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strategy+business



ISSUE 68 AUTUMN 2012




The Social Life of Brands
A marketing strategy informed by neuroscience can help companies
enhance customer engagement — and make better use of tools like
social media.




BY MATTHEW EGOL, MARY BETH MCEUEN,

AND EMILY FALK




                Scan this QR code with your smartphone to take a free
                10-minute survey to gauge how well your company is using
                and learning from digital data. This Digital Customer
                Centricity Profiler will help you see how your capabilities
                for customer centricity compare to leaders in your market
                and industry. You can also take the survey at
                www.beadigitalleader.com.




REPRINT 00118
features marketing, media & sales




                                    1
The
                              Social Life
                              of Brands
                              A marketing strategy informed by neuroscience can




                                                                                                                                                       features marketing, media & sales
                              help companies enhance customer engagement —
                              and make better use of tools like social media.

                              by Matthew Egol, Mary Beth McEuen, and Emily Falk

                              It was love at first sight for Nathan Aaron. The             pany has made a misstep.
                              North Carolina graphic artist, illustrator, and social me-        Eric Ryan and Adam Lowry, the cofounders and
                              dia proprietor first saw Method Inc.’s high-style, envi-     chief executives of Method, are not put off by Aaron’s
                              ronmentally conscious household cleaning products on         familiarity or independent-mindedness. On the con-
                              display in his local Target store. He was smitten.           trary, they think he’s a dream consumer, and their mar-
                                                                                                                                                           2
                                   “What caught my attention immediately was mint          keting strategy is built around people like him. “To suc-
                              dish soap.… Now, I’m a mint fanatic! Crazy about the         ceed in a world of earned and social media requires you
                              stuff.… Plus the gorgeous Karim Rashid packaging             to shift your mind-set from talking to customers to in-
                              didn’t hurt things one bit. And that was the beginning       spiring advocates,” they wrote in The Method Method:
                              of my, should I say, lust affair, with Method.” Aaron        7 Obsessions That Helped Our Scrappy Start-Up Turn
                              wrote that in 2008, in the first post on his new blog,       an Industry Upside Down (Portfolio/Penguin, 2011).
                              methodlust.com. Since then, he and a community of            “Not only do advocates make good business sense by
                              like-minded consumers have posted more than 1,000            buying more of our products more often, but also they
                              paeans and gripes there, all devoted to the Method           engage us — online, in writing, on the phone, and in
                              company and its brand proposition (fashionably de-           person — teaching us all sorts of stuff we wouldn’t have
Illustration by Richard Mia




                              signed, beautifully scented, nontoxic cleaning products).    figured out on our own.”
                              Methodlust.com is nothing more or less than a fan site,           Would your company consider Nathan Aaron a
                              similar to one you might see for a hit movie or television   dream consumer or a loose cannon? Would you encour-
                              show. It contains reviews of the company’s products,         age his public affair with your brand and listen to his
                              commentary on its marketing strategy, interviews with        ideas, or demand that he stop? Would you even know
                              employees at all levels, and reader polls — plus fierce      he was out there? Your answer says a lot about your ap-
                              critiques when Aaron (or a reader) thinks that the com-      proach to marketing and customer relationships.
Matthew Egol                      Mary Beth McEuen                   Emily Falk
                                    matthew.egol@booz.com             marybeth.mceuen@maritz.com         ebfalk@umich.edu
                                    is a partner in Booz &            is vice president and executive    is an assistant professor of
                                    Company’s communications,         director of the Maritz Institute   communication studies and
                                    media, and technology             in St. Louis, Mo. The institute    psychology at the University of
                                    practice. Based in New York,      is an independent network          Michigan in Ann Arbor, where
                                    he focuses on marketing           of thought leaders working         she directs the Communica-
                                    strategy and capability devel-    to create next-generation          tion Neuroscience Lab. She is
                                    opment related to digitization,   business practices based on        also a research associate at
                                    social media, and shopper         human science research.            the Research Center for Group
                                    marketing.                                                           Dynamics at the Institute for
                                                                                                         Social Research.




                                         Nathan’s devotion and Method’s response to it                   of the company that produces it, and the values they
                                    are becoming more typical. Some might attribute this                 share about it. Some marketers, like Whole Foods, Ikea,
                                    trend — the increasing use of community engagement                   and eBay, are consciously evoking a shift in attitude
features marketing, media & sales




