The Relationship Between CMO and CIO

Because the brand is ultimately about the consumer experience, I have spoken about the cooperation that needs to happen between CMO and HR VP, but equally importantly in today's digitized world, there needs to be a close working relationship between the CMO and the CIO.

Consider the impact of the online banking software and its functionality to a customer's experience of his or her bank. Or of the software that powers the bank's ATMs. Consider how Tesla vehicles are completely dependent on Tesla's software in creating the user driving experience. Or consider any retailer that has both an online and physical retail presence. Does the software make the user experience seamless across the channels? Or any company that uses a CRM system. How good is that system at creating personalized customer experiences?

Amazon.com's user experience is completely based on software. And Uber and LYFT could not have become the industry disruptive brands that they became without the intricate software that drives them. But even consider the software that drives airlines' pricing, capacity management and transportation logistics. Or consider the software that supports FedEx, UPS and other package delivery companies. Even drone deliveries are software dependent.

My point is that software makes all of the difference in the world regarding user experience and therefore brand experience. So, if a CMO is not constantly working with the CIO to improve the customer experience, then that CMO should step down to make room for someone who is more attuned to today's world.

Is Your Brand Still Relevant?

When talking about brands, brand managers often mention relevant differentiation but a less talked about topic is brand relevance. What happens when your brand is no longer relevant to its target customers? What happens when it is decreasingly relevant to any customer? What are the signs that your brand is losing relevance?

If you are a typewriter brand, what is your relevance in the age of laptop computers, tablets and even smart phones? If you are a photographic film brand, what is your relevance in the age of digital cameras? How relevant was the Blockbuster brand after the emergence of Netflix or Amazon Prime? If you are a taxicab brand, what is your relevance in the age of Uber and Lyft?

But one doesn't even need to go as far as brands that have been the victims of completely disruptive technologies. About ten years ago, I conducted a series of workshops for library administrators from a wide variety of academic, private and public libraries, helping them not only to think about their brands' missions but also about what they intend to be to thrive well into the twenty-first century. Similar thinking is happening (or needs to happen) for shopping malls, brick and mortar retailers, metropolitan areas, city centers, medical practices, museums and universities. 

What was relevant twenty or thirty years ago, or even ten years ago, is no longer relevant today. People expect entertainment, engagement, sound bytes, ease of use, remote access and even a shared set of values. Things are just changing too fast. The Internet, AI, robotics, big data analytics, 3D printers, alternative energy sources and the like are changing people's expectations and how they interact with the world. They expect lower cost, being able to order from their smart phones, on-demand use, instantaneous delivery, home delivery, entertainment, education, engagement, cross-channel integrated customer databases and customer-centric service.

So, is your brand and its business model still relevant? Or do you have some work to do to insure its long-term, and possibly even near-term, viability?

How Can Start-Up Brands Beat Well-Known Brands?

I was recently asked two related questions: Why are new no-name brands able to topple big decades old brands in today's environment? How can a small start-up brand effectively challenge older established brands?

There are so many different ways to answer this, many related to technology, but some also related to legacy brands resting on their laurels. The advent of digital photography (invented by Kodak) killed Kodak's previously highly profitable business model that was driven by film purchase and developing. This disruption was amplified by the advent of smart phones with built-in cameras. 

Uber's online platform not only revolutionized and democratized the way people can get rides but it also made it much simpler to find, hail and pay for a ride. Plus, it provided for a record of one's paid automotive excursions. This is an innovative model that is scalable and has network effects. Also working in Uber's favor is the general low level of quality of taxi service compared to the service offered by Uber drivers driven by a constant customer feedback loop. 

Though backed by a lot of money from Pay Pal's founder Elon Musk, Tesla also has made significant inroads vis-a-vis legacy automobile brands. It has done this by sheer strong will and innovation. From its vigorously pursuing the concept of a luxury all electric vehicle to its sales and marketing innovations, Tesla has taken the risks to do things differently. 

