By Nick Johnson - July 28th, 2015

Social media has given your customers far more power to dictate the conversation around your brand. Marketers are scrambling to respond.

"Brand is what you do"

—Dominic Collins, Chief Marketing Officer of Legal and General

In days gone by, a brand was a shortcut to quality and a particular set of attributes for customers.

People bought Coca-Cola because they knew what Coca-Cola was, they knew it was likely to be safe, they knew it would taste broadly the same in Brazil as it would in Belgium, and they knew it would contain broadly the same ingredients.

Those people didn’t have much of a say in how Coca-Cola was perceived by the general population. If the people marketing the brand decided they would make a somewhat counterintuitive move into promoting a make-believe old man who gives children presents in a red suit, a consumer could do little other than either accept it or switch to Pepsi.

That gave companies power to define their brands rather more easily than they do nowadays. To simplify radically, if Anheuser-Busch wanted Budweiser to be seen as a premium product, they started calling it premium. Sooner or later, it stuck.

Not anymore. Brand management as we knew it is dead. The increasing power of the customer has killed it.

The changing definition of brand is both an effect and an example of the rising power of customers in their relationships with businesses.

The overarching message companies want to disseminate—the way they want to look, how they act and feel, and how they deal with customers—is changing. There’s a deep, penetrating, and permanent change in what brand is, how it is built, and how it is maintained—and the power a marketer has to influence it.

Essentially, the marketer has significantly less of that power. Fortunately, marketers can still have a meaningful impact—and end up with a stronger, more engaging brand than they started with.

Your Customers Have More Choice and Power

“Brands don’t belong to companies any more—they belong to the people who choose to buy them.”

- Dan Lewis, Chief Public Affairs Officer, Molson Coors

Dan Lewis, Chief Public Affairs Officer for beer company Molson Coors, told me this while we were working on the Molson Coors case study that’s included in Chapter 5 of The Future of Marketing, our founder Nick Johnson's new book. Customers no longer need your brand as much as they once did. Now they have a choice. Indeed, they have more choice than they’ve ever had.

As we’ve seen, hundreds of new marketing messages and new competitors are vying daily for your customers’ attention. And those new companies aren’t backward about coming forward.

Your competitors are doing all they can to engage with your target audience as quickly, meaningfully, and efficiently as possible.

The brand with the biggest marketing budget will not win. The brand with the best customer experience will. And for you to be that brand, you must build the customer into every element of your business.

You must avoid the lazy confidence of many large corporations the world over in thinking that your priorities matter to anyone outside your company, that people will see the value in your product, and that your quippy little piece of marketing copy will be as fascinating for your customers to read as it was for you to write.

Backstory Is More Important Than Tagline

Increasing customer power means increasing customer expectations.

And nowadays, customers expect an awful lot more from their engagement with brands than that which results from an exclusive focus on Product, Place, Price, and Promotion.

This newfound power means customers feel entitled to look behind the curtain, investigating the inner workings of a company and holding them to the high standards they now expect. Their increased ability to choose means that they look beyond simple product benefits to find a brand they can buy into, a way of working that appeals, and an authenticity to communication and marketing.

In short, they look for a story they can believe in.

Brand is not about communications strategy. It’s no longer appropriate to simply “have a message.” You have to live up to that message in a far more extensive and deep-seated way than ever before.

An authentic brand story isn’t a confection manufactured by the PR team—it’s a representation of everything about how a company works, its position in the world, its goals, and its relationships with customers.

In short, branding just got a whole lot more complicated.

The Impact of the Global Financial Crisis

I had the opportunity to speak with Andy Gibson when he was still Chief Marketing Officer for Bacardi. He said that:

“There’s been a huge mental shift, toward a more truth-seeking, discerning, authentic experience for consumers than there has been in many generations.”

Many feel that the advent of the global financial crisis precipitated a shift in consumer approaches to corporations. Customers began to be aware of the repercussions of mistakes they made and began to strive for something more grounded, real, and authentic. Andy Gibson also commented that customers were now seeking products and companies that

“have a heart, a soul, and a truth, as opposed to something that’s made up and created.”

That shift in what customers are looking for has a significant knock-on effect on marketers. It changes how you must approach every element of your role. Customers are demanding that your brand story stacks up, and they demand to be let behind that velvet rope. It’s your responsibility to ensure that they like what they see when they get there.

