Building Strong Digital Brands

1.3.1 How brand management has evolved

The concept of brands as products and services with unique and powerful rewards evolved over time. Let us take a closer look at this evolution:

► Brand as proof of origin: in the beginning a brand was the proof of origin on a product. Craftsmen in antiquity stamped their pottery with a one-of-a-kind symbol. This symbol let everyone know who made this pot. American cowboys heat-branded their unique symbol into the hides of their cattle in order to tell them apart from cattle from neighboring ranchers. This is where the English term brand comes from (in German Brandmarke, Brandzeichen). Brand and branding were the same. Personal contact built the foundation of the relationship and trust between merchant and buyer.

► Brand as bundle of features: the personal contact between producer and consumer disappeared with the Industrial Revolution. Trust would now and forever be represented by a product carrying a brand which guaranteed certain features. The brand came to stand for a branded piece of mass merchandise of lasting quality. They were the same sizes and weights, in the same packaging, offered-up on a sales floor and were distinguished by heavy promotion and recognition in the marketplace. It did not take long for these features alone to fail at distinguishing against the competition: how is a car supposed to differentiate itself when cars are all of good quality and readily available?

In addition, consumers came to expect excellent quality as a given. Wide availability? There are powerful brands that actually differentiate themselves through exclusivity, like Rolls Royce. Consistent packaging? In that regard, one of the most successful brands of the last decades should not have been so successful: the Swiss Swatch. The consensus around mass production suddenly became too narrow. The competition in the service sector and among capital goods institutions had increased drastically. The central problem was that the end user was only a peripheral figure – her wishes, expectations and perceptions were not considered, nor was the dynamic relationship between brand and consumer. Increased competition changed this too.

► Brand as image: the consumer became the focus of brand management in the mid 1970s. Alone her perceptions of the product (brand image) determine what the brand is and what it is not. Our understanding shifted from assertion (brand features) to acceptance (brand impact).

Further developments then pushed this idea to its limits:

o If the consumer alone determines what the brand is, then brand managers have little authority to develop the brand in a targeted way.

o Furthermore, if the brand only seeks to satisfy the consumer, the brand will only evolve according her whims and arbitrary trends. This is like the person who tries to please everyone. The brand lacks true expression and personality. A fatal error! Consumers need orientation and trust in a promise which corresponds to their wishes and differentiates the brand over the long term.

o Another difficulty with a focus on image: there is too little focus on how the brand really acts in the world. Result: the communication of the brand in advertising does not line-up with consumer experience in the everyday world.

o In closing, managing multiple brands under one umbrella and extending into other segments also causes issues: which umbrella brand is most believable? Which qualities a one brand transfer to other markets? The answers are not found in an strictly image-based approach.

► Brand as personality: Both perspectives were joined in the 1990s. A brand is the product’s personality. Viewing the brand as a person means consumers choose brands which most strongly align with their personalities. Brand management means building and developing a product personality (sender).

The goal of brand management is the long-term creation of brand image, i.e. the idea of brand that lives in the minds of the consumer and other stakeholders such as employees (receiver). Accordingly, brand management looks both inward and outward from the brand. In this way, a clear and contradiction-free image arises that connects all corporate activity.

This concept is also not problem-free:

o A brand can offer consumers something they do not have. Think about a type of medicine that promises the control over one’s health and is missing from the consumer’s life. Other examples are banks that offer financial advice or a brand like Apple that lends the image of creativity to consumers who do not necessarily need to be creative to buy Apple.

o Neuroscience tells us that brands cannot produce the effects in the brain that another person can. The comparison of brand to person is at best a helpful analogy.

o The focus on the personalities of brand and consumer distract from the importance of emotions. Current research shows that emotions are what influence purchasing decisions and other behavior.

Strong emotions about a brand explain purchasing decisions

► Brand as reward: current research shows that people make decisions mostly by following their emotions. We want to experience the best possible feeling we can for a brand.

1.4 Unit 4: Strong Digital Brands Generate Emotion

Research shows we make decisions mostly by following our emotions. Emotion is the fundamental force of the human drive: we avoid bad feelings and search for good ones. We move through the (digital) world basically open to brands which offer positive feelings.

In fact, the work of world-renowned neurologist Antonio Damasio proves that emotions are preconditions for rational decision-making: patients with neural damage to the emotional part of the brain were unable to make any decisions.

Emotions are a prerequisite for rational behavior. One who cannot feel is unable to make rational decisions or act in a reasonable manner. Far from disruptions to critical thought, emotions are survival instincts.

The neural network responsible for our emotions is the limbic system, the home of our emotional intelligence. Our wishes, drives and feelings also live there. The overall function of the limbic system is to evaluate what the brain is doing. The limbic system functions like parallel feelings which either warn us against certain behaviors or steer us in the direction of others.

How does the limbic system work? The limbic system evaluates all the information that pours into our brains about (digital) brands and how emotionally meaningful they are to us – much as a librarian sorts incoming books.

