I wanted to share some thoughts about branding – where it has been and where I think it is going. I’ll split it into three periods, 1.0, 2.0 and 3.0 to be simple.
If we look at what we might call branding 1.0, we’re really talking about the period of theUnique Selling Proposition or USP. Marketers used insight or in some cases dumb luck to create a reason to buy their product or service – whether this was price, quality, performance, exclusivity, luxury, speed, convenience – any of a number of factors that differentiated. This period covered a period probably from the beginning of the twentieth century until relatively recently, say up to the 1990s through the turn of the 21 century.
Around the millennium, then, for the majority of brands, we entered branding 2.0. This is really the period of focusing on the customer experience. Differentiation and USPs still mattered, often being rolled up into a set of brand attributes, but the focus began to shift for most brands to a more experiential and emotional approach. Media fragmentation, the internet, social media, the decay of trust in business and the rise in both globalization and consumer power all combined to create a whirlwind of competitive forces and complexity that meant marketers needed to try to create and maintain deeper relationships with their consumers. So this has really been the period of engaging people in a brand with a focus on the customer experience and lifecycle.
Where are we heading to? It seems to me that some big forces have emerged that are making it easier – and more important – than ever to try to create 1 to 1 relationships with a powerful and demanding customer. Some of these forces – like big data, internet finance and mobile devices – might have made it easier to forge a 1 to 1 relationship with the customer. On the other hand, in the always-on economy and with channel proliferation literally blowing top off of the hopper, maintaining coherence of messaging and consistency in the brand experience is becoming a lot more challenging. When media buying is being done by computer and earned media are becoming powerful factors, brand 3.0 is really going to be all about building a bespoke ecosystem around every customer.
This will mean brands will need to create integrated partnerships with a range of other stakeholders – some of whom might also be competitors – in order to win the hearts and minds, not to mention the wallets, of their customers.
The first challenge this raises for most organisations will be the fact that most are still organized internally around the world of brand 2.0 and the customer experience. Immense friction is going to be caused as internal organizational silos no longer have clear ownership of their stakeholder relationships. This will extend externally to suppliers, partners, competitors, regulators, institutions, NGOs, innovators and entrepreneurs.
The second challenge brands will have in the face of this new complex landscape where coherence and consistency are harder than ever will be in reducing the complexity of their brand models and messaging. I think the way this will have to manifest itself will be in every brand having to be much clearer about its sense of Purpose – that is, why it exists in the first place. Timeless brands already do this, but many brands still operate without understanding that one of the surest ways to generate less profit is to focus entirely on generating it. Organisations that stick to their purpose should thrive in the world of brand 3.0 since they will have a very clear guide to decision-making that exists at a level above traditional brand management models.
The third challenge will be that organisations that win in the world of brand 3.0 are those that hardwire and weave their purpose and brand into every facet of their operation – so it no longer sits within the functional remit of brand, marketing and communications and instead becomes indistinguishable from their strategy and business model. Brand will become the filter through which decisions are made – product and service design, delivery and innovation; strategic investments, acquisitions and dispositions; the talent they hire, don’t hire, those they promote, reward and recognize; the markets they enter and the relationships they establish and maintain.
The successful brands of the 3.0 era will be those who manage to decouple decades of practice internally and build the agility, resilience and mindset to operate in the integrated ecosystem approach to branding – where managing massive data in real time will link to managing complex stakeholders in a way where there is a win-win to be found within and across each relationship.
Let’s continue this conversation.