                                    by marketers — to the rise of online social media: Face-             that grew more prominent in the Great Recession: a de-
                                    book, Twitter, YouTube, fan sites, and social marketing              sire for less acquisition of goods (or even experiences),
                                    websites (also known as private-label media) created by              and for more meaningful, lasting forms of fulfillment.
                                    companies themselves. (See “Scaling Up Social Media,”                Companies that promise simplicity, connection, and
                                    by Christopher Vollmer and Karen Premo, s+b, Autumn                  sustainable benefits can gain the most from this shift —
                                    2012.) But the trend represents a more fundamental                   but only if they deliver.
                                    change in marketing practice, linked to insights from
                                    social psychology, behavioral economics, and neurosci-               Two Systems of Thought
                                    ence and brain research. Every form of interaction be-               Marketers who want to build a strong social life for their
                                    tween companies and consumers — taking place online                  brands can start by better understanding the social na-
                                    and offline, in stores and over mobile devices, in brand-            ture of thought and action: the interpersonal, cognitive,
                                    ed content and by word of mouth, and indeed through                  and emotional triggers that link human interaction with
                                    all direct consumer experience — is now understood to                emotional experience.
                                    be shaped by the social nature of brands.                                 People essentially have two ways of thinking.
       3
                                         As marketers put this insight into practice in so-              Through several decades of research, cognitive scien-
                                    phisticated ways, a one-way message or image can no                  tists have come to recognize them as deeply ingrained,
                                    longer compete. The value of a brand is linked to the                complementary systems; psychologist and Nobel lau-
                                    relationships it fosters: the social connections among               reate Daniel Kahneman made them the central theme
                                    people who buy the product or service. Managing these                of his book Thinking, Fast and Slow (Farrar, Straus &
                                    connections at every scale, from an individual contact               Giroux, 2011). Social cognitive neuroscientists such as
                                    to a message that reaches millions of people, is the fun-            Matthew Lieberman have also identified brain regions
                                    damental task of marketing today.                                    that map to these two systems, with each playing a role
                                         With the right conditions in place, a brand can                 in social interactions.
                                    move beyond a purely transaction-based relationship to                    The first system — often referred to as System
                                    become a platform for an experience that feels to con-               One, “reflexive thinking,” or the Thinking Fast system
                                    sumers like friendship. Great marketers have known                   — manages habitual thought. When people take men-
                                                                                                                                                                      strategy+business issue 68




                                    how to do this for decades, of course, but it is now pos-            tal shortcuts, have a gut reaction, or form a rapid first
                                    sible to make authentic connections more consistent-                 impression, they are using this system. Thinking Fast
                                    ly. Tapping into the social nature of a brand this way               seems to operate effortlessly, often generating first im-
                                    means thinking differently about the expectations that               pressions within a tenth of a second. These impressions
                                    consumers have for the product or service, their view                are shaped by other ingrained and automatic thoughts
— current emotional states, prior experiences, habitual      Thinking Fast. As habits develop, consumers reach for
attitudes, and social norms — any of which may be re-        that brand with less conscious thought. Their percep-
lated to products or brands in some contexts. The snap       tions of themselves using the brand, and of others who
judgments of Thinking Fast don’t necessarily register        use the brand, may also change.
as conscious impressions or decisions, but they can be            Imagine setting out to buy a relatively complex
powerful and self-reinforcing; every time a person acts      product, like a mobile telephone. You might walk into
automatically, a neural pathway is invoked and the           a retail electronics store with an expectation based on
thought is made a little stronger and more accessible.       years of experience and perceptions, ingrained in the
     However, the quick impressions of Thinking Fast         reflexive (Thinking Fast) networks of your brain, about
are not sufficient on their own to meet the challenges of    “geeky” technology, manipulative service contracts, and
even a relatively uneventful day. People therefore rely on   unhelpful salespeople. This pattern of thought arises
the second cognitive system — known as System Two,           instantaneously when you enter, making you skeptical
“reflective thinking,” or the Thinking Slow system —         of sales arguments.
to process their thoughts, reactions, beliefs, and expec-         But if friends have told you ahead of time that they
tations more deliberately. The Thinking Slow system          had a positive experience at that store location, you
is not exclusively rational; it is also influenced by emo-   may slow down your thinking a bit. Then suppose the
tions. But it comes to the forefront in a more conscious     salesperson you encounter is skilled and knowledgeable
way when people are sufficiently motivated or attentive.     enough to describe other uses for the phone that reso-




