Monday, June 11, 2007

More on the Future of Business

Often times, I'll see a post that sounds significant, but that also appears like part of a larger idea that I'll want to talk about later. A perfect example is Ryan's recent post on why companies need to embrace social media now, rather than later. Then I saw Paul mentioning Russell's post on the Future of Business, and how he believes its design, and not branding.

Then for the second time in about a week, I received a flyer in the mail notifying me that satellite internet was finally available in my area.

This got my gears working. Broadband internet is currently available to just over half the households in this country. By the end of 2011, that figure is expected to jump to 70%.

Think about that for a minute. That's a roughly 40% increase over the next 4 years. I think it's safe to assume that technology will also continue to make our computers faster and more powerful, that upload speeds for our internet connections will increase, that we'll have many more tools available to us to create and share content.

Which means citizen marketing will continue to increase as well. But all this adds together to mean that there will be a LOT more information out there, and our need for filters will increase as well.

Which also means that the traditional branding model of companies telling customers what they should think and feel about their product, will continue to lose effectiveness.

Then my mind swung back to Ryan's post on the importance of companies diving into the social media waters now, rather than later. His point is that the earlier a company becomes immersed in social media, the quicker they will understand these tools, and be able to leverage them while they are still highly effective. The longer companies wait, the more these communication tools become common place, and their ability to differentiate and improve your business declines.

Then I went back to Russell's post about how branding is no longer the future of business. His main point seemed to be that all too often, the 'brand' and the 'product' are two completely different things, and that frequently, the brand is a sort of band-aid that's used to attempt to cover up an inferior product.

But then, all these ideas began to swirl together for me. Going forward, technology will give us the ability to create and share more content. We're already seeing this, which is a big reason why social media is taking off. And those companies that embrace social media the soonest, will reap the biggest rewards. Finally, branding in the traditional sense of a company telling its customers what to believe about its product(ie one-way marketing communication), is fading away.

So what happens if citizen marketing does continue to rise as our ability to create and share content increases? What happens to companies that do decide to dive into the social media waters and use these tools to better understand and communicate with their customers? What happens as 'one-way branding' continues to march toward extinction?

My guess? Social branding.

Let's say you have Company A that's steadfast in its refusal to embrace social media. It continues to attempt to tell its customers what they SHOULD think and feel about its products. They call this 'branding'. But these customers, that Company A refuses to communicate with, are increasingly using social media to create their own content, and to create their own 'branding' for Company A's products. Which means everyone, the company, and the customers, are doing their own branding for Company A. This obviously results in a muddled and ineffective mess.

But Company B is incorporating social media into its marketing communications package. It is discovering how these tools can be used to communicate with its customers, and how these tools allow for both sides to better understand each other. As a result, Company B and its customers create its brand together. What's more, the branding is a part of the product (which was supposed to be the idea all along), which makes it even stronger.

And its already happening. Look at how companies like Jones Soda and Threadless are making their customers partners in the product creation and branding process.
"We started this company with the philosophy that the world does not need another soda," said Peter van Stolk, the founder and chief executive of Jones Soda. "That forced us to look at things differently: How could we create a new kind of connection with customers, let them play with the brand, let them take ownership of it? Everything at this company is about sharing ownership of the brand with our customers. This is not my brand. This is not our soda. It belongs to our customers."

I think you're going to see more companies adopting this stance. That breaking down barriers between company and customers can work wonders. That customers want, and will soon EXPECT to be able to talk to and help shape a company's future direction. The smart companies will be the ones that accept this change, and share their brand with their customers so that together, they can create something much stronger than either group could alone.

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10 comments:

Anonymous said...

Mack,

"Which also means that the traditional branding model of companies telling customers what they should think and feel about their product, will continue to lose effectiveness."

I don't think "telling customers what they should think and feel" has worked for decades, long before what we call today social media came into being.

The traditional model since as long as I can remember has been story-telling not marketing about products or telling people how they should feel or think. Now, do many, if not most companies still sell products and services instead of solutions? Sure. But that is because either they don't know how to change their messaging or they didn't get the memo.

If you ask any marketing person the definition of brand, they will say something about it being the perception people have of a particular business. So they know it isn't about convincing anyone of anything: it is about telling stories that develop that perception, and those stories aren't about products and services. They are about how customers are valued and how those same customers get value from XYZ company. Some customers end up with a positive perception, some a negative, and some are ambivalent. Just makes sense: either we meet people's wants and needs or we don't.

