Brands Create Customers

In this and follow-up posts I’ll propose that the best way to develop brands is to design, structure and deploy them as customer-focused applications. Yes, you should create your entire brand as an application. “An application of what?” you might ask? In a nutshell, your brand is an application of your vision and values. You apply it in a brilliantly crafted program of wisdom, culture, street smarts and tools to advance your customers to richer realms of living, far beyond the reach of competitors. Your brand becomes an application for your customers to succeed, and to take you with them. Their success is your success.

Brands are customer-focused applications for getting things done

It’s always been apparent to me that brands are really customer-focused applications–for helping customers get things done–far more than they’re calculated  sets of  symbols, slogans and stories to influence how customers think or feel. (I began writing about personal brand applications way back in 2007.) As I see it, we develop brands to help customers achieve outcomes that they can’t achieve through products and services alone. Thus, a “brand”  is much more than an identity, a stylized sales stimulant, a promise or a reputation. It’s a deliverable that acts as a supra-product method of creating value, limited only by the brand imagination of the company.

Notably, the brand is a form of innovation rather than a belief system or persuasion package. Critically, it’s an interactive application, too, one that enables the brand to team with customers in the value creation process. As I’ll discuss  below, brand  applications are essential building blocks for brand  platforms, and for building strategic brand experiences.

What (exactly) is a brand application?

A brand application is a method (a series of steps, guidelines, interfaces, interactions, innovations and revelations) to advance customers to richer realms of living. It may accompany products and services, or it may be a framework for them. The brand is the operative vision and value stream. It lays out where the company is going, and the rewards for joining in. The brand journey marks the path.

The goal of the application approach is to make customers better off in a way that ultimately disrupts competitors. As part of the application approach we create customers (here and here) through value innovation in ways that competitors can’t match. Our customers win, and so do we.

For strategic purposes the entire brand can be developed as a unified, customer-focused application (as I propose). Within the brand itself, however, there will be many discrete brand applications. These function like brand programs. Customer service is a brand application. A warranty is a brand application. Note, though, that customer service at Zappos is the whole brand as an application.

Brands gain strategic power as applications

Brands gain strategic power when they’re developed as applications. In traditional brand approaches brands are typically a form of communications. They emerge as calculated messages and meanings to promote sales and customer loyalty. In contrast, the brand-as-application is a comprehensive, collaborative, multi-threaded and multifaceted means of helping customers change their world in reality, not “in the mind.” As an application, the brand emerges as a strategic means of action, a change agent and deliverable on par with products and services. As applications brands stand to be far more productive than a brand “essence” showcased as a glorious–yet static–identity.

Your entire brand is an application—inside and outside the company

One of the strengths of the brand application approach is that your brand becomes a coherent and consistent method of value creation inside and outside the company. You are one company, one application, one brand. The brand becomes your operating mode rather than a media construct. As an application it fuses strategic vision, employee creativity, quality, productivity, and desired customer outcomes. Brand applications lay the foundation for a company “Way” of unique vision and values. Conversely, when the brand becomes “image” instead of application, we wind up with sad examples like BP.

A big difference in brand approach

When we develop brands as applications we take a dramatically different approach than used for conventional brands. Here are the main differences:

1. Brands are agents of transformation, a means to change the world. They’re not sets of “meanings” to program customer behavior.
2. The brand goal is to innovate so we can advance customers into richer realms of living where our brand gains market advantage.
3. Our brand is part of our innovation strategy. It’s a method for creating value through customers.  Brand strategy becomes innovation strategy.
4. The brand team joins the innovation team. They pump brand intelligence into new products and services ab ovo.
5. Customers become strategic innovation partners, not just “buyers.” They are valued for their insights, intelligence and initiative far more than for their “loyalty.”
6. There is less need for brand symbols, slogans and stories, and no need for brand magic and miracles. Applications create new realities–an infinitely better result.
7. There is little need to “position” the brand. The application goal is to position customers to win–in new market spaces where customers and company can prosper. The application is self-positioning.
8. The era of the brand icon is over. Icons don’t innovate. Applications do.
9. There is less need for ad agencies. There is more need for app agencies.
10. The brand ceiling leaps skyward. It becomes: Company Potential  X Customer Potential. New brand avenues abound.

