Brands Create Customers

The dramatic success of the Apple iPod is a major business story, but the iPod’s innovations in brand identity are a major brand story as well. The iPod represents a game-changing shift in how brand identity is developed and managed. It shows how brand identity can become more effective when it’s less about the company and more about the customer. For brand builders this may seem counter-intuitive, but the iPod demonstrates it can work with great effect.

The iPod’s brand identity innovation

The iPod has moved beyond traditional brand identity approaches in two critical areas. First, it shifts brand identity from a company context to the context of the customer. This is a big change that greatly expands the scope of “brand identity” itself. It allows for many new layers of brand innovation. Second, placing brand identity in a customer context opens many new avenues for creating customers, and for advancing customers beyond the reach of competitors. The iPod itself is testament to how this can be done.

I’ll discuss the iPod’s brand identity innovation below, but first I’ll review some of the problems with traditional approaches to brand identity.

Problems with the traditional brand identity approach

In a traditional brand identity approach, the brand team develops a brand identity that’s company-centric. The identity stems from a unique company “essence” that differentiates the brand from competitors and supports marketing goals. Unfortunately, this approach comes with a major problem out of the box: it treats brand identity as a proprietary “package” that’s separate from the customer. Because it’s company property, it’s not meant to be shared. The customer is simply invited (or persuaded) to embrace it, and to become, in effect, a (passive) brand follower.

The traditional approach makes no attempt to add value to the customer’s own identity through the brand. By its nature, it tends to reduce brand identity to a perception play. Because companies desperately want customers to embrace their brands, the marketplace becomes flooded with competing brand campaigns broadcasting “me, me, me” brand identity calls, much like preening birds in the jungle, vying for mates. For customers, this typically results in too little signal, too much noise.

The generic weakness of the conventional approach is that it produces a brand identity in the context of the company, whereas the market exists in the context of the customer. That’s a disconnect. Brands use advertising to bridge this gap, but advertising is imperfect and expensive, and increasingly locks the brand into a perception-play spend.

An alternative to the standard approach

There is a brand identity alternative. Why not: 1) add value with your brand identity; 2) share it with the customer; and 3) frame it in the context of the customer, rather than the company? This can provide you with a more direct path to creating customers in the first place, and then keeping them for the long haul.

And that’s where the iPod points a new way.

Identity is all about the customer—not the company

Customers care about brand identity when it helps them grow their own identity. In truth, they want their identity, not yours. In other words, effective brand identity is about them, and not exclusively about you. The genius of the iPod brand is that it elevates customers to a new identity, without trying to impose its own. This is an act of liberation, not an act of conversion. It changes the game of brand identity from being company-centric, where dozens of brands compete head-to-head, to being customer-centric, where a brand teams with the customer to create a shared identity platform.

Buy an iPod, be a DJ

The iPod nurtures a customer identity from below, rather than projecting a brand identity from above. Through this organic process, the iPod becomes a customer identity enabler. It raises the customer from being a lowly “buyer of music” and a lowly “buyer of an mp3 player” to a superior identity: that of being a DJ — with the creative power of 10,000 songs.

Why buy an mp3 player from Creative or Dell when one can be a DJ via Apple? Being is superior to buying.

As an identity enabler, the iPod delivers demonstrable coolness. The iPod includes iTunes, and with iTunes every iPod customer can create customized playlists for every mood and occasion. Yes, playlists are a creative act. The iPod elevates the customer from a passive listener in his/her room to a mobile music creator and performer (the DJ), ready to share one’s taste, sets, mix and rhythms.

Brand identity is customer identity

The iPod does more than give customers power over their music. The iPod offers them their own musical identity. And thus, buying an iPod is an investment in one’s own identity. This is real, not symbolic. iPod customers are unlocking a part of themselves that’s been repressed and constrained. Apple understands this, which is why the integration between the iPod, iTunes and the iTunes Music Store is so strong. It is “seamless,” as is the identity it enables.

In fact, the iPod presages a coming convergence of brand identity and brand experience, where identity is forged as part of the brand experience process. This also means that brand identity/customer identity becomes deeply interactive.

