Branding for Modern Dynamic Products and Organizations

The need for a different method of Branding:

The brand has a different meaning in today’s environment. Conventional wisdom held that a brand is an image or a promise and that if you have enough time and money and a good product you can establish and maintain a brand. The main vehicles for establishing a traditional brand where the mass media, print, and broadcasting. But these Medias are all unidirectional, and by that we mean the message went in one direction from the advertiser to the consumer.Today the landscape is changing in several ways. First is the rise of a ubiquitous communications medium that is the antithesis of conventional communication; the Internet. The Internet is multidirectional and highly individualized.

Second, organizations can use the intelligence garnered from this dialogue with their customers to customize products and services. Products are becoming infused with services – lawn mowers, telephones, refrigerators, cars and thousands more. For example, your car might have one-button access to roadside assistance, directions to hotels, and advice on the best restaurants in a neighborhood. In addition, modern production techniques enable mass customization. Everything can be built to your specifications – from a car in your driveway to the monogrammed Nike athletic shoes on your feet.

Because products can be tailored to customers, organizations can finally build relationships in a deeper sense. For example a company like Mercedes-Benz and General Motors (GM) never really had relationships with customers. They only dealt with the dealers, never the actual customers. But with services such a Mercedes-Benz’s Tele Aid and GM’s OnStar, this is changing. Press the Tele Aid or OnStar button and you’re talking to Mercedes-Benz or GM, not the dealer you bought your car from. Now their customers have unprecedented access to information and power. As this new consumer environment becomes more far-reaching, brands are transcending the realm of mere image building to enable organizations to create powerful relationship with consumers.

In the past, the typical strategy was for an organization to bombard its target audience with a logo and simple messages – The simpler the better. Now, brands are no longer established solely through one-to-many communications. The advertiser has more options.

For example, today’s branding strategy should harness the Internet to open a dialogue with the target audience. Of course, traditional media can still be part of the marketing mix, but increasingly the customer decides whether and with whom to engage in a one, two or multi-way communication. In today’s environment, your goal as an organization should be to develop “relationship capital” with your customer, the more the better. The brand becomes largely a measure of your organization’s relationship capital.

Relationships are now assets. We are convinced that relationships are becoming so important that it makes sense to think of them as a form of capital. And the wealth inherent in customer relationships is becoming more important than the capital value of land, buildings, or even big bank accounts.

For the first time, organizations can forge two-way, interactive, personalized relationships with all customers on a mass scale. While the virtue of deep relationships was always self-evident in theory, in realty it wasn’t practical. But now the ubiquitous, cheap, and interactive Internet, coupled with enormous low-cost databases, enables producers to develop meaningful direct relationships with customers.

Relationship assets are different than traditional assets in several ways. For example, the more you use traditional assets the more they depreciate. Relationships seem to be the opposite; the more you use them, the more valuable they become. The more you interact with your customers and understand their needs, the more you and your customers value the relationship.

Creating a valuable relationship and marketplace value for your customers, partners, suppliers, employees and investors is Brand Mass. We like an adaptation of the definition of momentum developed by Ron Ricci and John Volkmann. They draw on physics to argue that momentum is a product mass multiplied by speed and direction. Speed is an organization’s ability to get there faster or to keep up with the pace of change in their industry. Direction refers to the ease with which customers can come to trust and understand where the organization or product is headed.

In this modern environment Brand Mass becomes particularly important because customers can discern the true value of products and services. Customers are better informed, have unprecedented access to information, and can inform others. This gives individuals tremendous power to understand the actual value that organizations create.

The key ingredient in the successful creation of a modern brand is first the values an organization embraces, and second is the value the organization offers. Organizations today operate in a much more transparent environment. This phenomenon did not start with the collapse of Enron. It has been gathering momentum as the Internet gained popularity. As information and communication technologies advance, organizations can expect to hide nothing. All decisions, from boardroom deliberations to daily purchases of supplies, now occur with somebody, somewhere – or more likely, many people in many places – scrutinizing the organization’s activities. For example, the “out of sight, out of mind” approach of low-cost offshore business practices and behavior is over. If an organization uses inputs that can be traced back to children in sweat shops, everyone will know about it.

If organizations today feel like they are being scrutinized, this feeling pales to what is coming tomorrow. In terms of values, organizations will have virtually no choice but to operate as open books. And if customers don’t lie what they see, they won’t come back. To appreciate how quickly a brand can be destroyed in a networked world, consider the recent fate of the accounting firm Author Anderson. Judgment and repercussions come swiftly.

At the same time, the true value of products and services rises to the fore. A manufacturer of a brand-name detergent can claim that their product washes whiter, but if the product doesn’t actually wash whiter, it will be unable to establish and maintain a successful brand. Consumers now have the ability to find out and inform others; especially the new generation of media-savvy youngsters that Don Tapscott dubbed “The Net Generation.” They’ll be able to research a product and its ability to deliver on its promise in 20 seconds. And in five years the microchips in your shirt and washing machine will have the ability to go onto the Internet and find out for themselves who “washes whiter.”

