Building Customer-brand Relationships

Don E. Schultz, Beth E. Barnes, Heidi F. Schultz, Marian Azzaro

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317475606
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Almost every advertising, promotion, or marketing communications textbook is based on an inside-out approach, focusing on what the marketer wants to communicate to customers and prospects. This text takes a different view - that the marketer and the customer build the ongoing brand value together. Rather than the marketer trying to 'sell', the role of the marketer is to help customer buy. To do that, a customer view is vital and customer insight is essential. Customer insights allow the marketer to understand which audiences are important for a product, what delivery forms are appropriate, and what type of content is beneficial. "Building Customer-Brand Relationships" is themed around the four key elements marketing communicators use in developing programs - audiences, brands, delivery, and content - but provides an innovative approach to marketing communications in the 'push-pull' marketplace that combines traditional outbound communications (advertising, sales promotion, direct marketing, and PR) with the inbound or 'pull' media of Internet, mobile communications, social networks, and more. Its 'customer-centric' media planning approach covers media decision before dealing with creative development, and emphasizes measurement and accountability. The text's concepts have been used successfully around the world, and can be adapted and adjusted to any type of product or service.

CHAPTER 1

Customers and Brands

Marketplace Drivers for All

Customers and brands and the relationships between the two are driving the twenty-first-century marketplace. Marketing organizations rely on customers, who are generally their primary source of income and profit. A number of years ago, Peter Drucker, the famous management guru, said that the primary purpose of a company is “to create a customer. … It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods. What the customer buys and considers value is never a product. It is always utility, that is, what a product or service does for him.”¹

Brands are the primary connectors between the organization and its customers, the key ingredient in building successful relationships between the company and the people it wants to serve. Yet the industry, both practitioner and academician, seemingly know little about brands although they have been around almost as long as people. While prehistoric people did not think much about brands and branding, they practiced a crude form of identification nevertheless since different features, capabilities, and actions have always separated one person from another, for example, through dress, types of animals hunted, where they lived, their tribal rituals, and the like. As early commercial people discovered, they could use symbols or marks to distinguish the goods they made from those of other artisans, brands began to develop—for example, when the first potter marked a vessel with his thumbprint, or when the first baker hung a sign outside her hut with her family symbol, or when one village became well known for the quality of its well water. In each case, the producers were establishing their name as the source of the goods being sold or traded. History has not changed that practice. Today marketers simply have a more formalized method of differentiating and connecting people and places and products and services. That method is what we call in this text customer-brand relationships, and it is this concept that will drive the marketplace in the future, both locally and globally.

Differentiation is the key. Differentiation is what separates people. What separates organizations? What separates countries and cultures and ways of life? Companies and people are differentiated and differentiating. We will focus on company and brand differentiation in this text for it is differentiation that allows the marketing organization to separate its goods and services from all the “look alike, sound alike, taste alike” competitors and to build an ongoing relationship with customers. Ongoing is the key word. In a mostly transitory marketplace, consistency, commitment, and continuity become the key elements all organizations should strive for. And all those elements can be summed up in the term customer-brand relationships.

The text has some simple themes. How marketing organizations can understand customers and prospects based on their differences. How marketing organizations can use brands and branding to differentiate their products and services from those of competitors. How brand communication, by being differentiated, can build the long-term and long-lasting relationships between the brand and its customers—relationships that benefit both parties. And, make no mistake, brands become ever more critical as the world moves from a marketer-controlled to a customer-controlled marketplace.

SETTING THE STAGE: KEY CHALLENGES AND REQUIREMENTS FOR BRAND MARKETERS

Today, there are four major challenges facing brand marketers—commoditization, communication, fragmentation, and reciprocity. And there is one clear-cut, overriding requirement: continuity. Continuity of relationships commonly is the result of reliability, or organizations making and keeping promises to customers, employees, distributors, shareholders, and other stakeholders. Generally, these issues are not much discussed in promotional circles—advertising, promotion, direct marketing, public relations, and the like—although they are indeed promises to the marketplace that the firm makes, promises that must be kept. We will demonstrate in this text why and how they are the real challenges for brands and how mastery of these areas will be critical in the days ahead as marketers move toward continuity of relationships with customers and away from traditional, short-term, outbound, “push” forms of marketing communication campaigns.

Commoditization and Differentiation

In today’s marketplace, differentiation is critical. Once the marketer could develop a product or service with a unique feature or function and expect to have a modicum of advantage over competitors for a viable period of time. Today, however, competitors seemingly can replicate any product improvement or value differentiation almost overnight. Given the fragility of physical features or even service quality, branding today is not so much about differentiating product features or service locations as it is about creating customer value, whether that be actual or perceptual and whether delivered through marketing communication or physical differences. The key, of course, is delivering on those perceived differences in the marketplace.

Commoditization is rampant in the world today and will likely only get worse. Thus, branding becomes one of the key elements in the success of any organization. Without a strong branding program, organizations will be forced to compete primarily on price, logistics, and delivery terms, areas that are easily negotiable and that have finite values for opportunities and returns.

So what will differentiation be like in the future? Will it continue to be resident in such historic methods as innovation, research and development, and new technologies? Or will it take on new forms and features that are more closely related to the areas of marketing and communication? That is a key discussion point in this book.