Innovative brands already use the application approach

The good news is that many of today’s innovative brands (young and old) already grasp what brands can accomplish as applications. In many respects their brands largely function as end-to-end applications as they focus on delivering market-leading customer experiences. They build their brands outward from their vision, values and core operating principles. Their brands begin as internal applications (operating policies and programs) to produce distinctive  products and  services. Extending brand applications to customers is a natural  follow-through of what makes the company tick. In the larger scheme of things, the brands of Starbucks, Trader Joe’s, FedEx, Costco, Nordstrom and Zappos function as applications. They advance their customers beyond the reach of competitors. They are more focused, more coherent, more disciplined  and more distinctive because of it. And customers can tell the  difference.

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Recent research from Google suggests that social media may become a double-edged sword for brands. While social media sites may be excellent platforms for promoting sales, they can also position a brand as a source of deals and discounts. This positioning can erode a brand’s pricing  power by conditioning customers to shop on price rather than intrinsic brand value.

In other words, unless a brand takes care in how it develops its social media community, it may lose in strategic pricing power what it gains in immediate promotional power. I say “may” because the data is far from complete at this time. But it’s data that points in a definite direction.

Retaining pricing power is crucial for brands

Social media provides enormous value to its users while offering low-cost and effective communications and promotional opportunities for brands. (For typical examples see here). For brands, the critical task is to develop a productive social media strategy that deepens brand engagement and experience while maintaining price premiums. I previously discussed this issue in a post on a Razorfish social media study conducted in 2009. Razorfish found that roughly 40% of brand “fans” and “followers” of Twitter and Facebook were looking for deals. My takeaway from the Razorfish study was that a brand may risk becoming a “brand of deals” if it is constantly linked to deals, or to the expectation of deals. The brand’s pricing power may be reduced accordingly.

Google finds that a brand’s “friends” on social media often want deals

Google released partial data from its research on Facebook, the 800-lb. gorilla of social media sites (and, we should note, a prime Google competitor). Google’s data indicates that the single largest segment (25%) of those who “friend” a brand on Facebook do so in order to receive discounts, deals and other types of special offers. In my view, this may perfectly acceptable if a brand needs constant promotions to attract customers. However, a brand that is not in the business of hot offers and blowout sales may find that this “deal ethos” on social media sites reduces its leverage as a brand of exclusive qualities. You cannot be a high-rent brand with a low-rent strategy.

A chart of Google’s findings

Below is a chart from the findings that Google presented:

For the consumers who do friend your brand, what are they looking for? Discounts!

A brand’s social media pages can become virtual coupons

Google’s data seems to confirm the Razorfish findings that a significant portion of a brand’s social media followers is shopping on price. These followers may treat a brand’s social media presence as a source of deals and discounts, as if the brand suddenly appeared in an outlet mall, offering an equivalent outlet mall experience. The brand may get more traffic and social graph referrals, but it’s traffic that can put price pressure on the brand if the prevailing ethos of fans is “let’s get a deal.” Fundamentally, brands are the deal; they don’t have to make deals. And once every competitor rolls out their social media shingle, deal shopping between brands will be easy. Strategically, the brand’s ability to command a price premium may be compromised.

Two causes of why this may be happening

I can envision two causes for why the deal ethos suggested by this data may be developing on social media sites. The first is that many companies envision social media as the ultimate advertising and PR platform–low cost, viral and high impact–and have consequently flooded their social media pages with sales pitches, deals and promotions. These companies want sales, not a strategic brand community. They gladly create a deal ethos, perhaps because their brands are little more than a sales ploy to begin with. They target fans and followers with pitches, and their “fans” target them with the expectation of deals.

The second reason is that the minimalist designs and capabilities of social media sites generally resemble bare-bones discount sites. The brand is a tenant on social media sites, with a cookie-cutter store front. In such formats, it’s hard for brands to create exclusive brand experiences. Brands that  lack strategic brand vision and a community sensibility (as many do) may adopt a social media default mode of persistent promotion—just to fill up the space.