As Internet communication gained popularity any experts feared that brands would disappear when competitors were “just a click away” and when customers could comparison shop more easily. But that’s not what’s happening. In today’s networked environment, brands can be even stronger if organizations use the right approach.

For example, the Internet can be used to increase the costs in switching to a competitor. Consider the services an online book retailer can offer. A customer can request all books on a certain topic or author. The customer can indicate authors he/she likes and find out what other authors are enjoyed by customers who share his/her views. He/She can request a bestseller list in a category or ask for a book’s daily sales status.

The relationship is mutual – the buyer creates value for the seller and for other participants by contributing his/her views. He/She establishes his/her personal profile; this is a relationship investment that includes registering gifts he/she would like to receive. Both customer and bookstore invest by exchanging customized information and knowledge. The more he/she invests time and effort, the more personal the bookstore becomes. He/She builds loyalty to this organization, not just because of the services it provides, but because of the effort required to re-educate another organization about his/her preferences. For both buyer and seller, this networked relationship constitutes capital. Over time the retailer gets to know the customer and the costs of switching to another bookstore-educating another retailer become prohibitive.

And identical process can occur in the business-to-business world. Dell sells great computers at great prices. But that’s not why it’s the number-one computer seller to businesses. Dell uses the Web to help its customers manage their computer investments. Want to know the best computer to buy given your installed base? Your personalized pages on Dell’s website will tell you. Want to buy more computers identical to the ones you bought last year so your technicians don’t need more training? It’s all a mouse click away. Dell helps you make smart decisions based on what it has sold you and the information you volunteer. You feel good about that. And the Dell brand becomes a relationship.

Executives today need a global perspective, and they must be socially and politically astute. They need to be even more sensitive and responsive to customer concerns. For example, Home Depot sells hammers and power drills not exactly a likely candidate to get embroiled in social, ethical, or environmental controversy. Recently, the Rain Forest Action Network launched a campaign against Home Depot because it was the biggest North American retailer of old growth lumber. After a bruising two-year battle, Home Depot changed its approach and is phasing out old growth lumber from its supply lines. The Rain Forest Action Network relied heavily on the Internet to get its message out. The Internet has made its easier for everyone to communicate, and it is now more important than ever for organizations to react quickly to address customer concerns.

The visionary leader contributes by creating true value, enriching products with services. The leader must help everyone connected to the organization to think of the brand as a measure of relationship capital and build trust. The starting point is to send a strong and consistent signal to employees about the values of the organization. And this doesn’t apply only to the customer facing employees, it applies to everyone! Employees essentially ask themselves when they make a decision whether their customers would approve.

The CEO or organizational leader sets these standards. This is not something that should be left to a Vice President or Director of Communications, business ethics or other similar job function. Just like war is too important to be left to generals, defining values is something in which all senior managers and organizational employees need to become involved and to which they all need to be committed.

Momentum Management: Branding for Modern Dynamic Organizations:

The chief purpose of a brand is to differentiate a product, service, or organization from a spectrum of competitive choices. Over the past several decades, brand gurus like David Asker and David Ogilvy developed the underlying science of branding and created tools to empirically link purchase decisions and loyalty to how people perceive the quality of a brand’s differentiation. Recently, the widespread use of cell phones, pages, personal computers, personal digital assistants (PDAs), and internet-based applications has changed people’s definition of differentiation.Two fundamental factors distinguish modern dynamic products, services and organizations (i.e. Electronic Banking, Palms, Personal Computers, etc) from their more traditional counterparts (i.e. consumer packaged goods): 1) modern dynamic products are never finished; and 2) they never stand alone. For example, Palm is constantly improving and developing features for their products, and Palm needs to be able to beam information to other mobile information products. Consequently, people have developed new expectations for modern dynamic products, services and organizations, and they are asking probing questions that map to a modern dynamic product model. The fact that modern dynamic products are never finished prompts customers to ask what’s next from this organization and can the organization keep up? The fact that there are no standalone products in any modern dynamic solution stimulates people to ask who else is betting on this organization or product.

In our research, the brands that best answered these emerging customer questions did not rely on a conceptual, image-based promise. In the interdependent modern dynamic model, every product, service or organization category inherently plays a role in solving a customer’s problem. The brand must have a clearly defined relevance in a customer’s life. As a result, from the customer’s perspective, every category of modern dynamic products either enables a solution or problem of importance, the more value a customer ascribes to a brand. At the same time, the sustainability of a brand’s differentiation over the long term is an equally fundamental emotional conviction in customers’ minds for modern dynamic products as it is for goods such as soft drinks, film and fast food. Subliminally, the customer wants reassurance about the organization’s future roadmap, in addition to confidence in the product, service, organization or the brand.

In this context, customers choose brands and organizations with the characteristics that create an aura of inevitability for a brand. The difficult task for any marketer is to understand how to translate the abstract concept of inevitability into a market dashboard so that a brand can be positioned and managed for competitive success.

