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Alan Mitchell

I’ve pondered John Hagel’s article Restoring the Power of Brands and can’t help concluding that James Surowiecki – who John dismisses as ‘not addressing the challenge’ for brands – is right about ‘a meritocracy of products’. This isn’t because the ideas behind John’s notion of a customer-centric brand are wrong but because of the way he applies them, with his notion of a customer-centric brand. This conflates and confuses two fundamentally different processes: the provision of value (i.e. products and services that help consumers get particular jobs done), and the provision of services that help buyers navigate their way to find and source this value.

Until very recently, this navigation function was provided in a rather half-hearted way by retailers as a by-product of their core function as distribution channels: ensuring physical product or service availability. But now that is changing. Services that help consumers navigate their way to best value are basically ‘pure’ information services. They deal with information about products or services, rather than with products or services themselves.

Navigation services are likely to be become the first port of call for consumer attention for two important reasons. First, because navigation precedes purchase, by definition. Second, because they offer greater value. What better source of value is there to me than a service that helps me find and source best value (however I choose to define value)?

Buyer navigation services are a new type of business with different skills, infrastructure, commercial relationships, revenue streams, incentives etc to organisations focused on original value creation: the makers and sellers of soap powders, motor vehicles, flights and so on.

In fact, they are a new industry combining many different specialist services focused on helping individual consumers identify value opportunities, clarify preferences and priorities, articulate and express these preferences and priorities, make informed comparisons, seek advice, negotiate terms and conditions and so on. Chris Anderson talks about some of these emerging services in his book The Long Tail, but most are either still being invented or are just in their infancy. They haven’t yet coalesced and crystallized into the full blown specimen. (see www.rightsideup.net/AVBS.htm)

John’s notion of a customer-centric brand confuses these two functions of original value provision and navigation, and this confusion is compounded by terminology. The term ‘customer’ internalises a vendor-centric perspective. A customer is someone who buys what a particular vendor – soap powders, motor vehicles, flights – is trying to sell.
In the emerging world of consumer navigation, the term ‘buyer-centric’ helps clear the fog. A buyer-centric service looks out on a world of many different, competing vendors from the point of view of the buyer, and helps the buyer source best value from this environment. A customer-centric brand looks out on a world of customers and potential customers from the point of view of a particular vendor.

Buyer-centric functions can not be carried out with any credibility by product and service vendors who can never credibly pass John’s first test of so-called customer centricity: product agnosticism. Product agnosticism may not be in the vendor’s interests. And more to the point, it’s not his job. His job is to provide the buyer-centric brand with the products to be agnostic about. Asking a vendor of particular items – soap powders, motor vehicles, flights – to “move to” this role as John suggests is just a flight of fancy. He’s effectively asking them to get out of their current business and start a new one, and if his advice were taken up it would be a disaster for all concerned. We would have a world full of navigators with nothing to navigate to.

That is why James Surowiecki is right. In an environment shaped by professional, expert, dedicated, efficient buyer-centric navigators, it is a survival necessity for producers of particular products and services to offer the products and services that buyers will choose to navigate their way to. Procter and Gamble was, and still is, absolutely right about demonstrable product superiority. Toyota with its Toyota Production System is proving the power of ‘product meritocracy’.

Now, of course, as we move towards this buyer-centric environment, vendor brands will have to adjust. But that is a different story. The underlying lesson is: if you are a fish, focus all your efforts on being the very best of fish. And if you are a fowl, be the best fowl possible. If you try to mix the two you will get the worst of both worlds.

John’s insight in Net Worth was profound and path-breaking. But the conclusion he is now drawing in terms of ‘customer-centric brands’ is muddying the waters.

Alan Mitchell

jim wilde

Since I am somewhat of a geek, what I look at first is the technology a company employs to support their brands. With both Amazon and Google, you can pretty much say the door is wide open, as in non-proprietary api's and web services. Just take a look at what geeks are doing to have fun : Google Maps Overlays Satellite Photographs, Google
Maps with Craigslist, and just use del.icio.us to discover Amazon meeting the greasemonkey.

Amazon - Bang! They are making web 2.0 exciting with: http://www.advancinginsights.com/mybiz/the_changing_nature_of_brands

Mark Jen

Those "expert friends" you talk about are also discussed in Gladwell's book, Tipping Point (where they are called "mavens"). He doesn't talk about how these "expert friends" get people deeper into the long tail though; good point :)

I think search engines like Google sometimes actually make it hard to get into the long tail. Why? Because the top search results are typically what's most popular, not what's in the long tail. Users have to go page 2, or page 30, or page 100 to find the long tail content they desire.

I also agree with you about search engines being merely a tool. In the near term, people will switch to whatever tool solves the problem best; I'm curious to see if there's brand loyalty in this respect. I for one wouldn't use an inferior tool to search when there's a better one just one URL away.

I further believe that search engines are about to be commoditized and people will easily switch to whatever offers more features, is easier to use, or is the default choice in your browser :-O

Adam Marsh

Interesting post. While I certainly agree that technology and the changing business environment are making a customer-centric approach more important for brands, I think it's important to remember that quality is still an extremely powerful part of any brand, and one whose neglect might be an important part of some of the brand declines mentioned.

With regard to global manufacturing, I'd argue that quality declines due to the turbulence it has caused in supply chains might be at least as important as the "flattening" of quality differentials between brands. For example, after previous research and experience, I had settled on Sony as my trusted brand for CD / DVD / TV products -- they just worked better, and I was willing to pay a bit extra for it. My most recent purchase, a CD/DVD changer, is a complete disaster; I don't know for a fact what the cause was for the sudden decline in quality, but I'm now back to being "tyrannized by choice" in this product category.

In addition, much of what makes a product "quality" today has to do with software, and there the differentials between brands can be quite large. Good examples are Nokia and Tivo, both of whom have built strong brands more on the quality of their software than their hardware.

I'd also go back to your own categorization of core business expertise into customer relationship, infrastructure management, and product innovation and commercialization. It seems to me that for customer relationship businesses, customer-centric branding might be an important facet, and from a B2B perspective, for infrastructure as well. But for product innovation businesses, this would seem to be much less of an important consideration.

edward cotton

I found it interesting that you mention Li & Fung as new example of a customer-centric brand, in the business to business world.

It seems somehow ironic that this company would be interested in old brands.However, with its margins being squeezed, Li & Fung are buying brand licenses, to elevate their financial performance- one license is for Levi's Red Tab.

Pretty interesing. if you condider the problems that Levi's has been going through. Many are symptoms of the changing role of brands that you talk about.

More info here:

http://www.influxinsights.com/index.php?id=360

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