A recent real-life encounter with Second Life turned out to be a big disappointment. For an academic research project, my co-author and I were looking for a list of real-life brands that have a presence in SL. The natural point of contact seemed to be SL’s press inquiries: Lewis PR. Being a geek, I tried email first. More than a week (or a year by Internet standard) went by, and no response. So I digressed to the more traditional way of telephone. Luckily, I reached a lady named Christen from Lewis PR. After explaining the situation to her, she said she would send me something related to what we were looking for. I was reaching the point of happiness and almost convinced myself that telephone is the tool to use when you really want to get things done. But not so fast! A few days later, I still did not receive anything from Christen. I called again, afraid that she might have written down the wrong email address. I only got her voicemail and left her a message with my email address and multiple phone numbers. After another few days, it’s still dead silence from the other end. Repeated calls to the contact number resulted in nothing but her voicemail (this is the curse of Caller ID technology).

It makes me wonder: is an academic project too ivory-towerish to deserve proper attention from SL or Linden Lab (the company behind SL) or Lewis PR? I did mention to the lady that the project will eventually turn into a journal publication. Is that not worth the same efforts as compared to, say, a prominent article in New York Times? I teach Integrated Marketing Communications (IMC). One of the main principles of IMC is that no matter whom a firm is communicating with, whether it is customers, internal employees, or the general public, the firm should always keep a consistent brand image. The fun and cutting-edge image of SL in my mind certainly does not match up with the disappointment and ill-will I felt during the recent encounter.

Ironically, the following quote from the SL marketing team was featured prominently on Lewis PR’s front page:

“It really does feel like our marketing team has four more members — I sometimes almost forgot that the LEWIS team isn’t actually part of the Linden Lab.” — Catherine smith, director of marketing and brand strategy, Linden Lab

Maybe that is the reason why we did not hear anything from Lewis PR. They are spending too much time functioning as Linden Lab internal employees and not giving enough attention to real-life external audiences…PUBLIC relations. Alas!

I just attended a talk by Debbie Millman on branding. One idea that I found very interesting from the talk was discussion on the current wave of tribal branding since 2000. Ms. Millman made the point that in this wave of branding, a brand that builds/facilitates connectivity is likely to be successful. She enlisted statistics that show 1 in 3 households in America now consists of a single person, in contrast with only 1 in 10 households as a one-person household in 1950. As traditional communion places like the household downsizes to be a single’s cave, our need for connectivity as human beings has to be channeled through other places and other objects such as brands.

This association between brand and connectivity is very interesting and is consistent with the evolution of contemporary marketing. So I’d like to elaborate on this idea a little further. The marketing discipline is witnessing two interconnected trends: an increasing emphasis on building customer relationships (i.e., relationship marketing) and a perception change of consumers as objects/targets of marketing efforts to consumers as collaborators (see Vargo and Lusch 2004). Both of these are manifestations of connectivity and how marketing may play a role in building connectivity.

So to use some concrete examples to illustrate the concept, a brand can build or contribute to connectivity in two ways: physical or infrastructural connectivity; and psychological connectivity. Brands in the former category build infrastructure for people to connect with each other, such as T-Mobile, MySpace, and Facebook. These brands derive their value not necessarily from consumers’ emotional connection with the brands per se but rather from the value of relationships that are built on these infrastructures. For example, the popularity of a social networking website such as Facebook is dependent on the people that we as users can connect to through the website and how satisfying that connection experience is. Consumer collaboration dominates in this setting as a demonstration of connectivity.

Brands in the second category aim more toward establishing actual psychological connections between consumers and the brand and between consumers and consumers. While the connection between people is still essential to the connected nature of such brands, each individual’s connection with the brand is an essential ingredient to this type of connectivity. For example, Harley Davidson or Apple owners identify among themselves because of a mutual connection with the brand. In this type of situation, rather than functioning as an underlying platform for connectivity to occur, the brand becomes an indispensable bridge in the connection process. Relationship marketing and CRM become key strategies for enhancing connectivity in such cases.

It is possible for brands to crossover between categories. An example of crossover from psychological connectivity to infrastructural connectivity is the online communities that many CPG companies have established, such as Kraft community. Consumer interaction in those communities may no longer be brand-centric and may broaden beyond the brand to other realms of life. An example of crossover in the other direction is Second Life, where devotees who have been able to build meaningful relationships in the virtual world come to love SL as their virtual country, no less than the feeling of patriotism that we feel as citizens of a country. By crossing over or occupying both realms of connectivity, these brand names build a stronger hybrid form of connectivity that is valuable to today’s single-dominant world.

For those who use cell phones, it is a well-known fact that when you first join a wireless service provider, you can buy a phone at a very low price or even for free. But once you have used the company for a while, if you try to upgrade your phone to a newer model, you are charged a hefty price for it. Although some companies offer a discount on phones if you are willing to extend your contract, the discount is much smaller compared with what new customers get. Below is a comparison of the prices a new vs. existing T-mobile customer (i.e., me) would receive on the same phone models:

Phone | w/o Extension | w/ 2-year extension | New customers

Nokia 6103 | $149.99 | $49.99 | $0

Motorola W490 | $159.99 | $109.99 | $49.99

Dash | $399.99 | $267.99 | $149.99

One can envision the reason for charging a higher price to existing customers when, in old days, people were locked in to a company by their phone numbers. If you wanted to switch to a different wireless provider, you would lose your number. That was a significant switching cost for a consumer. Therefore, it took “sweeter” deals to lure people to switch. Now with the portability of phone numbers, such a switching barrier is no longer present. By still offering much lower prices to new signups, cell phone companies are essentially encouraging consumers to switch providers frequently rather than staying with one firm.

While firms do have a need to make a profit and should not give everything away, under the new business environment, it makes much more sense to reverse the pricing strategy and offer existing customers a deeper discount instead. From a customer relationship management perspective, it is much more economical and efficient to keep your existing customers rather than trying to chase after new ones. When a consumer’s existing contract is about to expire with a wireless provider, the provider should offer the consumer an incentive to happily stay rather than going back onto the market and starting to look for better deals from another provider.

In sum, wireless companies should adapt their existing pricing strategy to the new market environment and aim to build a more profitable business around a core group of loyal customers rather than “hoppers”.