“Customer loyalty is a thing of the past.” So declares James Surowiecki in this week’s New Yorker Financial Page column. As instant access to objective information — reviews, forums, social media — becomes the new norm consumers can quickly find the new best option in virtually any product category without having to rely on the brand.
The New Yorker article references the fall from grace of Lulu Lemon. The yoga pant maker, once a lifestyle brand with a cult-like following, went into a tailspin when its product quality and defensive faux pas fell victim to the web.
Surowiecki’s thesis is based on a new book, Absolute Value, by Itamar Simonson and Emanual Rosen. While I haven’t read it, its premise appears to be that historically “brands were a response to information poor environments.” Consumers had to rely on advertising, packaging and imagery to determine whether a product deserved attention and consideration. The brand, it’s reputation and what you expected from it, may have even trumped its actual quality since it was harder and presumably riskier to try an untested alternative. Now in an age of instant access to more objective information, brands matter less.
I agree wholeheartedly with this sentiment from the publisher’s blurb:
“How people buy things has changed profoundly—yet the fundamental thinking about consumer decision making and marketing has not. Most marketers still believe that they can shape consumers’ perceptions and drive their behaviors. But current mantras about branding and loyalty are losing their relevance. When consumers base their decisions on reviews from other users, easily accessed expert opinions, price comparison apps, and other emerging technologies, everything changes. Contrary to what we frequently hear, consumers will (on average) make better choices and act more rationally.”
But is that news? And does it exclude the value of making a brand stand for something consumers can relate to? Even in the days when Heinz and Crest and Coca Cola pummeled consumers with awareness generating advertising, would anyone, with or without access to consumer reviews, have bought them over and over, or paid a premium, if they were lousy or inferior products?
Surowiecki and the authors suggest that before the Internet our judgement as consumers was impaired enough that we would have. If that’s the case, why did the American automobile makers lose so much market share to imports even before the web became so dominant?
Let’s back up for a second. Branding came about post the Industrial Revolution when new technologies, larger production factories, supermarkets and suburban sprawl brought an end to an era when consumers knew who made their products. Once cobblers, tailors, bakers, butchers were familiar to us. We knew the folks who made our clothes and food.
But when products on the shelves came from distant factories, marketers had to create Keebler Elves or Popping Fresh Dough Boys to make up for that lost connection. Advertising, messages, contrived brand personalities and imagery were all conceived to convey certain feelings that might make us like, try and feel good about the products we bought. If it worked, there was a snowball effect. Sales led to visibility, which led to more shelf space, which led to more sales. And the cycle accelerated.
Branding, the verb, was often detached from the full product experience. The former was simply slapped onto the latter for advertising purposes. And we can agree that this tactic has lost much of its effectiveness. But don’t most enlightened marketers know that? Even Dominos figured that one out when it publicly admitted the shortcomings of its product.
Today, most consumers define a brand based on the totality of its product quality, belief system, user experience and communications. Whether we’re talking about ice cream, apparel or automobiles. And smart brands know it. Look at Zappos, Jet Blue, Nike, Burberry, Uniqlo, or more recently Shinola. And yes, even General Motors and Ford. None would ever think of their brand simply as the advertising or the “branding.”
At the same time, none of those brands, regardless of all the consumer reviews that offer testament to their attributes, would ever be as successful as they are without the “branding” that helps define them, gives them a handle, and makes them accessible.
Let’s agree to this.
A brand isn’t a mark or a logo or even an ad. It’s a combination of our expectations, past and anticipated experiences, and the promises the company makes and keeps.
Branding is the way in which that story gets told and portrayed.
You need them both. And chances are pretty good that neither is going away.