We live in times of major uncertainty. The doom and gloom of the economic crisis, the deterioration of mass markets, the pervasiveness of the digital lifestyle, and the fragmentation of traditional societal institutions are not only inducing anxiety but also inspiring a search for simplicity and noneconomic value systems. Consumption-driven wealth and status are being replaced by identity, belonging, and a strong desire to contribute to — or to experience — something “meaningful” rather than to acquire more things. Trust and reputation are no longer enablers for the exchange of goods, services, and information, they are replacements for them. Values are the new value. Meaning is succeeding customer satisfaction. “The job of leadership today is not just to make money. It’s to make meaning,” writes management consultant John Hagel.
This new cultural climate presents a historic opportunity for brands to transform themselves into arbiters of meaning. When your brand is a vector, your base becomes a movement — as we learned from Barack Obama’s presidential campaign. A “meaning surplus” will become imperative: Only businesses that give more than they take will be able to create sustained brand loyalty. Out: bottom-line pragmatists and financial wizards. In: philosophers, ethicists, and social entrepreneurs.
Although all corporate functions are affected by this path-finding moment, marketing is best positioned to lead the transformation. Effort is required to move beyond simply connecting products and customers with the goal of facilitating transactions. Marketing must now create “meaning” through actions and interactions. What is needed is the marketer as chief meaning officer — someone who negotiates a “New Deal,” a new social contract between brands, their stakeholders, and society at large.
There are two reasons marketing should take on this daunting task. First, marketers are disposed to transformation by the very nature of their role. They must constantly adapt to ever-changing customer behaviors, and because of this exposure to trends they can also act as innovators, challenging the status quo inside their organizations. Second, since marketers serve as the public interface of their companies, orchestrating the relationships between the key market actors (customer, media, and public), they can also fulfill that role within their organizations, facilitating among R&D, operations, sales, finance, and HR.
A Brand Is a Small Town That Never Sleeps
The advent of the social web has disrupted traditional marketing conventions and has democratized the concept of branding. The truth is, a brand is no longer exclusively the bastion of marketing. In today’s open-sourced, hyper-transparent economy, customers own the brand, and no platform, book, or rigid compliance guidelines designed to protect marketers’ idea of that brand can change this. You cannot control your brand anymore, period.
A brand is a small town that never sleeps. It is open to (almost) everyone, it is vibrant, and it is made of and by people who are willing to connect in pursuit of either utilitarian value or a common cause — or both. It is composed of myriad social networks, micro-communities that communicate 24/7. Companies that embrace this new continuum and act as “brand urbanites” will easily adapt to the new digital arena. Chief meaning officers recognize that in the Cluetrain Manifesto world of marketing, the brand belongs to everyone and everyone is the brand. But they also understand that this is their big chance to reconcile brand polyphony with a recognizable brand personality. Brands can be either the subject of conversations or the host of conversations moderated by brand advocates and attractors. It is the chief meaning officer’s job to design, enable, facilitate, and curate these conversations and make them as meaningful as possible. If brands don’t have a point of view, they won’t be able to connect. If they don’t have an argument to make, they won’t be meaningful. Brands need to be well-traveled, well-read, and educated. If they only repeat the same message again and again, they won’t be able to engage in a conversation.
In a blog post, John Battelle, chairman of the Conversational Marketing Summit, cited the venerable management guru Peter Drucker, who defined marketing as “the whole business seen from the customer’s point of view.” Put another way, every single interaction the customer has with a business can and should be seen as marketing. Accordingly, for Battelle, “A truly successful business is one that is an ongoing conversation. Those conversations are marketing — if you add value and connect to your customer, you’re succeeding. If you don’t, you fail.”
This is a significant change. A decade ago, marketing was viewed mainly as a one-way push to get messages about products and services out to customers. Then marketers began to recognize the need to encourage a dialogue, propelled by the benefits of online marketing. Interactive tools, from wikis to blogs to social networks, have enabled marketers to engage existing and potential customers, not only at the most opportune times (when deciding whether to buy, for example), but also at all points along the value chain, including the development of the products themselves. The trend toward engaging in the ideation, development, distribution, and support of new products and services marks a new era in business culture. Marketers now need to have more than just an in-depth understanding of their audiences’ needs, habits, and desires; they must also initiate or join conversations to engage their audiences in channels of co-creation.
