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Naomi Klein notwithstanding, Brands are back on the agenda. Once you abandon the mid twentieth century view of brands as just a cynical megamix of product benefits, you are open to musing about a more interesting question. What are people actually buying when they knowingly pay a premium for a brand name?

John Hagel who wrote some of the earliest books on online communities and net strategy has been engaged in an interesting web discussion with Chris Anderson, who is himself writing a book on the much quoted "Long Tail Effect".

Hagel's view is that we are moving from product-centric to customer-centric brands. For Hagel, this is literal. The brand leaders of the future will focus on understanding what individual customers want, and invest in high levels of service to deliver it. Anderson, expands on this, by observing that in a "Long Tail" market, the most important brand is actually the person recommending the good or service to you, not the recommended brand itself.

It seems to me that Hagel and Anderson are talking about quite different things, and are right but not for the reasons that they cite. Yes, it is customers and not companies that own brands. That is because, as Seth Godin puts it in his latest book "All Marketers are Liars", brands are made up of the stories that people tell themselves and each other about your product. Individual customer service can be part of that story, but it is not the real reason why power has moved to the consumer.

Similarly, it is true that in a world of multiplying brand choices tastemakers or influencers have a huge influence in the spread of stories about brands. However these filters are only part of dynamic communications web we live in today, and do not explain sufficiently the premium that customers will pay for brand X over brand Y.  If it did, Joe Blogger would be well served to release his own brand of window cleaning detergent rather than blogging about his favourite one.

So what are people paying for when they buy a brand? They are buying into a colloborative myth about a product which was not written by a shiny suited marketing manager, but by themselves and other customers. And as you can imagine, there is no medium better suited for customer conversations and stories than the web.

Comments

[Ben Barren]

Hi. I know Paris Hilton. I was speaking to her best friend's agent and she said "Paris is a brand, and a Business". "Its no Simple Life out there", relayed the agent, "distributors are squeezing the margin on video sales." I said "Doh Paris, haven't you heard about Creative Commons ?"

http://benbarren.blogspot.com

[Jack Yan]

True. I’ve said for some time that the brand manager of this century is one who manages the perceptions of disparate audiences, rather than one who sells the corporate line to those audiences.

[wendy]

Mike, have you ever watched Newshour with Jim Lehur, I find it facinating, and wonder why no-one has created such a show in Australia; with balanced views from opposing sides.
The Current affairs programs we have are often one sided, to short, and do not explain clearly and conscisely what the whole fuss is about. The 7.30 Report is OK but dosen't cover enough subjects. regards wendy

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