                                                                                                                          features title of the article & sales
                                                                                                                          features marketing, media
The Thinking Slow system takes place in parts of the         nate with your needs — for example, as a navigation
brain (for example, the prefrontal cortex) where thought     system that can help you find restaurants in unfamiliar
processing can feel relatively demanding or draining.        neighborhoods. The reflective, Thinking Slow parts of
The brain has a limited capacity for reflective thinking     your brain might come to the forefront. Repeated ex-
at any one time.                                             periences with a salesperson who is honest and knowl-
     Although they occur in different parts of the brain,    edgeable might lead you to develop a feeling of trust to-
the reflexive (Thinking Fast) and reflective (Thinking       ward that retail store. If you keep returning, you might
Slow) systems operate together. Each influences the oth-     sooner or later revert to Thinking Fast, but now with a
er. Social psychologists studying persuasion — such as       higher degree of brand loyalty embedded in your day-
Richard Petty, John Cacioppo, Robert Cialdini, Alice         to-day behavior. Within the brain, loyalty can become
Eagly, and Shelly Chaiken — have long observed this          a habit.
phenomenon in experiments; when people are distract-              The flip side of the coin also holds; for example, if
ed or don’t care much about the issue in question, they      you can’t easily return a garment or resolve a frustrating
revert to reflexive thinking. But when the stakes are        banking problem, your brain might register the same
                                                                                                                               4
high or there is less distraction, people tend to engage     type of conflict and negative emotion that it would if a
in more reflective thought. Social neuroscientist Wil-       friend betrayed you. Distaste for that company’s brand
liam Cunningham has suggested that these two systems         would then color the starting point of your future in-
work together iteratively; the brain balances their rela-    teractions with the brand via the Thinking Fast system.
tive influence according to a number of factors, includ-     In either case, when the brain is motivated to expend
ing how motivated the person is to think hard and how        energy on the Thinking Slow system, and there is good
much experience he or she has in a given situation.          reason to change basic attitudes about the company
     How does this apply to marketing? Because people        and its products, the consumer is more likely to feel
are rapid meaning makers through Thinking Fast, and          that change.
deliberate meaning adjusters through Thinking Slow,
the development of brand loyalty is a complex and shift-     The Social Nature of the Brand
ing process. Both thinking systems are involved in pro-      Brand loyalty, when ingrained this way, also makes an
cessing each impression, and every impression matters.       individual more likely to talk about the brand with oth-
Initial decisions to select or change a product or service   ers — which, in turn, reinforces the loyalty. Thinking is
may involve the Thinking Slow system. But over time,         social or at least deeply affected by human interaction.
as people integrate that product or service into their       Some brands, such as BMW, Burberry, Coca-Cola,
routines, the decision to purchase or use it migrates to     Heineken, Lego, Nike, Starbucks, Virgin, and Volks-
wagen, have tapped into consumers’ hearts and minds          broadly emotional associations related to that product
                                    at various times because they are associated with a sense    or service will proliferate. When Aaron perceives that
                                    of community.                                                others value his information, he is more likely to con-
                                          Since Aristotle, philosophers have identified social   tinue sharing it, and to attract others to jump on board.
                                    relationships (in addition to reason and emotion) as im-     This social sentiment about brands need not be limit-
                                    portant factors in persuasion and influence. Starting in     ed to a fan site like methodlust.com; it can appear in
                                    the 1930s, social psychologists verified experimentally      any context, facilitated directly by brands and retailers
                                    the importance of social relationships in influencing at-    across both digital and physical touch points.
                                    titudes and behavior; beginning in the 1970s, behavior-          How, then, can your company shift to a relation-
                                    al economists confirmed that market interactions also        ship-driven approach to marketing — anchored in au-
                                    have a strong emotional and cognitive component.             thenticity, trust, and multifaceted connections? There
                                          Now, a growing number of social psychologists and      are four tenets, which form a convenient acronym:
                                    marketing researchers use social media to study the link     Reframe, Understand, Listen, and Engage (RULE).
                                    between social norms and purchasing decisions. They
                                    are finding that the context of a community influences       Reframe: Focus on the Whole Person
                                    how people interpret their experiences, and may shape        Many companies are still learning how to design every
                                    their willingness to have an authentic relationship with     touch point to generate a greater level of social interac-
                                    a brand, rather than just engage in a transaction. For       tion and participation. The new forms of marketing,
features marketing, media & sales




                                    example, when people expect others they know to re-          grounded in building relationships, are to conventional
                                    act with approval to a product or service, they are more     marketing what interactive games are to television dra-
                                    likely to react positively themselves.                       ma. Instead of a single, point-to-point narrative, present-
                                          Neuroscience research also suggests that social cues   ed the same way to every audience member, the cam-
                                    shape the way the brain responds to information. Social      paign is an immersive experience, in which the play is
                                    cognitive neuroscientists and neuroeconomists, includ-       unpredictable and both players — the consumer and the
                                    ing Greg Berns, Daniel Campbell-Meiklejohn, Vasily           marketer — may respond quickly. It is less scripted, and
                                    Klucharev, Malia Mason, Michael Norton, Hilke Plass-         consumers have an active hand in shaping the outcome
                                    mann, and Jamil Zaki, have shown that preferences —          of the game. The authenticity of connection is critical; a
                                    and the neural responses involved in computing those         brand that is not trusted cannot survive in this milieu.
                                    preferences — tend to change depending on whether                 To develop this level of authenticity, marketers
                                    people have been told what other people think.               must learn to connect with the consumer as a whole
                                          The brain doesn’t process all people equally. It has   person, including those drives and motivations that
                                    long been known by social psychologists that human           were formerly considered irrelevant to product con-
       5
                                    beings cognitively favor some people over others. Wil-       sumption. One useful body of work for this is the
                                    liam Cunningham and Jay Van Bavel (director of the           four-drive motivational theory developed by two or-
                                    social perception and evaluation lab at New York Uni-        ganizational science professors at Harvard Business
                                    versity) have found that the systems in the brain that       School, Paul R. Lawrence (who died in 2011) and
                                    signal motivational relevance are more active when peo-      Nitin Nohria (currently dean of the business school). In
                                    ple see other people who are members of their team or        their book Driven: How Human Nature Shapes Our
                                    group, in comparison to outsiders.                           Choices (Jossey-Bass, 2002), they proposed that people
                                          The social nature of thought, combined with the        are motivated and make choices as a result of four in-
                                    neuroscience of brand loyalty, should be a major factor      nate drives: the drive to acquire possessions and status;
                                    in marketing priorities. Every touch point in a consum-      the drive to bond and relate with others; the drive to
                                    er’s life should be treated as a pivotal moment, an op-      learn and understand the world; and the drive to defend
                                    portunity to reinforce the connection between the con-       what they consider important. Marketing has long at-
                                                                                                                                                               strategy+business issue 68




