The Brand Flip | Marty Neumeier

hi everybody why so quiet thinking I guess something okay okay so we heard from Sam who spoke eloquently about what we want to do for the world and so I'm gonna turn it around for the next 20 minutes or so and talk about what the world wants from us and that is the world of branding so you almost something about branding and branding branding isn't easy but it is simple right if you can if you know the trick right so I have 2025 minutes with you I'm gonna try to teach you the trick of thinking

about branding and I hope when you leave you'll have a whole different view of it and be able to use it you'll you'll be able to direct it you'll be able to lead it because branding needs to be led from the top it is not something you give to a marketing director okay that's all old-school branding is existential stuff you don't have a company without a brand and I'll show you why but first let me tell you about how I got into this authoring business I've got eight books now in the market and you know

it all started back here in 16 years ago I wrote this book called the brand gap and a miracle happened it started to sell books don't usually sell every book is a failure that's the the saying in the publishing industry so this one made the rounds of Silicon Valley where where I work and did really well and in about three months I would say it hit number 15 on the Amazon charts no that's pretty good for any book but for a business book it was unheard of at the time and so it became an evergreen

book an evergreen book is one that just keeps selling it sells the same amount every year so this is super great for me you know this is Steve Jobs's copy and as you can see it's had some use you know this is right but you know he read this right before the the iPhone came out so great I wrote that and it took off but the other thing I did that was even more surprising is I I gave a talk which turned into a workshop and one of my students at the brand gap workshop illegally

took the slides from the workshop and threw about two hundred slides that actually express the entire book so it's just in slide form and uploaded it to a new platform called SlideShare which I'd never heard of and people kept saying I read your book and where'd you get it a bookstore online what does no I read it online she said how do you weed it online oh it's on SlideShare and so I went there and found that it was on the home page and it stayed on the home page for about five years because of

the way they set it up it's like there's a slideshow that gets read all the time stays on the home page so it was just spinning around and everybody was reading it and to this day you can go there and it's still there not on the home page but if you go to SlideShare brand Gap cool stuff which is the alias of the guy who put it up there you'll see that since then it's had 23 million views now no book ever gets 23 million readers so that's like amazing and I suppose I should be

a little unhappy that those people got to read it for free when they could have bought a book but I'm not unhappy I'm grateful because it allowed me to change the conversation about branding and redefine it so it's not a logo or a bunch of marketing stuff it's a customer's gut feeling about a company a service or product so hugely different so when you start thinking about like that it changes the whole conversation so a brand is no longer what you say it is it's what they say it is so you can see the implication

of that if a brand exists in people's heads how do you change it how do you grow it and build it control it that's the work that's the work of of branding in that and so you really have to learn the trick and the trick is to look at it from the other point of view you have to always be looking at the brand from the customer's point of view and this really doesn't come naturally to us we really have to force it so this is the trick the trick you have to learn so I'm

gonna expand on this for the next 20 minutes and I hope when you leave you're gonna say okay I got it I can manage it I know who I need to hire going to work with how I'm going to position my product my company and all that okay that's the goal for you all right so just to simplify here if this is marketing you say I'm a great lover or you tell the customer whatever you want to hear it them to know and this is advertising you just keep telling them over and over and over

then this is branding this is what you want to happen the understanding of who you are just pops into people's heads they create it for you and then they spread if you keep trying to tell them exactly what to think about you they'll we reject you every time it doesn't work like that so that book came out of 2003 and a lot of things have changed obviously since 2003 for example all these companies were just a gleam and their founders I even the iPhone wasn't there yet and if we study the success of these companies

we can draw 10 observations about branding from those first Power has shifted from companies to customers so kind of what I was saying it's not what you say it is it's what they say it is I just had no idea it would go as far as it did so this is an understatement people are not focused on products anymore as much as meaning customers buy products to build their identities it's all about them they hate hate hate being sold but they love to buy do you have to make that easy they buy in tribes to

feel safe and successful everybody wants to belong to something this is huge so the battle is no longer between companies but between tribes our tribe is better than their tribe so now you have to start thinking about how strong your tribe is because the company with the strongest tribe wins tribes are connected through technology now and brands need to flow through multiple technologies the most successful brands therefore are not static but fluid so they're always changing so you can't just it's not a one-and-done sort of thing where in the old days you just make a