Current social media sites may homogenize brands

A further thought: It seems to me that in their current formats social media sites can exert a significant power to homogenize brands. They can (inadvertently) reduce brands to a lowest common denominator (e.g., Facebook page or Twitter account) that fits the social media scene. We wind up with brands stripped down for the convenience of social media sites themselves. If you look at how the brands express themselves in a fixed social media format you can sometimes glimpse a frightening similarity, as if two very different brands in the real world behave virtually the same in the social media world. Is this what your brand wants?

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In an example of brand innovation Google Labs has released App Inventor for Android, a desktop (browser) application intended to make creating Android apps fast and easy. According to Google, no programming knowledge is required. One simply drags and drops blocks of pre-packaged code into a composing screen, and the app is generated.

At this point the App Inventor is fairly rudimentary, and the demo apps appear somewhat simple. Wait a few months, however, and we all might be surprised with the apps that  result. One observer calls App Inventor “a game changer.”

An excellent example of brand innovation

I see App Inventor as an excellent example of brand innovation. With App Inventor Google is putting more power in the hands of Android users. It’s enabling them to do more of what they want with Android, shaping apps to their personal or particular needs. These will be apps in the pure context of the customer, and as such they can build significant brand depth. They’re also at the edge of the brand ecosystem, and that gives the brand new territory to enter and explore. That’s what personal brand applications are all about.

Personal Apps or Corporate Apps?

Google provides an example of a personal Android app in the video below, but there’s nothing stopping businesses from developing their own Android apps for sales, marketing or operations. A delivery business might find use for such an app, because one of the functions is geo-location. And if the Android OS powers the (rumored) Google tablet, these apps may work on the Google tablet, too. That could open up more possibilities.

Types of applications possible

Quoting from Google Labs:

	Because App Inventor provides access to a GPS-location sensor, you can build apps that know where you are. You can build an app to help you remember where you parked your car, an app that shows the location of your friends or colleagues at a concert or conference, or your own custom tour app of your school, workplace, or a museum.
	You can write apps that use the phone features of an Android phone. You can write an app that periodically texts “missing you” to your loved ones, or an app “No Text While Driving” that responds to all texts automatically with “sorry, I’m driving and will contact you later”. You can even have the app read the incoming texts aloud to you (though this might lure you into responding).

App Inventor in education

App Inventor may have important educational uses. See the video here from the University of San Francisco.

Google video and demo app

Here is an introductory video from Google showing the app development process and a completed app:

While social media sites such as Facebook and Twitter have great potential to build brand relationships, brands must carefully manage their participation on such sites to maintain brand price premiums. Recent research suggests that social media sites have the potential to erode brand pricing by cultivating a customer focus on “deals.” When you’re a brand of “deals,” your prices have only one way to go: down.

The potential danger: brands reduced to “deals”

The research data I refer to is in a recent Razorfish study: FEED: The 2009 Razorfish Digital Brand Experience Report. The Razorfish study found that the largest single driver for brand relationships on social media sites was “access to exclusive deals or offers.” It was not customer passion for the brand, brand values, or brand experience. As Razorfish puts it: “Largely, it’s about deals—pure and simple.”

In its analysis, Razorfish wasn’t too concerned with this outcome, but I think brands should be. Building a large brand following geared to shop on price can be counterproductive for a brand—unless the brand is a brand of deals and discounts to begin with.

Quoting from the FEED study:

The Language of Love for Brands? Deals.

Clearly consumers are doing more with brands today than simply “receiving messages.” Many social pundits would say that this is a new form of “dialogue” with brands. But if that’s so, the subject of that “dialogue” surprises. Based on our research, it’s not so much about some type of “shared passion” for a brand’s values. Largely, it’s about deals—pure and simple

Of those who follow a brand on Twitter, 44% say access to exclusive deals is the main reason. This is also true for those who “friended” a brand on Facebook or MySpace, where 37% cite access to exclusive deals or offers as their main reason. [My emphasis]

Creating deal-seekers instead of customers

If roughly 40% of your social media “fans,” “friends” or “followers” link to your brand because they’re interested in deals, chances are they are shopping on price. If you’re a brand of deals, discounts and promotions that’s fine, if not flat-out wonderful. But if your brand strategy is to lead your market and command price premiums through brand qualities unique to you, then a significant part of your social media following may be working against you. Instead of creating customers, your foray into social media may be creating legions of deal seekers aiming to push your prices lower.