                                    sumer and the brand. Touch points that encourage the         tempted to address these drives, but different campaigns
                                    sharing of social sentiment may be especially powerful       have focused on different ones. The more drives that are
                                    reinforcers. Thus, the more often that people like Na-       taken into consideration by marketers — not just the
                                    than Aaron post their recommendations online through         drives to acquire and defend, but also the drives to bond
                                    ratings, reviews, tweets, and commentary, the more           and learn — the more loyal consumers become. With
Brands that grew the most were explicitly connected
  in people’s minds to fundamental human values such
  as joy, pride, and the desire to improve society.




socially oriented marketing, it’s particularly important       page 7.) The reason, from a neuroscience perspective,
to balance all four drives, rather than emphasizing only       may have to do with the reflexive nature of deeply held
one or two.                                                    values. When these values are called to mind, the as-




                                                                                                                           features title of the article & sales
                                                                                                                           features marketing, media
     For example, Kimberly-Clark’s marketers engaged           sociated emotions and memories may transfer (through
all four motivational drives in their Potty Project cam-       Fast Thinking) to other concepts, including some brand
paign created for Huggies Pull-Ups training pants.             references. Indeed, when information about brand attri-
They considered all the stressful dynamics of potty            butes tied to values (such as protecting the environment
training: the drive to acquire (gaining status as a good       or honoring tradition) is manipulated in experiments,
parent by successfully training your children); the drive      people for whom the value is personally relevant are sig-
to bond (by having a better relationship with your kids);      nificantly more likely to make decisions focusing on that
the drive to defend (by avoiding conflict in the home);        attribute. In short, there appears to be a rapid connec-
and the drive to learn (by mastering parenting skills).        tion in many people’s minds between the relevance of a
The Pull-Ups team created a website (pull-ups.com/             brand and the fundamental things they care about.
na/) with instructional videos, featuring a community               Different values are important to different indi-
of parents learning together. It showed ways to make           viduals, but values themselves tend to be broad moti-
potty training a cooperative, relatively fun-filled task for   vational constructs, adopted by people the world over.
parent and child. In just three months, the Potty Proj-        One of the most comprehensive studies of values was
                                                                                                                                6
ect became a top destination for potty-training parents,       conducted by Shalom H. Schwartz, a social psycholo-
garnering 857,000 visits, which totaled 45,387 hours,          gist at the Hebrew University of Jerusalem. Schwartz
and 1.9 million video views. Even better, parents shared       classified human values into 10 types: power, achieve-
the experience; the amount of material sent on from the        ment, pleasure (hedonism), stimulation, self-direction,
site to visitors’ friends exceeded the project’s target by     universalism (which includes values like social justice
400 percent.                                                   and world peace), benevolence, tradition, conformity,
                                                               and security. He concluded that group cultures influ-
Understand: Align to Consumers’ Values                         ence the priorities people place on these values; higher-
In a study of 50,000 brands, former Procter & Gamble           priority values are powerful motivators because they
global marketing officer Jim Stengel found that those          are central to people’s concepts of themselves, and are
that grew the most over a 10-year period (on average,          bound to deep emotions.
three times faster than the overall group, from 2000                Thus, when people engage in brand experiences
through 2010) had one thing in common. They were               that activate their high-priority values, they may be
explicitly connected in people’s minds to fundamental          more likely to identify with the brand and develop an
human values such as joy, connection with other people,        emotional connection with it. A recent Starbucks cam-
adventurousness, pride, and the desire to improve soci-        paign on behalf of social consciousness may work this
ety. (See “The Case for the Brand Ideal,” by Jim Stengel,      way, by connecting perceptions of the chain with the
The Case for                               pressed what we stood for. I brought      subconsciously — aligned it with the
                                                                               it back, which was then an unheard-       concept of human growth. We became
                                    the Brand Ideal                            of move at P&G. We also created           more than a maker of peanut butter.
                                                                               a full-page newspaper ad campaign         We were a partner with moms in their
                                    by Jim Stengel                             headlined “The Answer Is No,” which       young children’s development.
                                                                               explained that our peanut butter had          Any brand is simply the collec-
                                                                               no cholesterol, no preservatives, and     tive intent of the people behind it. To


                                    T      he pivotal assignment during
                                           my early career at Procter &
                                    Gamble (P&G) was Jif peanut butter. Jif
                                                                               no artificial colors or flavors. It was
                                                                               based on the top 10 questions moms
                                                                               asked us about Jif. In tune with our
                                                                                                                         everyone your business touches, from
                                                                                                                         employees to consumers, the brand
                                                                                                                         defines who you are and what you
                                    was a US$250 million business when I       overall effort to support their values,   stand for as a business. If you want
                                    joined its brand management team in        we held national promotions in which      great business results, you and your
                                    1984. Before consumer engagement           we donated 10 cents per jar to local      brand have to stand for something
                                    became the vogue in marketing, we          parent–teacher associations.              compelling. And that’s where brand
                                    conducted an unusual number of in-             These efforts transformed Jif         ideals enter the equation.
                                    home visits and “shop-alongs” with         from a sleepy business to an explo-           A brand ideal is a shared intent
                                    moms. These occasions sharpened my         sive growth story. We achieved rec-       by everyone in a business to improve
features marketing, media & sales




