Why the Future Is in New-Century Brands
The baleful consequences of the Great Recession cannot be resolved by maintaining the same approaches as when we created it. The "new normal" in business means many brand owners need to leverage something much larger than a re-take on marketing. They need to accelerate their collaboration with consumers, so that principles such as "for people, for planet, for profit," combined with tools of the web and next-generation media, can transform brands' role in the economy, society and business.
These so-called new-century brands can go beyond the customer-centricity school of thought - focus on creating a positive consumer experience at and after the point of sale to differentiate from competitors, which truly has been achieved only by a handful of marketers like Disney, Apple and Mini. New-century brands help consumers achieve more and do better. Why? Today's consumer desires a two-way relationship that demands that brands be magnanimous, malleable and functional. An untapped opportunity exists for brands to act and feel differently from many of those dominating the landscape today by enabling their customers to proactively take part in the business and become virtual owners, participating in delivering the brand as a platform for action or wealth creation.
The majority of brands are not platforms for action and wealth creation; only a phalanx of new-century brands exist. But there are three reasons it's now possible: mind-set, skills and next-generation media. Product Red's success isn't just a platform for action to eliminate AIDS in Africa. What's overlooked is that its category-busting business model has reinvented the approach to philanthropy by successfully combining money-making with doing good, revealing that consumers and brands are now capable of collaborating at a sophisticated level, yielding brand advocacy and new kinds of demand creation.
Today the internet is just the plumbing. According to McKinsey & Co., two thirds of the world's economy is influenced by personal recommendations, and 95% of social-media users believe a company should have a presence in social media. Consequently, brand Meccas are being created deep inside social-network communities, proof that new-century brands can be built by harnessing communities across multiple platforms to strengthen and expand products, especially as consumers increasingly move into extending the product itself. Amazon has leveraged the power of digital communities by placing consumers at the center of the brand experience. It's expanding new value pools by creating a system for recommendation based on users' past purchases combined with user-generated content.
Consumers and communities are thriving online. Alas, many brands have been dilatory, reacting to customers who ask, instead of creating demand by being harbingers of change. We're witnessing a proliferation of platforms, places, systems and devices through which a brand is experienced, with mobile fast becoming the newest media channel and the front end to everything from health care to financial services, through to package-delivery systems and disaster relief.
The opportunity for new-century brands is to harness skills that recognize that the new marketing is storytelling across multiple points of presence, expanding the way we consume -- a new path that companies like AOL are bent on. Bain & Co. found that the most recommended company in any given category grows 2.5 times the category average, and a multitude of filters have evolved to help connect audiences in a more effective/targeted way. The 130 million users who are exchanging more than $1,000 worth of goods on eBay every second are testament to the unbridled success that is a direct result of the online community it has fostered. The business model thrives on a community-generated system of reporting by displaying a seller's history and community-generated ranking. This reputation mechanism facilitates wealth creation through interaction and commercial exchange, establishing trust and ensuring the eBay brand's relevance.
With the serendipitous expansion of digital networks, digital groups and cultures have exploded. Weber Shandwick's study on what influences purchase decisions found that word-of-mouth (including that of strangers) is the No. 1 purchase-decision influencer. Case in point, Groupon was founded only a few years ago with the mind-set that you can appeal to and activate a base of millions with a coupon offer that has proved to be a prolific success, posting a daily deal to more than 2 million fans in more than 40 cities. It's fast becoming a game changer in how we shop.
Savvy CMOs know that brand-building is not a technology arms race. The mind-set to create better customer experiences relies on adding value to the conversation: being useful, providing entertainment, sharing knowledge, enabling sharing, creating connections within a community and encouraging new forms of self-expression and personal identification through product offerings. In 2006, when Blake Mycoskie saw children with no shoes on in Argentina, he created Toms Shoes, which is short for "better tomorrow." The unique business proposition is based upon each pair sold, for which one pair is donated to a child in need. It's a runaway success online and has established footprints in major retailers such as Whole Foods and Nordstrom.
All these uncommon stories share a common bond: It is in their DNA from day one and is not an afterthought. It is the core of their differentiation, not a promotional initiative. It is integral to every part of the operation, not just marketing. And it is genuine, sought after and sustainable, not peripheral.
Brand hegemony is no longer about control. Emergent forms of company-consumer connections and social computing, interacting with a new kind of collaboration, are revolutionizing the way we interact, socialize and consume. Therefore, CMOs need the skills and vision to craft new-century brand experiences, products, services and businesses that bring people closer to the brand, creating intense physical, sensory and emotional experiences. As Michael Porter and Mark Kramer pointed out, "a social dimension to your value proposition offers a new frontier in competitive positioning."
We're in the midst of a major transition, and "imagination is more important than knowledge," reads the sign hanging in Einstein's office at Princeton. The revolution of innovation isn't just happening in the R&D labs of global brands; it's prolific in the garages and bedrooms of millions. What might seem like trivial tinkering today might well be a game changer tomorrow with a new rule book: First, align your strategy with the competition; second, flout what they do and then ultimately create new market rules.