The document discusses what defines an experience brand and the fundamentals of experience brands. It states that the first fundamental of experience brands is delivering on the brand promise at every point of interaction. It also discusses four other fundamentals: being a "people brand", valuing authenticity and the "3 Rs", aggressively seeking participation, and inventing new experiences beyond the core offering. Three examples of experience brands are provided: Zipcar focuses on providing a simple car sharing experience, IBM builds communities through compelling conversations, and LEGO constantly innovates how people can connect with the brand. The business case for being an experience brand includes improved employee performance, more efficient marketing spend, faster customer acquisition and greater loyalty.

1. 2010: THE YEAR OF EXPERIENCE BRANDS
2010: THE YEAR OF EXPERIENCE BRANDS /1

2. At the dawn of a new decade,
amidst a proliferation of new ideas and opportunities, we believe
marketers can set their course guided by one overarching principle:
that the brands that lead in the 21st century will be experience
brands. The more that marketers can build experience brands, the
more they will succeed.
This begs the question: what exactly is an experience brand?
This article is the first in a series on experience brands to be published
by Jack Morton in 2010.
We start with the essentials on the pages that follow:
* Definitions: brand?makes an experience brand an
experience
What
The brands that
* Examples: What areWhat do experience brandstotoday?by
notable lead in the 21st
century will be
* The business case: brands?
becoming experience
companies stand gain
experience
brands.
Liz Bigham
Director of Brand Marketing
Jack Morton Worldwide
2010: THE YEAR OF EXPERIENCE BRANDS /2

3. THE 5 FuNDAmENTALS
OF EXPERIENCE BRANDS 2010: THE YEAR OF EXPERIENCE BRANDS /3

4. EXPERIENCE BRAND?
WHAT’S THAT?
Defined literally, a brand is the identifying marks, names and words
that distinguish one company’s product or service from another’s.
But more meaningfully, a brand is a promise—a distinct value
offered.
And in the most meaningful sense, a brand is a promise kept—
through experiences that deliver on that promise at every point of
interaction with the brand. The first fundamental
of being an
experience brand?
Following are five fundamental truths about experience brands.
The first fundamental of being an experience brand? Delivering on
your brand promise at every point of interaction.
Delivering on your
brand promise
Because you can talk all you want, you can spend all you want on
carefully crafted messages, but at the end of the day, what people
at every point of
remember is what they actually experience. interaction.
2010: THE YEAR OF EXPERIENCE BRANDS /4

5. Your brand is
formed primarily,
not by what your
company says about
itself, but what the
company does.
Jeff Bezos, Amazon
2010: THE YEAR OF EXPERIENCE BRANDS /5

6. You’re defined by what you do—not what you say. So…
* If you saytheir questions,your topan experience that defines can’t
answer
customers are
that’s
priority, but your call center
your
brand as the opposite of “customer-focused.”
* If you say customer communityloyalty, but youwith each other easy
for your
you value customer
to connect
haven’t made it
and
influence your next generation of prospects? Again, your
experience contradicts your promise—and your brand will suffer.
Every interaction is an opportunity: those aspiring to be experience
Every interaction
brands should holistically assess all the touchpoints that comprise their is an opportunity.
brand for stakeholders. In theory, no experience is too small to qualify,
but different companies will weigh touchpoints depending on needs,
resources and whether they’re a product or service-based brand, B2C
or B2B.
2010: THE YEAR OF EXPERIENCE BRANDS /6

7. The second fundamental of experience brands: they’re true “people
brands.”
Experience brands don’t just say that people matter—they take a
“brand2everyone” approach that puts that commitment into action, at
every level in the organization. Think of US apparel retailer Patagonia.
The passions that motivated founder (and Let My People Go Surfing
author) Yvon Chouinard—outdoor sport, environmentalism, global
good citizenship—are authentic to its staff and proved out in its HR,
The second
operations and CSR practices. Or online retailer Zappos, whose
CEO Tony Hsieh is the “cheerleader in chief” behind its zealous
customer service ethos. According to a New Yorker profile, “He talks fundamental of
about being the architect of a movement to spread happiness, or experience brands:
‘Zappiness’,” and inspires that in employees.
they’re people
The third fundamental of experience brands: they build relationships
brands.
The third: they
based on values of authenticity and the “three R’s”—what’s real, right
and relevant when the brand comes together with its communities.
That authenticity really comes through because experience brands
value authenticity
promise values that are truthfully delivered by people across the and the “3 Rs”---
organization, from the CEO on down. They feel authentic to customers what’s real, right
and end-users because they are core to the brands at the level of and relevant for
corporate and cultural DNA.
their brand and its
The belief this inspires is one reason why you’ll find, among the
ranks of experience brands, so many that you’d also describe as fan
people.
brands, community brands, tribal brands, brands that have and are
embraced by communities that not only buy, but also talk, promote
and share their experiences with others.
2010: THE YEAR OF EXPERIENCE BRANDS /7