                                    team’s sense of Jif’s core customers.      ord market share, gaining two full        people’s lives. The ability to lever-
                                    They weren’t simply women between          share points in a market in which         age this ideal is what separates great
                                    the ages of 18 and 34; they were highly    fractions of a share point had been all   business leaders from good, bad, or
                                    engaged moms with young children.          but impossible to win without erod-       indifferent ones. A brand ideal is a
                                        As a result, my guiding thought        ing margin. We also attained record       business’s essential reason for being,
                                    was to make Jif the most loved peanut      profitability, with increases in total     the higher-order benefit it brings to
                                    butter by exemplifying and support-        profit and profit margin of 143 per-        the world.
                                    ing what these moms valued. We had         cent and 110 percent, respectively, in        Does a shared goal of improving
                                    to have the highest quality and make       the first year, and even more the fol-     people’s lives sound too idealistic for
                                    sure there were no traces of carci-        lowing year. These results became a       the rough-and-tumble of business?
                                    nogenic aflatoxins, which are toxins        highlight of my career and the careers    What about practical, hard-nosed
                                    produced by mold, in the peanuts we        of key members of our small manage-       goals such as making the quarterly
                                    used. We had to address concerns           ment team.                                numbers, increasing market share,
                                    about health and nutrition. We had to          Looking back on these decisions,      and cutting costs? All of these practi-
       7
                                    have great taste that young kids loved.    which seemed largely intuitive at the     cal goals are crucial. It’s also neces-
                                        Jif had abandoned its famous           time, I now recognize that they exem-     sary to want to be the best-performing
                                    “Choosy mothers choose Jif” slogan         plify a critical, but often overlooked,   enterprise around, with the highest
                                    for “Taste the ‘Jifference’ in Jif.” But   principle of marketing: the power of      standards, the strongest people, and
                                    our deeper understanding helped me         ideals. By aligning the business with     the most satisfied customers. But the
                                    realize that the older slogan better ex-   moms’ values, we implicitly — and         best businesses aim higher.



                                    values of universalism and benevolence, reinforced             its performance. He held a leadership meeting in New
                                    through visible actions, including the company’s own           Orleans that included a day of community service;
                                    employee benefit practices. Starbucks chief executive          11,000 store managers worked together in neighbor-
                                    officer Howard Schultz started the campaign himself,           hoods that had been damaged by Hurricane Katrina.
                                                                                                                                                                   strategy+business issue 68




                                    basing it on the idea that authenticity must be present        Since then, Starbucks has created a series of campaigns
                                    in any cause-based marketing effort or its influence will      that tie its corporate identity to voting, recycling, rain-
                                    be limited.                                                    forest preservation, economic revival, and other social
                                         It kicked off in 2008, soon after Schultz was             causes.
                                    brought back to the company as CEO to turn around                   In his own writing, Schultz asserts that Starbucks
They don’t get there through vi-       only six months. Its core businesses      We also had to model the ideal our-
sion and mission statements. When           were stagnating, and its people were      selves. And we had to measure all our
you strip away the platitudes from          demoralized.                              activities and people in terms of the
those documents, what’s left typically          A.G. Lafley, then the CEO, asked      ideals of our brands and the company
boils down to: “We want our current         me to take on the role of global mar-     as a whole. The success of that effort
business model to make or keep us           keting officer to help transform the      brought P&G’s extraordinary growth
the leader of our current pack of com-      culture of the company to one where-      from 2001 on.
petitors in current and immediately         in “the consumer is boss.” I jumped at        The business case for brand ide-
foreseeable market conditions.” This        the challenge, and proposed building      als is not altruism or corporate social
is a formula for mediocrity. It aims too    the best marketing organization in the    responsibility. It concerns connecting
low, locking an enterprise into a busi-     world — attracting the best talent; fo-   what happens inside a business with
ness model based on the agenda of           cusing on growing the market share        what happens outside it, especially
the business, not that of the customer.     of the majority of our businesses; and    in the “black box” of consumers’
If such a statement mentions the cus-       making our marketing known, recog-        minds and the way they make deci-
tomer at all, it’s the customer as seen     nized, and admired by all the people      sions. If you’re willing to align your
from the company’s point of view and        important to P&G’s future.                business with a fundamental human
in terms of the company’s agenda.               To hit these big targets, we need-    ideal, you too can achieve extraordi-




