The Seamless Connection: From Strategy, Brand and Innovation to Product, Service and Experience
- Jun 17, 2005
Like the fashionable width of neckties, business ideas cycle up and down in marketplace importance. Fifteen years ago strategic planning was a hot topic in the business world, and consulting firms were claiming that they could provide direction for companies at a strategic level. Ten years ago branding became a hot topic and everyone was focused on brand. Five years ago innovation started to evolve as a hot topic and now books and business schools are focused on how to become innovative. While strategy and brand may not currently be in the limelight, the understanding of how they relate to innovation is key.
Businesses have also shifted how they refer to and describe the core capability that they provide. Businesses fifteen years ago referred to everything as product, and the focus was on how to make those products robust. A new life insurance policy was referred to as a product, as was software and a laptop computer. Then products gave way to describing the ability to provide experiences, and the product took a secondary role to the new emphasis on the transactional experience between a consumer and the company's tangible or intangible products. Success was measured by the quality of experience. The focus on product experience is transforming into the experience of service. The challenge now is to redefine your output in terms of the service it provides. The shift to focus on service requires learning what your core value is, and translating that to your brand identity. As service becomes the core of the brand of the company, products become its delivery system.
Although the marketplace interest cycles among the terms product, experience and service, the process of strategic planning, branding and innovation are all still relevant. In the current use a company must continue to innovate to maintain brand equity through the strategic development of products that provide experiences to its customers by responding to unmet needs. These products must fit into a unique interconnected suite of services that are monitored at a corporate strategic level. Strategic planning must form an organic relationship among the forces of the society at large, the brand equity of the company and consumer shift in demand for new products. There are layers of strategic planning in a company that must all be working from the same script or set of compelling ideas. Corporate planning, divisional/business unit planning and product planning are all strategic and related, but differ based on scope.
Brand is the reputation that a company has with its customers. It is a dynamic where consumers react to the output of a company and, if the brand relationship is strong, consumers see the products and services as positive, consistent and evolving with their expectations. The development of brand identity elements becomes the symbolic representation of the brand, representing the company's reputation and the product-based consumer experience and contributing to the strategy. The best companies have a strategy that monitors the brand equity of a company and uses that understanding to dissect trends and develop actionable insights to produce new products, services and acquisitions. P&G produced Swiffer as an extension of its brand equity in the fabric and home care business unit. It extended product brand from a chemical-centered strategy to include experience-based products. The Swiffer line of products allows customers to more effectively use P&G's core chemistry in an easy, effective, and pleasant manner. Both the company and the customer are better served by this new stretch of a century old commitment to producing and distributing packaged chemical-based products for the home. The Swiffer line required the development of a new strategic direction that was implemented through innovative ways to deliver their chemistry with cleaning products that use both wet and dry delivery options. This approach extends the emotional connection to P&G's brands, and it sets the stage for similar products and services across all its business units.
In order for companies to continue to manage their brand equity, they need to develop innovative strategies. Innovation connects the capability of a company with the conscious and unconscious unmet needs of its customers. Companies need to strategically plan how to maintain and grow brand equity, the process they use to do this is product and service innovation. Apple developed a brand identity as a customer-focused company for non-technical trendsetters. The company has consistently led the industry in ease of use and aesthetic evolution. The iMac and iPod are excellent examples of establishing and growing a brand strategy through comprehensive pragmatic innovation. Apple's brand equity was extended (and in many ways re-invigorated) through the aesthetic and easy-to-use interface of the iMac. The iPod is a product that delivers an enjoyable experience to consumers by providing the service of downloading and listening to music with ease in a way that makes money for the music industry at a cost that consumers will accept over piracy. In addition, the iPod also connects to the rest of Apple's products technically and visually extending brand to hand-held products, connecting to consumers' sense of individualism and providing a forum for mass customization of use.
Every company provides a service; sometimes the service is overt and its products are secondary while at other times the products are primary and the service is secondary. A bank provides a service of money management through a number of sub-services that include savings, checking and IRAs. Sometimes companies refer to these sub-services as products. But they offer physical products as well to support their service; an ATM is a physical product that allows you to have access to a company's banking services. When you buy a car you want to have a great driving experience with the physical product but you also need continuous maintenance of the vehicle for as long as you own it. With a positive experience the company hopes you will return to the dealer for that service. Auto companies rely on the sale of the product for profits but make significant profit through secondary services that include financing, maintenance and repair.
While innovation is the hot theme, it is connected directly to topics that were more prominent in the recent past, brand equity and strategic planning. Every company has a core service and uses tangible and intangible products to deliver that service while creating optimum experiences. The ability to modify products to meet the emerging needs of consumer experience continues to build brand equity. So the core of brand strategy is the relationship created by a company's ability to anticipate and develop product and service experiences. The next time you see someone on a Harley notice that they are having a thoroughly enjoyable experience, riding on a vehicle that has tremendous brand equity. The company will not change a bolt on their motorcycle without consulting with its customers. Harley also generates more profit from lifestyle products than from the sale of motorcycles. The lifestyle products are sold in their showrooms that provide point-of-purchase environment designed to reflect the core brand equity of the motorcycle and the driving experience. The emotional-based service of enabling personal expression is the essence of the Harley brand.
The emerging emphasis on service does not negate the importance of products, but the new emphasis does require looking at products in a new way and reordering strategic priorities. The methods of service design, product design, and brand design are all the same. They are the methods of innovation. The challenge for companies is to first understand this interconnection, and then understand how to be innovative, rather than just talk about it.
Our book, The Design of Things to Come, helps you understand the process of innovation and provides tools and methods to help you be innovative. We look at some of the best innovators today to understand what makes them tick. We look at some of the most innovative products of today to understand how they were developed and how you can use the same approaches to be innovative. And we look at some of the most innovative companies today to understand how they connect strategy, brand and innovation to create some of the best products and services, and their experiences of use.