8. That’s a great set-up for the fourth fundamental of experience brands:
they aggressively seek out the participation of their stakeholders.
Experience brands invite participation in three key ways:
* they welcome ideas fromadapt the brand to their needs
the outside
* they empower people with the social web
to
* they’re trulysocial media not as the channels—Twitter versus
They think of
engaged
Facebook—but as a strategy of interaction where their people (even
c-level people) both talk and listen. Above and beyond their digital
footprint, they invite customers, users and staff across functional
areas to share their input and ideas as part of a cultural commitment
to innovation. Google is an exemplar: the very first of their famous
“9 Notions of Innovation” is: “Ideas come from everywhere.”
The fourth
fundamental of
And finally, experience brands are not afraid to empower users to
adapt and play with the brand. NIKEiD and Vans customized shoes
experience brands:
are familiar examples of how this plays out thanks to the power they aggressively
of mass customization; Google invites users to create fan logos; seek out
and more recently, following the devastating earthquake in Haiti,
CNN.com gave site visitors the ability to control camera angles as
participation.
online footage was playing.
2010: THE YEAR OF EXPERIENCE BRANDS /8

9. EXPERIENCE BRANDS RECOgNIzE:
IDEAS COmE FROm EvERYWHERE.
2010: THE YEAR OF EXPERIENCE BRANDS /9

10. An important complement to all this active participation and outside
thinking: experience brands are famously good at inventing new
ways for people to interact with them, above and beyond the
products and services they sell.
So that’s the fifth fundamental of experience brands: they invent new
experiences beyond their core offering that differentiate them from
their competition.
In some instances, companies can add new revenue streams by
going into the experience business, creating physical destinations
or transactional happenings that are so great, so different, people
will pay for them.
Yet incremental experiences do not have to fit this literal interpretation;
there are robust opportunities to create new experiences that aren’t The fifth
dependent on a physical destination or so costly to undertake. For fundamental
example, smart companies transform corporate social responsibility
(CSR) initiatives into new experiences—think of Nike+ Human Race
of experience
or Google.org’s PowerMeter. brands: they
Ultimately, every experience brand is unique—and they’ll tailor these
invent new
incremental experiences accordingly. experiences, new
ways to interact.
2010: THE YEAR OF EXPERIENCE BRANDS /10

11. 3 gREAT EXPERIENCE BRANDS
Experience brands are not all B2C, lifestyle-driven brands—they’re
B2C and B2B, product-based and service-based. Truly, any brand
can be an experience brand.
That said, there are overarching principles that hold true for all
experience brands. Every experience brand must optimize the
following core elements:
* The digital experience (since mobile devices and computer screens
discovery experience (how people learn about you)
* The today’s default shopping mall and town square)
are
The experience
* The customer experience (what happens in store or when customers
are in market) they create
around their
* The user experience (what happens after the sale) with you products or
* The community experience (how stakeholders connect
and one another beyond what you sell) services is as
carefully thought
* The employee experience (how vision) potential recruits align
around core values, culture and
staff and
through as their
So what does that look like, in action? Sketched out on the pages that products and
follow are three exemplary experience brands. Radically different services.
in their business models, they’ve all transformed experience from
a marketing channel to a point of differentiation. The experience
they create around their products or services is as carefully thought
through as their products and services.
This isn’t a ranking of top experience brands, but an effort
to define by example. We’ve purposely left off some of the
more obvious experience brands—like Apple and Starbucks.
Look for our experience brands ranking in a future article.
2010: THE YEAR OF EXPERIENCE BRANDS /11

