The future of brand management
How can companies build the resilience and agility they need in the digital age? And what is the role of the brand in all this? One thing is certain: the brand manager will be the “hero of the transformation”.
We live in fragile, restless times: Digitalization, explosion of available channels, real time communication, new competitors, the transformation of existing business models –all of it exerts immense pressure on company management. The principle is called "disruption". It was introduced to strategic management by Harvard-Professor Clayton M. Christensen 20 years ago (sic!) and was the management buzzword of the year in 2015.
We are experiencing a disruptive transformation in all areas of our lives
Actually, it means nothing other than what Schumpeter called "creative destruction". Or, as Amazon's Jeff Bezos so nonchalantly explains: „Disruptive is whatever people like better than what they knew before." What is new is the concentration and global focus on the "Now" of business life and the lives of consumers. We are currently experiencing a huge transformation of everything we know in all areas of our lives – through products and services that we didn't know before and like better, all with the help of digital technology.
The question I ask myself:
- What exactly is changing? And what stays the same for brands, brand management, and their movers and shakers?
- How can brands help to make companies resilient and agile to take them into the future?
- And what is in it for the brand manager, who thus far has been at the periphery, and has been communicating and embellishing the transformation – but not shaping it?
In this four-part article, I will concentrate on the power of the brand, its development, and its utilization in the digital age. What it's not about: operative marketing, which unfortunately is often mislabeled as "digital brand management" (what channels and tools are becoming more important in the digital media and how to generate traffic with what content).
The power of the brand is frequently and systematically underestimated
Regrettably, CEOs and Managing Directors in this age of transformation are often looking only for process optimization solutions and expensive digitalization and cost reduction programs. Or they keep a zoo-like "digital lab" with hipsters in Berlin, take trips to Silicon Valley and come back with beards and "moonshot ideas". IT managers, "nerds", and digital consultants like Accenture are slowly taking over opinion leadership.
In this melee, most CEOs and entrepreneurs forget about their longest value-adding lever: their brand. They often don't see it as an instrument of value creation. Instead, they consider it as a secondary battle field, a kind of "summer beautification program" – but not as a power tool for more profit. Not to mention as a beacon in the transition. Why?
Marketing and brand are wrongly positioned
Marketers and brand managers often position themselves too narrowly and wrongly within their organizations when their work primarily involves vying for creative prizes, measuring advertising efficiency, and declaring the company's image as their life's purpose. Such topics, however, no more than kindle a faint idea in CEOs' minds that the brand may be in some way important. The work of CFO and IT manager, by contrast, is considered much more essential, because it appears to have more of an impact on business success and strategy than the work of brand managers.
This is wrong. Not only strategically, but plainly also from a business management point of view.
The reason: Strong, attractive brands make companies resilient and robust in turbulent environments.
- For one, they are value conveyors against the downward price spiral.
- For another, they promote the agility you need for entering new markets and product categories through the trust they evoke in your customers.
Apple can believably get into cars, payment transactions, and watches. Amazon is going into the movie business and food retailing. Brands not only make companies more beautiful and likeable – but more resilient as well.
The 3 Vs: brand as value conveyor, value appreciation, and value creation system
The fundamental character of the brand – its essence – is often forgotten in the digital hype surrounding SEM, SEO, big data, and content marketing. But we are not dealing with a communicative playground for creative thinkers. A brand is a value creation system that is charged with values and peak performances, which can then be marketed.
When a performance – for example exceptional product quality – is not perceived, then it is not appreciated. So it creates no value. Instead, it becomes interchangeable and the result is enormous price pressure. A peak performance is only perceived through a well-managed brand, and only then can it be appreciated by the customer. Only then will the customer be willing to pay more ("It's worth it to me") and value be added for the company. Only then will customer loyalty and recommendation rate increase. Only then can prices be raised.
As simple as that sounds, real life is a long way from it. Today, awareness and advertising efficiency are managed – not attractiveness and its contribution to price premium, cross selling, and recommendation rate. This is how marketers miss their chance of finally being recognized by their CEOs as key players in the company's success – not just as communicators and "image makers".
