Digital transformation is changing the economy and indeed our entire society. The new opportunities it provides have changed customer requirements and are presenting brands with new tasks. The latter still have to support the sale of products and services but nowadays a lot more is expected of them.
Their worlds of experience shape customer relations and increase the customer lifetime value. Brands are considered a key factor for the success of a company. It’s also true that there are more and more brands on offer now which are becoming increasingly interchangeable; brand loyalty is also on the decline. The sheer number of communication channels and options often means that consumers feel overwhelmed rather than informed. The result is that in surveys three quarters of all brands are described by customers as being “expendable”.
What can brands thus do? It’s no longer enough today to simply end up in the customer’s shopping cart. With the help of smart, intelligent services brands should also be firmly rooted in people’s memories once they’ve made their purchase and build up a longterm relationship with the client. It is therefore important to pay close attention to the entire customer journey and not to interrupt it even after a successful sale.
From the individual brand to the brand ecosystem
Companies such as Amazon, BMW, Lego or Nespresso have realised this and bond customers with their brands in the long term by creating new, integral added-value systems. These “brand ecosystems” denote a holistic range of products, services and experiences. They are provided as system solutions under the umbrella brand and usually give customers plenty of added value. Here, depending on the situation partners from various sectors pool their services throughout the entire customer journey.
Ecosystems are based on systematic thought, at the centre of which is the relationship with the customer and its reciprocal effect on the brand. Brand ecosystems are managed by different service areas in a single company. However, they can also be largely designed outside the company in interaction with people. In this way customers can be actively involved in communication, the brand experience and in creating added value, for example. This takes place in the form of feedback provided on social media channels, for instance. Another option is active contribution and designing of the brand as a fixed component of the system.
One example of this is the Nestlé Group’s Nespresso brand which works together with appliance manufacturers DeLonghi, Miele, Siemens and Krups, among others. The Nespresso system itself, the interplay between coffee capsule and espresso machine, is an innovative technology in both the B2B and B2C sectors that permanently links product and service – and also people and brand – in an intelligent manner. The sale of coffee machines and the ensuing regular trade with various capsules is a prime example of successful cross-selling throughout the customer journey. Through this Nespresso has managed to constantly develop further its business model by providing intelligent products and services and create unique extra value for its customers.
Amazon Prime is another supreme example of a brand ecosystem which is permanently anchored in the lives of its members. People usually join for convenience and then stay out of habit. The online mail-order company successfully gives participants the feeling that they enjoy a higher status than non-members – although they have to pay an annual fee for this privilege. They do indeed gain a tangible amount of added value, however, in the form of fast, free delivery or early access to exclusive products. Free book and video rental are also an incentive as are the ingarage delivery service and other exclusive benefits.
Create multidimensional experiences
Brand ecosystems are based on holistic brand experiences which are normally multidimensional. The Lego company, for example, has perfected this and filled this concept with life. This ranges from the communicative experience with the help of games and films to the informative experience through magazines and the product packaging. By no means does this stop with the customer’s shopping experience at the Legoland Discovery Centre, because on top of that, there is the social experience at this indoor theme park. The actual product sold by the Danish company, those bright and colourful play bricks made of plastic, is just one of many components in the Lego brand ecosystem.
To create holistic brand experiences companies must gain in-depth knowledge of their customers – so-called customer insights. You should thus firmly embed the concept of customer centricity in your firm’s DNA. This calls for a process of change of medium magnitude and an inherent change in perspective for the entire company. Not only for brand managers but for all decision-makers this means that the organisation and the brand strategy must focus on customer service and not on products or services.
First listen and understand, then speak and learn
The handling of data is critical for success when designing holistic brand experiences. Our digital age is dominated by information – and a vast amount of data. Before a brand can start to communicate, it must develop the ability to draw relevant conclusions and derive suitable measures from this customer data. Or in other words: the ability to “speak” is based on the necessity and competence of “listening”, “understanding” and “learning”, even with brands.
The keyword here is big data. This phenomenon can be described as follows: the volume of data collected from everybody worldwide up to the year 2003 was generated every 48 hours just ten years later. In this mass of data there are probably all kinds of unforeseen, surprising and valuable correlations to be made which hardly anybody is considering at the moment.
For brands this means that in our data-driven world data expertise determines the brand’s ability to enter into an intelligent service dialogue with its customers. It’s not just a matter of controlling the process or interpreting this data. Rather, one of the brand manager’s tasks should be to specify the strategic cornerstones in the data expertise profile.
Before a brand can start to communicate, it must develop the ability to draw relevant conclusions and derive suitable measures from customer data.
