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Is Marketing Ready for the Stakeholder-Focus Brand Era?

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We are now starting to grasp the implications when the basic customer decision to buy has shifted in power from a seller’s market to a buyer’s market, to borrow the real estate analogy. The customer is now taking charge of your brand. How did this evolve and where does it stand now? In this interview of CRM thought-leader Mark Tamis, we discuss these changes and what it means to be in the Stakeholder-focus Brand Era.

I reconnected with Mr. Tamis at the Social Business Forum 2012 in Milan, where he gave a talk [video] on how our ideas of brand value have been changing particularly in the recent past. Social business is showing us new ways how our relationships and what we know about them can play a greater role in how we execute business. As Mr. Tamis points out based on leading research, there are differences in the execution on we build brand relationships with individuals versus communities, but more importantly, how we even think about the nature of branding itself and the role it plays in designing a customer relevant, connected business.

Mr. Tamis gave a presentation on the four eras of brands (in his presentation, available on Slideshare) as they have evolved in our understanding of Marketing as a science:

  • 1900 – 1930s – the Individual Goods-focus Brand Era:
    Describes Brands-as-Identifiers where brands constituted a way for customers to identify and recognize goods on sight. Brand value is embedded in the physical goods and created when goods are sold. Brands were operand resources and had value-in-exchange. Customers are passive in the value creation process.
  • 1930-1990s – the Value-focus Brand Era:
    Describes Brands as Symbols where creating unique brand images become necessary in an increasingly competitive environment. Brands become symbolic objects independent of the actual product being sold.
  • 1990-2000s – the Relationship-focus Brand Era:
    Describes Brands-as-Knowledge where brand value is dependent upon the perception of a brand’s value-in-use as co-created by the customer. Brands have personalities that make customers form dyadic or paired relationships with them.
  • 2000s–onwards - the Stakeholder-focus Brand Era:
    Describes Brands-as-Dynamic-Social-Processes where brand value co-creation is a continuous, social, and highly dynamic interactive process between the firm, the brand and all the stakeholders. For any brand purchase the value depends on more than an individual customer’s experience but as a collective experience of many stakeholders, both customer and community.

[Stakeholder in this case refers far beyond internal company ones.]

Rawn Shah: Rather than product focus, Goods-dominant logic, how do you describe service-dominant logic?

Mark Tamis: Yes, Service-dominant logic. These are concepts developed by [Stephen Vargo (Univ. of Hawaii) and Robert Lusch (Univ. of Arizona) originally in 2004]. What I talked about was the notion of service-dominant logic and its impact on branding. There is another good article on that by Vargo, Yi and [Merz] from 2009 [where] they basically put [the evolution of branding] in four different eras.

From 1900s to 1930s which is plainly value-in-exchange -- “we don’t care about the customers input” or “they have nothing to say” or brands were operand resources [only] – to where we are now which is all about creating value not only for the individual, but doing things for whole community that’s all around them. It becomes more of a dialogue between your brand and the [equity] created by the customers within a community that shapes the value that customers actually get out of you.

RS: One thing we should try to be clear about is that [Service-dominant logic] works whether you are a services company, than people who sell products.

MT: Everything is a service actually. Even products – it is a package – can be defined as a service. The product is just a delivery mechanism; it is part of the market offering. Everything that is around it adds to the value that you get out of it through value-in-use not value-in-exchange.

RS: So it is not necessarily about just having the device or box in hand but is actually what experience you get out of it.

MT: Just think of Apple. If you look at it now, your iPhone is just a phone, but it is all the emotional and other aspects of it--the connection you feel to other iPhone users—that adds value to it.

RS: It’s also why people exchange mobile phones all the time, because the next one produces a better experience of things I could do that I couldn’t do with the current one.

MT: It is also just staying within that ecosystem of mutual support, of sharing, of having a social object that you can talk about. The shared understanding.

RS: In terms of the structure of an organization, is this something that only marketing understands or is this really understood by the rest of the company?

MT: I don’t think Marketing at the moment understands it. They are still stuck back in the selling widgets, value-in-exchange idea, for many of them. Some smart brands are starting to catch on to the idea. I think, for example, the Customer Journey map is very good, but it is still very oriented towards the individual customer’s interaction with the service.

It is not looking at taking one step further and saying that, “We should look at the effect of the touchpoints on the community experience.” But, I think it is a small step from [just] customer journey mapping to … mapping where your path along your decision journey intersects with what you get out of the value shared with others, or that you create with others.

RS: Is there a difference between a single session use [of a product] versus the lifetime experience of the customer. Do you think that is a real thing? Customer lifetime value?

MT: Customer lifetime value is going to be dependent upon your expectations that you have built up around the brand. Again, with the iPhone when you went from the iPhone 4 to the iPhone 4S, basically nothing changed but people still went with the 4S, because they had that experience with Apple; they had expectations that were linked to the brand; they had a ‘promise’ and because of that promise they stayed with the iPhone.