12. EXPERIENCE BRANDS
uNDERSTAND AND OPTImIzE
2010: THE YEAR OF EXPERIENCE BRANDS /12

13. zIPCAR
Tiny compared to the other experience brands cited here, Zipcar
introduced car sharing to the US with its 2000 launch—and has
built an hourly car rental brand so distinctive that giants like Avis
and Hertz are moving into its core market. Still, Zipcar’s CEO told
CNNmoney.com they’ll be a $1 billion company in under five years;
they’re growing at about 30% a year. Here’s what makes them an
experience brand:
* convenient, web-enabled whatso simpleselling isbe expressed in
it’s
Zipcar is crystal clear that
and
they are
it can
an experience:
four simple steps. Fortune calls it Netflix for cars.
zipcar is crystal
* Zipcar is flawless at the first fundamentalpointexperience brands:
of clear: it’s selling
delivering on its brand promise at every of interaction. Its
voice threads through everything from the reservation process to its
an experience.
iPhone app to the emails users get if they return a car late. Voice
and personality are so strong that customers are made to feel they’re
part of a community of like-minded people—despite the fact that
it’s possible to be a frequent customer without ever seeing a Zipcar
employee or another customer (rentals are handled online and pick
up is self-service).
* Zipcar has consistentlypresencenew heavily urbantoUS business—
expanding from its initial
added
in
experiences its
markets to
universities and programs for business, and more recently leasing
its proprietary technology to city governments that need it to better
manage their sizable car fleets. Others are looking to Zipcar to help
prepare for a future of plug-ins and electric car grids. Even big car
brands like Toyota and Ford are talking to Zipcar about how the
experiences they create might be complementary.
2010: THE YEAR OF EXPERIENCE BRANDS /13

14. IBm
One of the most respected companies in the world, IBM is ranked
among the most powerful brands in the world by BusinessWeek and
Interbrand—one of just three B2B brands that consistently number
among the top 10 (the other two being Intel and GE). What’s truly
exemplary about IBM is how it has maintained that brand and its
core promise even as it has continuously evolved its business. Behind
this evolution lies great experience brand thinking:
* IBMis famous: according to itsitsChairman & brand Sam Palmisano,
culture
staff—“IBMers”—are front-line
CEO,
advocates. Its
“[IBM’s] revolutionary idea was to define and run a company by a
set of strongly held beliefs.” It is consistently ranked high on Fortune’s
Best Places to Start a Career and has an authentic commitment to
social media as part of its corporate culture and communications.
Conversations
like IBm’s are
* IBM’s “Smarter” campaign takestoacreateidea—“welcome to the
decade of smart”—and extends that
core
“a global conversation
hallmarks of
about how the planet is becoming smarter” across an array of industry an experience
sectors and communities. What IBM can do to make cities smarter, or brand.
healthcare smarter, or energy smarter—conversations this compelling
are hallmarks of an experience brand. IBM has also done a great
job of extending them through high-level events like its Smarter Cities
conferences around the world.
* IBM has consistently innovated the platforms through which it hosts
conversations with its communities—resulting in new experiences that
may counter conventional wisdom. It has been called a “pioneer
in what today might be called open or crowd-sourced employee
innovation” for a staff innovation program it founded in 1928. It
made an early stake in Second Life with its IBM Briefing Center, a
virtual presence it has maintained.
2010: THE YEAR OF EXPERIENCE BRANDS /14

15. LEgO
Children around the world spend 5 billion hours a year playing with
LEGO’s trademark plastic bricks, famously dubbed the “toy of the
century” (the last one). After some rough years, LEGO is being hailed
by the Harvard Business Review for a comeback that’s (arguably)
fueled by experience brand thinking and that sets it up for great
success in the years to come. Here are some of the reasons LEGO
wins our vote as a great experience brand:
* LEGO sees a strong link between the brandthey’reemployees.they
seekers are advised that no matter
its
role
and
seeking,
Job
should understand and embrace its vision—because it’s “values
that make the LEGO brand unique—and give us an edge on all the
others.” LEgO constantly
innovates how its
* LEGObrand and innovates howThey’ve created(kids) can connect
with the
constantly
each other.
its passionates
a vibrant social passionates can
networking site for kids as well as LEGO Universe, a multiplayer connect with the
online game environment, all while maintaining their most robust
model and game products, not to mention Legoland theme parks
brand and each
and destinations. other.
* LEGO has innovated newDesign byME, that invite consumers to
become creators—like LEGO
experiences
where consumers create
their own LEGO design online and then receive a custom kit (right
down to the box and building manual) in the mail.
* LaEGO issponsor of toThe FIRST LEGO League,not just customers.
It’s title
commited kids as future innovators,
an international
organization that gets kids engaged in robotics. Over 150,000 kids
in scores of countries solve hands-on competitive challenges that
empower their creativity and inspire them to careers in engineering
and technology.
2010: THE YEAR OF EXPERIENCE BRANDS /15

