Brands Create Customers » Fundamentals

When your brand is not meant to be seen

Brian Phipps — Fri, 15 Dec 2006 16:35:17 +0000

It may seem counter-intuitive, but a primary purpose of your brand is not to be seen.

It is to be seen through.

Your brand is a lens that enables customers to experience their world, and their role in it, in a richer and more complete context. You show the way.

A brand activates beyond the brand. It does not hook.

It frees.

And great brands do not sit dumbly on a shelf.

They fly.

Top companies are serious about their brands

Brian Phipps — Tue, 17 Oct 2006 07:20:44 +0000

Find a company that’s deadly serious about its brand, and that company will dominate its market. Its brand energy will keep it at the innovative edge, free from moribund thinking, and moribund markets. It will also prevent the company from collapsing into sclerotic bureaucracies where “brand” is reduced to media games.

Toyota leads with the brand

That’s my takeaway from an October 14 WSJ piece (sub req.) on how Toyota reinvented itself to be able to produce vehicles for global markets outside of Japan. Such “local production” was (and still is) a Herculean task of focus and execution on principles aimed to make Toyota vehicles truly world class. Honda and most recently Nissan also show the same fortitude to “lead with the brand.”

Brands lead by example

Like all brand endeavors, “leading with the brand” starts at the top. It means leading by example. The CEO sets the brand tone, up and down the line. Once that’s done, if the tone is serious there’s no screwing around.

Top brands are serious about their customers

Alas, American car makers, who treat their brands like something out of Battle Creek, ceded brand leadership to others years ago. Toyota currently has 12 plants in North America; Honda has 8; Nissan has 4, all with more to come.

Customers saw these better cars and flocked to them. They could tell the companies were serious about their brands, because the cars were serious about the customers. The cars themselves delivered the message, creating new customers for vibrant new markets.

(Pictured: Toyota Fine N fuel cell concept car)

Photo: Wikimedia Commons

When a great brand retreats to “caveat emptor”

Brian Phipps — Wed, 11 Oct 2006 14:11:26 +0000

Paul Paetz provides a ground-level, first person account of how the famed Maytag brand became a shell of its former self. It’s a sad story of how a distinguished company, a great product line, and devoted customers were undermined by mismanagement.

Paul calls the Maytag decline and fall “brandicide.” That’s as good a term as any. Most brands are not killed by competitors. They’re done in by their own companies.

The danger of lowering the brand bar

There’s a lesson here for other manufacturers, too. Once you lower the brand bar for your offerings to caveat emptor, you signal your own customers to find brand value elsewhere. And you invite competitors to provide it.

Travails of the brand trade

Brian Phipps — Thu, 05 Oct 2006 22:46:55 +0000

The hardest part about being a brand builder is that you’re a 3D person in a 2D world.

Business is a spreadsheet. It’s a march of X and Y, where 2D thinking is the rule.

Brands are the drama of deep spaces. They hear birds fly, feel tired leaves turn, watch clouds change mountains. And just to make things interesting, they reveal this for, and through, customers.

Business can be out of touch with nature, and with customers, and can lack perspective on itself. It often comes up a dimension short.

Brands restore that dimension. They’re the distance to be touched, the seasons greeted, and life everlasting, underfoot. And they add the customer to this picture. And business, too.

Photo: jurvetson, Flickr

Where brands fit in the big picture of things

Brian Phipps — Wed, 04 Oct 2006 20:10:48 +0000

As brand builders we’re continually pushing the edge of innovation, creating customers in new markets, and increasingly across international boundaries. In this effort it helps to situate brands in the big picture of things, as a prime-time player on the global stage. What we need is a succinct formulation that defines the “macro” role of brands as an independent, proactive force in today’s world economy.

And I do mean succinct. Keep it short and sweet, so it packs a punch. Make it a big picture in 25 words or less, something that would also serve as a elevator pitch for the supreme importance of brands.

Moving brands to the top tier

This means raising brands to the top tier of economic movers and shakers, right alongside capitalism and business, the two global economic drivers. Brands currently exist in a world of capitalism and business, so that’s where I start. The goal is to wrap capitalism, business and brands into one integrated concept. In the formulation below, I give each element a global purpose, and then tie all three together in a common value logic, ascending from commodities to higher forms of value.

