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February 21, 2006

Culture as Brand

Here's a thought: large companies have the problem of peering into the crystal ball, while small companies have the problem of functioning in a fishbowl.

What does that mean? Large companies act like they are picking the market; small companies act like the market is picking them. Both cases, tough situations for them to handle.

Ironically, the lip-service in each case is usually reversed. At least when these companies are facing their funders, large companies talk about being picked, and small companies talk about doing the picking. Interesting how things switch when the issue is asking for money instead of taking it.

Thinking of the small start-ups and non-profits that I've worked with (not exclusively!) over the years, I'm reminded that both of them frequently struggle with another interesting choice. They might have multiple value propositions riding on the same competency, or they might have only one value prop that anyone cares about, and must shift amongst multiple competencies in order to continue delivering the goods. My experience with them is that the more the outfit needs money, the more it sends multiple competencies at one value prop -- whilst the more it already has money, the more it imagines that one competency is wonderfully fertile. This is related to the market targeting issue, but it's more directly concerned with competing after the targeting has been done.

Related to that, I notice that we usually try to imagine branding as being a cause versus being an effect. That is, if brand is what we want buyers to think we think we're about, how do we make the many things that we do cause them to see us one way? Or are we simply at the mercy of whatever random things they do to see us?

Mulling over branding a few years back, and thinking about companies that can't see themselves the way customers see them, I hit a point regarding the vast difference between "positioning" and "position" -- hardly a new topic. I suddenly had the thought that to close the gap, the real purpose of a business is to create customers, while the purpose of a customer is to create products.

The realization came from an imaginary dialogue:

Company: "I'm doing this *for You*
Prospect: "Yes, but are you doing it *this way* ?"
Company: "Well, what do I get if I do?"
Prospect: "You get *me*..."

Think about how persuasive it is to be able to tell an audience what kind of customer you make -- which is what we can think of as the "cause" aspect of branding. Prospects would say "I want to be like your other customers" and so the reputation helps you to make more customers. (Good positioning!)

The "effect" aspect is more about the product (or likewise service) that actually gets made. Although the catalyst for the product is the customer, the bottom line is that the company winds up making the product for itself and finding out later if it's good enough to sell. Prospects say "I require something of a certain type" and their scrutiny of your product/service ranks you (leaves you) somewhere in their consciousness. (Position, for better or worse.)

At any rate, those thoughts boil down to the idea that the prospect defines the opportunity by expressing their *preference*, so you market to the preference. Moreso, as savvy salespeople know, the preference reflects an "assumed identity", and the same prospect could turn into several different customers.

Putting it in the context of revenue growth through superior competition, such differences seem to point at segmentation. It's quite interesting to imagine that one given potential buyer might be a customer simultaneously in different segments, but this is something to think about especially in terms of what customer relationship management must address. Frankly, it must address culture -- which is the empirical evidence that the prospect's multiple personalities make sense to them...

Posted by Malcolm Ryder at February 21, 2006 1:53 PM

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» The Purpose of Business is to Create Customers from Marketing Interactions
In Malcolm Ryder's post, Culture as Brand, he presents some great food for thought about brand and positioning as related to customers. He writes: Mulling over branding a few years back, and thinking about companies that can't see themselves the way cu... [Read More]

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