The more emotionally meaningful the information, the better a person learns it. Emotions put learning into turbo. Studies confirm that emotions improve perception and learning. Humans make quicker and more focused decisions when the situation has a strong emotional component. The more powerfully a company speaks, the more effectively its message comes across. "Forget about Power-Point and statistics. To move people at the deepest level, you need stories" (McKee, Harvard Business Review, 6/2003). This is the most important reason behind the efficacy of brands with a one-of-a-kind, experiential image: they generate strong emotions and are better remembered because of them. They leave behind a deep impression in our minds. The more emotional the brand, the longer we remember it.

The mind catches what the limbic systems judges to be positive or negative. Everything else just rushes into and mostly out of our brains. Stories speak most effectively to our limbic system with vivid pictures and emotional words like “death” or “love”. But so do brands like BMW, Adidas or Nike. Boring, unengaging brands do not activate the limbic system to a very high degree. Result: we hardly remember brands that do not awaken any feelings in us.

Current research supports this and has altered the model of a mind which merely stores pictures or transcripts from events and then recalls them on command. Instead, people run an emotional filter program that we use to fish out of the river of our life experiences. This filter program is not rigid, but is instead constantly being revised on the basis of our experiences. Likewise we are able to re evaluate experiences and thereby change them.

To a high degree, brands function unconsciously

People process most of the information around them unconsciously, namely 95%. Only a very small portion makes its way into consciousness. One reason is that consciousness burns a lot of brain energy: the brain is only 2% of the body’s mass yet uses 20% of the body’s available energy when it’s thinking. Most brain processes therefore run unconsciously. It conserves energy and happens quickly.

Precisely because the processes of the brain run so quickly is another reason for the value of the important work of the unconscious. The unconscious works parallel to consciousness and is therefore able to simultaneously evaluate many brands.

Important too is that the unconscious so quickly and easily decides. It does this by calling up any and all experiences with a brand and checking whether they were good or bad ones. More on this in a bit. Why should a brain do all that conscious thinking when it can simply reach for a time-proven solution? When consumers stand before a decision, they do not need to deliberate long or invest needless energy.

They can instead rely upon key information and stored emotions –foremost from learned stories – to immediately asses the brand.

Emotion as soul-stirring

If emotions are so important, what are they? The term is from the Latin: emovere. The verb means to move forth and out and also to stir up. Most definitions collaborate that emotions are about a very complex phenomenon. Emotions equal a movement in our nature or a stirring of our souls.

Emotions alter our physical state, e.g. increased heart rate, sweating and dilated vessels. Emotions alter our demeanor, e.g. facial expression, gestures, body language and voice.

World-renowned psychologist Philip Zimbardo sees a complex pattern of changes in emotions that includes physiological excitement, feelings, thought processes and behavior. That pattern emerges as a reaction to a situation which an individual considered personally meaningful.

Emotions alter our thinking, feeling and action

Bundled feelings produce experiences.

The structure and targeted development of experience profiles should therefore also be at the center of digital brand management

Brands with a one-of-a-kind experience profile such as Porsche, BMW and Audi speak directly to our primal instincts. Irrelevant and interchangeable brands touch these instincts little or not at all. Latter result: we forget them. This is the most potent reason for the powerful effect of brands with a one-of-a-kind experience profile: they telegraph emotions and therefore remain vivid in our minds. The ideal brand target wants to own this brand because it fulfills their wishes and expectations over all other brands.

The experience profile must be one-of-a-kind. This raises the profile of the brand and differentiates from other brands. The more focused the experience, the clearer and more distinct the consumer decision – research bears this out.

Critical thinking supplies reasons and can relent

Decisions and behavior are emotional and are later rationalized. The feeling of desire comes first, after the limbic system has long since decided what should be done. The crux is that the limbic system has the final say whether or not to act. Bottom line: emotions are prerequisites for reasonable action.

The real motive reads: you want it, you must have it, it is fantastic.

The rationalizing motive reads: you need it, it is necessary and meaningful.

Practical tip for strong brands: show reasons for the brand’s value and the powerful emotions it evokes. Emotions guarantee attention, deeper effects and longer retention. Evoke powerful emotions. Cite concrete reasons, especially for important decisions that carry higher risk.

Emotions determine thinking, feeling and action. Now, what are the most important emotions? This is important. The answer determines whether someone wants and buys our digital brand or not.

1.5 Unit 5: The Strong Digital Brand Speaks to the Reward System

No matter where we are from, we all act according to two, interconnected systems: the punishment system and the reward system.

The punishment system determines what we avoid to escape danger.

The reward system determines what we seek to heighten pleasure.

Avoiding danger and seeking pleasure is the brain’s modus operandi (primary function).

The reward system is designed to guide behavior so that it gives pleasure when the behavior is good for the person or has a positive effect. The reward system is a part of the limbic system. The limbic system is a network of pathways and core regions deep in the brain. The amygdala and interbrain cell groups connected to the cerebral cortex also live here. The communication between the individual parts of the reward system runs on the semiochemical dopamine, a so called neurotransmitter, that communicates signals among nerve cells. The release of dopamine is pleasing and may cause action.

Dopamine makes us happy

Our consumers experience a sense of pleasant anticipation when think of our brand because of the reward system, e.g. driving a Jeep. Positive emotions also evoke the memories our consumer has collected about the brand.

