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Survival of the Fittest

Paul English

Consulting Principal, Digital Transformation

Ogilvy Consulting

Paul.English@ogilvy.com

        

Survival of the Fittest

The Evolution of Brand as a Service

Change isn’t changing. If you work in a business, you’re well aware of all the disruption

that’s been going on and you’re aware that it’s accelerating. The convergence of digital, mobile, cloud and high-speed connections has given rise to a whole raft of companies that have redefined the role brands play in consumer lives.

But if you manage a legacy brand – one not fortunate enough to have been born in the cloud in the last 20 years – this has created new challenges as expectations around what brands do for customers have irreversibly changed.

It’s no longer enough to depend on a quality product at a reasonable price supported by marketing.

Evolutionary Progress

Today we call it Brand as a Service (BaaS), but the idea that brands need to go above and beyond product propositions to differentiate and stay relevant isn’t new.

Brands have evolved to work harder as more competition has made it difficult to drive preference and loyalty among customers who are increasingly inured to traditional marketing tactics. And there’s always a sell-by date on differentiation.

In its most advanced state, BaaS is about the brand’s ongoing relevance in customers’ lives beyond the transaction or engagement around product.

Think about a brand spending time with a customer on a problem that doesn’t involve a sale. There’s a scene in “Miracle on 34th Street” where the Macy’s Santa sends a customer to rival Gimbles because getting the right gift for the kid is more important than selling some alternative. The result? Loyalty for life.

Batteries as a Service?

Energizer is a brand you know because it has been selling a commodity product over 40 years. Many millions of dollars on advertising have brought sustained awareness and a bunny to prove it.

Amazon is also a popular brand. You might not think of it for batteries, but Amazon has something else going for it – an uncanny sense of how to turn a commodity into a service. Using its Amazon Basics brand, the company entered the battery game a few years back. It not only solved the mad dash for batteries with rapid delivery, it also removed the hassle of buying batteries altogether with a subscription service.

In the battle between old-fashioned brand equity and BaaS, in this case BaaS wins as Amazon has cornered the market for batteries sold online.

What’s Next?

Where do you go once you’ve added all the service layers you can to your products? Some mature brands have been taking BaaS to the next level, a few even leapfrogging earlier stages for deeper competitive advantage.

 

One example of this is Huggies. Traditional thinking would say that the longer the delay before potty training, the better the outcome for the nappy business. But Huggies is working with parents to help their kids get to the point where they no longer need nappies at all. Success is measured not by nappy sales but by increasing the speed of transition from nappies to Pull-Ups to pants.         

In looking at how BaaS is evolving, we notice that it is moving along with customer attitudes and beliefs. The very notions of trust, convenience and value are broadening. While trust used to mean reliability, now it includes the secure handling of data for a consumer’s benefit. Convenience means not just widespread availability but also anticipating people’s needs. And value means being not just worth someone’s money, but worth their time.

What’s a Legacy Brand to Do?

These notions of trust, convenience and value are being redefined by changing consumer expectations which in turn are being driven by relatively new, service-based brands such as Google, Apple, Facebook and Amazon. As mighty as these brands are, however, they lack many of the assets that older brands have built over time.

We’ve identified four questions that brands should be answering as they plan for future relevance.

  1. Is your brand promise well suited to a BaaS world?

Modern brands are evolving in order to meet the changing needs and expectations of customers, and in doing so they are future proofing their businesses. Some brands are finding they need a refresh or re-articulation of their brand promise for renewed relevance.

  1. What territories can your brand stretch into?

If you don’t stretch far enough, you risk losing the impact you’re looking for in people’s lives. If you stretch too far, the brand won’t be seen as credible in its new role and the initiative will falter.

  1. How well do you know your customers, really?

Many brands have more data than they know what to do with. The job now is to add “thick data” to “big data” and by that we mean more ethnographic insights and true customer empathy to find the real moments where BaaS can make a meaningful difference.

  1. Finally, are you organised around BaaS success?

In true BaaS scenarios, the product and the service become indistinguishable. This means that product and service teams work side by side, with customer service, product development, insights and marketing driving the innovation together.