Friday, June 21, 2013

Defining the Post-Brand Era (post 3 of 4)

See Post 1 (Welcome to the Post-Brand Era)
See Post 2 (How The Brand Era Happened)

Most marketers can recognize the calling cards of the Brand Era--USPs, mass media, sponsorships and so forth.  However, they may not recognize the Post-Brand Era.  Simply put, the Post-Brand era describes the present marketing environment in which brands no longer comprise the only--or even the most efficient--means for finding and keeping customers.  Other marketing approaches have arisen to shoulder the burden.  These approaches all share one common trait: situational relevance.

In other words, we now market in an environment where we can predict the right place, the right time or, sometimes, the right price that will overwhelm the right brand.

To understand the Post-Brand Era, we should first consider the factors that led to its emergence.  As many would expect, technology played a major role.  However, the technology in question isn't SoLoMo (social, local, mobile), the Internet or even the computer.  Instead, a technology ecosystem enabling communication and commerce with widely dispersed and decentralized tendrils reaching nearly everywhere on the planet led the way.

You call it the Post Office.

Here's what happened.  Postal Services, led by the United States Postal Service (USPS) allowed retailers and direct-selling manufacturers alike associate customers with specific addresses.  Over time, they learned that they could make increasingly accurate educated guesses about what customers wanted to buy and, in turn, promote those items to them.  From the consumers' perspective, they bought from direct marketers not because the offers seemed like a good idea for most people, but rather because the offers seemed like a good idea for them as individuals.

Some marketers abandoned traditional brand marketing entirely, relying instead only on direct mail or its followers, direct TV and eventually online direct (among other direct channels).  Indeed, the addition of online marketing to the mix only increased the scope and effectiveness of direct marketing.  A few years into the 21st century, brand marketers have the ability to segment and change offers in near-real time.  In short, marketers now have an easier time than ever forgoing the Mr. Right of branding for the Mr. Right Now of direct marketing.

Brand marketers might argue that this kind of direct marketing constituted de facto brand marketing.  That is, direct marketing tactics like Johnson boxes, starbursts and the venerable "but wait, there's still more!" constituted a shoddy sort of branding.  These brand marketers may, in fact, have the right of it.  However, successful direct marketers laugh their way to the bank.  They find success in selling despite, or perhaps because of, their disregard for traditional brand thinking.

Moreover, direct marketing represents only one alternative to brand marketing.  Marketers can segment offers not only in terms of tightly-defined groups of people, but also tightly-defined segments of time and place.

Airlines, for instance, have long understood that branding doesn't get them all that far.  Rather, people pick flights based on timing and pricing.  Thus, while air passengers routinely complain about the Byzantine system of airline ticket prices, airlines realize that tickets for the same routes have different values to different passengers at different times and places.  For instance, a businessman making a last-minute trip to save an account will inherently value a ticket more than a grandmother planning a visit to her grandchildren weeks in advance.

Demand-based pricing has exploded recently due to the Internet (think of StubHub or even eBay for that matter).  However, the tactic has existed for millennia (WARNING: nearly pointless aside from classical history).  The pre-Socratic philosopher Thales of Miletus reckoned that anyone with half a brain could make money if he wanted to.  When his friends laughed at him, he decided to prove his point.  After the olive harvest that year, he bought up all the olive presses, the contraptions used to make olive oil.  His friends asked him what he was going to do with all those olive presses after the harvest.  He said nothing.  Guess what he did when the next harvest came along?

Traditional bricks-and-mortar retailers have a similarly distinct perspective on consumers.  While a customer may only visit a store for 20 minutes, the retailer she visits has nearly 100% of her attention while she shops.  By contrast, a consumer might watch hours of TV, but even if commercials make up a third of that time, the brands producing those commercials have only a slim percentage of the overall time to connect.  As a result, many retailers and their supplier partners have used the store to change consumers' minds on the spot.

I'll give you an example from a cell phone manufacturer I worked with a few years ago.  They told me that when a consumer has a specific brand and model of a cell phone in mind when he goes into a store, he'll buy that brand, but not necessarily that model, 85% of the time.  However, if that same customer only has the brand in mind, the chances of buying that brand drop to 20%.  Suffice it to say that retailers have any number of ways to change your mind, even when brand preferences exist.  If a gift-with-purchase, an in-store demonstration or a clever package has ever changed your mind in-store, you already know that.

How does brand marketing relate to tactics such as direct marketing, dynamic pricing and in-store marketing?  Sometimes, the brand drives those practices, such as when Wal-Mart promises the lowest prices.  In this case, they forswear dynamic prices.  Dell made direct selling a cornerstone of their growth in the 1990s by promising custom-tailored PCs.  And, of course, branding often determines the design and offers of in-store marketing.  You would never see a Coke display in yellow and green.

However, the brand doesn't have to lead all of the efforts, as I suggested in the direct mail and dynamic pricing examples above.  They may act in parallel, as with an airline's dynamic pricing and its brand campaign.  A branding purist might equate this situation with anarchy.  However, sometimes it makes good business sense to operate these approaches independently of the brand.  For instance, L.L. Bean trades on its history as a folksy New England institution, but that doesn't stop them from employing extremely sophisticated direct marketing efforts.

All told, tools such as direct marketing, dynamic pricing and retail marketing offer marketers cost-effective complements to brand marketing.  Brand marketing is no longer the only way to skin the cat, so to speak.  More to the point, these alternative tools have only grown more effective over time.  In short, the changes in technology and other factors mean that relying only on brand as an organizing principle for marketing may do more harm than good, such as when JC Penney used new branding to upend a popular--or at least well-understood--pricing model.

In the conclusion to this post, I'll discuss how marketers should align their brand and post-brand marketing efforts to maximize their opportunities.  While other approaches have diminished brand marketing, it still has a vital role to play.

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