The Internet also makes it easy for smaller companies to seem bigger than they are and compete effectively with larger, more well-known companies. And the customer targeting offered by Facebook and other social media platforms makes it more cost effective to go after highly targeted customers. 

CarMax, though supported with major funding, came into existence because legacy used car dealerships did not treat customers well. CarMax saw the opportunity to make automotive purchasing easier and more transparent. Again, it relied on an innovative business model and a transformative technology, a database that can be accessed from anywhere through the Internet. 

Airbnb is another example of a brand that has used the Internet as its platform to achieve scalability. But it also is driven off of the concept of shared resources. This same sharing of resources has worked for Zipcar and Zagster.

So, in summary, these examples point to the following sources of legacy brand disruption and displacement:

• An innovative business model
• A superior model of customer service delivery
• New superior technologies
• The Internet
• Software-driven solutions
• Scalability
• Network effects
• Resource sharing
• Product differentiation
• Highly targeted marketing

Brands, Change & Innovation

The rate of change in our society continues to accelerate. This causes many people quite a bit of anxiety. Emerging technologies have replaced millions of jobs but, so far, they have created more jobs than they have eliminated. 

Consider what digital photography (invented by a Kodak scientist) did to Eastman Kodak company. Consider what Uber is doing to traditional dispatcher-led taxi cab companies. Consider how airbnb.com is impacting the growth rate of hotel chains. What did laptop computers do to desktop computers? How are pad computers and smartphones impacting laptop computer sales? Consider how Hallmark and American Greetings are impacted by digital technology. Consider what CreateSpace and other self-publishing platforms have done to traditional book publishers. What will artificially intelligent medical diagnosis systems do to medical internists? With self-driving automobiles, how will the auto insurance business change? What will Tesla and its battery-driven vehicle revolution do to the oil industry (and the auto industry and gas stations)? Where will drones ultimately take us? What will increasing aerial surveillance do to our ability to capture criminals and prevent wars? Consider that AI experts are exploring how to give computers the capacity to innovate. And this is just the tip of the iceberg.

Consider how Einsteinian physics superseded Newtonian physics and consider how quantum physics recast Einsetinian physics and consider the potential impact of superstring theory and multiverse theory. 

Research universities and company R&D labs are working on these disruptive technologies - energy storage, fuel cells, genomics, advanced materials, autonomous vehicles, renewable energy, advanced robotics, 3D printing, mobile Internet, automation of knowledge work, cloud technology, integrated digital design and photonics.

We were recently approached by a company that is on the verge of commercializing human organ regeneration. And consider the LED revolution. Incandescent and florescent lightbulbs may soon become historical artifacts. And several companies are working on developing direct computer-brain interfaces.

In a rapidly changing world, no business is safe from technology-driven obsolescence. So, what is a brand manager to do? For that matter, what is any business manager to do? Here is what will matter for future survival, and more importantly, to thrive well into the future - higher education, advanced degrees, lifelong learning, a solid understanding of math and science, diverse interests, diverse reading, personal flexibility, ideation skills, courage in the face of uncertainty, the ability to change course at a moment's notice, understanding the intersection of many different scientific disciplines and technologies, an opportunistic attitude, entrepreneurship, the ability to take risks, a penchant for action, an optimistic attitude and the ability to discern patterns and recognize meta-themes.

Sources of Brand Differentiation

Brands benefit from a wide variety of sources of differentiation. While many components can contribute to the differentiation, often there are only one or two dominant ones. For instance, Absolut vodka benefits from its unique bottle shape and the promotion of that unique shape. GEICO insurance benefits from its huge advertising budget and it unique and quirky advertising including its charming gecko character.  On the other hand, Amazon.com benefits from from being one of the first brands to adopt the online retail model, including its very powerful search and browse technologies. Also, the fact that it plows all of its profits back into business improvement. Uber benefits from a breakthrough business model and the technology that supports it, which drives costs down substantially while improving the customer experience. Robert Graham clothing benefits from its bold product designs, coupled with its highly unusual product features (i.e., custom designed Swarovski crystal buttons) and its interesting tagline - Knowledge, Wisdom, Truth. Tesla Motors automobiles benefit from a visionary product concept (all-electric luxury car), supported by leading-edge high quality luxury features and a relentless pursuit of excellence. Opaque restaurants benefit from a unique restaurant concept - dining in the dark.