A deal experience or a brand experience?

Are you in business to offer a deal experience, or a brand experience?

Social media sites are often touted as sales channels, and many companies use their Facebook and Twitter accounts for dedicated push marketing, pumping out a steady stream of promotions to fans and followers. They amass as many followers as possible, then let loose a fire hose of blowout deals, loss leaders, high volumes, upselling and add-ons to squeeze a profit at the end of the day. Their actions contribute to the deal-finding ethos of social media sites. They condition followers (and their friends) to look for deals.

If your brand strategy aims for higher margins based on premium pricing, you may want to distance yourself from vendors boasting super hot deals at rock-bottom prices. Their world is not your world. You offer a brand experience, not a deal experience. You wouldn’t locate your flagship store next to a used car lot, or in an outlet mall.

Using social media to support premium pricing

Even with the above caveats I would still argue that social media technology is an outstanding way to build brands and drive price premiums. All it needs is the right strategy. While the Razorfish study identified “deals” as the No. 1 social media brand driver, it also had some interesting results in other categories. Let’s look at some numbers for Twitter/Facebook (rounded up) on why people follow a brand:

– I am a current customer 24%/33%

– Entertaining or interesting content 23%/18%

– Other people I know are fans of the brand 6%/6%

– Service, support or product news 4%/5%

If these numbers are representative, there’s a huge task ahead for brands to actively engage customers on social media sites in ways that bolster premium pricing. Brands can work creative wonders with content, service and support, but these currently total less than 30%. These should be brand strengths, part of a brand’s core attributes. They need to rank much higher to support price premiums.

Brand strategy options for social media

If a key brand goal is to maintain premium pricing, how should a brand approach social media sites? It’s a given that a brand needs to listen to what its customers are saying, engage them in the spirit of the brand, provide information, quickly answer questions and squash malignant rumors. What else?

I would suggest three options:

1. Use social media to build strategic customer relationships

Determine where you are leading your customers and use social media to advance your mission. Align your social media participation with your intended brand journey. This entails a strategic view and a focus on creating customers beyond the reach of your competitors. In this effort your customers are allies, not “consumers.” And yes, this is a strategy of maintaining—if not growing—price premiums.

2. Consider moving social media inside the brand

Carefully manage your participation on social media sites like Twitter and Facebook. These are effectively co-branding sites. On their sites you merge your brand with theirs. Is this what you want? They may not add that much value to your brand, especially if their prevailing ethos is “deals.” Strategically, your brand may be better off if it brings social media elements inside the brand itself.  As an example, look at Burberry’s Art of the Trench. Burberry leveraged its Facebook presence into a Burberry social media site, where the Burberry brand calls the shots.

In other words, your Twitter or Facebook page is not a destination. It’s a portal into your brand.

3. Develop personal brand applications

A personal brand application (PBA) on a smartphone can be a far stronger brand builder for premium pricing than waltzing with the masses on social media sites. The PBA is personal, portable and persistent. And it’s all you, 24/7, as close to the customer as a second skin. Some reference links:

• Building personal brand applications
• Building your brand—there’s an app for that
• Personal brand applications: conceptual examples
• A personal brand application from Whole Foods

Bottom line: think outside the social media box

On social media sites, all brands tend to look the same, and act the same. That cannot help premium pricing. Apple, a highly profitable brand with tremendous loyalty and cachet, and $30 billion in cash, has a very limited social media presence. Ask yourself, “Why?”.

It’s increasingly apparent that the digital world is rapidly going mobile and is taking the brand world with it. This new mobile landscape will largely dictate the shape of brands to come. As smartphones multiply they’ll be creating more proactive customers in dozens of new dimensions. Brands will either gather dust on the shelf or join the mobile revolution as smartphone apps, becoming always-on, 24/7 enabling brands. Instead of icons they’ll be allies—actually, a much more powerful position.

Mobile trends out to 2020

To map your mobile brand strategy you need a vision of what the mobile world may be like in the years ahead. The following  presentation from m-trends may help. It’s a collaboration of more than 30 experts in digital technology, mobile technology and social change. The result is a wide-ranging collage of the potential mobile trends that may impact your brand.