But, my question [is], “Will they be able to maintain that momentum?” If they cannot do something that is similar to the current model, [the customer] might say “we’re not happy with this any more; you’re not meeting our expectations any longer.” The moment of truth will be the next release, and we’ll see what happens then.

RS: Here’s a question based on two things: there is a ranking of the most valuable brands in the world. For example Coca Cola is number one. The last I saw it, it was $60B or more; just the brand and the premium that you pay. Apple is up there; IBM is up there. The second point is what HBR pointed out recently that customers don’t really care about your brand. So, what do they care about?

MT: This goes back to the “job-to-be-done”. Does it get the functional job done? Does it help me realize my ambitions… my self-awareness… my emotions that [I’ve] symbolically attributed. … So, there is the idea of the functional and there’s also the emotional. Like, [Coca Cola] refreshes me; helps me feel good; and I can relate to other people that drink Coke with me.

RS: The concept of a brand was created so you have something that is higher level than a single product. Don’t think about this bottle of Coke, but think about the brand itself.

MT: It’s actually something that can be separated from the product itself. The brand used to be an identifier, as a competitive differentiator. Then it came to be the embodiment of certain values. For example, Shell wants to try to make me believe that they are ‘green’, so you think of them as green and you go to their pump. It’s a personality as such.

Think of it as this way. The brand allows you to reduce your risk. The next time you have a buying decision, you do not have to make it again. You have a reference; you can go back and say, “There’s little risk in me taking this again.” This is actually loyalty when you think about it.

RS: It hinges on the customer experience itself. But what drives that experience has shifted from the concept of the value-in-exchange to the experience that you have …

MT: To the experience that you have and that’s what I was trying to put forward as well. It’s not just the experience but also how it is put together; how each of these touch points interacted [with you on your customer journey] and if that lived up to your expectations. And if so, the organization needs to learn why it did or did not live up to expectations, and organize to make that come about. Because each of these touch-points is a moment of truth, where there is some brand equity you can use. But, at any place beyond that is a bad experience can break down the brand equity, which means at that moment of truth, you might accept that once. For example, if you tweeted [a call for service from the company], sent an email and didn’t get a response, and on the third attempt you call the call center, you may [already] be very unhappy.

RS: Do you think we have gotten to the point where we not only do brands to a demographic (e.g., the “luxury” market), but we actually design things for each individual, say ‘What Rawn wants’?

MT: That just part of the equation [now]. Value is unique and created by the person that actually experiences it. Even if everyone has the same iPhone, everyone would have a different experience. So, the question is would you need to mass customize each object, because you need to live within your cost structure as well, or would you need to create something very specific for each and every person? I don’t think so [on the latter]. It’s too expensive to do so. You may still need groups, maybe not along demographic or psychographic lines, but more along lines of interest. For example, back to what I said communities are interesting because they tend to polarize people with the same interest. Get that together and make something according to the wishes of the community, and you’ll likely have something that fits into the needs of the market.

RS: On the aggregation level, demographics/psychographics are too big, and individuals are too small. So communities of interests and affinity are more the scale you want.

MT: Yes, this is going to be the big challenge. People are saying Big Data or Smart Data are going to pool out those interests and groupings along those lines, rather than demographics.

RS: There are systems like Amazon and others that are always brought out as the model. “People who read this, also bought this one.”

MT: I just bought a book for my aunt [that she may like] and I’m going to get suggestions for those topics [*shaking his head*]. They try affinity but they don’t always get it right. I look at many things but I am interested in looking at that the next time I come. Or, even, things that I have already bought

RS: So past history is not necessarily always the case for current interest.

MT: Yeah. We are still on a learning curve.

RS: There is interesting research out there by Doc Searls [and Harvard’s Berkman Center for Internet & Society]. His new book The Intention Economy focuses on rather than trying to guess what people want, just ask them. Have their browser negotiate what it is that they want.

MT: Trying to get to desired outcomes. [It’s] a shortcut.

RS: My point is that Big Data is guessing. From all the data out there right now, we think they need this. Guessing the affinity area itself.

MT: But it is also a balance between guessing and spamming them with requests for information.

RS: The extreme of what we have now: broad-based advertising just in case you might possibly be interested in something like that…

MT: Yeah, the point zero-zero-zero-zero-one chance.

RS: Towards the scale of more… if you read this, you might possibly be interested in this… towards his extreme is the other side of the whole thing: just declare what you want. The browser keeps track of all of that.

MT: But do I trust the companies that I give my data to as well.

RS: That is part of the equation as well. How long do they get to keep it.

MT: Keep the information and have the right to ask for it. With VRM, you put out an RFP for what you want and companies can respond to it. I think that might be an idea but first of you have to be able to articulate what you want, and I don’t see it scale.

RS: The scaling issue is one but that’s a technological problem that can be addressed. The psychological issue where you don’t know what you want, that can’t be solved. Or you keep doing the same things over and over again; you don’t do or buy anything new.

MT: That is the idea of ‘Jobs to be done’. It is to get to what is important and how well these are being satisfied.