A big picture context for brands

We’re talking real big picture here, as seen from high earth orbit. What does “capitalism” do for mankind? What’s the role of “business” on the world stage? And how do “brands” complete the picture?

My formulation doesn’t pretend to be definitive (well, not at this point, anyway). It’s my working snapshot, a starting point to put brands in their proper perspective.

So here it is, in 25 words or less:

Notes

OK, let me explain the thinking behind this formulation. As you can see, there’s an upward progression of value from commodity to “life,” i.e., to the customer, with brands as the crowning/creative/human touch. And there’s also a progression from underlying system (capitalism) to active institution (business) to human agency (brand.) In a profound sense, brands complete capitalism, and they complete business. (Could brands exist beyond capitalism and business? Of course.)

Capitalism

I mean free-market capitalism as an economic system, in the textbook sense. The main reason to keep capitalism around (with its endless imperfections) is that it does create commodities, and commodities (eventually) make us all richer by lowering the price of goods. Worldwide, this does seem to be the case. Put a bunch of capitalists in a room and commodities will burst out like popcorn.

Can capitalism be made more open, more responsible and more equitable? Absolutely. That would also make for better brands.

Business

Business uses commodities to create value: iron ore into sheet steel into cars, knockdown furniture at Ikea, H&M, Gap and the clothing chains that run on cotton, digital devices with cheap chips, a grass-roots bank in India using open source software. The more commodities available, the more forms of value that business can create. (Commodities fuel business opportunities.)

Business, though, typically thinks first about profit, not advancing customers. And that’s where brands come in. A business can make a sale, but only a brand can create and grow a customer.

Brands

I mean value-based brands, not brands developed as stylized sales stimulants. In my formulation, brands are avenues of innovation that invent new forms of value beyond the product proper. They do this by integrating the mission of the company and the product with the mission of the customer. Brands “bring business value to life” by transforming it into rich human context. Indeed, this is how brands create customers.

A side benefit of this formulation is that it makes brands the greatest place to be if you want to combine human values, creativity and business innovation. But then, you already knew that.

Comments, please

By all means, please let me know of any comments, suggestions or revisions you might have to make this formulation better. Or create one of your own. We are inventing a new world of brands. It’s the collaborative task of many.

And yes, I’m quite aware that most existing brands would fail this big picture test.

Update: the Cougar Ace brand challenge

Brian Phipps — Thu, 28 Sep 2006 14:16:39 +0000

Here is some updated information about the Mazda cars on the Cougar Ace. (See my original September 4 post on the brand challenges of the Cougar Ace saga for more details.)

Cougar Ace cars will not be sold as “new”

Autoblog quotes a Mazda press release that none of the Mazda vehicles on the stricken Cougar Ace car carrier will be sold as new. As stated in the release, Mazda will make a final determination on the saleability status of each car only after all the vehicles have been taken off the ship and inspected in Portland, Oregon. With almost 5,000 Mazda vehicles on board, that may take some time.

Mazda has announced that it will also publish all the VIN numbers of the vehicles, so that there will be a clear record of “Cougar Ace cars” released to market.

Steps toward brand transparency

From the Mazda release:

HIROSHIMA, Japan– Mazda North American Operations (MNAO) today announced that the Mazda vehicles aboard the car-carrying vessel, Cougar Ace, which ran into trouble on July 23, 2006, off the Alaskan coast, resulting in her listing some 60-plus degrees, will not be sold as new vehicles.

“While we do not, at this time, know the full extent of the damage to vehicles on board, none of the Mazdas will be sold as new”, said Jim O’Sullivan, president and CEO of MNAO. “Those beyond repair will be immediately scrapped. It is possible that those vehicles which are repairable would be made available for sale as used cars through Mazda’s dealer network in the U.S. and Canada. We will only be in a position to decide on any used car sales once the vessel has been unloaded and each unit comprehensively inspected.”

“In the interests of transparency and customer peace of mind, we will post a listing of all vehicle identification numbers (VINs) on our consumer Websites, www.MazdaUSA.com and www.mazda.ca so that there is no confusion as to which vehicles were on the ship,” stated O’Sullivan.