While all of the benefits listed above might be classified as some combination of functional, emotional, experiential or self-expressive customer benefits, those benefits derive from different sources. In some instances, it is the result of product design, marketing strategy or advertising genius. In others, it is the result of radical new business models or organizational cultures driven toward excellence.

The point of this is that sometimes marketers create the primary source of differentiation, while in many instances it is something that is typically outside of the marketer's control - visionary leadership, business model design, product design, organizational design, the organization's culture, etc. - that leads to the brand's differentiation.

Think about what differentiates your brand. Visionary leadership, disruptive technologies, radical new business models and cultures of unrelenting excellence often can have a much greater impact than what a marketer can control. What do most all of these have in common? They are are based on a design and innovation mentality, whether it applies to business model design, organization design, product design, product packaging design or marketing strategy/tactic/campaign design, there is some level of design and innovation in each of these examples.

States of Mind

When I think of evocative brand names - Pandora, Hotwire, Apple, Gateway, Tesla, Amazon, Uber, AXE - or when I think of evocative advertising imagery, from the cigarette ads of yesteryear (Marlboro) to today's pharmaceutical ads (Lunesta), it makes me think of how important signaling a state of mind is. This led me to inventory different states of mind that people seek or to which they aspire. Here is the list I compiled (in no particular order):

• Tranquility/serenity
• Freedom
• Expansiveness
• Effortlessness
• Anger
• Rebellion 
• Discovery
• Delight
• Naughtiness
• Playfulness
• Complete letting go
• Uninhibited
• Letting off steam
• Complete control
• Adulation
• Debauchery 
• Animal magnetism
• Unbridled bliss
• Sexual release
• Lightness
• Belonging
• Complete acceptance
• A sense of being home
• Longing
• Nostalgia
• Venturing into the unknown
• Testing the outer limits of achievement
• Taking risks, living on the edge
• Flirting with danger or mortality
• Instigating drama
• Feeling completely safe and secure
• Melancholy 
• Tantalizing the senses
• Surrounded by beauty
• Complete comfort
• Complete luxury
• Complete indulgence
• To be completely satiated
• In the chase
• Striving
• Living completely in the moment
• Flow state

My point with this is that brands, through names, identity systems, advertising and other imagery can tap into and evoke these deeply sought after states of mind ... and that will sell products.

Taking Risks

Southwest Airlines tried something new when it decided to create an airline based on a new low cost model and employees who were cheerful and funny. Amazon.com took risks when it created an all online mega store. eBay was also an entirely new concept. Industry insiders laughed at GEICO when it began advertising so heavily with a gecko spokesperson. Uber thought out-of-the box when it created its new model for paid vehicular transportation. Wegmans has a history of constantly trying new things and integrating them if they work and abandoning them if they don't. Tesla started a new car company based on the concept of an all electric luxury car. And they decided not to sell through dealerships. CarMax created an entirely new model for selling used cars. Abercrombie & Fitch repositioned itself from a staid century-old upscale sporting goods store to a hip clothing store targeted at the teenage market. 

Not all risks pay off. Saturn was a different kind of car company and a different kind of car but when it got integrated back into GM mainstream, it began to fail. Song Airlines, a Delta Airlines startup, was designed as a lifestyle brand targeting stylish hip professional women and focused on creating a new culture in flying. It started at the worst possible time for airlines, post 9/11.