product throw it into a package you know name it do some advertising and it just stays that way forever for 20 years until you have to change it or update it or something those days are over it's constant alright and which actually makes it fun to be an Orchestrator of brands so those ten things that's a lot that to put in your heads it's in the book you have the book in your bag but I'll simplify that for you so take those ten things and you can build a model around what's changed so in the

old days the company would create a brand and when I say create a brand I mean they would manufacture a product they name it slap a logo on it advertise it Bob's your uncle that brand would attract customers customers would buy it or not and but the ones who bought it sustained the company so the company could go on and make more brands it's so creating a virtuous circle so today it's a bit different it's the same elements but they're in a different order and that order makes all the difference so today a company creates

customers creates customers the customers they do that by having the customers be involved in building the brand and proving it and everything customers build the brand by telling their friends the brand sustains the company so the company can go on and make more brands so how is this better well it's because brands last longer than customers brands are sticky they go in for a long time it's a long term investment and so even if a company stumbles their brand can save them I mean it's not like Apple hasn't made mistakes or Netflix remember Netflix made

that huge mistake and they split their company into two brands the world said no the immediately backdrop but people gave them cut them slack because they like that flicks that Netflix had a strong brand so that's one of the benefits of having a good brand so to you know this this I just found interesting for myself I was thinking about the words create a customer which shocked me when I first thought of it but then I thought you know I've heard this before somewhere and I went back into my notes from the first book and

looked through them all and I found this card written out and Peter Drucker the famous management guru from the 50s and 60s said this a business has only one valid purpose can you guess what it is to create a customer so I started looking back at all of his work and I started to realize Peter Drucker wasn't a management guru he was a brand guru he was the first one that's to see all these things that had to happen with companies and everyone is aligned with branding they just didn't know what branding was then branding

was sticking logos on things so you know he was the management guru but this really he was a brand guy so if you create the customers they'll build the brand simple as that now the book only takes two hours to read so you might read it on the plane on the way home but if you don't have time or you've got something more urgent to do that's fine I'm gonna try to sum it up I have them of enough time to sum it up I'm gonna give you five areas of concern that you need to

master step one is see greatness in people oddly companies don't do this they actually see weakness naivete and addiction those are the things they tend to target because there's quick money in those things like if you go after people's weakness you can you can make a lot of money for a while or naivety or addiction the example of addiction might be remember Blockbuster Video okay so you know stores that rented a video cassettes and of course they only had so much inventory so they started charging late fees for people that brought them back after three

days and after a while what happened is people just said I'll pay the late fee right it's just I just I'm not gonna keep going to this I don't want the Blockbuster to drive my schedule okay so they're gonna pay it this turned out to be addictive for people and and then it was became addictive for the company so what happens is those things backfire and you you take on the weakness that you're targeting so blockbusters are targeting addiction they became addicted to late fees and that made them weak and so when Netflix came along

they just changed the whole thing they said no we're not gonna we're not gonna penalize people for bringing back stuff late we're gonna protect them against that we're gonna protect our customers from addiction and they were able to do that with DVDs through the mail and blockbuster was still selling them in the store and charging late fees and that was that it's almost overnight the thousand stores or so went out of business deikun backfire so don't do that just doesn't work in the long term so don't position your products we're all about our products and

our company but just remember it's what they say it is you've got to look at it from their point of view don't position your products position your customers position them for success in the world find out what they're trying to do in their lives or their professions or their industries and help them do it it's really easy it doesn't even take selling it's just presenting you know you present your solution and if you're the only one it's kind of no-brainer so that's that's position you take so you look for the highest good that you can

address in your customers what is that thing beyond just the product that you can address so an example might be Ritz Carlton they say you know this is internal they say we are the ladies and gentlemen serving ladies and gentlemen so they're gonna model civilized behavior so that their guests feel civilized feel better about themselves and learn something about behaving properly because they're seeing it all around them that's a nice thing to add to the world or you know Procter & Gamble on the other end of the scale so we improve the lives of our

customers now and for generations to come for generations to come so they're thinking long term not five years this is an ongoing effort to improve people's lives now contrast that with say Las Vegas where they don't really want to improve people's lives and nothin's certainly not for generations they don't care if you ever come back and so their slogan is what happens in Las Vegas stays in Las Vegas which is pretty funny what stays in Las Vegas is usually your your hard earned money your self-respect maybe you know unless unless it's your grandmother and she

always wins I don't know how that happens but she comes back with thousands of dollars in their pocket okay so the question you have to ask is how can you enable greatness in your customers think about that let that keep you up at night step two is help them find meaning in their lives remember now people are they want meaning they're we're all knocking on the top floor of Maslow's pyramid so help people with self fulfillment self-actualization those kinds of things is what people in the first world want so you know products are like Russian

