Re-thinking branding

In fact advertising has become a less credible tool in defining brands: the growing sophistication of consumers, the fragmentation of media, the excesses of some advertising campaigns and the growth in importance of other elements in image formation have undermined advertising’s stature. In its place a more inside out perspective on brand building has emerged that stresses the importance of employees in communicating both product and service brands and in creating value for customers.

Engaged employees, connected customers

As Richard Branson of Virgin has often argued, you can’t deliver to customers, unless you first deliver to employees. It is the assumptions, beliefs and commitment of employees that determine how products are designed, how web site interfaces work and how service is delivered. It is employees who drive innovation and create value for customers: the convenience, efficiency, enrichment, excitement, status that the customer attaches to the relationship they have with the brand; the very raison d’etre of branding. Amazon for example set out its stall at the very beginning. It aimed to understand its customers better than any other organisation – indeed founder, Jeff Bezos once claimed; ‘Our goal is to be the Earth’s most customer-centric company’. In Amazon’s case, the point of connection is enabled by its software, but that software would be nothing without the underlying commitment by managers and employees to customers. Indeed, whether a business connects primarily through online or via direct experience or a combination is not the issue. The success of a brand is determined by its sense-making ability. Some organisations assume this must mean investing in market research. This might be part of the answer, but research tends to universalise – and those universals still have to be explained. Instead organisations need to re-think their means of connecting with customers. The challenge here is that most organisations are not wholly focused on customers, nor are they joined together on the inside. The balkanization of most organizations leads to a lack of integration between such areas as marketing and finance, HR and operations. As Lou Gerstner, former head of IBM, writes, “One of the most surprising (and depressing) things I have learned about large organizations is the extent to which individual parts of an enterprise behave in an unsupportive and competitive way toward other parts of an organization. It exists everywhere.” This silo thinking positions areas of specialisation as departments or as functions and inhibits communication, reduces innovation and stimulates conflict. Interesting connections are missed and the customer becomes a mere spectre rather than an active presence inside the organisation.

If we try to imagine this organisational picture visually the immediate image is one of a series of boxes representing departments or functions – with tenuous horizontal links between each. Some boxes connect with the outside world of the customer (who sits outside the structure) to whom as a result of a planned strategy, things are done to. A strategy is set, enacted and results occur. However, as Mintzberg et al argue, ‘it has to be realized that every strategy, like every theory, is a simplification that necessarily distorts reality. Strategies and theories are not reality themselves, only representations (or abstractions) of reality in the minds of people.

In the traditional structure chart the emphasis is on the boxes (functions/departments) and the vertical lines. In a connected structure, the emphasis is more on the horizontal lines and the connections between the boxes rather than the boxes themselves. In this way of thinking it is the interaction between parts that creates the potential for action and innovative ways of thinking. The connected version reduces the importance of silos in the organisation and instead stresses the communication and unity derived from the connecting lines. It does suggest that managers pay attention to the way an organisation is fused. Also in the connected version the organisation needs to re-thinks its boundaries and to open up the inside to the outside. Here the customer is not a box that sits outside the organisation, but is an integral part of its thinking; it is part of the machine. This does not simply imply the cliche of ‘getting close to your customer’, but rather a sense of oneness with the customer. In this structure customers are encouraged to be part of the process of product development, suppliers of ideas and challengers of direction not passive recipients of marketing communication. This way of working changes the nature of the relationship with customers. Companies can be faster to respond and customers themselves feel closer to the organisation.

Two Examples of Connectivity: Quiksilver & Tesco

Even if you’re not into surfing, there is a mystique about the sport born out of its style, bohemianism and contact with nature at its rawest and most dangerous. Surfing is also where sports apparel company, Quiksilver, started out in the early 1970s. Today it is a skateboarding, snowboarding and surfboarding equipment company and it has a turnover of $1.27 billion and 4,350 employees. Since 2001, market capitalisation has increased from $400 million to $1.75 billion and earnings per share has grown 134%.

Quiksilver is a branding success story. It has a distinctive product range, well targeted sub-brands aimed at specific lifestyles, good control over its brand presentation both visually and in terms of retail channels, a policy of continuous innovation and a hard core of loyal customers. You would expect the company to be a textbook example of how to build a brand. Yet, Quiksilver doesn’t follow the rules. It doesn’t have a clearly articulated set of brand values, it doesn’t go in for market research, it tends not to employ seasoned marketing professionals and it largely rejects the use of external marketing agencies. Quiksilver, like the board sports it serves, is a maverick. It believes in a visual not textual culture, intuition rather than analysis and a free-flow connection between employees and customers. It is an connected organisation that has a clear sense of unity with its customers which is achieved by getting employees to take part in customer events and by inviting customers inside the organisation and encouraging them to take an active part in the development of the brand.

The British based supermarket, Tesco is a less glamorous business but it operates along similar lines. It has become the biggest retailer in the UK with 1 in every 7.40 spent in British retailers spent there. It is the biggest online supermarket retailer in the world and it has doubled its market share of the British supermarket business in the last 10 years. The key to this success has been twofold. Partly it has been due to using the customer knowledge of managers and employees and generating innovation through them and partly it has been due to a massive investment in capturing and interpreting customer-buying information. It is a success for informal and formal knowledge; for the personal and the technological. Perhaps if Amazon is achieving its nirvanha of being the most customer centric organisation on Earth, Tesco is not far behind.

Summary: achieving connectivity

There is a general view that brand building is the responsibility of the marketing department. However, it should not just be the task of marketing to define the brand – the whole organisation should be aligned and individuals empowered to deliver it. And rather than second-guessing what customers would like customers should be involved in co-creating the brand. This perspective of the brand is one that stresses the linkage between brand and business performance. Achieving connectivity between the organisation and the customer is not a virtue in itself, but relevant because in a world where on average 78% of a company’s value is in intangible assets it makes sense to involve employees and secure the loyalty of customers.