Brand buyer beware, the users are coming

by Nigel Hollis

A recent article on the Harvard Business Review site attempts to answer the question, what makes a brand successful in the digital age? The answer is that they focus on users not buyers. Sorry, I am not buying that.

The basic premise of the Harvard Business Review article is that traditional brands focus on positioning their brands in the minds of their customers, digital brands focus on positioning their brands in the lives of their customers. In a direct comparison of legacy with newcomer brands the article reports that,

“In every case, the legacy brand rated higher on the statement “Is a brand that people look up to.”  But the newcomer brands all rated higher on the statement “Makes my life easier.””

When at least one of the comparisons was between Airbnb and Hilton/Marriott this seems a ludicrous distinction. You cannot buy Airbnb, you can only use it. Further, the article appears to assume that a newcomer is by definition digital. Is Red Bull really more digital than Coca-Cola? And, for that matter, can they even be classified as satisfying the same needs? And are we meant to regard Venmo as successful? I am not even sure the team at Venmo or owner PayPal have figured out how it will make money.

I suspect that in part what the comparison reveals is that a brand that is perceived to better meet people’s needs is going to find it a lot easier to attract users than an incumbent brand. Convenience has always been a major driver of success, so is it any wonder that the newcomers are rated higher on ‘make my life easier?’

The other factor play here is how long the brand has been in-market, which accounts for one of the other assertions made in the article,

“Respondents were more likely to hear about legacy brands through advertising and traditional media, compared to digital brands which are more often discovered via social media and direct word of mouth.”

It seems to me that legacy brands are looked up to in part because they have built a reputation through decades of competition against similarly functional brands. They used advertising and traditional media because that is what was available.  The newcomers are focused on disrupting the status quo by serving an existing need in a new way (Red Bull versus coffee), offering a more convenient solution (Airbnb versus hotels) or offering a cheaper solution (Dollar Shave Club). And, guess what, when the new offer is seen to be desirable people talk about it in social media (because we have that option now).

No one in their right mind would argue that how users experience a brand is not a huge determinant of how successful a brand will be. People today are intolerant of bad experiences, just like I am intolerant of facile analysis. But to argue that the most successful brands focus on users not buyers rather than shape what people think about the brand along the path to purchase is just misleading. When they get to the stature and maturity of the incumbent brands I think you will find a lot of advertising being deployed to encourage people to use the brand.

I guess the real question is if American Express, Coca-Cola and Hilton were created in the last decade do you think their business model and go-to market strategy might leverage the full potential of digital to add value to their customer’s lives?

 


https://hbr.org/2018/02/the-most-successful-brands-focus-on-users-not-buyers

 

 

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