Brand-building in on-demand economy

This article was originally published in The Guardian on December 17, 2015

Twitter is in trouble. In early October, it cut up to 336 jobs. The company’s share price dropped. It considerably lags behind Facebook and WhatsApp in the number of active users. In July, the company noted the slowest user growth since its initial public offering back in 2013. Around the time of the October layoffs, Twitter Moments was introduced in yet another attempt to make the service less confusing to new users.

And there lies Twitter’s problem. Failure of a company to clearly articulate why it exists in the world, who it is and what value it adds, is a brand failure. If Twitter’s growth is stalling, it’s because of its brand.

The fastest growing companies today had their brand promise figured out even before they invested a single dollar in their brand marketing. Uber is evolving the way the world moves by being everyone’s private driver, delivering on-demand flu vaccinations, Christmas trees, kittens, by being a nanny, a corner store and the same-day shopping service. Because Uber defines itself as a global urban infrastructure for shipping and logistics, the company now successfully competes in a wide range of markets and commands an impressive $70bn valuation. Its products and services keep evolving under the umbrella of Uber experience, which remains the company’s key competitive differentiator and the core of its lucrative business model.

Uber’s focus on user experience to scale growth and build a brand isn’t new. But it is this convergence of brand building and scaling growth that traditional marketers and startups struggle to figure out.

Farfetch, an online luxury fashion marketplace, created a well-designed product that seamlessly integrates content and commerce. It also introduced a superior delivery service and built a business model so successful that the company became a unicorn — private firm worth $1bn or more. Where Farfetch struggles is to evolve from a service provider to a brand. The theme of the company’s first brand advertising campaign, launched in early 2015, had surprisingly little to do with what makes Farfetch successful — being one of the biggest digital bazaar on the planet.

Other upstarts are more savvy. Airbnb began with the idea of creating a community and successfully hacked its initial growth by piggybacking on the largest transactional community there was: Craigslist. Airbnb’s Belong Anywhere brand promise was born out of this community focus and propelled its growth beyond its initial user base and established it as one of the top global hospitality players.

But without Airbnb’s focus on customer experience, its brand promise wouldn’t get very far. Airbnb’s relentless innovation of its products and services and its focus on user journey makes its brand promise valid. Due to this customer-centrism, Belong Anywhere became the binding principle of Airbnb’s experience.

Today, brand promise serves as a code of conduct for hosts and guests and as the reason users choose Airbnb. Belong Anywhere simultaneously acts as a business model and brand differentiator.

Where Farfetch struggles and Airbnb succeeds is in simultaneous nailing of the brand experience and a story. “A house is just a space, but a home is where you belong,” says chief executive Brian Chesky. With this seemingly small distinction, Airbnb successfully evolved from a technology company that reverse-engineered cross-listings on Craigslist into a lifestyle brand, rooted in people.

This distinction critically shifts the economics of design and branding.

Design has evolved from product to experience to service and system. To keep the ever-more complex service design together, brands need a clear and strong promise and a narrative that is as intuitive, human and seamless as the customer journey.

The focus of branding needs to move from driving traffic and creating awareness deeper into service design. Retention, usability, user segmentation all used to be under service design teams. Now they need to be part of branding, whose job is to keep demonstrating company’s value throughout the entire customer journey.

Design and brand development are not separate practices. If in doubt, think Groupon. Groupon was quick to expand globally and buy Super Bowl ads without making sure that its promise lived as a superior brand product, service, experience and business model. In the end, the brand campaign promoted a brand not a lot of people wanted to interact with.

Most successful companies today are savvy in combining both brand and technical craft. They don’t apply branding after their product is complete — because modern products are never complete. They are connected, upgradable and trackable. They are inherent parts of services, experiences and systems that add value to their use.

The situation is even more complex when we take into account that Airbnb, Uber, Net-a-Porter, Facebook or WhatsApp are platforms. They do not directly create their own value, and as a consequence, do not exert control over their value proposition. Their business is to make value exchange seamless, convenient, intuitive and efficient.

For companies that are platforms, brand promise is even more important. Its job is to make the core value that’s exchanged as clear, viable, feasible and desirable as possible. Its job is also to provide filter for decision-making and focus for the whole company.

Without it, a company may try and cater for too many use scenarios and offer too many things, to a point when it’s not clear what it stands for anymore. Think Twitter.