Sadly, brand managers often see themselves and actually are merely "conveyors of the brand promise". They don't consider themselves brand makers, because they are lacking the most important half of their brand jobs: Influence on the value-added chain, on the customer journey from first contact through sales and product use to customer loyalty. But this is crucial for building a brand, especially in this age of digital excess. There is enough communicating going on – what counts is the performance experience, keeping the brand promise at every single touchpoint. But what manager these days has influence on the performance at touch points?
Key questions for the future: How can you establish your brand as a value creation system that can impact the customer journey? To make sure it significantly shapes the future of the company?
Digitalization – more of an opportunity than a threat for brands
Even today, customers do not merely buy products – it's all about meaning. Digitalization reinforces this effect; customers become co-creators and co-producers of the brand story.
Though it is often proclaimed: In what way does digitalization really threaten the brand? Sure, the competition is only one click away, every product lie is exposed. Performance transparency and increasingly knowledgeable customers are weakening brands that are already poor performers. Gatekeepers like Google, Amazon, and Facebook are in position to dominate customer contact. Brand control seems to slip away in the social media.
All this is unsettling brand makers and marketing managers and they are looking for solutions, often in the operative bustle of "trial and error". On the one hand this is the right thing to do, because it means breaking new ground. On the other hand, it is not very expedient, because in doing so they often neglect the power of their brand. They are always looking at what others are doing, and acting randomly – not in a way that makes their brand unique, distinguishable from others. They are not using its values to differentiate it, tell special stories, display unique peak performances, and extract what is special from the depths of its performance in order to become indispensable for customers and users every single day.
This is the task of the future: Using uniqueness to persevere in the daily battle for attention against competitors and new gatekeepers on smart phones.
But what benefit does digitalization offer my brand? I think this question is not asked often enough. Because, once embraced, it is a powerful booster for brand management:
- Digitalization opens up ten to 2O times more contacts with existing and potential customers as well as global market access, at much lower cost than before!
- Thanks to digital channels, even small manufacturers can supply markets all over the world.
- A company can benefit its customers every day by means of services and content.
- You can involve your customers in a brand ecosystem to intensify relationships, and increase the conversion and recommendation rate. But that only works if I can tell a special story and offer something unique.
So, digitalization is more of an opportunity than a threat for brands, because it lets us communicate better with our customers. We can convey our peculiarities, our uniqueness, and our performance, packaged in a story, at much lower expense than in the classic world.
Brands have the job of making buying decisions easier
That is, provided I have such peculiarities! Because interchangeability with regard to content and function is often the core problem of marketing practice – despite new and necessary (!) abilities like SEO, SEM, content marketing, and great apps. In the digital life as in real life, brands have the job of making buying decisions easier: through previously earned trust and clear differentiation. But if they are interchangeable, diluted, and unclear, they don't exert any attraction. This is where many brand managers have to do their homework. Because an interchangeable performance or story is not going to get any better as an app or Facebook post.
Key questions for the future: What makes me unique? What can "only" my brand and not "also" my brand deliver? What makes my brand indispensable every day?
Brands need a "big idea"
So the question is: What makes brands attractive and indispensable in the digital age? Good brands have always been "concepts of the desirable", with their own micro-ideologies that they condense into stories – through codes, artefacts, designs, rituals, symbols, behaviors, and performance – and make them accessible via digital channels.
From Coca-Cola ("Fun"), Disney ("Fun Family, Entertainment"), Sony, Porsche, Ikea ("democratizing good living") all the way to Apple, Google, and Facebook („give people the power to share and make the world more open and connected") – all these brands have their micro-ideology, which is concentrated and reflected in the mission statement, the big idea of the brand. It is the guiding star that gives impulses for new business ideas, provides stability during transition, and sets credibility limits, entirely in line with new ideas. This is the source of the brand's original power, its significance, its purpose, and what gives it a higher meaning beyond earning money.
Brands without a big idea often exert little attraction, and even that will dwindle in the future. Because what is scarce in our world of excess is uniqueness, attitude, and meaning. But we'll get to that later.
Key question for the future: What is your "why", your mission and micro-ideology? What would the world and your customers be missing if your brand ceased to exist? What gives your product, your company meaning beyond making money? What "codes" do you use to convey this?
After the agricultural, industrial, and information ages comes the "Age of You"
What do customers want today and tomorrow? Already, customers don't merely buy products – it is about fulfilling a wish or removing a life shortage – ultimately about meaning. The customer is increasingly assuming the role of co-creator, author, and producer of the brand story. Which makes him the future driver of value creation per se.