Personal Brand Applications

As I see it, the future of brands lies in personal brand applications, where the brand is a smartphone app that enables customers to be more and to do more through the intelligence, imagination and sensibility of the brand. The brand is an application, not an attribute. It helps customers get things done: emotionally, spiritually, esthetically and practically.

If you’re interested, here are some reference posts on personal brand applications:

• Building personal brand applications
• Building your brand—there’s an app for that
• Personal brand applications: conceptual examples
• Mobile design and personal brand applications
• Brand layers: new context for smartphones
• A personal brand application from Whole Foods

Hat tip: David Armano

Thanks to innovations in mobile software we can now use our smartphone camera as a lens to discover new layers of context in the scene before us, ideally a relevant, personalized context that’s not visible on the surface. Two examples of this emerging technology are Wikitude and Layar.

Brand layers: shapes and shades of meaning

Since this is a blog about brands, I look at this new technology as a way to create brand layers, planes of brand sensibility (taste + intelligence + awareness) that can enhance situational user experience. Such layers can turn the smartphone into a lens that reveals new perspectives, new depth, new shapes and shades of meaning. The agent of these goodies can be a brand—if it has the smarts to be co-creating an interesting brand journey with its customers.

A form of Personal Brand Application

I’d consider the brand layer a form of Personal Brand Application. It may be a web-based mashup of sorts, but what counts is the intelligence and passion that drive it. These are the key ingredients to make it relevant to the user.

Travel apps are a natural for brand layers, but you don’t have to be in the travel business to offer such a layer. Every brand is in the customer business. Find a unique way to bind customers to you in a creative context that fills a need. Think how Absolut made itself into a “brand of art.”

Magazines as brand layers?

It may be that magazines and other forms of declining print media renew themselves as brand layers, creating new value on digital devices by adding contextual layers to otherwise “flat” environments.

Not billboards and a sales pitch

Given where brands are today, I’d say that maybe the top five percent of brands could develop effective brand layers on smartphones.  Brand layers are culture. They’re not sales, marketing, PR, “image,” or some kind of compressed “brand theater.” The last thing you want from a brand layer is cheesy billboards and a sales pitch cluttering a three-inch screen.

“Augmented reality” is in its infancy

This new technology of “augmented reality” on smartphones is in its infancy. We have no way of knowing if these first steps will be the next steps.

The measure of success

The best brand layers will sync the cultural intelligence of the brand with the cultural needs of the user. It’d be nice to download a layer when exploring Beacon Hill—or ambling through Père Lachaise. A good layer means that a particular brand and I are on the same page, writing it together.

Photo:  Wikitude

Whole Foods has taken initial steps to create a personal brand application (PBA) that can strengthen its brand ecosystem and develop deeper brand relationships with customers. Potentially, it’s a PBA that can radically differentiate Whole Foods and its customers from the Safeway’s of the world, raising Whole Foods customers to a level of brand experience that other grocers can’t match.

Personal brand applications

Personal brand applications are software applications that deliver brand value on smartphones and similar digital devices. As brand applications they do things, and they’re personal, portable and persistent (always on). They enable the brand to be a partner, sidekick and mentor to customers 24/7.

(You can read more about personal brand applications here, here and here.)

Being enabled is a high-level brand experience

Personal brand applications enable customers to do more, and to be more, consistent with the brand’s vision and innovation roadmap. This sense of enablement is a brand experience. It’s proactive, not passive, the experience of a newly empowered partner and participant. It’s a tremendously powerful and often liberating feeling.

Brands that aim to amuse, flatter, entertain or otherwise “delight” customers are no match for brands with the power to enable.

What the Whole Foods PBA does

The (free) Whole Foods PBA is based on the iPhone/iPod touch platform. It enables customers to enjoy tasty and nutritious food by providing a comprehensive database of 2000 recipes, including nutrition information and tips for preparing meals from what one has in the fridge. As Whole Foods describes it:

Searchable by ingredient, special diets, and other elements like “budget” and “family friendly,” each recipe contains detailed preparation instructions and nutritional information, which can be copied and pasted, saved as a personal “favorite,” and emailed from within the App itself.  The App also includes an “On Hand” feature where customers can enter ingredients and get back meal recommendations.