Brand is a Conversation between Companies and their Customers

“Your brand is always going to be a conversation between what your customers view it as, and where you’re trying to take your brand.”

—Victoria Burwell, CMO, McGraw-Hill

Customers still care about brand—perhaps now more than ever–—but what they care about has changed.

In a post-financial crisis world, customers want to buy into a company that means something. They want to buy a product that does what they want as well as they want it to. They care considerably less about the size of your marketing campaign, the fact you’re a market leader, or the fact that you advertise at the Super Bowl. As a marketing executive, it’s up to you to ensure that this message gets into the heads of a corporate boardroom laboring under the misapprehension that the world hasn’t changed.

The process of building and maintaining a brand is now collaborative. Customers have more power, and more of a contribution to make, in defining what your brand is. This process isn’t a new one, as Russ Findlay, Chief Marketing Officer for Hiscox Insurance, points out:

“When I read your overview for the book, it reminded me of a project I worked on back in the mid-’90s where we tried to predict the future of consumers. We did a big global trawl through a number of countries and came back with a number of observations [regarding] global megatrends. And one of those trends was ‘Consumers in Control.’”

So customer power has been increasing for decades. But the process reached critical mass in recent years, with 88% of marketers saying that customers have had more ability to influence and define their brand over the last five years.

In large part, that’s due to the growing power of social media. The rise of social networking has meant that corporations no longer have the whip hand in defining a brand. Fundamentally, your brand is now a conversation between your company and your customers.

I’ve been somewhat dismissive of the “4 P’s” thus far. It’s worth pointing out that it’s still incredibly important for a company to choose what it’s going to stand for and what it wants to talk about. However, the 4 P’s of Product, Place, Price, and Promotion now simply define the subject and parameters of a conversation. Not the conversation itself, which is controlled to a great extent by your customers—and importantly is happening whether or not your brand is involved. As Jason West, former Chief Marketing Officer of food giant Heinz told me,

“We used to control the conversation. And now we sometimes do, sometimes don’t, sometimes never.”

Companies must therefore not only initially set out what they hope their brand comes to be, but also listen to the response from customers and act accordingly. Barry Wolfish, Chief Marketing Officer for dairy brand Land O’Lakes, said:

“There’s a recognition that brand has been democratized. So it’s not just us pushing messages at consumers and hoping that we get it right. We get very real-time feedback about what resonates and what doesn’t, and we also get feedback on what’s missing.”

The challenge is for companies to set up in such a way that they can engage meaningfully in that dialogue. It’s a risk not to, as Arra Yerganian, Chief Marketing Officer for One Medical Group, told me:

“If you’ve had a great experience, you’re encouraged to talk about it. A lot of people do. If you’ve had a terrible experience, you do so as well. And any company that’s not listening in to that is at a huge disadvantage.”

When you ask marketers about their budgets, you can see that they have already begun to take action. Currently, 9.4% of marketing budgets go toward “social” activities, according to The CMO Survey.

This is expected to increase to 13.2% in 2015 and accelerate to 21.4% by 2020.

Victoria Burwell, CMO at McGraw-Hill Education, puts it best:

“I think the era of 50 years ago, when marketing happened at you, is dead. Now consumers expect and demand a conversation. It’s something they want to be privy to.”

Your Brand is your Story, and it's Told in Collaboration with your Customers

That means that the definition of your brand changes whenever your customers want it to. And that definition is based not on your marketing messages, but on your customer experience, your operations, and how those customers see you.

It’s a broad and confusing area. But two things we do know:

  1. The backstory is as important as the tagline. Your consumers are searching for something more. If they scratch at the truth and find there’s no substance under it, they’ll leave your brand and find something more aligned to their needs and values.
  2. Brand is driven by conversation. In a world of social media and customer power, brand is no longer defined by a company and consumed by the customer. It’s the product of an organic, ever-shifting discussion between those two parties. The company can influence that discussion, of course, but the owner of the brand is now, in Dan Lewis’s words, your customers.

This is the third extract from our founder Nick Johnson's new book "The Future of Marketing: Strategies from 15 Leading Brands on How Authenticity, Relevance and Transparency Will Help You Survive the Age of the Customer".The first extract, "Power Has Changed Hands" is available here.The second extract, "Against Humanizing Your Brand" is available here.

The book is published by Pearson, and available to purchase here. New extracts will be published here in the coming days and weeks.

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