The reward system is especially active when a brand exceeds our expectations; when we feel even better than we expected to. Conversely, we are disappointed when the anticipated reward or the expected feeling is missing.

Bottom line: since the reward system determines what our consumers look for, our brand should be associated with a one-of-a-kind reward promise

Consumers learn brand stories better and are more likely to act in a favorable manner when brand stories exceed expectations. Note: the reward system and the motor system (motion) are very close together in the brain.

On the great importance of expectation and experiences

Experiences and expectations play a substantial role in decisions about brands: experiences store whether our actions benefitted us. We use expectations to gauge whether a planned action will benefit us – based on available experiences.

Experiences are so important because we store the significant ones with a value of whether they affected us positively or negatively: was the interaction with a brand and its story pleasant or unpleasant? Was the story enjoyable? The limbic system does the evaluating. When it is time to make a decision, we call up our experiences – their assistance is immediate and reliable.

Further: along with our experiences and emotional evaluation, we get a bodily sense or good feeling – our physical emotional memory of experiences. It stores our feelings and bodily sensations. Every consumer keeps an account/diary of emotional income and expenses: on the credit side of things all positive experiences with the brand add up, on the debit side all negative experiences.

How do consumers plan?

How does the brain plan actions based on its emotional memory of past experiences? When faced with a decision, the mind of the consumer imagines scenarios in a kind of internal movie. These movies in the mind run simultaneously and unconsciously. The brain compares these imagined action movies with similar situations from the treasure of experiences collected in the emotional memory of experience. If a comparable situation is found, the brain automatically assigns the corresponding evaluation at lightning speed. The goal again? Repeat good experiences and avoid bad ones.

Where do experiences come from? Humans inherit some experiences from the collective memory of their ancestors without personally having to experience them. Throughout life, we add to this collective memory of experiences with our own, e.g. those we have with brands. We remember first impressions especially well because they effect the emotional memory of experiences so strongly – and with it the feelings around the experience. Children who have a positive experience with a brand remember the interaction especially well.

Experiences collected before the age of 7 are stored most effectively since this is when the brain is working hardest to create structure. There are windows in life when experiences leave the heaviest mark. One possible conclusion: car makers might want to ensure their product is my favorite childhood toy instead of dangling expensive imagery in front of me as an adult, hoping I will bite. What stories should I conjure up? Which performances should I find a role in?

It is imperative that international (digital) brand management pay close attention to experiences which are shaped by culture. The culture code reflects the meaning unconsciously attributed to a thing in the culture a person was raised in – a car, a particular food, a relationship, a brand. Significant impressions in the emotional memory of experience can thusly be individual or collective.

To uncover which collective experiences shape a culture, researchers examine early childhood impressions. They reveal all the meanings and emotions that determine a culture’s consumer behavior. The famous cultural researcher Clotaire Rapaille states: “If you want to sell cars to Americans of food to Germans, you must understand the reference system these peoples use. I am convinced that the US car industry is in such a tough spot because it does not understand what the American consumer truly wants. Toyota, on the other hand, is on the right track. An important requirement for marketplace success is understanding the cultural code. I am naturally not claiming that all Germans or all Americans are the same; but they do each share a common cultural reference system. If one understands this system, i.e. if one is ‘on code’, success is practically automatic.” That is why it is so important to the effect of storytelling that the stories take culture codes into account.

Expectations forecast possible gains

Expectations are so closely tied to experiences because experiences help forecast the expectations we use to make decisions. In this way, the brain removes the possible effects of action and asks itself how it would feel to act in such a manner: how with this brand make me feel? Because we are social animals, our brains also ask how others will react when they see us using this brand. Storytelling can produce this effect wonderfully for the brand: people or characters in the story appear who show the emotions, e.g. admiration, envy, curiosity.

Consumers do – mostly unconsciously – physically feel whether an interaction with the brand was pleasant or unpleasant, because they record a physical sensation along with each memory that is recalled along with the memory, e.g. a positive gut feeling, tingling or tension. Neuroscientist Antonio Damasio believes that every object and situation of experience is connected to emotion and the accompanying physical sensation. The simple formula reads: good = repeat! Bad = avoid in the future! This mechanism, this automatic signal, makes it possible to select a brand from many choices which best satisfies a consumer’s needs. “The automatic signal readily protects you from future losses and helps reduce the number of choices. You still have the opportunity to conduct a cost / benefit analysis and draw clean conclusions, but only after this automatic step has drastically reduced the number of alternatives.”

In this way, users can call upon knowledge about the brand but also emotions in order to decide what to expect from our brand. They are able to quickly turn to memory without too much thinking if a corresponding, positive experience is available. Users process our brand mostly unconsciously, storing it as internal imagery along with strong physical sensations. They call this information up when they are faced with a brand decision. They are unaware most of this is happening since most of it happens unconsciously.

Conclusion: our brand should generate clear expectations of a one-of-a-kind reward with consideration to the experiences of consumers. Digital brand management is thereby also the management of expectations: what can consumers expect from the brand? Also, what should they not expect? The question is therefore, what rewarding feelings does the brand need to generate in order to steer consumer action?