                                                                                                                                features title of the article & sales
                                                                                                                                features marketing, media
     Truly sustainable business mod-        ed an even bigger goal: identifying       nary growth. Imagine the possibilities
els are linked to fundamental human         and activating a distinctive ideal (or    that creates for you, your people, and
values — an ideal of improving people’s     purpose, as P&G dubbed it). We would      your community.
lives. This clarifies the business’s true   improve people’s lives; that would be
reason for being, which in turn sup-        the explicit goal of every business in    Jim Stengel
ports open-ended processes that can         the P&G portfolio. We could then es-      www.jimstengel.com
drive many different business models        tablish each business’s true reason       is the former global marketing of-
in succession. The model will have to       for being as the basis for new growth,    ficer of Procter & Gamble and is a
change with market conditions, and the      and we could link them all into a         consultant to senior management
only sure basis for creating viable busi-   strong foundation for P&G’s recovery      and an adjunct professor at the UCLA
ness models over the long term is when      by building each business’s culture       Anderson School of Management.
a business and its customers share an       around its ideal.                         This essay is excerpted from his book,
agenda. To hit higher targets and stay          Every P&G business had to com-        Grow: How Ideals Power Growth and
in front of the competition requires        municate its ideal internally and ex-     Profit at the World’s Greatest Compa-
                                                                                                                                     8
an ideal.                                   ternally. Lafley and I and the rest of    nies (Crown Business, 2011).
     Procter & Gamble had a remark-         the senior management team ex-
able run in the first decade of the         pected all the business leaders to
21st century. But in 2000, it was in        articulate how each brand’s individual
big trouble, having recently lost $85       identity furthered P&G’s overarching
billion in market capitalization in         mantra of improving people’s lives.



had foundered in the mid-2000s because in pursuing              Listen: Deepen Consumer Insight
rapid growth it became disconnected from its own                One hallmark of effective marketing has always been
values. The perception of Starbucks as a yuppie-style           collecting signals and feedback from purchasers; now,
gentrifying force, for example, built up negative asso-         marketers have richer opportunities for listening to
ciations and cost the company the loyalty of some con-          consumers and learning what they want, need, and
sumers. One result of his new approach is a significant         value. Digital media enable this capability; a staggering
leap in appeal to both consumers and employees; they            amount of data about products, brands, and companies
see the company, and its CEO, as making a sincere, sus-         can be gathered by tracking and analyzing what people
tained commitment.                                              say and do online. But the most significant aspect of
Enterprise Rent-A-Car monitors tweets and
                                      comments posted on social media sites each day.
                                      Whenever a negative comment is posted, the
                                      customer care team immediately reaches out.




                                    listening is not the technology; it’s the way companies     Insights like these can help marketers better understand
                                    use what they learn.                                        the implicit and emotionally charged elements that the
                                         Consider, for example, the services provided by an     consumer took from the experience, elements that can
features marketing, media & sales




                                    online software company called Bazaarvoice. Founded         significantly shape future interactions with or percep-
                                    in 2005, Bazaarvoice compiles ratings and reviews of        tions of the brand.
                                    products and services posted on hundreds of brand                Companies need keen customer-insight capabili-
                                    and retailer websites, allowing companies to use those      ties to make sense of customer feedback and respond
                                    insights to strengthen their capabilities for reach-        effectively. They need to integrate consumer percep-
                                    ing customers. (Its business partners include Salesforce    tions gathered from multiple touch points. One com-
                                    .com, SAP, and Booz & Company, the publisher of this        pany that is building its listening capabilities this way is
                                    magazine.)                                                  Enterprise Holdings, the parent company of Enterprise
                                         Global manufacturer 3M also gathers Bazaarvoice        Rent-A-Car, National Car Rental, Alamo Rent A Car,
                                    data and uses it in both marketing and R&D. It has          and WeCar. Enterprise uses surveys and social media
                                    collected thousands of reviews and comments from            to track customer experience. Information on factors
                                    more than a dozen retail sites and mobile apps, as well     such as perceived wait time is gathered, analyzed, and
                                    as Facebook postings, using them to improve market-         reported from all the branches and representatives. This
                                    ing campaigns or create new ones. In one case, the com-     drives clear frontline accountability for delivering an
       9
                                    pany’s Precision Ultra Edge nonstick scissors were sell-    exceptional customer experience. Enterprise’s commit-
                                    ing below expectations. 3M changed its product copy,        ment to listening led it to create a customer care team
                                    quoting the language consumers used online (“they’re        that monitors tweets and comments posted on social
                                    great for cutting fabric and photos, with a comfortable     media sites from 6 a.m. to 10 p.m. each day. Whenever
                                    grip”). Among the results was an increase in the click-     a negative comment from a distressed customer is post-
                                    through rate for banner ads. Customer feedback gath-        ed, the team immediately reaches out to the customer
                                    ered online also led to the redesign of other products.     to resolve the issue. Enterprise’s leaders also consider
                                         Listening to customers, both through social media      the customer perception information when they rede-
                                    and with more traditional research methods, requires        sign the company’s services.
                                    going beyond what customers say to better understand-
                                    ing their emotional experience with the brand. For ex-      Engage: Humanize Touch Points
                                    ample, Maritz Research conducts some of its customer-       The brand experience is no longer restricted to the tradi-
                                                                                                                                                               strategy+business issue 68




