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July, 2005

Beware of Insurgents

There are insurgents in our midst. They are invading our streets and skies and there's no sign they're going anywhere. They're a danger to the institutions we have grown up with and come to know.

Before you think I'm getting all Dubya on ya, let me explain. The insurgents I'm speaking of have nothing to do with violence, or even politics, these are brand insurgents and they've gained quite a foothold in the world of business over the last few years. Think about it for a minute, how many small brands have come into the game and set their own rules, in turn changing the game. In a recent entry about just this topic, Gareth Kay explained insurgent brands in this way:

They have a powerful belief system that drives them; they ignore the dogma of the category about how to behave; they act (and are often organized) in a decentralized 'cell like' structure; and they continually surprise people (and their competitors) as they don't wear a uniform (it's no longer about uniform message, look and feel or behavior).
He mentions companies like Jet Blue, Axe, Fox News and even Apple as examples of this kind of mentality. I would add companies Dyson and Starbucks to the list. These are both companies that have taken the dogma of an industry and turned it on it's head (Dyson by telling consumers that your vacuum is more than a cleaning device and Starbucks by shifting the focus of a coffee shop away from coffee and onto the customer). Starbucks chairman Howard Schultz explains that, "we [Starbucks] are not in the coffee business serving people, but in the people business serving coffee." (One of the ways insurgent brands make their mark is by shifting focus away from themselves and onto the benefit to their customers. Something I discussed at some length in my "Creating Passionate Users" post.)

When you look at the success of companies it forces you to wonder why every brand isn't taking an insurgent stance. I mean, with the price of entry moving ever-lower thanks to digital technology, what's stopping everyone from being an insurgent?

Before even delving into that question, though, I think it's worthwhile to take a closer look at insurgent brand strategies. When I sent this link to my friend Tad, who's currently getting his MBA at Kellogg, he wrote this back, which I think gets at the heart of insurgency as a strategy:

Good find. I'm taking a marketing strategy class and the professor has another very simple theory that actually explains why insurgents work so well. His belief is that old marketing paradigms work when the consumer knows what they want. Then companies just find out what they want and do it better than competitors.

The problem is most consumers don't know what they want or are continually learning about what they want. For example, no one wanted an iPod until Apple made one and taught people what was so cool about it.

The key for companies is to be the one to lead the consumer learning to create new rules of the category. once consumers have learned about a category according to your rules, all the other players have to then follow your lead as a second-rate replacement OR change the category rules again. Which is why the insurgent brands are becoming more successful.

[Tad asked me to make sure I credited Professor Carpenter at Kellogg, since that's where the idea came from.]

The thing that bothered me when I first read this explanation was the "when consumers know what they want." More often than not, want is created by marketing, at least partly. I mean, I don't want a Dyson because it's just a vacuum. But as I thought about it more (and discussed it a bit more with Tad), the idea that the brands that define the rules of the game are the ones who are successful, makes lots of sense.

What Dyson does, as a brand, is show people that a vacuum should be more than just the thing you pick up dust with. It should be a piece of art, an expression and extension of your life. Whether this is bullshit or not, Dyson has sold a hell of a lot of vacuums by making people believe it. Not only that, though, they've forced other manufacturers to rethink their strategies.

The reason everyone hasn't jumped on the bandwagon, though, is because it's not easy. How do you convince people who have been in a business for a long period of time that they should focus on something completely new? Large companies get so caught up in their ways that change becomes a dirty word. They start to believe that their experience will lead them to the top of the pack. While twenty years ago this may have been true, that mindset is become more and more detrimental.

Especially when talking to young people, experience is hardly an advantage. That's because it often acts as a barrier between the company and fresh thinking. People want attitude. They want brands that they feel reflect them and their thinking. In a digital world, where anything can be personalized and customized, we feel as though we have more control over our identity than ever before. Therefore, a company that follows the rules is deemed behind-the-ball: A place no company wants to be.

July 6, 2005
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