch, it pays to use your brand space to enter nascent markets at the earliest opportunity. While your competitors are building out their feature lists, you can be delivering the pre-product experiences that align customers to your brand months before actual product introduction. This is not about hype or “making promises.” It’s about knowing what freedoms your customers crave, what freedoms your offerings will deliver, and giving customers a measured taste up front.

Brand space example: WiFi-enabled handsets

Tom Evslin has a fascinating post on dramatic changes coming to the mobile phone market. In a few years mobile phones will be WiFi enabled, meaning they can connect to the Internet wherever there’s a WiFi signal. That means, of course, that those WiFi phone calls will then be VoIP, and possibly, or probably, free. As you can imagine, and as Tom details, this threatens a major disruption of the telco carriers who now control things via their cell networks. One of the ripple effects is our brand space example. To quote Tom:

WiFi support in mobile phones will shift the balance of power from the big wireless operators to the cellphone hardware and software makers. Phones will be purchased independently of calling plans just as computers are purchased independent of Internet connectivity arrangements. Coupons for access may be included with phones instead of phones being included with calling plans. Why? Because voice calling will be too cheap to meter and hardware will still cost something. [my emphasis]

This amounts to a HUGE market shift. If you’re a maker of electronic devices and software whose products have personal communication potential, this change signals the potential opening of lucrative markets previously held captive by the major carriers. Perhaps there’s a future for you in the handset business, if you can leverage existing brand strengths in portable electronic devices, WiFi, design, and computer/Internet interoperability. If you’ve been on your toes, your brand space beneath this potential market will be jumping. It will already include a rich mobile communication context that can fit hand-in-glove with a WiFi-enabled handset. Your brand space is your running start, a latent brand context ready to be activated. If/when you launch that phone, customers will be standing by. The new market will appear to be naturally yours from the get-go.

I, of course, am no one to foment rumors.

Photo: laughlin, Flickr

It pays to keep an eye on legacy brands, because they can create the kind of brand vacuum that spells market opportunity for disruptor brands. Simply put, legacy brands stand tall on feet of clay. They’re fragile because they don’t cultivate the resilient customer connections that make for enduring brand strength. They may have a boat-load of high-drama symbols and a spiffy showcase sheen, but on the real terrain where customers run they don’t get much traction—and a brand vacuum is born.

Legacy brands defined

Here’s how we define legacy brands in our New Brand Glossary:

Legacy Brands
Backward-facing brands that can suck the future from a company. Legacy brands are predicated on top-down, command and control models which position the customer as a passive commodity, purely to be sold to. Legacy brands are vulnerable to competitors who create active partnerships with customers to innovate on brand, elevating customers from “commodities” to value co-creators.

Lack of brand value creates the brand vacuum

Because legacy brands focus primarily on themselves, and because they speak down to customers, they find it increasingly difficult to create new brand value. The more exuberant and ethereal their self-styled spectacle, the more they create a brand vacuum that others are sure to fill. The vacuum is a brand value void.

Icon brands take note

Companies with legacy brands are vulnerable in their markets, and on the M&A front. If your task is to husband a brand that rarely listens to customers because “icons don’t need ears,” be forewarned.

Photo: salsaboy, flickr

It usually happens like this: I’m describing how a new approach to brands can be the best thing since sliced bread when someone in the room says: “That sounds great, but my company really doesn’t need a brand. We’re not in retail. We’re not a consumer goods company. We don’t worry about packaging and shelf space and stuff like that.”

There are several ways to address the “brands don’t apply to us” issue. I like to start with the universal form of brand that runs like a dial-tone through all markets, affecting all companies.

“What about your default brand?” I ask. “That’s the brand your market assigns to you. Every company has a default brand, whether they realize it or not.”

I explain that a company’s default brand is called caveat emptor. This brand premise is embedded in potential customers. It’s been driven deep into their minds by society, the market, and by their own experience. It tells them that until they know otherwise, their behavior toward you should be “buyer beware.”

Caveat emptor is the first hurdle you cross as you build your active brand to create customers.

And yes, it is your brand, until you demonstrate otherwise.

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Most people don’t realize it, but brands are code. At the core level, brands have much more in common with software development than they do with logos and product identities. In fact, brands should be viewed as an extension of the product development process rather than as a separate, multi-media “add-on” just before launch.

This is because brands are much more than symbols, slogans and promises. Brands are programs to get things done. And as programs, they’re built of . . . code.

In this snapshot, let’s take a look at some of the reasons why brands are code, beginning at the outside and working in.

Unlocking brand code

First, some interesting similarities:

• Brands have architectures.