My point with each of these brands is that wildly successful brands (and some that fail) usually step out of the box, break the industry mold and take risks. As a brand, you cannot win by doing what everyone else in your product categories is doing. 

I can't tell you how many clients have said to me, "But if we do that, we would be taking huge risks. No one else in the industry has ever done that before." I have also heard the following: "We just don't know how to do that." "That is not our area of expertise." "But then we would be entering a new product category." "Our shareholders would not allow that." "That is just too risky. What if we fail?" Gambling establishments are quick to point out that "you can't win if you don't play." The same holds true for brands. If you are unwilling to take any risks, it is almost certain that you will not stand out as a brand. In fact, every single brand that was successful over the history of commerce took a significant number of risks to achieve their success. That is just how it works. 

If you are unwilling to take at least calculated risks, your brand will never achieve the highly successful differentiation you would seek for it.

Creating "Category of One" Brands

To become a “category of one” brand is the holy grail of branding. What does it mean to become a “category of one” brand? It means that no other brand is even in the same category as your brand. Your brand has created a new category – one that matters to people.

What does it take to create a “category of one” brand? Intuition, insight, vision, risk-taking and an entrepreneurial spirit.

Here are some examples of “category of one” brands:

• The Strong (National Museum of Play)
• Cirque du Soleil (A New Form of Live Entertainment)
• CarMax (A New Approach to Used Car Sales)
• Uber (A New Approach to Paid Transportation)
• Netflix (A New Approach to Movie and TV Watching)
• Naropa University (Focused on Spiritual Enlightenment/Transformation)
• Opaque (Dining in the Dark)
• Modern Toilet Restaurant (Toilet Themed Restaurant)
• Elio Motors (Two Seat, Three Wheel, 84 MPG Vehicle for $6,800)
• Medifast (Energy Drops and Flavor Infusers)

Central to creating a “category of one’ brand is envisioning and innovating the new category. This will certainly create buzz and a huge amount of free publicity. It will also create new demand. The people to whom it is targeted will want to try the new brand. And then they will want to spread the word about what they experienced. Word-of-mouth marketing is significant for “category of one” brands.

Creating a new category also creates a first mover advantage, and depending on how fast one can scale up, significant economies of scale and network effects. This creates tremendous financial advantages for the “category of one” brand and barriers to entry for me-too brands and other subsequent competitors.

Eventually, other brands will enter the category, especially if it is large, profitable and growing. However, if your brand is the one that created the category and it scaled up fast and took advantage of the category creation buzz, it should have financial advantages and mindshare advantages.

Are there currently or will there soon be competitors to each of the above listed brands? Sure, but there will likely never be another Cirque de Soleil.

Being a “category of one” implies a fair amount of innovative thinking, product innovation, often system innovation and usually business model innovation. So “category of one” brands can even be quite disruptive. Consider Amazon.com when it was first introduced or eBay when it was first introduced or Uber today.

Brands that innovated new categories must take charge of and credit for those new categories and they must grow them quickly or they might lose their advantage. Kodak created digital photography but consider its position in that market today. Who created the smartphone category? Who owns it today? Who created the MP3 player category? Who owns it today? Is it even relevant anymore with the emergence of the smartphone category? Which brand created airport rental beds? Is that brand still dominant in the category?

Instead of trying to differentiate your brand within an already crowded product or service category, consider creating a “category of one” instead. It is more fun. It will create more buzz. You will get a lot more free publicity. And, if you do it right, your brand will grow at an amazing rate. To read my post on seven strategies to  create new business categories, click here.

We offer a full day workshop in which clients explore alternative category definitions, competitive frames of reference and preemptive brand positions to discover a potential “category of one” brand position. This highly facilitated workshop is preceded by stakeholder research. Its output is a recommended “category of one” brand position, which can be translated into a tagline, a marketing campaign and inform strategic business decisions.

Please email us about how this workshop can benefit your brand.