Clustering customers into segments based on aggregated demographic or behavioral data has serious limitations in an “age of conversations” in which the boundaries between consumer and producer, amateur and professional, are blurring. An increasing number of companies, therefore, are adopting the principles of observational ethnographic research, looking at outliers and eccentric behavior on the fringes of their target audience. The resulting insights are often more meaningful than those from focus groups and quantitative consumer research, which are typically predictable and confirm certain assumptions. In this vein, Jump Associates’ Dev Patnaik posits empathy as a critical skill set and calls for companies to be “wired to care.”
The chief meaning officer’s role is to generate this empathy by opening the “open brand” even further. The new marketer needs to urge old-school brand guards (who still think they need to “protect” the brand) to let go once and for all. The more invisible marketing becomes, the more effective it will be. The more control it gives up, the more influence it gains. Axel Wipperfurth, author of the book Brand Hijack, calls this “marketing without marketing,” and author Stowe Boyd calls it “unmarketing.” Chief meaning officers should evangelize this philosophy across their organizations and work with their CEOs to agree on new metrics that reward the subtle, implicit, and collaborative element, which is critical for establishing and fostering brands in the 21st-century. “Brands aren’t defined by campaigns anymore, but by the consumer ecosystems we nurture to support them,” HP’s CMO Michael Mendenhall recently told Strategy + Business magazine. The creation of brand equity is a cooperative act based on the values that companies share with their customers. Brands are assets in the public domain. They are social funds. The chief meaning officer’s mission is to raise their intellectual and emotional capital by “activating” customers.
An effective way to do this is to activate the dormant social networks customers inhabit (often without even knowing it). All online communications essentially have a social component and can be seen as expressions of underlying social micro-verses, worlds within worlds in which — shifting time and place — individuals can travel and interact online. As marketers face the daunting challenge of connecting with increasingly fragmented audiences, activating dormant social networks is their foremost task.
KLM’s Africa and China clubs provide an interesting case study. The Dutch airline offers business customers the opportunity to meet fellow travelers who do business in either of these two regions — before takeoff and during the flight, online and in person. KLM plays the role of the matchmaker and adds value to the otherwise often value-free hours frequent travelers spend in airport lounges and in flight. It is the principle of the social-networking site Dopplr, applied to the exclusive crowd of business and first-class travelers: connecting travelers who share the same connections. KLM prefilters the club members so that travelers who sign up for the invitation-only network are afforded a certain quality of contacts. The clubs are a win-win-win: Trade groups and business offices from the travel regions are provided with a highly targeted way to advertise their services; travelers benefit from a true value-add and a richer travel experience; and, finally, the clubs bolster KLM’s reputation as an airline that cares about its customers. Of course, these networks already exist; they’re just dormant. KLM does not make immediate revenue, but it generates “social wealth” as long-term equity.
In this case, KLM activates the dormant networks through an actual common motivation, but the activation can also occur through a shared set of ideals, values, and beliefs. Joseph Newfield, founder and CEO of the marketing agency School of Thought, puts it aptly: “Start with beliefs and you’ll get believers. Marketers still need to use every trick in the book and dozens that haven’t been thought of yet to engage people in great, compelling stories. The difference today is this: To make believers, the stories have to be true.”
The catalyst for these stories based on shared ideals, values, and beliefs is social content. The chief meaning officer connects members of dormant networks, creating and distributing the type of content apt to trigger the desired network effect. If that occurs, content is passed from one individual to the next in a cascade of viral distribution: partly through formalized online social networks (Facebook, etc.), partly through activated dormant networks of existing online populations, and partly by individuals who establish new networks within what Logic + Emotion blogger David Armano calls “social solar systems.”