dolls you know you you know you're buying a product or service and but really what you want inside of that is you want the features of that product or service really what you want isn't features its benefits I want the benefits but there's something else you want from the benefits you want an experience we're all talking about brand experience but there's something we want from that and that's meaning so that little kernel of meaning is what makes some brands great and some brands not so great the really great ones have something more than just functional

benefits even kind of boring industrial ones you'd be surprised at the emotion those can create in people so it's but it's all about meaning no because having more isn't as important today as being more it's it's about the customers and what they become in lives no no I said customers build brands which is a great service that they do for you why would they do that because brands build customers when you choose a brand like when you choose anything in your life you're building your identity right it's part of you you're you're making a choice

even if it's just some little thing even if I buy a package of M&M peanut in the store there's something about that that's building my identity I'm proud that I buy that right this is my favorite you know so the big question is in it for customers if I buy this product what does that make me Who am I so ask that about your brand if your customer buys it or your client buys it subscribes to it whatever they do how do they see themselves after that how do you want them to see themselves so

for example if I joined at sea I like to make crafts so but I've never you know known how to sell them or anything I don't really know a lot about business but suddenly I am a creative entrepreneur I can sell my crafts online opens up vistas for me my whole life changes my world changes if I buy a Tesla I'm not just a driver anymore I'm an automotive sophisticate and people will look at me differently if I use Twitter I'm an information source if I use LinkedIn I'm a corporate player if I upload videos

to YouTube I'm now video celebrity changes everything for me if I like to write and I put my writing on medium I'm now published offered author just like that and it looks great and I can share that with my family friends and my audience if I use TripAdvisor I'm a savvy traveler if I have an iPhone I'm now a road warrior when I go to the supermarket there's a guy at the foot of the driveway and these panhandling homeless guys got a sign in one hand on the other hand he's texting his buddies with an

iPhone so in his mind he's a businessman I'm sure that is just really rewarding for him and empowering so it's just amazing what the right product can do for people now if if you do this correctly your product becomes a symbol of something right it has meaning and that symbolic value is worth something to people it doesn't cost you anything hardly anything as a company but it means a lot to customers and they'll pay a premium for that right and the interesting thing about that is when the product becomes a symbol then the symbol becomes

the product so I remember back when I was doing a lot of work in Silicon Valley for computer companies and software companies I spent a lot of time in CompUSA this retail store and I remember when Apple decided they were going to open up their operating system to other licensees and they there was and so one company took them up on that called eMachines and on the table there's all the computers lined up and there's an Apple computer iMac and then there's an e machines and the II machines said you know it's something like $700

and you look at this and the eye and the Apple was like 13 $1400 so twice as much but if you look at the specs the e machine was the same or slightly better and everybody could read the specs there they were and it looked okay didn't look quite as good as an Apple product but it was okay nobody nobody bought that product it just died it didn't have the symbolic value it didn't have a brand it was people didn't trust it they didn't want to be seen with it they wanted the real thing okay

so that real thing thing this of it that's worth another $700 per product I think that's worth investing in it doesn't cost as much as you'd think all right so that we can call that intangible value I would think so you know in that in 1985 17% of goods sold we're intangible right now 2015 80 percent a good salt is intangible now that is prime territory for branding because we're all talking about ideas feelings positioning slack Apple with again steam machines this is that this is why branding is so important so valuable such a great

investment if you can do the trick in your mind if you know the trick so that's what I'm teaching you okay so step 3 is design the customers you want right now as I said before we need to create customers for the company and I know as a designer that's how I started out in life that if you create something without designing it it's usually a mess has no consistency no organization no purpose you're just creating something that's what most companies do you want to design them right so I mean design like you know Frankenstein

designing a monster or something I mean you design the space for your customers so they can see themselves in that space and inhabit that space they say oh that's me that's me you're talking to and they go in there they become part of your brand they join your brand and then they tell other people and that's the beginning of a tribe see they're doing the work for you it's great you just have to design the space for them the right space okay so we all know that you know brand loyalty is worth the millions and

millions and millions of dollars it's very important but when you have tribal brand loyalty it's even stronger because the the tribe members reinforce each other and it's harder to leave the tribe and you tend to do everything the tribe does because you want to feel safe and successful as I said before so we're getting some very big numbers out of loyalty these days so here's one I like that the most loyal 10% of customers generate 50 percent of the revenues so those core members of the tribe you really want to treat them well because they'll