                                    experience research with a “make or break satisfaction”     tional organizational silos of advertising and marketing.
                                    methodology, surveying customers to understand the          Now, the entire company takes part in strengthening
                                    key encounters that either made a brand experience          relationships and brand advocacy. This might involve
                                    great (like finding unexpected treats in a hotel room) or   mobile marketing (with the smartphone acting as a
                                    broke the connection (like finding bugs in a hotel bed).    connection point across the full purchase journey from
the customer’s couch to the store shelf), store displays    A Better Brand Relationship
(where brands can engage shoppers with solution-ori-        Many marketers — and some consumers — may won-
ented merchandising), the anticipation of future behav-     der how far companies should go in pursuing enduring
ior from past customer behavior data (through vehicles      brand-to-consumer relationships. Conventional market-
such as frequent-shopper cards), and the redefinition       ing, focused on the explicit value of products and ser-
of technical support (as in Best Buy’s Geek Squad or        vices, is easier and more familiar.
Apple’s Genius Bar). In the most farsighted companies,           But social engagement is not just unavoidable. It
mobile marketing is a means of bringing the commu-          represents a far more effective use of marketing effort
nity to the shelf. When an apparel shopper photographs      and resources, and at its best, it represents a more hu-
a garment and texts “What do you think?” to a friend,       man approach to engaging consumers. By using the
the friend’s positive response may activate social emo-     four RULE activities — reframing, understanding, lis-
tions that solidify the brand connection.                   tening, and engagement — companies can invoke the
     Building a high level of customer engagement           kind of social learning that leads to long-term, mutu-
through experience can require broad-based cultural         ally rewarding relationships of any sort. On their side,
change within a company; employees must align their         companies will deliver products and services that are
actions with the values of the brand. This type of          more closely tied to the values and ideals held by both
corporate alignment is often perceived in the breach        employees and consumers. Of all the moments of truth
— when an environmental disaster, quality crisis, or        along the total brand experience, the ones that make




                                                                                                                                         features title of the article & sales
                                                                                                                                         features marketing, media
ethical scandal damages the company’s reputation and        the most difference could turn out to be the repeated
bottom line. By now, many consumers are looking for         social connections that create bonds among the people
authenticity, and companies can only “walk the talk”        who are part of the brand community. The social life
by creating cultures where brand values are expressed       of a brand can be an integrative force for a more holis-
every day. With the right kind of cultural initiatives,     tic approach to marketing, in which companies build
training programs, and incentive structures, the actions    long-term, multifaceted, and fruitful relationships with
of frontline employees — who represent the part of the      the people who identify with their brand ideals and
organization that customers usually see — can be a          choose to buy and advocate on behalf of their products
critical component of the brand experience.                 and services. +
     Embassy Suites Hotels has engaged all its “team                                                                 Reprint No. 00118
members” (as it refers to employees) in the creation of
a socially rewarding brand experience. The company’s
culture is focused on this, and is characterized by the
Embassy Suites service statement: “Gracious, engaging
                                                                                                                                         10
and caring…making a difference in the lives of others
— in ways both big and small.” The ongoing culture
                                                            Resources
initiative, “Make a Difference,” encompasses a number
of programs that influence the behavior of employees,       Charles Gremillion, Make Their Day: The Power to Make Guests Happy
other stakeholders, and guests. For example, new team       (Tribe, 2011): By the director of Embassy Suites’ brand culture, on the
                                                            power of a great customer relationship.
members are introduced to The Deal — a booklet that
                                                            Daniel Kahneman, Thinking, Fast and Slow (Farrar, Straus & Giroux,
outlines goals, expectations, behaviors, and “secrets to
                                                            2011): Compelling guide to the two overarching systems that govern
success” that catalyze the distinctive Embassy Suites       thought.
brand experience. A complementary program called            Paul R. Lawrence and Nitin Nohria, Driven: How Human Nature Shapes
“Make a Difference…for you” enables hotel managers          Our Choices (Jossey-Bass, 2002): How to build a business that meets the
to acknowledge team members for their contributions;        drives to acquire, bond, learn, and defend.

acknowledgments include certificates of achievement         Jim Stengel, Grow: How Ideals Power Growth and Profit at the World’s
                                                            Greatest Companies (Crown Business, 2011): Research-driven manifesto
and a selection of other nonmonetary rewards. The
                                                            on the link between what brands stand for and how they prosper.
payoff for this attention has been dramatic; in 2011, for
                                                            Maritz Institute: www.themaritzinstitute.com
example, Embassy Suites took the top spot in the J.D.
                                                            For more thought leadership on this topic, see the s+b website at:
Power and Associates annual North American Hotel
                                                            strategy-business.com/marketing_media_sales.
Guest Satisfaction Index Study in its category.
strategy+business magazine
is published by Booz & Company Inc.
To subscribe, visit strategy-business.com
or call 1-855-869-4862.

For more information about Booz & Company,
visit booz.com



• strategy-business.com
• facebook.com/strategybusiness
• http://twitter.com/stratandbiz
101 Park Ave., 18th Floor, New York, NY 10178




© 2012 Booz & Company Inc.

