Everyone wants to be someone else. This 6 word sentence props up billion-dollar industries, creates unrelenting waves of consumer demand, provides employment to millions and always keeps us wanting for the next best thing. Consider the scenario of you getting a radically different haircut — going from long to ultra-short, shaving your head off or getting a style you never had before.
There are two possible outcomes playing out of this scenario:
- You get both praise and brickbats but your self decides to stick with the new style
- You get both praise and brickbats but your self can’t handle the brickbats and you revert back to your previous hairstyle
Brands do not have it this easy, which means there are less opportunities for flip-flops. The disasters on trying to ride purpose, social action, sustainability and more recently, BLM, are all around you. In short, brands do not have the option of wearing the “Emperor’s New Clothes” because they will be called out almost immediately.
Brands evolve gradually, and when they are in the hands of the right custodians, they do so cautiously. As they evolve, the perceptions they create, the images they build and their definition also evolve. You have the choice of positioning your brand as a problem solver or as an allure in this journey.
Sustainability, community empowerment, purpose and social progress are all the rage now in terms of brand positioning platforms (and rightfully so). But even on these platforms, a brand can sustain a major beating on its equity if it is simply perceived to be a vanity. A brand needs to be seen as a solution for enhanced sustainability, higher levels of community empowerment, implementing purpose and elevating social progress to be taken seriously.
Let’s move down a level to a brand’s functional and emotional positioning. The single biggest trend across industries is the move towards “services” as a positioning. Moving towards services has one inherent advantage — service as an offer sounds more ‘solution’ish’ compared to a brand. Organisations have tried this pivot for decades, but the opportunity has never been bigger as it is now. On the top of it, Covid-19 accelerated it.
In 2004, Xerox changed its tagline from “The Document Company” to “Technology / Document Management / Consulting Services”, which evolved into “Work Can Work Better” in 2015. Within 10–11 years, Xerox shifted from a product-focused to a solution-focused organisation twice. But what is so fundamentally different now compared to Xerox’s positioning in 2004? It is the focus towards enterprise document management services.
This is one of the many examples at an enterprise level. The same fundamental shift is happening in the SME segment. Startups have injected rocket-fuel momentum in this shift. Innovation and creating disruptive models in services is the most common characteristic of startups across the world. According to Tracxn data, startup funding in the SaaS (Software as a Service) space in India crossed $1 billion in 2019. Venture capital investment in European SaaS startups grew from $2 billion to $5 billion between 2016–2019.
How does this trend towards becoming services fit in with traditional brands, which have existed for decades? Is it one of those fashionable trends, which will be replaced by another or is it a deeper shift in consumer and industry dynamics? From a brand positioning perspective, if being solution focused allows a brand to address a wider set of needs, then the shift makes sense.
Key factors to consider:
- Service focused businesses have brands too (and in many instances, more than one)
- The shift needs to be delicately managed — positioning as a “service” should not damage the existing credibility of the brand
- Personalisation is not being service focused — it is about having a portfolio that can be adapted to a wide set of needs
- No brand can transform to a “one-stop shop” in the medium-term as it requires significant transformation
- Service-focused businesses deeply evaluate a customer’s overall life and not only momentary points of consumption
- Building an e-commerce capability is not becoming service-focused — it is about expanding the reach by going beyond physical presence
On the other hand, if your brand doesn’t want to become service-focused, it does not mean it is a vanity. If your brand’s quality and performance is top-notch at every moment of consumption, it is creating a positive experience, which is being continually reinforced.
Can every brand become service-focused? The answer is a resounding “no”. But it has its advantages. A pivot towards servicing allows a brand to have a presence in each phase of the customer journey. This leads to more engagement and interaction opportunities with the brand, which can positively impact brand loyalty.
But it comes with its own unique set of challenges:
- Supply chains and distribution networks need to provide competitive advantage
- Excellent customer service becomes pivotal for success
- Short-term revenue maximisation mentality does not work
- It takes patience to make the whole service ecosystem work smoothly — a brand is entering this space with some key strengths but equally into a lot of new and unexplored territories
- A brand should have the ability to stretch into a service-focused business — A brand can be great in meeting needs of point-in-time occasions but might fail in extended occasions
- Brand portfolios require optimisation when shifting towards a service-oriented business
For a traditional brand, a shift towards becoming a service, requires it to look beyond servicing an immediate or visible need. It is about becoming a part-and-parcel of a consumer’s life. It is about becoming a trusted guide and advisor, and not hesitating to recommend others when it comes to addressing a pressing need. Can traditional brands ever become pure-play service providers? It is an important question to ask.