From Branding to Bonding: Becoming a Platform Business

The business of branding is in flux. Once upon a time, branding was seen as a craft – a way of telling consumers what to think, how to feel and where to buy across a perennial media mix, driven by the advertising and media sector. But today, branding has become something very different. To be successful, branding is now more of an asset – a bond created between customer and product, driving the product innovation pipeline, and with the power to make or break a company’s future.

Of course, we have long recognised a brand as the sum total effect of the experiences a consumer has with a product. Added to this, marketing communication has been transformed in the last ten years or more, and is now more social, accountable and consumer-driven. And yet, pre-purchase advertising still takes the lion’s share of the CMO’s budget. Marketers are still paying their agencies vast amounts to measure consumer engagement with their brand message, and to supply the advertising to deliver it.

Any CMO, or even CEO, will agree that an ongoing, long-term customer bond with a product increasingly dictates the fate of their business. So why are marketers still zeroing in on traditional brand recognition in the pre-purchase phase? Shouldn’t the focus be shifting towards developing a sustained, committed and happy relationship between consumer and product?

The new reality is that brands are a bond between a business and a consumer, created by every experience a customer has. To meet this challenge, the most innovative companies across all sectors are switching from simply marketing their products to turning them into services, and then platforms, that can be used to offer customers a connected service ecosystem.

With this change comes a massive acceleration and proliferation of sustainable new service-based revenue streams back into the business. And in fact, for a CMO, it’s all great news.

Change is coming

Love them or hate them, Apple, Alphabet, Amazon, Facebook, and Microsoft all derive much of their worth from being platform businesses. Amazon, which at launch essentially sold books, took great care to establish a platform that could diversify massively. Their pre-purchase spend was moved into purchase and post-purchase — the actual experience a person has with their product or service.

The e-reader market is pretty much non-existent, and conventional wisdom would suggest that consumers have no interest in buying a device that can do only one thing, since they can own a smartphone that does almost everything. And yet… the Kindle market is in fact thriving, due to the network effect of all Amazon’s products and services.

We’re not suggesting that everyone can or will be an Amazon. But companies that weren’t born as platform businesses rarely realise that they can turn their products and services into a platform and transforming an offering into a platform will enhance a company’s competitive advantage. But it’s no easy feat.

With over half of today’s CMOs having enterprise wide P&L roles and accountability for product development and growth strategy, the chance to step up is now. CMOs have the opportunity to oversee the expansion of their products and services into platforms, becoming custodians of the entire customer journey. But where to start?

Don’t run before you can walk

The potential business benefits of a product-to-platform philosophy haven’t gone unnoticed in the C-suite, but moving to a platform model can be harder for an established business. Those with digital transformation fundamentals in place will be in a far better position than those who do not. Digital transformation applies not just to products and services but to organisations as well, and encompasses structural, cultural and technological change. A particular trend we are noticing is the power of bringing sales, marketing, insight, product innovation and commercial finance into one ‘demand’ channel, owned and operated by the CMO.

It’s also essential to shift thinking away from traditional processes into a more agile and design-empowered process. Modern companies design for a single, holistic customer experience powered by a personalised platform that creates value over time, rather than a separate experience for each product or service.

Five considerations for CMOs beginning their platform journey

  1. Great ideas start with vision. As collector and guardian of all customer and community data, the CMO can start by quickly identifying relevant hypotheses at the intersection of user needs and business assets to test against.
  2. Experiment by rapidly designing, prototyping, and piloting to define the most meaningful platform ingredients. It will enable faster product optimisation in the long run.
  3. Identify functional and emotional personalisation elements and explore their use as relationship building blocks.
  4. Build a platform that can deliver different service experiences and build a “living innovation roadmap” to enable pivoting as you go. This will allow you to respond to customer feedback and market forces – future-proofing your business.
  5. Don’t be shy. Invest in storytelling and consider publicising pilots to maximise business impact and maintain internal momentum.

There are hundreds of examples of businesses working to achieve this. Pharma is moving into FMCG, food is moving into beauty, car manufacturers are moving into ride sharing. They are all businesses trying to switch from their product or service offering into a more platform-style ecosystem. And this path is likely to be where the marketing spend is heading, with both the customer journey and commercial accountability positioned with the CMO.

Case study: Gatorade and Gatorade Gx

The Gatorade Gx platform, which recently launched to professional sports teams in Europe, builds on years of research at the Gatorade Sports Science Institute and incorporates compelling aspects of the latest trends in personalisation.

Gatorade Gx is a cutting-edge sports nutrition personalisation platform that utilises unique biometric data from athletes to generate specific individual sport fuel recommendations based on weather, intensity, and activity duration.  With the ability to track athlete fluid balance in real-time, the system can provide personalised recommendations before, during and after exercise to optimise performance at each stage. The cloud-based system is currently used by elite teams across a range of professional sports from Premier League Football to the NFL and NBA.

The Gx platform is a far cry from the traditional Gatorade business model and is positively affecting the company as a result. Gx continues to evolve and extend the Gatorade brand from its origins as a sports beverage, to sports fuel optimization. Gatorade changed its tagline to ‘Sports Fuel’ to encompass food and future innovations, truly thinking and acting like a platform business.

Louise Astley

Louise Astley

Managing Director at Smart Design
Louise Astley is the Managing Director of Smart Design in London.She worked inside the media and advertising world of WPP for over a decade, first as a media planner/buyer at Wavemaker (previously MEC), then subsequently at Wunderman and POSSIBLE. She made the move to Design and Innovation Consulting in 2013 when she joined Smart Design as a Business Director in New York.
Louise Astley

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