Our research demonstrated that a market position imbued with a sense of inevitability lies in creating and managing a brand’s momentum. Momentum is frequently used to describe stocks, politicians, and sports teams – especially those on the threshold of success. Best of all, momentum already has a formula associated with it:

Momentum = Brand Mass x Velocity:

  • Brand Mass is the ability to create marketplace value-for customers, partners, suppliers, employees, and investors. George Foster, a professor at Stanford University’s School of Business, interprets Brand Mass this way: “A brand with ‘mass’ has to create marketplace value independent of itself.” Scott Cook, the visionary behind the software company Quicken and Intuit, describes a brand with Brand Mass as having a “system of economics around it.”
  • We break Velocity into two discrete components, Direction and Speed. Brand Direction captures whether people believe in a brand’s view of the future and whether the brand’s promise can keep up with the application of technology to solve business and personal problems. Brand Speed refers to people’s confidence that a brand can keep up with the pace of technology and community change, and just as importantly, how customers can leverage this change to solve problems better.

After more than two decades of experience with the evolving, interdependent modern dynamic product model, customers have developed sophisticated expectations for Momentum Brands. These brands must accomplish the following:

  • Create a relevant value proposition – Organization’s must understand which applications and business needs will move customers to acquire modern dynamic products and services and which problems these products hope to solve. Organizations must also identify precisely which critical customer problem you’re trying to solve and be prepared to sacrifice territory in order to own a more relevant problem in your target customers’ minds.
  • Establish category leadership – Organizational leaders must determine what role the organization and brand play in solving a customer’s problem; leaders must understand whether their brand enables the solution or simply participates in the solution. They must also define a product metric to help people judge superior product performance and gauge “state of the art” so that they can manage differentiation over the course of years.
  • Build an ecosystem – Organizational leaders must design into their product strategy a way for third parties to add value to their product or service. They must encourage “brand extensions” by making it easy for committed third parties to demonstrate their support for the organization’s or brand’s category, both from a technical perspective as well as a marketing perspective.
  • Keep your brand in motion – Manage the lens through which customers judge the pace of change in a particular category of modern dynamic products, services and organizations. Create a roadmap to manage customer expectations and implement consistent customer and industry announcements in accordance with that roadmap
  • Articulate a credible vision of the future:
    • Ideas about the impact of technology on business and people’s lives are the currency of innovation for Momentum Brands. Customers expect Momentum Brands (and their CEO’s) to solve old problems in new ways, to communicate what we call “thought leadership.” In a business-to-business context, thought leaders illustrate over-the-horizon business concepts that describe the impact of modern dynamic products on a market’s business model, business processes, or customer behaviors and its inherent opportunity for all constituents in a given market space. Designate an external executive champion that can credibly represent that brand promise to customers. Don’t just say it; do it!
    • Trust has always been the most subjective of all the factors that influence the quality of a brand’s differentiation. Momentum brands capture both the very human quality of trust, but marry it with a practical “trust barometer” to gauge a brand’s likelihood to continuing to solve a problem of business or personal importance. Customers’ place special value on these organizations behind the brands that have leveraged modern dynamic products or services themselves to solve problems or to gain competitive advantage
  • Finally, when and if the time comes, be humble. Organizations make mistakes. New modern dynamic products and new technologies sometimes don’t work. Business leaders are human and fallible. The most respected organizations and CEOs face issues head-on and deal with customers concerns in a straightforward manner.

The 3-Step Plan:

Step 1:

Determine your organization’s source of momentum. The organization’s source of momentum is the best indicator of genuine brand differentiation. Have an honest conversation about the product or service category you compete in. Where does your category fit on the value chain in the customer’s mind? If you are not the enabler or platform to solving a customer problem, you probably don’t have a lot of mass. But you might have a speed and direction advantage.

Step 2:

Identify what’s required to sustain your product or organizational differentiation: Do you have a strategic context for how adjacent categories could invade your space and capture your mass? What could your key competitors do to siphon off your mass; i.e., offer a better customer/channel program or a superior relationship development model? Do you have a phased and multi-year roadmap of what you need to do to maintain your speed advantage? Do you have a direction advantage by knowing what your customers’ future problems will look like and do you have unique ideas on how to fix them? Are you using the latest version of your own product?

Step 3:

Build an executive communication platform for your CEO: Keep your story fresh in the marketplace. Think of your CEO as a product. Position him or her relative to key competitive CEOs and in the context of your product or service strategy. Develop a thought leadership-based “elevator story” for your CEO. Look for sources of validation in the academic or consulting communities and develop a marketing plan for your CEO in the same way you would market a product. Target key influencer relationships with the press and industry analysts to contribute to the dialogue and agenda in your product or service category’s broader industry. The most common and effective channels for thought leadership are public speaking, best practices, case studies, original market research, white papers and books. These proven marketing tools put your CEO’s ideas into decision-making opportunities and conversations, even when he or she isn’t in the room.

On August 16th, 2016, posted in: Technical by Tags: , , ,
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