The New Branding Frontier – A better experience builds a better brand.
Your brand is not just a collection of images and design – it is a collection of experiences.This is the new branding challenge and it’s much more difficult than the way we have thought about it to date. Not that the symbolism often thought of as branding is less relevant, it is just that it is not enough.
It’s very interesting to hear business people talk about business success. “All that you have to do is satisfy your customer”, is very often heard. But why then does international research indicate that business is so poor at satisfying customers in spite of the awareness about customer orientation and the massive amounts spent on CRM and the like in recent years?
It was once thought that product and technical superiority would deliver a competitive advantage, and that the branding process involved the association of that product superiority with a brand in the mind of the customer. In the modern world product advantage is fleeting; the use of similar technology has standardised processes and the rapid pace of the innovation from idea to market have delivered a world of commodities and the so called “parity product.” We now know that in contrast to the old proverb that not only will the world not beat a path to the door of the inventor of the better mousetrap but in fact the better mousetrap will have been copied and cheaper manufacturing commenced by your competitor the day after tomorrow.
Once upon a time business was conducted on the basis of relationships: the pre-industrial shopkeeper and the village blacksmith developed close relationships with their customers; understood their market well and innovated precisely according to its needs and requirements. The pursuit for industrialisation and manner in which profit associated with industrialisation was achieved, has changed that.
The news is that the wheel has turned. Is it good news or bad news? The answer is clearly that “it depends” on the extent to which your business is customer orientated. Today the source of sustainable competitive advantage is found in a brand that is the symbol of a total customer experience, and not the product alone.
The reason why we don’t act on this, in spite of the fact that we intuitively know this, is based on our corporate DNA. By and large business is focussed on its own needs and the needs of its shareholders and the role the customer plays is merely a means to those ends. It’s this focus that drives commoditisation. Driving towards productivity and process efficiency, invariably the customer experience and the brand become the victim of this productivity. There is always a trade off and business will very seldom miss the opportunity to squeeze extra margin in spite of the fact that the cost may often be (and usually is) a reduction in customer value.
The reason why is of interest. The key features of the industrial revolution were the division of labour and the mechanisation of processes, both resulted in enormous changes in the costs and variety of products available on the market, as well as considerable changes in wealth and the distribution of wealth in society. Demand for the new mass produced products far outstripped supply. To improve returns in a market that could not be satisfied, business had merely to improve by producing more at the same or a better price – efficiency.
Once a customer can only choose between parity products, his or her decision is made in a completely different manner: product performance is a given, quality is a given as well, the new differentiator is the quality of the experience delivered.
In a very tangible way the industrial revolution has run its course. Organisations are experiencing the law of diminishing returns on their attempts to deliver organisational performance out of improvements in efficiency and improvements in productivity. (The law of diminishing returns holds that, beyond a certain point, each unit of additional input results in ever decreasing units of output.) Organisations need to switch from a focus on their own internal needs to a focus on customer
Lewis P. Carbone and Stephan H. Haeckel in Marketing Management magazine say, “customer differentiation and preference migrate from the offerings themselves to the institutions that create the experiences associated with their acquisition, use and maintenance.” We are rediscovering that business success lies not only with the perceived incremental value of a business’s products and services, but also with the perceived value of the experience the business gives its customers.
Dr. Gerald Zaltman, chair of Harvard Business School’s Laboratory of the Mind, has confirmed that, “total customer experience is, in fact, more important than product or service attributes in determining future customer behaviour” – even more important than price.
The best modern example is that of the world’s number one brand viz. Google. It is a brand that reached this position by breaking all the normal established rules of “branding”.
Click onto www.google.com and you will find an almost clean white page.
That page has literally billions of hits per day. What do you think is the value of all that white space? Why does Google ignore the revenue opportunity? The reason is because Google got it! They understand. Google’s focus is on improving customer experience.
Did you know that at Google there are teams of people focussed on solving problems and finding ways to make the search engine work better and that they develop and deploy these solutions with absolutely no consideration on how they represent revenue flows to the business? They just focus on improving the value received by the customer.
Did you know that Google’s growth has been entirely based on word of mouth as satisfied users tell their friends about it or people read about it? There has been zero advertising.
Did you know that the Google name was due to it being misspelled? It was intended to be spelt Googol. The logo device was naively designed by a computer geek, with no knowledge of the rules of design.
To quote Google itself, its number one guiding principle is: Focus on the user and all else will follow.
From its inception, Google has focused on providing the best user experience possible. While many companies claim to put their customers first, few are able to resist the temptation to make sacrifices to increase shareholder value. Google has steadfastly refused to make any change that does not offer a benefit to the users who come to the site:
• The interface is clear and simple.
• Pages load instantly.
• Placement in search results is never sold to anyone.
• Advertising on the site must offer relevant content and not be a distraction.
By always placing the interests of the user first, Google has built the most loyal audience on the web. And that growth has come not through TV ad campaigns, but through word of mouth from one satisfied user to another. In this and in so many other ways Google is leading the new wave.
The brand has always been built by the whole customer experience. In the past it seemed enough to focus on the physical product and to build a brand as a symbol of the superior features of that product. Now with differentiation occurring in far more subtle ways most of us are still stuck in the business paradigm of the industrial revolution – greater productivity and better efficiency equals greater profitability, only very few have learned that greater profitability will come from better delivery of a value proposition delivered to a tightly defined target audience with whom we have a trusted relationship. Metrics have been developed that prove this fact if logic is not enough.
A better experience builds a better brand – that’s the new focus of the interface with the customer.
Walter Pike is the founder of PiKE, a marketing strategy consultancy. He is a public speaker who speaks on why business interests and customer interests are chronically misaligned and assists organisations in dealing with this fact in developing customer focussed solutions. In addition to consulting to corporates he runs a coaching and mentoring service to small and medium business. Walter is a keen fly fisherman.