Increasingly, this content is small. Small content can go anywhere. With accelerated news cycles, shrinking attention spans, and communications fragmented into 140-character tweets, instant gratification and presence have become the predominant paradigms of online interaction. Microblogging services such as Twitter diversify meaning into myriad atoms of communication, hyper-targeted in-the-moment forms of looking at the world by expressing it in real time: As marketing strategist Geoff Livingston says, “Now is gone.” The shorter the attention span, the more important the role of microformats. The more sliced up the content, the richer the channels of communication. The smaller your brand, the more you can share it.
The Obama for America campaign masterfully utilized the power of social networks to generate this small-world effect. “As networks grow, they shrink,” says Jure Leskovec of Carnegie Mellon University. “As people accumulate friends, the distances shrink.” The more people joined the social Web hubs of the Obama campaign, the easier it became for the messages to spread and for the campaign to amplify its outreach and turn undecided voters into Obama voters and passive supporters into active volunteers. The bigger the network grew, the more the distance between the brand and its followers shrank. The campaign became an inclusive movement for everyone: Obama was us, and we were Obama.
A growing number of companies are realizing that their brand is “a small town that never sleeps.” Amazon (Amazon Flexible Payments Service), Netflix (Netflix Prize), Virgin Mobile (Virgin Earth Challenge), Procter & Gamble (Open Innovation Challenge), Dell (IdeaStorm), and Starbucks (MyStarbucksIdea), among others, have all moved from firm-centric to network-centric, empowering and leveraging their community of users by giving them a voice in strategy, product development, and marketing decisions. These companies understand that crowdsourced and peer-to-peer business intelligence helps them overcome the “not-invented-here” syndrome, reconciling inside-out and outside-in innovation. In addition, more and more brands are adapting to the new paradigms of the Distributed Internet and the new economy of micro-scale, and have launched a number of open-source Web services and APIs (application programming interfaces) that make their brands smaller and thus easier to share.
But only a few companies are currently committing to the underlying, more radical proposition: That they’re all more or less in the content business.
Sharing Is Giving Is Taking
In his seminal 1960 article “Marketing Myopia,” Theodore Levitt cited the railroad industry as an example of business failing to adapt to changing circumstances. Had it realized it was in the transportation business, it might have survived. Similarly, all businesses — regardless of their industry — need to realize that they’re not just selling products or services: They’re in the communication business, tasked with sharing information.
Bypassing ailing traditional media, companies can establish proprietary media channels to produce and disseminate their own social content and communicate with their audiences directly. These channels include social media, as well as micromedia (hyper-targeted formats that reach niche audiences). Through all of these channels, brands can “show by telling.” This applies particularly to service marketers and marketers who promote premium brands (see The McKinsey Quarterly or the firm’s recently launched expert group blog, What Matters, as examples). They sell intellectual capital, culture, and expertise, conveyed by stories based on shared values — in short, they sell meaning. In a digital economy where most transactions are free (or expected to be free), value is created through sharing. Sharing makes content meaningful.
A study from Nokia predicts that by 2012 a quarter of all entertainment will be “circular”: created, edited, and shared within peer groups rather than generated by traditional media. “People will have a genuine desire not only to create and share their own content, but also to remix it, mash it up, and pass it on within their peer groups — a form of collaborative social media,” wrote the study's authors. Similarly, management guru Gary Hamel (The Future of Management) proclaims a new “gift economy”: “Power comes from sharing information, not hoarding it. To gain influence and status, you have to give away your expertise and content. And you must do it quickly; if you don’t, someone else will beat you to the punch — and garner the credit that might have been yours.” Economist Umair Haque points out that, “The pressure for sharing in a hyper-connected world is too strong to resist. It’s not a fringe effect, relegated to geeks and hippies — it is one of the foundations, as we’ve been noting, of next-generation value creation. And it’s doubly vital in a world where the fabric of value creation is breaking apart.” As an example, Haque refers to car-rental company Hertz, which introduced a new “micro-chunking” service that allows customers to rent cars by the hour. This has helped Hertz compete with ZipCar, City Car Share, and similar services that were micro-community-oriented and green-marketed well before Hertz got into the space.
