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Posted by James McQuivey on January 22, 2014
Marketers, you are officially on notice: The very idea of brand relationship is going to become irrelevant thanks to digital disruption. If you continue to focus on building a wonderful brand relationship with your customer, you will one day awake to find that someone else has taken your place in your customer’s life — not with a more compelling brand relationship, but with a more compelling digital customer relationship.
Someone out there is building the “ultimate customer relationship,” a type of digital bridge I write about in my most recent Forrester report, "Start to Build Your Ultimate Customer Relationship." That ultimate digital customer relationship is the type of relationship that digital tools and services enable and that digital consumers welcome. They’re happily signing up for anything that tethers them to a source that can give them more of what they want, more easily than before. Even with the supposed threat of privacy all around us, consumers are diving into deep digital relationships with companies or brands that deal with the most sensitive aspects of their lives. Weight-loss app Lose It helps users log personal information such as calories consumed and tell others of their goals, leading to the loss of more than 27 million pounds so far; Square gets consumers to email cash to friends — thus introducing them to Square and inducing them to sign up; and Airbnb has welcomed more than half a million listings of spare rooms and apartments that have been visited by more than 9 million guests. What’s more personal than your weight, your money, and your spare room?
Yes, it’s true that these companies end up achieving a type of brand relationship with their customers. But the brand relationship is a byproduct of the ultimate customer relationship they have built. And though it will be hard to shed our emotional dependence on the idea of brand relationship, isn’t it really better for everyone in the long run? In the old days, McDonald’s relied on its brand relationship to draw customers into the store as they drove by. It sent ads into the ether and reaped customers, using vague talk of a brand relationship to sum it all up. But the company was completely unable to connect the dots along the path to that choice to visit McDonald's.
Today, Starbucks stays digitally connected to its customers through the My Starbucks Rewards program, which allows for stored cash and points to accumulate, but more importantly gives Starbucks visibility into the actual relationship it has with each individual customer, a far better source of market power. Apple is supposed to have a fabulous brand relationship that explains its success. I disagree. The company provides known customers with specific benefits that can be measured both ways — both the customer and Apple can see whether the digital connective tissue forming between them is getting stronger or weaker. How people then feel about the brand is a side benefit at that point.
In the last year since publishing the book Digital Disruption, I have spent time advising companies who are eager to engage in digital disruption but are overwhelmed by the task. Should they focus on internal technical capabilities, redraw organizational lines, or innovate the product portfolio? Companies don’t know where to start, and as a result, some are doing nothing at all. That’s where smart marketers can lead their organizations forward by renouncing their pet preoccupation with brand metrics and instead insist that the company design and build its ultimate digital customer relationship. Focusing on the customer you want to have a relationship with is the fastest way to bring your various problems into focus. Need new technical abilities? You’ll find that out quickly as you try to build a digital relationship. Need a new organizational approach to the customer? Need to develop new products? All of this will become crystal clear once you move beyond your brand relationship and try to build the ultimate customer relationship. Seen through this lens, many moves in the market are now clear. This explains Nike Fuel, it explains why LG bought webOS, and it explains why athletic gear maker Under Armor snapped up MapMyFitness, a company with more than 20 million digital customer relationships.
(See my TouchCast below for a discussion of whether to build or buy or partner to get your ultimate customer relationship.)
You have to do the same thing. Whether you build it or buy it or partner to get it, your product and service will soon become part of a set of digital decisions that your customer makes with the help of digital tools and services. If you are not embedded in those tools and services, you will not be considered. All the brand marketing in the world won’t compensate for irrelevance. That’s why the CMO of the future is the ultimate customer relationship holder who happens to enjoy it when brand tracking studies — which will probably live forever as long as CEOs and corporate boards need oversimplified metrics — reinforce what the direct data from the digital customer relationship already makes plain.