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Brand Strategy

Brands Face Dramatic Shift In Social Economy

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Brand Strategy Brand Evolution Social Economy

The context of consumer engagement for brands these days is that of a social economy, a marketplace in which nothing is worthwhile or valuable unless it is shared with others. This is not an easy environment for brands. It requires more than simply adapting a brand’s promise or performance to new needs or new priorities. Instead, it demands that brands be utterly un-brand-like.

Perhaps the best way to say what a social economy means for brands is simply to observe that people don’t want relationships with brands; they want relationships with other people. Maybe this has always been true, but it has gotten special emphasis in recent years. Since the mid-1990s, brand marketing has been about nothing but building strong relationships with consumers. This brand focus is rooted in the one-to-one marketing concept of customized design and individualized service that became popular with the development of deep, robust databases and new technologies like the Internet. These innovative marketing capabilities gave rise to an over-the-top enthusiasm among marketers that brands could finally make genuine personal connections with consumers that would be highly relevant, truly meaningful, and worth the price. The idea of brand relationships ruled the day, defining the essence of what it meant to be a powerful brand. The best brands were those with the best relationships with consumers.

The purpose of business has always been to deliver the best possible solution to customers. As the late Harvard marketing guru Ted Levitt famously said once about consumers, “They don’t buy things, they buy solutions to problems.” One-to-one marketing and the parallel idea of brand relationships were organizing principles to help brand marketers accomplish that. But these ideas, while more useful in a marketplace in which consumers have fewer ways of exerting control and making connections, do not serve marketers well in the social economy.

What the newest technologies now enable is less the ability of marketers to engage with consumers and more the opportunity for people to engage with other people. Brands matter only when they have something to offer that people can share with one another. Brands have value only when they give people a chance to connect with other people, not when they themselves try to make a closer connection with consumers. People are trying to be social not commercial, to relate to one another not to transact with brands, to share with friends not open up to marketers. Technology has shifted from putting brands at the center of power to diffusing power across a network of social connections among individuals.

This is something that brand marketers have trouble grasping. Not because they don’t understand social media, but the way people use social networks runs counter to their understanding of brands. One of the most frequent questions I am asked nowadays goes something like this: “People never talk about my brand or my category on Twitter or Facebook, so why should I care about social networks?” The presumption in this question is that something has value only if brands are part of the conversation. But this is not true in a social economy.

It’s not about brands being at the center of the conversation. It’s about brands delivering more opportunities for people to have the kinds of conversations they want. The locus of value in the social economy is about process not product. It comes from social engagement not brand usage. Brands should care about conversations for the sake of conversation.

The imperative for brands is to avoid butting into the conversation and instead to facilitate the kinds of interpersonal conversations people want to have. That makes a brand relevant and valuable. When people make choices about social networks – discussed as the six pivot points of social media in our Status Update Future Perspective – they use criteria about personal relationships not brand relationships.  Accordingly, brands must reinvent some core business models.

Customer service should no longer be based solely on consumers having to engage with brand representatives.  People should be able to seek help from other people to fix what’s wrong. In other words, build service around the relationships people have with other people. This can’t always be done, of course, but service could be opened up to include personal relationships in the mix. Apple has long done this, leveraging its cult-like following for people to find help from other people while also having its own service staff when needed (which itself often searches email strings in various Apple communities to find a solution for the customer on the call).

Similarly, new product development should be remade. The traditional model is to identify a needs-gap, develop a new product to fill that needs-gap, roll it out, and then develop customer relationships around that product once it’s established in the marketplace. This is product-first, relationships last. But what if relationships came first?

Brand marketers should first facilitate social engagement, then on that basis learn what product to introduce. This is exactly what Washington, D.C. real estate developer WestMill Capital is doing in the H Street neighborhood where it is looking to fill empty storefronts it owns. It has created a Web site called Popularise.com to host and facilitate interpersonal interactions among residents about the businesses they would like to see in those storefronts. By letting the social economy lead, WestMill can follow once people have decided among themselves what they want.

With personal relationships in ascendance, brands must relinquish control and measure success by metrics of social not brand engagement.

Contributed to Branding Strategy Insider by: J. Walker Smith, Executive Chairman, The Futures Company

Sponsored byThe Brand Positioning Workshop

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