The brand context of the PBA

At first glance this may seem like a pretty basic smartphone app that helps people chose and cook good food. However, there’s tremendous brand potential in the context of the PBA, where Whole Foods and its customers can team and collaborate in the daily process of eating healthy food and living sustainable lives. That’s a very different brand context than the traditional “grocer” + “shopper” context of supermarkets. It’s a shared context of value chock full of opportunities for personal growth and new market creation.

Whole Foods becomes more than a supermarket brand

The PBA makes Whole Foods more than a brand of organic foods and natural products. Its certainly helps raise Whole Foods beyond your basic supermarket brand. Through the PBA Whole Foods becomes a brand of healthy choices, healthy living, creative cooking, nutrition, sustainability and taste. All this happens at the personal level of the customer, via the iPhone/iPod touch. Brand and customers share and act within a unified, holistic vision, accessed on a daily basis. This shared context extends far beyond the store proper.

A PBA that builds brand trust

An added value of the Whole Foods PBA is that it can help build brand trust at the personal, interactive level. It integrates Whole Foods into a customer’s daily life as a trusted partner. And if Whole Foods ever decides to offer new products down the line, such as health insurance or life insurance, it can leverage the platform of trust created in part by its PBA.

Changing the retail future

Personal brand applications have the power to change the retail future. A retailer can combine store brands with personal brand applications to gain more brand presence (and brand clout)  with customers than packaged “name brands.”  The PBA becomes the connective tissue between retailer and customer, a low cost substitute for the billions of dollars spent by national packaged brands to advertise their goods. The PBA puts the retailer and the customer on the same page, writing it together.

Related post: Brand platform innovation at Whole Foods

Photo credit top : kalebdf – Flickr

Photo inset: Whole Foods

In the near future you’ll be able to build your brand with an app. No, check that. In the near future your brand will be an app. It will re-define itself as a personal brand application on a smartphone or similar device, where it can deliver unique brand value to customers 24/7. Apple’s current iPhone ad campaign, “There’s an app for that,” provides a glimpse of this brand future.

In other words, there’s a new brand game in town. Can your brand set the agenda here?

The era of personal brand applications (PBA’s)

As I’ve noted previously, we’re now entering the era of personal brand applications (PBA’s). Personal brand applications are software applications on portable digital devices that enable customers to do more, and to be more, through the brand. They represent the intersection of high technology and brands in the palms and pockets of people, everywhere, and the chance for brands to be closer than ever to customers.

Why personal brand applications are important

Personal brand applications are important because they forge a new 1:1 brand/customer relationship. Through this relationship they have the potential to create new classes of customers from the ground up, in new market spaces. In this process they can undermine traditional brands built on ad campaigns, images, messaging and mass media saturation. Most importantly, personal brand applications free brands (and the brand team) to use the full fruits of their imagination—and to use the brand to lead.

PBA’s can accelerate brand trust

As applications, PBA’s are immediate and direct. They deliver results customers can use, now, and they build core brand trust in the process. While traditional brand campaigns may work wonders in building awareness and shaping perceptions, they’re not engines of brand trust. Personal brand applications are. They can accelerate and energize brand trust, compressing what used to take years into shorter time frames.

Technology advances make PBA’s possible

Since I first wrote about the concept of personal brand applications two years ago, we’ve witnessed amazing advances in wireless technology, digital handsets, user interfaces, online services, and software systems and platforms that tie everything together. With Apple’s iPhone, App Store and iPhone developers leading the way, we’re now are seeing a first flush of innovative smartphone apps that foreshadow the personal brand applications to come.

PBA’s: the ultimate brand relationship

In many ways a personal brand application is the ultimate brand relationship, where the brand operates as both a trusty sidekick and a trusted advisor, as close as a second skin. PBA’s do more than “connect” the brand with customers. They transform the brand into a proactive customer platform of choices, directions and actions, helping the customer at a personal level to accomplish objectives and deal with life’s challenges. The brand becomes a central means (and platform) for customer growth and development.

Personal, portable and persistent

Because they operate on hand-held devices that are wireless, Internet enabled and “always on,” PBA’s are personal, portable and persistent–the critical three P’s for brands going forward. In many ways they’re the ultimate brand presence. Think of them as perpetual touchpoints where the brand plays an active role in the culture, context and creativity of an individual’s life, day in and day out.

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