And the reaction from Autoblog:

We’re pleased to see that Mazda is handling this the right way. Publicizing the VIN list is a great good faith measure, and doing so inoculates them from accusations of trying to pass on damaged goods to customers. In fact, we wonder if the list will actually help them close a few deals along the way (assuming some cars are in repairable condition).

Think about it: given their history, some may view the cars on board as odd collectibles — reminders of a fascinating and dramatic maritime event. In this case, the VIN list serves as irrefutable proof of the cars’ backgrounds.

Still, you won’t find us lining up for one if they show up in dealerships. We prefer cars whose trips across the ocean are more boring and uneventful.

Mazda’s brand options

I outlined a number of Mazda brand options in my original post. The mere fact that these vehicles withstood a near disaster in the open ocean qualifies them for special status. They are a test of the Mazda brand. Given Mazda’s announced direction, the cars certainly merit a brand consideration above the humdrum category of “used.” They’re experienced, and they’re survivors. If Mazda treats them as such, and has 100% confidence in them as Mazda products, it can sell them as examples of brand strength.

The key to this process, though, is that while none of these vehicles fell overboard, Mazda itself must go overboard in supporting them, and Mazda customers, in rebuilding this corner of the Mazda brand.

H-P faces a test of brand character

Brian Phipps — Wed, 27 Sep 2006 17:16:04 +0000

Great companies lead with their brand. When they fail their brand, everything else comes a cropper. H-P’s current governance crisis is a case in point.

While this ever-expanding affair is troubling for employees and shareholders, it has also become a crucial test of H-P’s brand character, with far-reaching business consequences.

Brand character starts at the top

H-P’s leaders who pushed the limits of the law to spy on company Directors, employees and outside journalists called into question the very integrity of the H-P brand. After all, they are/were among the highest level of brand stewards in the company. Their actions define the character of the brand.

H-P’s internal investigation and its recent executive actions recognize the severity of the problem, and the types of steps needed to restore H-P’s brand character to its expected level. A full resolution will take time, for this has not been a file-and-forget transgression. It’s been a brand character meltdown. Additional developments are expected.

Brand character means business

Just as an employee with character failures may be disciplined or even terminated, a brand that scores low in character can be punished or even terminated by customers. Because a brand represents the whole company, downstream ripples from brand character deficiencies can erode hard-won brand advantages in customer trust, pricing, and repeat business.

Internally, there’s also a price to pay in damage to employee cohesion, productivity and recruiting. Everywhere a brand returns a benefit, a defect in brand character means more work, more struggle and more sacrifice to re-establish a brand edge.

Brand character vs. “brand personality”

Brand character should not be confused with “brand personality.” The latter is usually a shallow fiction that (lesser) brands use as a front for sales. Brand character is not a front. It’s not make-believe, a happy face, or a charade. It’s what holds the brand together, and what comes to the fore when brand values are put to the test.

Definition of brand character

From our New Brand Glossary:

Brand character is the spine of a company. It’s evident when a company is accountable to the values that make it stand tall. This means accountability in action, not on paper. Brand character draws a line that moral weakness cannot cross.

Companies with character create brands with character. Brands with character lead.

I would add that the values that make a company stand tall are the same values that create customers. That’s the holistic unity between business integrity and business growth. Brand character is more than a gesture or a figure of speech. It’s a business essential.

The Board and the brand

H-P’s Corporate Governance Guidelines define the responsibilities of the company’s Board of Directors. They don’t mention the H-P brand—but perhaps they should, so that policy decisions affecting the brand fall under Board oversight. The H-P brand is certainly vital to the company’s business, and as a valuable corporate asset is certainly important to shareholders. One outside observer has called for a radical re-structuring of the H-P Board itself, stating, “You have a board here right now that is crippled in every way imaginable.” (WSJ, sub required.)

Character and the gold standard for brands

For many years the H-P brand was the gold standard among high-technology companies, with market valuations to match. H-P and “brand character” were practically synonymous. Nothing prevents the H-P brand from regaining those heights—once it passes its current brand character test.

How “user-generated content” got a bad name

Brian Phipps — Mon, 25 Sep 2006 15:56:56 +0000

We’re in Paris, in June, 1912.

As the sun sets a maker of fine sable brushes sits outside a neighborhood bistro with his good friend, a master manufacturer of tubed oil paints. They meet every few weeks to have a drink and talk about business.