In terms of economic history, after the agricultural, industrial, and information age we are now entering the "Age of You" as other authors and myself are calling it. Why? Because additional value creation only originates within us. The digital big four – Google, Amazon, Facebook, and Apple – are offering platforms, technologies and tools we can use to productively and joyfully get the most out of life.
We publish private information, communicate, illustrate, share our private selves, market our food, and seek recognition for it. We collect and share photos, pictures, films, stories, are creative, play with the world. We actualize ourselves and refine our consumption. We are socially productive by making opinions in the social media under the motto "broadcast yourself", we belong, like something, friend and un-friend. In the social web, we are message, medium, and product at once.
The "self" becomes a source of added value
We "pay" with our lives and receive recognition and love in the form of unique users, followers, and likes. The large platforms with their "siren servers" (Jaron Lanier) skim off the value via data, their insights, their marketing, and become more powerful with every visit and every user. We can see where that might lead in the wonderful book "The Circle" by Dave Eggers. But that would require a separate article.
We know from Apple CEO Tom Cook: "If a service is free, we are not its customer, but its product." That means we, our "selves", are the additional and strongest growing source of added value of the future. Unlimited and renewable. Let's take that at face value for now.
What comes after digitalization?
When our selves become a source of added value and brands strategically build themselves around us, the question is: What will be our wants, shortages, and ideas of the desirable after digitalization? Because digitalization is only technology, after all. Technology has always been enabler and satisfier of human or social needs. Or it has been the basis of new, sometimes disruptive business models and services that we didn't know before – but we like them.
I am not trying to belittle it, it is a hurricane. But it is still only a technology, an aide. No more. You cannot eat information. Because the economy is a problem solving and wish fulfilling machine, brand makers now have to ask what is scarce and desirable for existing and potential customers in this digital age.
The seven desires of people in the "Age of You"
Identity, freedom, stories, or uniqueness – in the dawning "Age of Humanity" there are several spheres of desire that represent development and attractiveness potential for brands.
Transformation always happens dialectically. Trends generate countertrends. In essence, we can call what comes next the "Age of Humanity". Because, the more digital the world becomes, the greater becomes our yearning for real, empathic, unfinished, analog, creative, dreaming, spiritual, and sweaty humanity. Hype topics like the "internet of things", self-driving cars, robotic butlers, big data, 3D printers, smart homes, and m-Health ultimately only serve people to fulfill their needs and desires. This is what I would like to focus on now.
In my view, there are seven spheres of desire emerging from the digitalization and its impact on our lives. Of course, there might just as well be eight, nine, or ten, but in any case, the spectrum fans out and offers brands development and attractiveness potential. Perhaps you'll think of your own:
1. Identity: The more we publish of ourselves digitally and sell ourselves on the market place of the social media, as with "selfies" (in the future more often with sticks, so the backgrounds of our lives are also visible), and have others rate us with likes, the more insecure we become. Who are we really? The search for orientation and stability is enormously important. Add to that value discussions in the public realm. What is European and what is German? How do you have a good life?
Life always was and still is a construction site. Brands as value keepers and meaning providers seem to offer stability, orientation, and identification. From the simple, superficial lifestyle motto "I am what I buy" toward a clear value commitment of genuine Good Brands like GLS Bank or Patagonia, who represent a true social contribution. Brands are guide posts and handholds of individual development, which of course can only light the way for real self-recognition and identity formation.
One of the fastest growing markets is the self-help and life-help sector. It is not about egotism, but about belonging, the identification through self-chosen meaning and value communities like friends, clubs, associations, real or virtual regular meetings, or online communities. The true, redeemed "self" is only realized in the collective.
Key questions for the future: What identification options does your brand offer? Who should belong? Who should not?
2. Freedom: Richard David Precht wrote an excellent article in the ZEIT about the "digital feel-good matrix" with which Google, Amazon, Spotify, and others are aiming to liberate us from the chore of free choice with their suggestions of what we might like. The opposite is going to happen. Curated consumption (what used to be called "professional consulting") as a new pre-configured consulting model – like Outfittery and Modomotto or curated book stores like Osiander and individual travel – will of course continue to grow in the premium segment. But in the end, differentiation will again be achieved by what individuals choose for themselves.
