Is Your Brand an Image or a Club?

By Balaji Krishnamurthy written about 7 months ago

On May 8, 1886, John Pemberton, at Jacob’s Pharmacy in Atlanta, GA, sold nine drinks of his new concoction made of coca leaves and kola nuts. He called his drink Coca-Cola and grew his business by selling it at soda fountains. Businessman and marketer Asa Candler took Coca-Cola from the soda fountain to the iconic bottle and led to building what would become the most recognized brand in the world — until as recently as 2012. Over the last ten years, two companies have slowly creeped up to dethrone Coke: Apple and Google. What allowed Apple and Google, both technology companies, to unseat such an established consumer product company? Did they spend more money in advertising? Did they have better marketing campaigns? Or will they be a flash in the pan in comparison to Coca-Cola’s century-long position? We won’t know the answer to the last question for another hundred years, but as for the first two questions, the answer is no.

To explore the difference between Coca-Cola’s approach and the newer entrants, consider this question: is brand an image or a club? Do you drive a BMW? Then you would be a member of the Bimmer club. Do you carry a Louis Vuitton purse? Do you ask for a Grey Goose martini? People associate with these brands and are proud to be members of the club. For them, the identity is a statement, as much about them as it is about the brand. Apple and Google have created popular clubs with deeply committed members. Google club members not only use Google for their search engine, they use Google Maps and upload their files to Google Drive. They collaborate with their colleagues on Google Docs, keep their schedules in Google Calendar, and send their emails with Gmail. Apple club members are even more churchgoing. They line up around the block and camp out all night for a product that will be readily available in only a week. Is brand an image or a club?

Consider the Walmart brand. There are those that would not be caught dead at a Walmart store. And then there are those that would brag to their friends about the deal they got at Walmart. You may or may not belong to that club, but the club exists. Compare Walmart with Costco – a similar brand focused on savings. Although I do not have the market data to prove it, I suspect Costco’s club members are more zealous than Walmart’s. But they are both clubs. Is brand an image or a club?

You might think that this club phenomenon only applies to brands where the customer is proud to announce their membership. That is not the case. Consider a grocery store chain like Safeway, a pretty ordinary brand in the U.S. Some people might pull into the nearest grocery store to pick up their groceries. Others might schedule their grocery shopping for that day of the week when Safeway’s flier comes out. They carry the Safeway app on their phone, get coupons added to their account and, literally, are members of the Safeway club. Is brand an image or a club?

Does this sense of belonging only apply to consumer brands? Is the brand of a B2B business a club? Talk to anybody who will only buy Intel laptops, or counts on 3M for innovation, or thinks of DuPont coatings as the gold standard. They are all B2B companies. Does this only apply to global brands? How about a small local company that operates in a small community? I claim that if you can create the notion of a club, you have strengthened your brand.

So how do you create a club? The simple, and conventional, answer might be to advertise. But the most common reason people join clubs is because their friends have joined them. How do these friends hear about clubs?

Brand used to be about creating and managing perceptions. Instead, think of it as inviting and conducting conversations. You don’t have the ability to manage perceptions anymore. They are being created by the conversations that are happening right now without you. So, join in on those conversations. Managing perceptions is one to many (company to customers) broadcasting. Conducting conversations, on the other hand, is a one to one activity.  

Now customers rely heavily on their peers as a source of trustworthy information. Peer to peer recommendations is the primary factor behind 20 – 50 percent of all purchasing decisions, according to a McKinsey study. Your potential customers are being informed of your brand by their peers.

We have many touchpoints with our customers. Clearly, physical interaction is a good opportunity for a touchpoint, particularly if you operate in a retail environment. However, nowadays, most of our touchpoints with potential customers are electronic. Your digital presence provides for impersonal touchpoints and is simply a substitute for old-style advertising. Far more impactful is personalized, 1-1 conversations between one of your employees and one of your customers. And you can facilitate these conversations with potential customers through worthwhile content!

David Lazarenko makes a convincing argument for the need to build your content as an asset on the balance sheet. And Derek MacDonald argues that the world is moving from paid media to owned media and on to earned media. What is media, anyway? Media is simply content communicated through a specific channel.

In the old days, we communicated to the market using paid media, i.e., advertising through other people’s channels, like TV, radio and print publications. All of those channels are one to many channels, but most savvy customers today have learned to tune you out. Companies like Google, Facebook and LinkedIn have offered you an alternative, 1-1 channel, whereby you communicate a specific message to a specific customer based on their use pattern. But most of us routinely ignore the paid advertising in our search engines or LinkedIn page.

The world is moving from paid media to owned media. Here, you (the brand) own the content and deliver it through your channels. Your first thought might be your digital presence on the web. But that is still an example of broadcasting a fixed message to a generic audience. Think 1-1. How can you create a 1-1 conversation between your customer and your employee? By creating content that has value.

Take this blog, for example. I have somehow caused you to come to this blog and read up to this point. Hopefully you have found this content useful and worthwhile. Have I given you value? I hope I have! But have I sold you anything? I don’t think so. If I have sold you anything, it’s me! Through this blog, you have developed an opinion of me, my company and our services. Will this lead to a 1-1 conversation between the two of us? I hope so.

What’s next? The world is going to move even more toward earned media, where people create content about brands and convey it through their personal channels, convincing their friends to join the same clubs they belong to. How impressive is that? Do you have earned media? Because it’s becoming more important every day.

Is brand an image or a club? I claim it is a club, with members that talk about you in a dialogue you don’t control and through channels you don’t manage. Get used to it. Take advantage of it.