Identity that makes a market

The goal of any brand identity effort is to create an identity that makes a market. For this to happen, that identity must be a customer identity. Instead of trying to “sell” a brand identity to the customer, or hook the customer on an illusion, the iPod simply frees a powerful identity driver within the customer. Note how Apple highlights the customer in iPod campaigns. The Apple logo and the iPod don’t dominate the stage. We see persons totally at one with their music. And they’re not mere “listeners.” They’re manifestations of a new brand identity that exists as a customer identity: dancers, DJ’s, performers, creators.

Hosting the new brand/customer identity

Creative and Dell used traditional, company-context identity strategies against the iPod and failed to gain market traction. In effect, their “company first” brand identities had to compete against customer identities fueled by the iPod. It was “no contest” because the iPod had already changed the game. The iPod strategically repositioned digital music identity from the product to the customer. Using its “umbilical cord” of iTunes and the iTunes Music Store, Apple now hosts this new identity—a very enviable position, indeed.

Photo: iLounge, Flickr

On Friday, May 19th, Apple opened its stunning Fifth Avenue store in Manhattan. The large underground store is entered through a striking glass “cube” aboveground in a spacious urban plaza, making the entrance itself an iconic beacon. It’s an immediate landmark.

The Fifth Avenue store is a showcase of the Apple brand. It has lessons for all brand builders.

Framing the customer
To aspire to greatness a brand must frame its customers on a plane of greatness. Apple knows how to do this. Through its innovative architecture, Apple makes a trip to this store the virtual equivalent of visiting the Louvre in Paris, where visitors enter through an equally striking glass pyramid. Apple thus frames its customers in the context of Europe’s greatest art. The “cube,” though, does not mimic the Louvre’s pyramid. It honors it symbolically while making its own distinct statement. It invites customers to become active creators of art using Apple technology, not just spectators of past creations. Customers who enter the glass cube experience both the homage and the daring break.

The event
A cardinal rule of retail is to make your retail space an ongoing event that awakens your customers to new experiences. Your store is a realm of customer connections, not just a door and four walls. And “event” means drama—lots of it. Thus, opening a store becomes an exponentially dramatic event, flush with new connections. Apple is a master of such occasions. The indefatigable ifoApple has some Fifth Avenue event details. Here is a snippet:

The short early line and thunderstorms translated into a huge line just before and after the opening. At 4:10 p.m. New York Times tech writer David Pogue showed up with a new black MacBook, with the iMovie recording feature running, and was interviewing people. At the same time, we could hear the store employees yelling and hooting inside the store. At 4:30 p.m. there were 915 people in line, stretching around the block. Security guards split the line at business entrances to keep them from being blocked.

At about 5:30 p.m. dozens of store employees came up the stairs and started working the waiting line, standing on the plaza and making like cheerleaders–the crowd yelled back. At the same moment, Steve Jobs appeared at the entrance, generating more yells, including from some young woman who told Jobs, “You hot!” Apple’s architects and retail execs also joined the group, standing to the right of the cube entrance. Johnson and Blankenship hugged again. The press had arrived and were positioned to the right of the entrance.

With just 15 minutes left before opening, the young man who was #8 in line turned to his female companion and proposed to her. She accepted, and that set off a ripple of “Awwww” back through the crowd, and up to the Apple staffers. Some came over to offer their congratulations.

The waiting line was in a perfect configuration to watch the show and create sidewalk buzz. The closest people were both those at the front of the line, and those at the end. Both groups were looking straight at the cube, which is raised up several steps, creating a stage. The pedestrian area was jammed, and there was a huge crowd of people across Fifth Avenue trying to catch a glimpse of what was occurring.

Retail as an expression of brand
Apple rightly considers retail to be an expression of the Apple brand, on par with other brand expressions such as “design” and “user interface.” In other words, “retail” channels the brand. It is not allowed to impose constraints that bend the brand.