• They have roadmaps.

• They have platforms

• They have programs.

• They have interfaces.

• Brands are executables.

• They have developers, and end-users.

• And most importantly, they have brand API’s.

Brands have a language, too. In fact, they are written in only one language. It is called CUSTOMER. It is a language that is infinitely interoperable.

What brand builders code

At a basic level, they code the customer’s needs into the product. In this process, they also code the whole customer into the company. This enables customer DNA to flow through a company, through its employees, operations and innovations. At a more advanced level, brand builders code new freedoms into the customer through the brand, enabling customers to be more, and to do more. In effect, they create a branded customer platform that advances the customer beyond what products alone can provide.

Brands as executables

Brands are not static images or frozen icons. Brands are action-oriented. They get things done. In other words, brands are executables. Every brand is a “.exe.” When you execute on brand, you raise the customer to the next level. Brands do this through value transforms embedded in the code.

How brand code works

Simply stated, brands are code for creating value. Their architectures, platforms, programs and interfaces transform the value inherent in the product into value realized by the customer. (This is no easy task.) At their best, brands do this in such a satisfyingly brilliant way that the customer leaves his or her old customer shell behind, and embraces the new brand going forward. When a great brand connects, there’s no turning back.

How exactly does a brand do this? First, brand building begins at the core of a company. Brands are not add-ons after the fact. Brands are a process of architecting customer progress into the product. Yep, the operative word is “progress.” The goal of a brand is to advance customers to progressively higher levels, so in future months and years they will be demanding all those cool innovations you have up your sleeve. Thus, brands are forward-focused. They are part and parcel of your innovation strategy.

Unzip your brand

So, if brands are code, how do brand builders create and deploy this code? You can find some initial guidelines in Unzip Your Brand.

Over at Sandhill.com Geoffrey Moore dissects ten “innovation myths,” and then makes solid business sense of what remains on the bone.

Read his essay if you’re in brands. Innovation is what you do.

One of the traditional tasks of brand practice is to spend time, energy and money to divine “brand essence.” This is the quest to distill the “soul of the brand,” that irreducible quality that will distinguish and infuse brand programs going forward. Meetings are held. Surveys conducted. Minds probed. Navels gazed. The mission statement is dusted off and re-read, often with perplexed faces. After all this, the usual result is essence by committee, one that’s “different enough” from competitors, but still more-or-less the same so it won’t disturb anyone’s routine.

It’s thus no surprise that a few years down the road, this compromise essence wanes. Sales slip. Markets are lost. The brand must be “refreshed,” and the “essence cycle” is repeated.

What a waste! There has to be a better way.

I’d like to propose a different approach to brand essence. In the true spirit of navel gazing, it’s a shift in focus: from an “inny” to an “outie.” In other words, don’t look inside for your essence. (Trust me, there’s only lint.) Find your brand essence in what you do for customers. (That’s the “outie.”) The bottom line is that your customers will define your brand essence, not you.

And I propose making brand essence action-based, rather than an inert asset. It’s much more dynamic than some sacred fluid locked in the company vault.

So here’s how I see it: The essence of brand is collaboration. Brands are collaborations in context between a company, its customers and the product. (Yes, products themselves play a role.) To change your essence, do something different with customers. If you want a better essence, create better customers.

Your essence is in their hands.

In our Pages section (sidebar top) I’ve added a concise definition of what brands do. It is an anthem of sorts for a new perspective on brands, one predicated on value and innovation.

This new perspective has several things going for it:

1. It disrupts the comfy, lazy world of mainstream brands. It will flush out the slugs.
2. It puts brands on a new playing field.
3. It identifies new opportunities for creative companies, and for creative individuals in those companies.
4. It does the same for customers.
5. It opens up new avenues of value between companies and customers. What now seem like dull or “mature” markets may harbor significant growth potential.
6. It explains the title of this blog.

This same material is included on our site, but I’ve added it here because it underlies 99% of my posts.

Over there to the right, in the Pages section, I’ve added a New Brand Glossary for quick reference. Brands need a new glossary because many conventional brand definitions suck. They lack structure, rigor and vision, and they have to be thoroughly re-thought and re-shaped if our practice is to deliver higher levels of value.

In the Glossary you’ll find concise (re-)definitions of brand, brand innovation, brand vision, brand platform, brand loyalty, and other key terms, plus a growing number of new terms: legacy brands, pseudo brands, brand API’s, brand chain, and others.

If you think brands have a positive future, the Glossary is not a bad place to start. (And yes, I am channeling Joseph Schumpeter every chance I get.)