But to be honest, other than car dealerships, I don't know many businesses trying to convince customers to think or feel anything.

Mack Collier said...

"If you ask any marketing person the definition of brand, they will say something about it being the perception people have of a particular business. So they know it isn't about convincing anyone of anything: it is about telling stories that develop that perception, and those stories aren't about products and services."

And I think that's the problem. We have stories being told about products, that are inconsistent with the product itself. Because I think we have companies trying to create 'branding' to tell the story they want customers to believe about their products. How many times have we seen fast food franchises try to tout their 'healthy menus'. How many customers believe that fast food franchises are a source of 'healthy' food?

Does Burger King and Wendys want us to believe that they serve healthy food? Of course. Do we believe that? Nope.

With social branding, the customers have a sense of input in the branding. They get a voice in creating the product's story, which means it's more likely to be more consistent with the actual product.

Anonymous said...

I tend to agree with you Mack - go look at CK's DOW chemical example today on her blog - and the reaction to it. That's what happens when somehow the company's view of reality is far askew of everyone else's.

Perhaps the value of social media is making each aware of the other's view and allowing them to interact around that.

If a company is aware of how they're viewed and how their products perform and still produces messages that are in conflict with the that, then it seems to me that they are attempting to tell their customers what to think.

But...you all are the marketing experts!!!!

Anonymous said...

I LOVE LOVE LOVE this, Mack. I think you definitely drove the nail home. I was struggling with where and how branding IS and where and how branding is going. I sensed it wouldn't die, but wasn't able to articulate this at all.

Question for you. How do I do a trackback to blogger? Any idea? There's the "create a link" but it demands a blogger/google account...

Anonymous said...

At the risk of what it may do to my personal brand, I sort of agree with Lewis. :)
There are two competing stories going on with any product. The story the seller wants and the image the consumer crowd spreads. I think what we see with the rise of the citizen journalist, AKA blogger, we see the power shifting away from the story teller to the crowd. Kind of like the reputation you had in high school. If the crowd thought you were a geek, slut, jock, or smoker you had a hard time fighting that. If you had the money you could dress yourself up and maybe change perceptions. If you made some great achievement your brand could be reset.
I think that the increase in quality is a function of the increase in knowledge availability. It used to be that if you said something enough people did start to believe it. Now it is easy to find contrary opinions and so this undermines the old brand building machinery. This has been underway since newspapers, radio, and television found that "consumer reporters" had traction.
For years I have been talking about what I call the 5-Fold Way. That is, there are 5 positions or branding styles a company can take to present itself to the market. Superior Quality is just one of them. Companies like to change this and the smart ones go with it. They pick a type and they let everyone know what it is.
This is where the convergence of social media can be a strength. When a company picks its position, actually lives it and people confirm it. The companies that skip a step in that process will suffer.
My 2 cents with a tip o'the cap to Lewis Green.

Mack Collier said...

Ann I saw that ad as pure fluff. Where was the relevance for the viewer? It was just nonsensical crap that Dow probably thought would be a huge success.

Thanks Sean, and Blogger doesn't allow trackbacks, as far as I know. That's always been one of the biggest gripes with the service.

Mack Collier said...

"There are two competing stories going on with any product. The story the seller wants and the image the consumer crowd spreads."

Exactly Roger, and that was my whole point. As companies begin to actually utilize these communication tools now available, we'll begin to see companies and their customers get on the same page.

Then the branding is baked into the product, because the company is working with the customers to create a story that's consistent with the product.

Mack Collier said...

"At the risk of what it may do to my personal brand, I sort of agree with Lewis. :) "

I missed this the first time ;)

Anonymous said...

Mack-

I think you're definitely on the right track here.

A brand is what it is, right? For instance, what I think about Nike has to do with the ads I saw, what my family and friends say about it, how their shoes fit my feet, etc. When we say branding, we're implying the addition of force to move the brand in one direction or another. But, by calling it Social Branding, we're actually starting to describe what the force actually is and what it means to some extent. It sounds like a more communal push.

Nicely done...

Mack Collier said...

Paul I think with most branding, you have the company trying to push the 'story' they want the brand to represent. With social branding, you have the company and the customer creating the brand together. So if the company tries to push a brand story on the customer that isn't consistent with the product, there will be pushback from the customer.

When we have social branding, the company and customer are both telling the same story. That results in a much stronger brand.