Just as their wine arrives Pablo Picasso walks by with a gaggle of Montmartre buddies, laughing, joking, shouting back and forth, spilling from the sidewalk onto the cobbles.

They pass, and a relative calm ensues.

“Well, how’s business?” the brush maker asks his friend.

The paint maker watches Picasso and crew disappear into the night. He remembers some of their work he saw earlier in the week. “Business is OK,” he says, “but the user-generated content is going to hell.”

Apple gets the sofa, Microsoft gets the door

Brian Phipps — Sat, 16 Sep 2006 15:52:33 +0000

It’s way too early to predict whose products will define the emerging “home media center,” but at its big “Showtime” extravaganza this week Apple ran across the room and boldly jumped on the sofa. It can’t claim to own the sofa—far from it—but it certainly acts like it belongs there, with its Front Row remote in hand, new full-length movie downloads from iTunes and its sleek “iTV” device streaming Pirates of the Caribbean to our widescreen TV’s in early 2007. “I think it completes the story, and shows you where we’re going,” said Steve Jobs.

Microsoft, which has powerful technology of its own in this market, doesn’t seem to be inhabiting the same room as Apple. It’s standing uncomfortably back by the door, as if still wondering how to fit its classic market control strategies into this new high-touch, high-design world of mom, dad and the kids.

Apple’s brand advantage

What we’re seeing in Apple’s initiative is how a customer-centric brand strategy can undermine the market dominance of a far stronger player. Microsoft owns most of the cards, but it’s Apple who’s picking the game, and it’s Apple who’s dealing. It can do so because:

It leads with its brand
It has structured its brand as a holistic expression of the customer
Apple has integrated innovation into its brand, creating clear customer pathways to higher levels of value.

These three elements contrast with Microsoft’s historic strategy to control customer choice, a strategy that puts internal limits on Microsoft innovation. While Apple is just as hard-nosed as Microsoft in its business dealings, it understands that by making Apple a brand of innovation it can create market opportunities in areas Microsoft can’t easily reach. Case in point: Apple’s five-year head start between the first iPod in 2001 and Microsoft’s Zune in 2006.

Some observations:

The power of customer-centric brands

Brands can be “about the company” or “about the customer.” Apple’s brand is the latter. Its brand has a supple, sensory texture that helps customers feel more alive. Through its customer-centric brand strategy Apple appears to be your personal agent in bringing about everything you’d want in the promised land of digital innovation and digital media: convenience, performance and completeness. Apple exudes a focus on “you” with such easy, holistic confidence that you want to jump on the sofa beside them. (That, of course, is the plan.)

Brands as “the customer inside the product”

One way to think about brands is to consider brand to be “the customer inside the product.” A brand built this way will radiate a strong customer presence. It does so because your brand strategy has integrated the customer’s forward path into the product. When the customer is “inside the product” you complete the customer as you complete the product, creating a powerful brand advantage. (A contrast to note: Apple works on completing its customers; Microsoft works on completing its controls.)

Apple’s “brand path” effect

I’ve previously described the concept of “brand space” and how a company can use a brand space strategy to gather strength in new markets before its products are ready for launch. There’s a corollary to this concept that we might call the “brand path” effect. Think of the brand path as a vectored brand space infused with your brand vision and brand qualities. It’s a customer pathway paved by the brand, in the direction you are taking your customers, even though your full suite of products hasn’t been delivered. They can see it, and feel it. Apple may well have the reigning brand path in the home media center space.

Brand path is somewhat related to the “halo effect.” For the last five years marketers have debated whether an iPod halo effect would boost sales of the Apple Mac line. Well, it turns out that was the wrong place to look. The real halo effect of the iPod will be in the home media center, thanks to the brand path Apple is constructing. Apple’s brand path is the iPod scaled up to the entire house.

The real “video iPod”

In other words, in the brand scheme of things the home media center will not be a “computer.” It will have nothing to do with computers. It will be an extension of people, as laid back and as comfy as the sofa. It will be a holistic, brand-enabled media experience, the purest experience possible. It will have the simplicity and ease of use of the best consumer devices, as typified by the iPod. In more ways than one, the home media center will be the real “video iPod.”