buy everything you have they'll tell everybody about it they'll keep buying despite anything you might do wrong it's a great it's a great feature so 5% increase in loyal customers can produce a ninety five percent increase in profits and fifty percent of customers would pay twenty five percent premium before switching brands so go back to that Apple thing they'll pay you know double what the other kind what eMachines charged charges they and they won't even know know by the eMachines product that's how strong the Apple brand was think at that point the Apple brand Scott's

here Scott at liquid we met Scott at a summit a brand summit that liquid put on and there was a person from brand finance there and he was just talking about the amazing valuations due to branding and Apple at the time I think had 60 percent of their market cap was in the brand so an intangible just the brand itself and I think it's more now I think it might be 80 or something that's huge so 50% of customers would pay 25% premium and you know there's your price elasticity it's right there so any effort

to get customers is marketing any effort to get customers and keep them is branding so branding is a long-term investment it's not something it's not Las Vegas it's not like the Grand Bazaar in this down boil where they don't care if they ever see you again they're gonna rip you off because they know you're going to be gone you're leaving on the plane tomorrow and they'll never see you again and they're not gonna give you their phone number either so that's the other end of the scale that's not branding that's just swindling okay step four

to support and grow the tribe so you know being part of the tribe has responsibilities you have to support the tribe you have to invest in it but it's the cheapest investment you'll ever get you know the old way of marketing was kind of like or innovation was you know you'd look at a market and you'd say the market is X billions of dollars and we're gonna divide it up into segments and we think we can attack that segment and maybe that one over there and so a little bit different audiences and we'll just have

a different message from that one for that one and not a different one for that one and we'll get away with it because nobody knows what we're saying to each audience this just doesn't work anymore the whole market segmentation thing especially if there's no market like if you you know you guys are like creating categories out of thin air how do you do that what's the market for that well there's zero market for it until you make the market so it just doesn't work what works is starting with a core group of customers getting them

to sign on with you join you spread the word and start out from there right and you grow it out so instead of divide and conquer the old way of doing it you multiply and conquer instead of you know asking this question how big is the market the right question is you and what army well what's your tribe how strong are they how powerful are they are they good messengers for you for what you're doing choose them don't just have them choose you decide you want that tribe imagine them design them it's a design space

for them invite them in and they will do the work of battling the other tribes again going back to the poster child Apple very fiercely loyal customers who will defend the brand against anybody and even when Steve Jobs left when he went into exile those customers stayed loyal they waited for him okay so you all probably know the purchase funnel you should probably seen variations of this you know you you know you're finding your audience and you you know message out to everybody and they go into the funnel and they go through stages of awareness

interest consideration the intense evaluation and finally purchase and out comes a customer at the end ok so there's there's still some value in that but that's just the first step what you then need to do is think about a different model and that's the brand ladder and call it the brand commitment scale in the book which you'll find out about if you read it but the idea is to take your customers up a ladder little by little from satisfaction which is just you know table stakes to delight where they start telling people up to engagement

where they start to feel like they belong in a tribe and finally to empowerment where they would be really upset if your brand was taken away from them because now they're totally engaged with it they depend on it their lives depend on that their identities depend on it their whole tribe depends on it that's where you want to get it you can measure that year-over-year with a little formula that I have in the book it's very simple you can do it that's really cheap you know Survey Monkey kind of stuff so customers don't buy brands

they join tribes step 5 create a framework for stories whenever advertising people and a lot of brands strategists like they talk about stories they get very animated because they love stories and they understand intuitively that a brand is kind of an ongoing story which it is but what they get wrong is the story shouldn't be told by them on your behalf or you on your they happy F it to be told by customers on your behalf remember it's what they say it is so go right for that empower them to say the right stuff about

you and how do you do that you have a framework for the stories where you just kind of set the scene you know here's the situation here's the enemy here the heroes you know this is the direction we're all going and you let them tell the story about it and you give them you feed them little pieces that they can make sense out of and tell stories with you don't dictate the story if you start doing that you're back in the old school again and people don't like to be sold you're selling you don't want

to do that you know branding is the whole idea of branding is to eliminate selling so this is the one I use I'll share this with you the brand commitment matrix and this is like a contract between you and your customers okay so you have three boxes on the Left that the customers you have three on the right those are your boxes and they all have to dovetail okay so the top level is you have to figure out who your customers are like your core customer who is that person what do they care about what

