Fuzzy Signals

Towards the Commoditization of Love?

Surely not, you say.

But this may be the direction marketing mavens are heading. Check out the recent book Lovemarks: The Future Beyond Brands by Kevin Roberts, CEO of Saatchi and Saatchi unit of Publicis Groupe. Put aside, for a moment, the nauseating connection between the most emotive word we have in English ("love") and the most commercial ("brand") —at least long enough to hear what Mr. Robert's has to say, some of which is quite illuminating. But first, why are brands in troubled waters these days? Here are some inter-related drivers creating all of this angst.


* The noise-to-signal ratio: Brands are having a harder time capturing consumers' attention. While a key filtering device, brands are also competing with a proliferation of other media choices. Thousands of messages are being bombarded at us every day. At what point does our brain just filter these out? Research suggests a great deal. The law of diminishing returns has hit in terms of advertising efficacy.

* Consumer empowerment: Consumers are getting more empowered (although not as fast I would like) with new technologies, access to more information, and racheting expectations about their role in commercial space. For instance, the Web, with its many-to-many architecture, enables consumers to influence other consumers in a viral-like way about products and services. As someone put it, products and services now have "real time resumes". So how companies think about building and maintaining brand equity under these new conditions will require a serious reconsideration. And this is just the beginning. Imagine the implications of the NetGen, all grown up, ten years from now.

* Increasing transparency and pushback: Thanks to this new mediascape, brands that screw up pay an increasingly high price. Greater transparency and scrutiny is bringing to light everything from environmental health issues (Coke's bottled water fiasco in the UK) to financial irregularities (most recently, Royal Dutch Shell). Increasingly corporations that don't measure up to people's ideas around being good corporate citizens are going to get punished. And in the wake of September 11th, American brands were starting to feel a backlash, although recent research suggests they were less affected than people predicted. (I would question the short term snap shot of this research; the jury is still out, I think, over the next decade.)

* Overcapacity: Markets in the West are maturing, yet the industrial production machine keeps churning out more stuff. Not surprisingly, the spectre of commoditization is haunting many branded consumer good companies, making it harder and harder for them to justify their high margins over lower cost alternatives. Add to this the competitive pressure of globalization, places like China and India, and you can see why the long term futures of some markets are in doubt. Which brings us to the next point...

* Incremental versus structural improvements: Most companies are tackling these dilemmas through an incremental strategy, making small improvements versus more structural fixes. This is completely understandable. Most large companies have an entire business system configured to producing goods as efficiently as possible for a mass market. It's thus very hard to overlay on this a mass customization approach, one that produces "remarkable" things that appeal to an unprofitable niche group first. This is what Clayton Christensen called the Innovator's Dilemma.

* Shifting values: Add to structural issues with the economy, a possibly more profound shift in values. We may be seeing a "post-consumer" shift where some of the assumptions about consumption are in flux—at least in the West. (Billions of people have a problem of underconsumption in terms of basic human needs.) Already good evidence suggests that most of the wealth, the highest margins, are coming from "experiences" and intangibles rather than commodity services and goods. And as other cultures and civilizations become more important in the global economy—namely China and India—it will be interesting to see how these values start influencing the commercial space.

So lots going on.

How does Mr. Robert's try to reframe these dilemmas? In short: his idea of Lovemarks as opposed to Trademarks or Brands as we know them today. Lovemarks are about "remarkable" products that capture our affection, devotion and emotions. Examples of lovemarks are brands like Apple Computer, Krispy Kreme doughnuts, Harley-Davidson motor cycles, Aeron chairs, and the Google search engine etc.

"Branding is all about the brand; lovemarks is all about people." His democratic, if not radical, vision is that Lovemarks belong to people, the consumer citizen, and not companies. In an age of Open Source, where core concepts around property rights and ownership are being challenged, I think his instincts are in the right direction. The opportunity? If companies create Lovemarks, rather than just your average 20th century brand, many problems will be solved because you can charge a premium for them.

Another key message of Mr. Robert's book is that the marketing and advertising industries have failed to adapt to these new realities.

"Mass marketing is a thing of the past; now, it's about the market of one."

"Today's marketing world is broken. We are still too dependent on marketing tactics that are not in touch with today's consumer."

The 30 second spot, the superficial intervention, is also to blame. How do you build enduring relationships, something that is authentic and real, using these methods? And don't get me started about the failures of market research.

All of this sounds about right. But it is the use of the word "love" that is problematic. I cringe at the cheapening of one of the most authentic of human experiences. This is also very Anglo-Saxon, my French friends would say, this melding of the commercial with the personal space. The use of love is also conceptually flawed. Love tends to convey commitment and exclusivity, says Gapper of the FT: "We are not intensely attached to lots of things because we are not built that way. Companies must either try to make products that a few people love, or products that many people quite like, an attempt to achieve both will be fraught with obstacles and conflicts. In markets, as in real life, love does not usually coexist with promiscuity." Nothing of course is sacred in our post-modern appropriation of everything. It was only a matter of time before love was up for grabs. Speed-dating anyone?

Speaking of a values shift, it would be amusing to have Buddhist perspective on all of this—all this talk about attachment and consumption. Imagine how this would reframe the business system if this worldview captured more and more of the public's mindset? An interesting thought experiment.

At the end of the day, Lovemarks is just one attempt to make sense of the future of brands. Other initiatives are in the works at the highest levels of Corporate America and beyond. We also have the upcoming meeting by GBN, "Brands: New Futures", which will be held in NYC in May 2004. (Email me if you are interested in attending.) An earlier GBN meeting which I helped organized, Customers of the Future, surfaced many of these themes as well.

References:

"Winning hearts of consumers" by Eric Pfanner, International Herald Tribute (Monday March 22, 2004)

"The challenge of turning a brand into an object of love" by John Gapper, The Financial Times (Tuesday, March 23. 2004

"The Post 9/11 Resilience of American Brands" by John A. Quelch and Douglas B. Holt in Strategy + Business.

Posted by nicole at April 15, 2004 12:46 PM