Apple demonstrates that retail space is also a spatial extension of brand, a multi-dimensional platform for customer experience and growth. Retail is thus a workspace for brand. You build out from the brand. It’s what your brand does with—and within—that space that defines who you are, and where you lead.

More on the Fifth Avenue Store from Apple.

Photo source: openeye, flickr

UPDATE: ifoApple looks into estimated construction and maintenance costs of the Fifth Avenue Store.

When you walk into an Apple store you feel your spirits lift, your senses sharpen. That’s a function of a retail space shaped by the Apple brand. And it’s no accident.

If you’ve ever wanted a detailed account of how Apple manages its brand in its retail stores, the ifoAppleStore blog is the place to go.

It’s all here: store basics, design, layout, brand identity, customer experience, architectures of participation and architectures of purchase, and the constant tweaks and adjustments to make it all work.

You can even learn all about those fabulous glass stairs.

MySpace is not a “container.” It is the uncontained.

Lesson A: Rupert Murdoch

Lesson B: Tila

This has been a tough week for Microsoft, and for the Microsoft brand. The scheduled release of Vista has been moved back from 2006 to early 2007, missing the big Christmas season. Release of Office 2007 will also be delayed until the new year. As if this wasn’t enough, the company also announced a massive re-org intended to re-align desktop and online strategies. And, at the end the week, both Dare Obasanjo and Robert Scoble cite weaknesses in emerging Microsoft brands. Dare compares new MS online brand efforts to competing Google and Yahoo brands, and finds the Microsoft brands confusing. The Scobelizer agrees.

Dare and Scoble make some good points. I’ve touched on Microsoft’s brand quandaries here, here, and here, and obliquely in my post Brands are code.

(more…)

Here’s what Walt Mossberg has to say about Microsoft’s Office Live offering in his column of February 23:

Confusingly, Office Live has nothing to do with Microsoft Office, the company’s productivity software suite. It doesn’t include Web-based versions of Office programs like Word, Excel and PowerPoint.

If the way you name your products leaves customers confused, don’t expect them to line up at the sales counter any time soon. (It’s never a good sign when your own employees have reservations about a naming scheme.)

As we’ve said before, and will no doubt say again: in brands there is no beta.

And just for fun, don’t miss the web site that Walt created using Office Live tools.

This site is a treasure trove of corporate design guides, guidelines and policies.

It’s a useful resource for those whose job it is to manage a company’s visual identity, signs and symbols.

Of course, a company’s performance identity is a different matter. That will largely be determined by its brand programs.

In what appears to be another instance of brands playing catch-up to technology, Microsoft watchers and MS employees are pointing to potential customer confusion between the new Windows Live brand (now in beta) and Microsoft’s established MSN brand. The two online brands overlap in many areas, and address the same set of customers.

At present, it’s not clear how the two brands will co-exist, or if the older MSN brand will be retired. Windows Live is the more dynamic platform (AJAX, software as a service), and represents Microsoft’s online business future. MSN is the brand that millions of Microsoft customers have used for an array of online programs (Hotmail, Messenger, etc.) and for online content (automotive, sports, financial).

Hotmail, Messenger and other MSN programs are being revamped and re-branded as part of Windows Live.

Other reports say Microsoft may re-brand MSN as a content-driven “Microsoft Media Network.” This would add another brand and a draw a line between online content and services. However, much of the Live platform tends to blur such distinctions through its strong focus on access and feeds.

Microsoft’s challenge is to migrate customers to a new brand context that empowers customer choice and action. For Microsoft, the question is whether the brand will add real customer value, or be a last-minute kludge that leaves customers in the air.

Potential brand confusion is a critical issue for Microsoft. The company is competing head-to-head with Yahoo, AOL and Google in a high-stakes battle for market leadership. This is a battle of brands as much as it is a battle of technologies. If you come to market without a fully-baked brand strategy (architecture, platforms, programs and identities), and without a clear idea of the customer value you plan to deliver, you run the risk of confusing customers and the market. You also leave openings for competitors.

Here’s a rule worth remembering: In brands, there is no beta.