The Rise Of Brands As A Service

Rather than simply making products and advertisements, winning brands are setting themselves up culturally and technologically to do much more for their customers.

A few weeks ago, I spent the weekend at a friend’s cabin. He’s a 40-year-old confirmed bachelor, and his place has a basement man cave that looks like it came out of a magazine. Right in the middle of it was a huge Maker’s Mark barrel with his name on it.

He explained to me that Maker’s Mark has a loyalty program that involves both personalization and replenishment. He has his name on a barrel aging in the brand’s warehouse, from which he can purchase bottles. He also receives special privileges at the distillery. But most importantly, the brand also listens to loyal customers like him. When a bourbon shortage was coming and the brand wanted to lower its proof to meet demand, he and his fellow customers convinced it not to do so.

This reminded me of something Intuit’s Scott Cook said when I was just starting out in marketing: “Great brands are earned, not bought. Customer experience is where brand is built, not in the marketing budget.”

Maker’s Mark is not alone in its efforts. Nowadays, many leading brands are trying to add something to their customers’ lives. Whether it’s convenience, exclusivity, or utility, we’re seeing the emergence of a new model: brand as a service (BaaS). Rather than simply making products and advertisements, winning brands are setting themselves up culturally and technologically to do much more for their customers.

The reason they can do so is, of course, the cloud. The big majority of new solutions take advantage of scalable, cloud-based software and a data orientation that enables them to take their services to the next level. This approach is paying dividends, according to the recent BrandZ Top 100 Most Valuable Brands Report. Its Top 10 Overall category includes many software-driven companies, such as Google, Apple, and Microsoft, while its Top 10 Risers cites the technology-enabled Amazon and Starbucks.

But BaaS is not merely about high-flying tech companies. To see how broad-based the movement is, we can look at two brands in a category not known for digital disruption or one-to-one relationships: CPG.

The first is Nespresso, which has completely hacked the coffee experience with a new transactional model. If you buy one of the brand’s machines, it can, of course, make good coffee. (Nespresso claims barista-level, but I’ll leave that open to debate.) But Nespresso also provides software that you can use to manage your coffee stock. When you’re running low, an app alerts you and makes it easy to order more. By providing such convenient replenishment, the brand has displaced many others and gained a strong transactional relationship with its customers.

The second is Red Bull, which is one of the most experiential of all brands. By hosting cultural and sporting events held around the world, Red Bull has seen hundreds of extreme and performance athletes serve as its willing ambassadors. The brand creates and curates content with the best of them, including feature films, apps, TV, and music. It also links to shared experiences that appeal to its customers, whether they are interested in free-skiing, kayaking, or even dance. It doesn’t merely make a product—it supports the lifestyles of its customers.

So how do you start being a brand as a service?

• Rethink loyalty: Wunderman’s recently released study on Wantedness showed that 79% of consumers want brands to adapt to their needs. In other words, loyalty is no longer something a customer does for a brand. Instead, brands have to prove their loyalty to their customers in every interaction they have.

• Embrace cultural competition: BaaS has completely changed the competitive landscape. Today, 87% of consumers measure and compare your brand against the best. So whenever you’re trying to design a customer experience, you should realize you’re not just up against your direct competitors; you’re competing with Netflix, Amazon, and Dollar Shave Club, too.

• Know customers individually: People expect individualized attention, which requires data that is both in-depth and compiled in a seamless and unobtrusive way. Brands should be smart enough to auto-detect, copy, or deduce customer needs at scale. That way, they can deliver maximum utility, while earning and keeping the customer’s trust.

• Stay creative: Data doesn’t rain on the creative parade. You still need to use technology and messaging to make your customers happy. Execution and experience matter as much as personalization.

Of course, BaaS is not an entirely new concept, but brands without services are becoming increasingly rare. The cloud has helped shape a world where experiences will likely beat out goods in the long run. We need to stop obsessing about how to talk more effectively to customers and start thinking about how we can better serve their needs.