Unit Cohesion and the End of the Age of Branding

| 17 Feb 2015 | 01:26

    Military researchers have found that cohesive units can withstand much greater hardship and fight far more effectively than noncohesive units. So it's no accident that America's officer corps are required to learn and relearn the leadership skills necessary for building cohesive units. That's what our military leaders must do: take ordinary people and work with them so that they are capable of doing extraordinary things.

    In civilian life, you know unit cohesion when you see it.The New York Yankees last year were a team that had unit cohesion. The Atlanta Braves did not. The Boston Red Sox, famously, are known for their lack of it. "Twenty-five guys, 25 cabs" has always been the team's postseason epitaph. n In political life, John McCain achieved something like unit cohesion with voters in New Hampshire. Although McCain lacked the financial and political firepower of George Bush and Steve Forbes, he was able to prevail in New Hampshire by forming a close bond-almost a shared sense of mission-with that state's electorate. He did this over a period of roughly one year, holding 114 town meetings along the way, and by the end of it they "got" him and he "got" them. And together they blew the doors off the Republican race for president.

    Here in New York, Mayor Rudy Giuliani has achieved unit cohesion with city (and suburban) residents. Our relationship with him is almost interactive. He has kept his word about what he would get done. We now trust Rudy (even if we don't like him) to keep the city safe, clean and functional. His zealotry in pursuit of worthy goals is understood by a majority of New York residents knowingly. We give him the benefit of the doubt.

    Unit cohesion cuts across all walks of life. You see it (or the lack of it) everywhere you go, from the classroom to the supermarket and to the projected images at a movie theater (a group of actors working well together can light up the screen). But it's perhaps particularly relevant when applied to the digital economy. Looking through the lens of unit cohesion tells us a lot about who's likely to thrive and who's likely to fail in the new economy.

    Why, for instance, do people continue to invest in Amazon.com? The numbers couldn't be more hideous (I suppose they could be, but you know what I mean). There are inventory problems, delivery system concerns, ferocious competition from all sides and losses for as far as the eye can see. So, on paper, Amazon is a train wreck waiting to happen. And the price of the stock keeps going up.

    It keeps going up because Amazon.com has achieved something like unit cohesion with its customers. This isn't about branding, although Amazon.com has a powerful brand name that connects on an emotional level. It's more than that. Amazon customers believe that the company is doing everything it can possibly do to make their lives easier. They assume that Amazon is actively on their side. They believe that Amazon is devoted to its customer-service mission statement and that it will honor that commitment regardless of the consequences. Investors are betting that this kind of customer relationship-unit cohesion on the Web-changes the very arithmetic of value.

    Take another company, General Motors. Most people think of General Motors as the emblem of America's industrial decline. And throughout the 1970s and 1980s, that's exactly what it was. But today, after years of painful restructuring and reengineering of the company's operations, GM is a very different company. And at the heart of that new company is the Internet.

    They're not there yet. It takes a long time to change the culture of a company so huge. But you can feel them getting better at it. I lease a Chevy Tahoe, which I found through their website. They provided me with very reasonable financing and since then have quietly begun to approach me about other products I might buy from them. They've asked me to compare my mortgage interest rate with theirs (it wasn't as good) and have offered me a GM-branded Visa card at a very low rate of interest (although not as low as Yahoo!, so I didn't accept).

    As they get better and better at the Web, they'll get smarter and smarter about how they approach me and with what deals at what times. In the interim my whole opinion of General Motors is changing. I used to think of them as a hopeless dinosaur. I now think of them as Net-savvy (or at least getting there).

    If they do get there, imagine the franchise they might have. They'd handle your car, your car payments, your car insurance, your mortgage, your mortgage insurance, your credit, your satellite television, your Internet access (through satellite technology), your telecommunications in general (again, through satellite technology) and a host of other services. All in one place, all well-served by an increasingly intelligent network of interactive capabilities. Which is why, more than truck sales, GM's stock has been perking up of late. At long last, it appears like they may be on the road to achieving unit cohesion with their customers.

    The king of unit cohesion on the Internet is Yahoo!. They "get it" completely. After AOL bought Time Warner, the press figured that Yahoo! had to have something cooking. So reporters called up the company's management and asked, basically, "When are you going to do a big deal?" And the company's management said: "When it's in our customers' best interests." The press pack thought they were lying. But customers didn't think Yahoo! management was lying. They loved it.

    Every time you turn around, Yahoo! is making its site better for customers. A few months ago, they changed their e-mail program. It used to be that you got your e-mail at Yahoo! in one bundle (junk mail and normal mail together). Now you get it in two bundles; one labeled "bulk mail," the other marked "inbox." All the junk mail goes into a separate folder. If you don't want to, you never have to read it. Your real e-mail is sequestered from all the junk.

    What a nice touch! And that's just a small, little thing. Yahoo! provides its 120 million individual site visitors (per month) a host of highly useful, high-quality services every hour of every day. Need driving instructions? Yahoo! provides them. Need Investment House-quality financial information? Yahoo! provides it, along with direct links to articles and analysis of equally high quality. Need cheap credit? Apply online for a Yahoo Visa card and your approval (if you're credit worthy) is a done deal in two minutes. Want to sell something? Yahoo! will auction it off for you with minimal fuss to a huge audience of potential buyers. On and on it goes.

    Not surprisingly, Yahoo! customers are very happy campers indeed. They don't like Yahoo!. They love Yahoo!. The company has achieved a whole other level of unit cohesion with its customers. I have friends who say they have separation anxiety when they've been away from their MyYahoo! (a personalized site that individual customers can tailor to fit their specific needs). It doesn't get much better than MyYahoo! out there on the WorldWideWeb.

    Not surprisingly, Yahoo is one of those stocks that just keeps going north. Its numbers don't even come close to justifying a nearly $100 billion market capitalization. The company had profits last year of roughly $600 million. But the value of the company isn't in the fourth quarter earnings report. The value of the company is in the value of its customers, with whom Yahoo! has achieved unit cohesion.

    All of this has important implications not just for companies, but for advertisers and marketers as well. Since the beginning of the post-World War II era, advertising and marketing agencies have preached the value of branding. The term "branding" was well-suited to analog communications. Analog media stamped a "name" on a "package" and advertising gave it emotional context. The producing company then reinforced the brand with reliable distribution, customer service and occasional improvements (usually accompanied by the words "new and improved").

    That was fine for the analog age. But we're in an interactive age now and it doesn't work. Branding is still the altar at which most marketing and advertising executives worship. They believe in it because it worked so well in the past.

    But it won't work in the future, because the future is digital and therefore interactive. The Web is not a distribution chain, it's a community of interests. And to be accepted by the community, one must share the values of that community. One must respect the codes of conduct that the community deems beneficial to the community's survival. In short, one must behave within the community so that one might achieve unit cohesion with some or all of its members.

    This is a different mindset, but it is the future of marketing communications. Companies that achieve unit cohesion with community customers will be successful. Companies that don't will fail. The age of branding is over. The era of unit cohesion, or whatever it ends up being called, has now begun.