Microsoft's Mistaken Branding Blunders

(MoneyWatch)  There were a few pieces of news in the last few days about Microsoft, ranging from competing with Google for a Verizon deal and Steve Ballmer having to testify in the Vista Capable lawsuit to a new name for Windows Live Search. Although they seem like separate stories, they aren't because there is one underlying thread: Microsoft's disastrous plodding when it comes to practical branding.

On the surface, that seems like an ignorant statement. After all, Microsoft has one of the most recognizable brands in the world. But Microsoft had developed that brand over decades the way any company does -- though dealing with customers. That's what real branding is: a compressed expression of how customers perceive a company. Although it is a form of shorthand, there is no short way to get to it. A company develops its brand for better or worse through ordinary interactions with customers. Many executives blunder by thinking that developing a brand is nothing more than developing a logo and then advertising it.

That is the sort of mistake in which Microsoft has increasingly indulged. Its actions in the search arena are telling. Rebranding Live Search? Why bother? People aren't ignoring it because the name or logo design isn't cool enough. They go to Google instead because they perceive an advantage in doing so. Maybe it is based in fact or maybe in fiction. Perhaps it has something to do with a largely text-based interface rather than using a graphically-driven one. Even if Microsoft's search capabilities are every bit as good as Google's, or better, it doesn't matter of people don't perceive it as such. Changing the skin, with a new name and new design, won't change a thing, because that assumes business to be centered on the company, not the customer.

Microsoft may perceive mobile advertising as critical to its business, but the idea of success by purchasing an opportunity from Verizon is short-sighted -- and similar. The attempt is another way to say that a company can simply buy a market position and that customers will want to do business. But that's a losing proposition on the Web, mobile or not. People can always fire up a browser and head to Google or Yahoo or Ask or any of the gazillions of search engines that seem to be available.

Microsoft's issues with Vista include the class action law suit about PCs that were listed as Vista-capable but weren't and the $300 million it spent to market the product against its real competitor, the previous version of Windows. There are again signs of management's assumption that telling people the "right thing" is enough to increase sales.

It's not. Customers rarely if ever care about companies. They don't care what management wants or what Wall Street want. They care about what they want. And unless Microsoft can reverse its course, it doesn't matter if this quarter or next breaks records or not. When you don't deliver what your customers want, the only reason they stay around is because they're waiting for something better to come along. In the hyper competitive atmosphere of high tech, that isn't going to be a long wait.

Brand image via Flickr user ninjapoodle, CC 2.0.