Off-brands that allow people to say "I'm outta here" will prosper. "Analog will be the new Bio" is the title of a great book by Andre Wilkens. Since the events of 2015, the term "freedom" and the struggle for it will once again be a hot socio-political topic and pull us out from our Neo-Biedermeier feel-good matrix.
Key question for the future: The question "What do you stand for and how do you fight for it?" is becoming relevant again! This takes brands with real attitude and character – not lotteries. How can your brand satisfy this standard?
3. Creativity: The more the digital world applies algorithms to our lives and relieves us from tasks, the more we can realize our creative potential, alone and in the collective. Apple claims that it has always worked at the interface of technology and art and provided people with tools for developing their creative lives. Photos, videos, drawing, writing – everyone can be an artist and market their creativity on Instagram, Pinterest, and Etsy. Everyone can bake their own bread, brew their own beer, design their own shoes, invent recipes, and share it all with others in the "creative cloud", on Skillshare we can even enable others to do the same and connect with them.
Key question for the future: How much creativity does your brand as a platform bring to your users and customers? How do you network the creative potential?
4. Uniqueness: "A person is a person because of a person". We are personalities only because of the way another person sees us. This is why we are part of a society, in various online communities. However, the more we move in public in the social media and dissolve in that community, the more desirable becomes our own true uniqueness, squeezed from ourselves through introspection. The wish to be accepted the way we are.
The pianist Jewgeni Igorewitsch Kissin has said it very eloquently in a poem: "If I am like others, who will be like me." The inward search, the fight for our "self" and the appreciation of being who we are becomes a precious jewel in times when the only thing that is real is what is visible in the digital networks. We can read about this fight for uniqueness in Karl Ove Knausgard's multi-volume literary success "Min Kamp" (My Struggle) about living, dying, dreaming, loving, and playing.
For brands, this means that beyond initials on luxury handbags or shirts or superbly hand-crafted one-offs ("just for me"), they have to really commit to advising and caring for people. It means giving people tools to find themselves, their own uniqueness. With or without digital brain chips.
Key question for the future: Where do you facilitate uniqueness?
5. Stories: Content is King. This has always been the formula of the media, but it has become tougher: The supply of content is exploding; everybody is their own journalist, opinion maker, communicator, networker, and storyteller. Whether in 140 characters on Twitter or in six seconds on Vine, in two minutes on YouTube or in ten-part horizontal serials on Netflix, Amazon Prime, Apple iTunes, or in a 30 minute business pitch.
The ability to tell exciting stories – profound characters, hero's journeys – has the greatest
effect on our brain and is becoming the supreme skill in marketing and brand management. The digital is causing a renaissance of storytelling. No story with a good headline, no attention. We need tellers of fairy tales again, we need "brand chief storytellers". Especially for videos and images, not so much for text.
Key question for the future: What stories does your brand tell? And what stories does it enable your customers to tell?
6. Romance: In a digital and consumptive surface culture, political correctness, in an "Age of transcendental homelessness" (Ulf Poschardt), a longing arises for mysticism, spirituality, romance, stillness, and depth. People need something beyond the "self". Be it a soccer club, the nation, the family, or religion.
A digitalized atheist likes to believe for instance in the power of nature, goes "hiking", or becomes "lumbersexual", a real man who grows a beard, chops wood, builds treehouses, and recites poems about "loneliness" from the new » men's magazine "Walden", which gets right to the heart of this yearning with its claim "Nature wants you back". Blockbusters and fantasy games like "Game of Thrones", Star Wars, and World of Warcraft illustrate the longing for the mystic, the possible, the spiritual, the unclear, and at the same time the deep. Brands take advantage of this yearning by going in-depth: into the history, the raw material, the skills, the essence, into the "only". From Louis Vuitton suitcase to craft beer, this depth, expressed through craftsmanship, origin, roots, secret formulas and "The Art of", is tangible and valuable.
Key question for the future: How romantic is your brand? Where does it convey depth and craftsmanship? Where do you spark your customers' imaginations? Is there any "spirituality" beyond function?
7. Mindfulness: We are living in an overstimulated world where everything happens at the same time and right now. Global media dilute our sense of near and far, friendships are maintained or replaced by lose technical connections, and nearly all companies digitalize their customer contact by "outsourcing to the costumer". We cannot feel ourselves anymore.