Sharing means exchanging information through open conversations, in the spirit of what Wired contributing editor Clive Thompson dubs “radical transparency.” Companies that are not afraid of showing their vulnerability have begun to embrace radical transparency as an effective way to humanize their brands: Online retailer Zappos lets every employee blog, Comcast has its engineers go on message boards to answer customer questions, and more and more companies are using Twitter for what it is best suited for — ostentatiously public personal conversations. All these companies understand that personality — brand personality — comes from being personal. The more transparent and vulnerable they are, the more personal they will appear.
As much as transparency can underscore that you have nothing to hide, it can also highlight that you have a lot to give. Winston Churchill’s saying, “You make a living by what you get; you make a life by what you give,” is true for brands as well. “Giving Is the New Taking, and Sharing Is the New Giving,” asserted a Trendwatching report, pointing at a new Generation G (for generosity) that is poised to reboot capitalism. “As consumers are disgusted with greed and its current dire consequences for the economy — and while that same upheaval has them longing more than ever for institutions that care — the need for more generosity beautifully coincides with the ongoing (and pre-recession) emergence of an online-fueled culture of individuals who share, give, engage, create, and collaborate in large numbers.”
Case in point: the San Francisco-based firm Virgance, which shows that the new kids on the Web want to make a difference. The Economist described Virgance’s model as “for-profit activism.” Named after a plot device in Star Wars, the company aims to support social causes through a multi-pronged campaign platform that resembles the way Obama for America mobilized its supporters, and it typically consists of four core elements: a web-empowered network of volunteers, a presence on Facebook, a team of paid bloggers to promote the campaigns, and YouTube viral videos.
Virgance is not the first for-profit do-gooder, of course; there have been plenty of others whose business models have combined bottom-line thinking with social values. But Virgance is more like Facebook’s Causes. It adopts the forces of amateur self-organization described in Clay Shirky’s book Here Comes Everybody and builds its entire business on a social Web platform, embracing the principles of open source, mass collaboration, and transparency. The Virgance Web site describes the company’s ambitious mission: “If a for-profit company did the type of work that nonprofits often do, but did it more efficiently, would people trust it the same way they trust nonprofits? What if everything the company did was completely transparent? What if it was open source? If we can create this kind of company, and succeed, how many other companies would follow our example? Along the way, could we change the face of the business world itself?”
Does that language sound familiar? Clearly the Obama-nization of business, both in terms of substance and style, has arrived, and we will see more examples going forward — brands that provide emotional, intellectual, and moral guidance and are steered by chief meaning officers.
Generation G has internalized the claim by philosopher Alain de Botton that “there is no wealth but life, so concentrate on your portfolio of life, and not your portfolio of cash.” While the boundaries between work and life are dissipating, “lifeholder value” is gaining traction as the ultimate return on investment. But Generation G not only demands new concepts of quality of life versus concepts of material wealth, safety, status, and comfort — it also wants to have a say in developing them. Were Maslow’s hierarchy of needs still a valid model, it would have to include social and environmental needs that are bigger than those individual, and it would also look less like a pyramid and more like what the Catalan tradition calls a castell, or a human tower, offering an endless array of configurations of balance that are possible through openness, experimentation, and cooperation.
Brands seeking to engage Generation G must replace outdated concepts of ownership, control, and coordination with concepts of open source, open IP, open innovation, and transparency. They must turn customers into “brand holders” by “activating” them, promising one or more of the following benefits: personal or professional growth; new insights and learning; a connection with like-minded people; and the opportunity to contribute to a common cause by using their talent and potential.
In light of the economic crisis, companies have a historic opportunity to transform the way they do business and provide customers with more value-rich, sustainable, and meaningful products and services. With this special series on “The Meaning of Business,” design mind invites business leaders from various industries and disciplines to explore new, innovative models of value creation.
A New Era of Meaning - An Introduction
By Tim Leberecht
Chief Marketing Officer, frog design