Exhibit 1.1 “Push” or Outbound Model

Communication

Historically, organizations typically considered communication nice to have but not critically important to the success of the firm. Communication was done when times were good or when there were clearly identifiable threats or challenges. However, in between, communication was often considered an expensive toy for the marketing people and continuously subject to reductions, downsizing, or outright elimination by senior management. The fact that communication people could provide little evidence of the financial returns on their marketing communication spending only worsened the situation.

This view that communication was nonessential may have been acceptable when communication was largely a one-way street—from the marketer to its customers—and when the marketer could dictate where and how it would occur. That created the base for the traditional promotional “push” marketplace, a system where the marketer talked and the customer or prospect was supposed to listen and respond. That approach generally looked like Exhibit 1.1.

Today, however, communication is dynamic, multifaceted, and occurs whether the marketer initiates it or not. Companies can be challenged by every blogger or Web site developer anywhere in the world. Product flaws can be quickly exposed and widely publicized—witness the embarrassment brought upon the Kryptonite bicycle lock when a Web-based discussion board revealed that the expensive ($100+), supposedly secure, lock could be easily picked using a Bic ballpoint pen.² Or consider the furor kicked up by the Neistat brothers, Casey and Van, whose frustrations with the short-lived, irreplaceable batteries in the first-generation iPods resulted in the video “iPod’s Dirty Secret,” which raised challenges Apple simply had to address.³ Management can be publicly challenged, as seen in the saga of Martha Stewart and in the ongoing labor relations conflicts for Nike and Wal-Mart. In short, marketers have lost control over the communication process they formerly thought they ruled.

Today’s marketplace features both traditional, outbound or “push” communication and the new, emerging areas of customer-controlled or “pull” communication. Pull communication is generated by the customer or the audience, as illustrated in Exhibit 1.2. As shown, customers and prospects can access or acquire information about their needs and relate that to the organization and its products or services through any number of alternative customer-activated communication systems, such as the Internet, the World Wide Web, digital, and the increasingly ubiquitous social networks such as My Space, YouTube, and a host of others.

Today brand managers must be proactive in all forms of communication, both those they control directly (e.g., advertising, direct mail, events, sponsorships) and those forums where they are only a guest (e.g., blogs, podcasts). Branding is not just about advertising, a point we will return to throughout this book, but it is most definitely about strong and effective communication of all types and forms. Starbucks, the Body Shop, and Red Bull, near-iconic brands built with little or no formal advertising, have used instead powerful, pervasive communication programs to acquire and maintain their marketplace status.

Exhibit 1.2 “Pull” Communication

So communication is critical to brands and branding. The question is what type of communication? How do organizations move beyond traditional promotional forms such as advertising, direct marketing, and sales promotion in order to combine and leverage the possibilities offered by new, interactive media forms? Those are the primary issues facing today’s marketing and branding managers and their organizations.

Fragmentation

Historically, the marketplace has been the site of aggregation, consolidation, and concentration, bringing together buyers and sellers. From the earliest days, bazaars and marketplaces gathered people together to sell or trade their wares, to find products and services to fill their needs, to collect and share information, and to create social systems. This consolidation and concentration has been critical to the growth of civilization and modern economies. Yet, today, the focus is on fragmentation. A fractionalization of marketplaces. Today, the emphasis is on segments of one or only a few. On individualization. On personalization. On “me” as compared to the group. This segmentation challenges traditional branding, which is based on group acceptance and group recognition.

With the increasing emphasis on fragmentation and individualization, can the concept of branding still have value? Does branding and do brand relationships still make sense? Can they be valuable elements in the twenty-first-century organization or are they relics of the mass marketplace of the past? These critical issues for future marketing managers will be discussed at some length in the following pages.

Reciprocity

Reciprocity is a term not often heard today. In the world of “me” and “mine,” reciprocity or the sharing of value just does not fit well. That is also true when it comes to traditional marketing and promotional texts. They are filled with warlike terms—capturing market share, owning a market or segment, offsetting competitors, hitting target markets, creating advertising blitzes, and on and on. In truth, we have built a marketing culture based primarily on conquest. But today not many customers want to be conquered. Instead, they want to be recognized and acknowledged.

In this text, we focus on a reciprocity model; that is, an approach in which the marketing organization and the consumer share equally in the value and benefits of the brand. This simply means that the marketer provides value and gains some return and the customer gains some value and is willing to provide a reasonable return to the marketers. In truth, this is when real brand relationships occur—when both the marketer and the customer give and receive value from their ongoing associations over time.

In our view, today, branding, which traditionally has been one-sided as we noted earlier, is in a state of transition; that is, branding and brand communication issues are discussed and defined only from the point of view of the marketing organization. Customers and prospects are still often viewed as pawns in the branding game. Too many managers believe people and markets can be manipulated and maneuvered to fit the company’s needs and requirements. Branding, therefore, is often described as what the organization wants to do to customers, not what the organization can do for customers.

In this book, we will take the customer view first and translate that into practical, feasible actions for marketers. After all, it is still the marketer who has business goals to achieve, employees to pay, and shareholders to satisfy. It is still the marketing organization and its owners and shareholders who are risking their capital and resources to find ways to satisfy customer needs wants and desires, hoping that what the firm has developed will be of interest and value to the customer. So, while the customer will always come first, the view of this book is firmly on what the marketer can do to create products and services and support them with brand communications to create sustained win-win relationships with customers.

Requirement for Continuity

Modern marketing organizations have traditionally had a very short-term focus,...