THE EXPERIENCE IS THE BRAND.
But the brand is more than the experience.
Let’s assume:
A brand is “a person’s gut feeling about a product, service or organisation.” (Marty Neumeier)
And that it involves “all the emotional and tangible touchpoints surrounding a product”. (Scott Galloway)
And that its role is to influence people’s willingness to buy or use it and/or pay a premium. Therefore, “if the consumer doesn’t pay a premium, make a selection or spread the word, then no brand value exists for that consumer.” (Seth Godin)
Now let’s look at the impact that the rapid expansion of the Internet has had on brands and the way they’re formed and nurtured.
From perception to behaviour
In the industrial age, marketing often was an afterthought. You had a product — and marketing was about finding an audience and convincing them to buy that product. With the increasing interchangeability of products, the brand became the most important differentiator for people to inform their buying decision. And building that brand became one of marketing’s most important tasks. Which was mainly about creating a perception that would hopefully drive behaviour.
That’s not to say that the “user experience” was not important. If you had a shitty experience with a product or a brand repeatedly, you would eventually stop buying it. So the user experience has always been an important part of the brand. But it was not in the realm of the marketing people and therefore not part of brand building. Today however, it’s playing a much bigger role for brands. In some cases, the user experience is in fact the key element in representing, building and even growing a brand.
From behaviour to perception
The amount of possible interactions and touchpoints between people and brands has grown exponentially. Brands are creating “ecosystems” of content and digital services around their core products to expand their share of time (and wallet) in the busy lives of consumers. They’re following prominent examples.
Undoubtedly, we are experiencing a transformation from a world of “hardware” brands to “software” and service brands. Just look at the latest BrandZ Top 100 ranking. Two of the three dominant brands of the last years are essentially software brands (Amazon and Google), the third one arguably a hybrid between both (Apple).
Compared to hardware brands, the relations between software and service brands and people tend to be more “experiential” by nature, aiming for long-term usage rather than just pushing short-term purchase. This often goes hand in hand with an increased focus on strengthening customer relationships, hence shifting investments from pre-purchase promotion (advertising) to (post-purchase) experiences to drive recurring revenue. Which is what Amazon is pretty good at. Creating a behaviour to inform perception. Their brand was built on an experience rather than a promise. And that experience certainly laid the foundation for their continuous innovation and unparalleled cross-category expansion over the last years.
Wait, but why
Wait. But why did Amazon spend 8.2bn US$ on ‘dumb’ advertising then? Which is a lot. In fact, it puts Amazon among the top global ad spenders with the likes of P&G or Samsung.
Firstly, looking at the absolute numbers conveys the wrong impression. While 8.2bn US$ is a huge number, it’s more interesting to look at the relations between ad spend and revenue across different brands and categories:
In 2018, Amazon spent around 3.5% of their revenue on advertising. But they spent nearly 29bn US$ on research and development — which accounts for more than 12% of their revenue. Which clearly indicates their strategic priorities.
P&G spent around 10% of their annual revenue on advertising and only 3.3% on research and development.
Nike also spent around 10% of their revenue on advertising. They didn’t disclose investments into R&D. But a look at their patent history provides some interesting insight. According to CB Insights, Nike was granted over 690 patent approvals in 2016. Many of those patents were about designs for footwear, apparel and accessories. But a big part of them focused on enhancing the brand experience through software and technology, including innovation around biometric sensors, fitness tracking platforms and product customization, along with several discussing augmented reality and gaming.
Obviously, this comparison is not quite valid. Those are very different brands with different business models. But it indicates the attempt of many organisations to shift from a “hardware” to a “software” business. A transition that will be more likely to succeed for some categories (like Nike’s) than others.
So traditional branding is dead?
8.2bn US$ still is shit loads of money. And Amazon wouldn’t have spent it for nothing. Here’s the catch:
There’s no perfect experience.
Delivering a great user experience is a tricky thing. Even the best user experience is (theoretically) replicable. Creating the “perfect” user experience is practically impossible. Because user expectations are dynamic. They adjust and continually evolve over time, according to the experiences people have and the influences they’re exposed to.
That’s not to say that organisations shouldn’t aim for the perfect experience. They surely should, before anything else. But only focusing on incrementally optimizing the user experience of a product or service or a specific element of it won’t create memory structures. And certainly not meaning. That’s what stories do. Effectively distributed on a broad scale.
“Advertising adds value to a product by changing our perception, rather than the product itself.” (Rory Sutherland, Vice Chairman of Ogilvy)
In fact, without their heavy marketing investments, I’d argue, Amazon wouldn’t have become the world’s most valuable brand, after quintupling its brand value in just five years.
Experiences need context
So no — traditional brand work is not dead. Far from it. It’s just become harder because the environment has changed. There are more touchpoints to manage, more disciplines to align, more tools to master, and a more complex competitive landscape to navigate. But the work will pay off eventually. There remains to be great value in crafting a differentiated and distinctive brand.
The brand provides the context — the fiction — in which the experience takes place. And the experience ideally is an embodiment of that fiction — not just a UX best practice, focused on solving user problems when interacting with products or services. It should aim to delight and surprise the user, exceed her/his expectations rather than just fulfilling them. That’s when the experience becomes a powerful branding tool in itself.
Like the “Insane Button” in a Tesla. Do you believe it would elicit the same associations and feelings in a VW Passat station wagon? Unlikely. But it works because Elon Musk has sent one of his cars to space.
Brands and experiences are not the same. But they are strongly interlinked and complement each other. Inferior or lazy brand work leads to inferior experiences. And shitty experiences make it impossible to build a sustainably successful brand.