16. THE BuSINESS CASE: BEINg AN
EXPERIENCE BRAND PAYS OFF
$ ImPROvED EmPLOYEE PERFORmANCE AND RETENTION
mORE EFFICIENT uSE OF mARkETINg SPEND
SPEEDIER CuSTOmER ACquISITION AND mORE LASTINg LOYALTY
INCREASED REvENuE FROm BETTER EDuCATED CuSTOmERS
2010: THE YEAR OF EXPERIENCE BRANDS /16

17. WHAT’S THE ROI OF BEINg
AN EXPERIENCE BRAND?
There are a lot of ways that being an experience brand can pay
off for the companies that achieve this status. Here are four core
metrics:
1. Employee performance and retention
Because experience brands understand and leverage the impact
employees have on customers, they invest in employee engagement
that creates better alignment and performance in support of brand
and business goals. Because employees feel valued and engaged,
they want to stick around. The combination of these two factors
increases staff impact while lowering costs due to attrition and Experiences may
retraining. be experienced
2. Efficiency of marketing spend by few, but they
Experience brands do things that people talk about and share. They are witnessed
provoke conversation. They have stories that people want to spread. and talked about
And when they make an investment in creating an experience for
the people who matter most to them, those experiences may be
by many.
experienced by few, but they are witnessed by many.
3. Customer acquisition and loyalty
Because they promise and deliver a great experience, experience
brands win customers more quickly and keep them long-term. Because
they invite interaction and engagement, they are able to take people on
a journey from relative indifference to commitment and advocacy more
quickly than other brands.
2010: THE YEAR OF EXPERIENCE BRANDS /17

18. 4. Customer revenue
Because experience brands do a good job of inviting participation and
sharing information, their customer communities are better educated—
making them better and higher-value customers.
Experience brands can measure impact both ways: what happens
when they improve their experience, and what happens when their
experience declines.
BusinessWeek has reported that Best Buy’s improvements in employee
engagement are directly tied to store profits.
Starbucks, which innovated a “third space” experience brand but
“For every
suffered from over-expansion and extensions that weakened its core one tenth of a
brand promise, has recently achieved a comeback that Forrester point increase
customer experience guru Bruce Temkin has described as follows:
“Nearly two years ago I wrote that Starbucks had lost its soul. That’s
in employee
why Schultz returned to his role as CEO in January 2008. Shortly engagement,
after his return, Shultz took the unprecedented action of closing each Best Buy
7,100 stores for three hours to ”retrain” employees on the Starbucks
store increased
profits by
experience.”
Imagine a CEO shutting down the business to retrain employees
on the brand experience. That sums up just how much ROI he feels
$100,000 a
Starbucks can win (or lose) on the basis of their experience brand. year.”
(BusinessWeek)
Not every brand is Starbucks. But every brand can be or become an
experience brand—and reap the benefits.
2010: THE YEAR OF EXPERIENCE BRANDS /18

19. 2010: THE YEAR OF
EXPERIENCE BRANDS
We believe that this year will mark a new ascendancy for brands that
are or seek to be experience brands.
We’re committed to doing our part to contribute to the conversation
about experience brands in a series of forthcoming articles that
expand on key topics.
Look for upcoming articles including:
* Experience brands are people brands: Engaging and leveraging
employees
* Experience brands and Howsocial web brand thinking could
the
* Back fromathe dead:brand experience
reanimate dormant
* Gotta love it: Experience brands and theirperformers
passionates
* The experience brand index: ranking top
2010: THE YEAR OF EXPERIENCE BRANDS /19

20. SHARE THIS EXPERIENCE
If you like this article, please share it with your friends and colleagues
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For more information, contact Liz Bigham at
liz_bigham@jackmorton.com or 212-401-7212.
2010: THE YEAR OF EXPERIENCE BRANDS /20

21. Jack Morton Worldwide is a global brand experience agency.
We create experiences that strengthen relationships between
brands and the people who matter most to them—thereby helping
our clients become talked-about experience brands. Rated among
the top marketing service agencies worldwide, we integrate live
and online experiences, digital and social media, and branded 3D
environments that engage and inspire consumers, business partners
and employees. Our staff work across the US, Europe and Asia-
Pacific as part of an idea-led agency culture.
© Jack Morton Worldwide 2010
2010: THE YEAR OF EXPERIENCE BRANDS 2010: THE YEAR OF EXPERIENCE BRANDS /21