are they trying to do in their lives how do they see themselves so it's who are they and across from that is your purpose beyond making money if your purpose is to increase shareholder value you're dead nobody's going to join that tribe but if it's something about changing the world are seeing changing some part of the world and it's important to them they'll sign up for that right so that's why we exist those two things have to go together below that you have the customer Ames okay Ames are you know the jobs they're trying to

get done in their career or in their life so it's what they want from you that you can provide and across from that is your own leanness okay only 'no siz that thing that makes you unique right so our brand is the only blank that blanks you should be able to do this okay so that's your homework for tonight our brand is the only blank in the first blank you put your category it needs to be a category that everyone understands you can't make up a category that blanks that should be a very short statement

with no ands or commas that just says why you're different and compelling right so our brand is the only blank complaints that's what we offer that ties in with what they want so when they see that you offer it they go well this is my only choice it's my only choice or there's another choice but I can afford the best one so I'm gonna go with this right I could get another computer but I'm gonna get an Apple because I can afford it okay so only this is kind of like the centerpiece of Brandt's foundation

you really have to have nail that and if you can't say that simply don't work on your messaging work on your product work on your company it's just not there okay so at the bottom is how customers belong to a tribe it's their mores the habits the rules of the tribe you have to understand how the tribe works right and then across from that is kind of like your tribe it's what are your values how do we behave towards customers and towards each other those two things have to link up so you get these three

things and those three things linking together you've got a filter for all your decisions going forward and a way to start telling stories right and again you don't want to tell the complete story you just want to give them the the carrot the main characters and the plot and let them go I mean they're they're gonna make it up from the stuff that you give them so what's that stuff that's touch points it's like how you express it in every way that touches customers okay so if if your car that you produce is turns people

into automotive sophisticates everything about that it should just be that sophistication should be evident so the design of the car you know the styling the the mechanical aspects of the car the the way the car you just you know how you photograph it in front of a house what kind of a house you put it in front all those things are little clues so people can start telling stories about you they don't need to know what your matrix is they don't need you to tell them in a commercial what to think they can do that

if you give them just the right touch points and let them do it they'll take ownership of your brand if you're blue apron and your whole idea is that we pick out fruits and vegetables and produce for you so that you can cook it and it's gonna be amazing you're gonna be a gourmet home chef well then it better be right so better arrive fresh those things better be picked out beautifully the recipes ought to be great better than you could find online all that stuff has has to work or else you just the whole

thing falls apart Patagonia is you know all about the environment so if that's your position that's the thing you care about that's your passion that's your purpose then you should see things like this where they say don't buy this new jacket we're collecting all the used ones because they're still great they they hold up and we're gonna sell you those and save the environment right at the expense of profits now that is pretty impressive so that kind of move is real for people right that's authentic if Whole Foods is supposed to be like a farmers

market farm-to-table freshness then it should feel like a farmers market you should go there and it should be a lot of excitement a lot of people the produce should be stacked high it's to be gorgeous it smell fresh shouldn't smell like chemicals like they just polished the floor or something otherwise the whole thing doesn't work and I'm kind of curious now how this is gonna go we're coming forward with Amazon because I go to Whole Foods sometimes and I've noticed the change it appears as if they don't care about the food anymore so I don't

know what happened and maybe it's a hiccup but if they keep going down that road this brand will be not what it was so it's it'll be interesting if Starbucks is supposedly the third place you know to hang out you should see things like this tweet here by this about this guy who comes to Starbucks and he puts out a sign that says willing to listen Starbucks retweets that I don't think that happens a lot but that's the kind of thing you want to see a lot of to make that be real because I'm not

sure people do go to Starbucks to hang out with their friends maybe they do I don't know I think it's semi-successful but the idea is good so customers don't want to be told your story they want to tell so let them tell it and when they tell it pay attention so that's to me what social media is really good for so you know you you you listen to what people are telling you and you build your brand based on the smart ones they listen for the ones that are a little bit ahead so you start

branching out any branch in ways that make sense and that's how you build it so some up an explosion of connectivity and the power it gives customers is turning companies upside down so it's not the question of whether a company will be disrupted but when and who's gonna be the disruptor the choice today is clear you either flip now you get flipped alright so a lots changed since 2003 like I said the one thing that has not changed and it's just growing deeper is that it's not what you say it is it's what they say

it is and that's the trick okay thank you you