All of this distraction leads to a desire for mindfulness (meaning: for directed attention, non-judgmental and concentrated on the present moment). Inward mindfulness to find balance and outward mindfulness in order to connect with real people and deal carefully with the environment. The term "mindfulness" – brought to the world 20 years ago by John Kabat Zinn as a fusion of stress research and Zen – today gets over 40 million Google hits.
The future researcher Matthias Horx describes "mindfulness" in his future report 2016 as "cultural technique of mature individuality in a connective world", as a way to freedom, contemplation. It might even replace the term sustainability. Mindfulness is the foundation of empathy, of compassion for others, for refugees or the whole world. Entirely without guilt or judgment, but with responsibility.
Key question for the future: How mindful is your brand? Do you convey human attention and empathy? Are you ecologically mindful? How does your brand assume human responsibility for simultaneous balance and development?
Brand managers become shapers of the transformation
Seven points will help brand managers in the "Age of You" to create strong brands, make the company more resilient, and take the stage as central shapers of the transformation.
Brands in the "Age of You" will be at eye level. They will build personal relationships with customers made ever smarter by the use of data. They will make customers into co-creators in their brand ecosystems and become connected platforms of development and realization of their wants and needs. Together they will facilitate curated experience that will be built around the customer and not around the enterprise.
Brands will thus become dialogue forums of our common future, based on smart technologies and shared data. They will become guideposts to a better self, companions of a new depth. They will become media of mindfulness and responsibility. More than ever they will connect their customers into meaning and value communities, but these will be more open, more network-like, and more fluid than today, and led by customers.
In the future, brands will be beacons, inspiration, and guiding lights in the sea of possibilities. By conveying value this way, they make companies resilient against the erosion of the digital world.
Brands carry a promise for the future because they promise a better life through using the service or product. Brands are not engaging in storytelling, but in "futuretelling" in brand specific differentiation to storytelling. Aside from the must factors like quality, service, or other business standards, strong brands have a wow factor: they stand for the unexpected and assume the role of fulfiller of deep desires – beyond features you can get from somewhere else. Desire beats feature!
Key question for the future with futuretelling: Does your brand have a future promise beyond the product that touches one or more of these spheres of desire or transformation lines? What desire does your brand fulfill, what better future does it show customers?
The ten transformation lines to the "Age of You"
Preparing a brand for the "Age of You" presents entirely new challenges. The focus on community formation makes way for the support of uniqueness. The 0/1 ratio is replaced by romance. There are essentially ten transformation lines that mark the new age:
Brand managers need access to the touch points
Aside from the new and necessary operative marketing skills – i.e. SEO, SEM, content marketing, community management, and the establishment of strategic partnerships – the marketing and brand manager can gain more company-wide influence and strategic clout by establishing the brand with its "big idea" beyond the product and its clear values as a beacon in the transition, as a management system with hard key figures. When he finally gains access to the touch points and works with customers and lateral thinkers in "brand labs" to develop new customer journeys with new products and indispensable services that nobody knew before and people will want in the future – all based in the brand and its credibility and differentiation, so it is not arbitrary.
The brand manager thus hones the brand and uses it for more price premium and growth, rather than merely beautifying it. He increases its outward value and strengthens the company's inward identity. This is why the brand manager will be indispensable for the transition. Brand-centered transformations processes make a company resilient in disruptive times.
The following seven points will help during the "Age of You" to create strong brands, make the company more resistant, and take center stage as a shaper of transformation rather than just watching it from the periphery:
1. Redefine your own role: Change your self-image from "communicator" to impulse provider and "hero" of the transformation.
2. Find the "only", not the "also": Find out what makes your brand unique, the Number 1 position, the "only", the "big idea" beyond your performance.
3. Keep your brand promise: Gain influence on cross-channel touchpoints, so they not only communicate the brand promise but make it a tangible experience.
4. Make your brand indispensable every day: Think about how your brand can become indispensable every day across all channels along the customer journey.
5. Create a brand ecosystem: Define an "open closed" brand system and connect it with your users, social media, and other "aggregators" to your topics.
6. Engage in futuretelling: Focus on the desires and wishes of the "Age of You" that fit your brand. Tell new stories of the desirable with the help of your customers.
7. Create true value: Establish and measure the brand beyond advertising as a value creation system with price and volume premium.