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The Social Life of Brands

  • 1. strategy+business ISSUE 68 AUTUMN 2012 The Social Life of Brands A marketing strategy informed by neuroscience can help companies enhance customer engagement — and make better use of tools like social media. BY MATTHEW EGOL, MARY BETH MCEUEN, AND EMILY FALK Scan this QR code with your smartphone to take a free 10-minute survey to gauge how well your company is using and learning from digital data. This Digital Customer Centricity Profiler will help you see how your capabilities for customer centricity compare to leaders in your market and industry. You can also take the survey at www.beadigitalleader.com. REPRINT 00118
  • 3. The Social Life of Brands A marketing strategy informed by neuroscience can features marketing, media & sales help companies enhance customer engagement — and make better use of tools like social media. by Matthew Egol, Mary Beth McEuen, and Emily Falk It was love at first sight for Nathan Aaron. The pany has made a misstep. North Carolina graphic artist, illustrator, and social me- Eric Ryan and Adam Lowry, the cofounders and dia proprietor first saw Method Inc.’s high-style, envi- chief executives of Method, are not put off by Aaron’s ronmentally conscious household cleaning products on familiarity or independent-mindedness. On the con- display in his local Target store. He was smitten. trary, they think he’s a dream consumer, and their mar- 2 “What caught my attention immediately was mint keting strategy is built around people like him. “To suc- dish soap.… Now, I’m a mint fanatic! Crazy about the ceed in a world of earned and social media requires you stuff.… Plus the gorgeous Karim Rashid packaging to shift your mind-set from talking to customers to in- didn’t hurt things one bit. And that was the beginning spiring advocates,” they wrote in The Method Method: of my, should I say, lust affair, with Method.” Aaron 7 Obsessions That Helped Our Scrappy Start-Up Turn wrote that in 2008, in the first post on his new blog, an Industry Upside Down (Portfolio/Penguin, 2011). methodlust.com. Since then, he and a community of “Not only do advocates make good business sense by like-minded consumers have posted more than 1,000 buying more of our products more often, but also they paeans and gripes there, all devoted to the Method engage us — online, in writing, on the phone, and in company and its brand proposition (fashionably de- person — teaching us all sorts of stuff we wouldn’t have Illustration by Richard Mia signed, beautifully scented, nontoxic cleaning products). figured out on our own.” Methodlust.com is nothing more or less than a fan site, Would your company consider Nathan Aaron a similar to one you might see for a hit movie or television dream consumer or a loose cannon? Would you encour- show. It contains reviews of the company’s products, age his public affair with your brand and listen to his commentary on its marketing strategy, interviews with ideas, or demand that he stop? Would you even know employees at all levels, and reader polls — plus fierce he was out there? Your answer says a lot about your ap- critiques when Aaron (or a reader) thinks that the com- proach to marketing and customer relationships.
  • 4. Matthew Egol Mary Beth McEuen Emily Falk matthew.egol@booz.com marybeth.mceuen@maritz.com ebfalk@umich.edu is a partner in Booz & is vice president and executive is an assistant professor of Company’s communications, director of the Maritz Institute communication studies and media, and technology in St. Louis, Mo. The institute psychology at the University of practice. Based in New York, is an independent network Michigan in Ann Arbor, where he focuses on marketing of thought leaders working she directs the Communica- strategy and capability devel- to create next-generation tion Neuroscience Lab. She is opment related to digitization, business practices based on also a research associate at social media, and shopper human science research. the Research Center for Group marketing. Dynamics at the Institute for Social Research. Nathan’s devotion and Method’s response to it of the company that produces it, and the values they are becoming more typical. Some might attribute this share about it. Some marketers, like Whole Foods, Ikea, trend — the increasing use of community engagement and eBay, are consciously evoking a shift in attitude features marketing, media & sales by marketers — to the rise of online social media: Face- that grew more prominent in the Great Recession: a de- book, Twitter, YouTube, fan sites, and social marketing sire for less acquisition of goods (or even experiences), websites (also known as private-label media) created by and for more meaningful, lasting forms of fulfillment. companies themselves. (See “Scaling Up Social Media,” Companies that promise simplicity, connection, and by Christopher Vollmer and Karen Premo, s+b, Autumn sustainable benefits can gain the most from this shift — 2012.) But the trend represents a more fundamental but only if they deliver. change in marketing practice, linked to insights from social psychology, behavioral economics, and neurosci- Two Systems of Thought ence and brain research. Every form of interaction be- Marketers who want to build a strong social life for their tween companies and consumers — taking place online brands can start by better understanding the social na- and offline, in stores and over mobile devices, in brand- ture of thought and action: the interpersonal, cognitive, ed content and by word of mouth, and indeed through and emotional triggers that link human interaction with all direct consumer experience — is now understood to emotional experience. be shaped by the social nature of brands. People essentially have two ways of thinking. 3 As marketers put this insight into practice in so- Through several decades of research, cognitive scien- phisticated ways, a one-way message or image can no tists have come to recognize them as deeply ingrained, longer compete. The value of a brand is linked to the complementary systems; psychologist and Nobel lau- relationships it fosters: the social connections among reate Daniel Kahneman made them the central theme people who buy the product or service. Managing these of his book Thinking, Fast and Slow (Farrar, Straus & connections at every scale, from an individual contact Giroux, 2011). Social cognitive neuroscientists such as to a message that reaches millions of people, is the fun- Matthew Lieberman have also identified brain regions damental task of marketing today. that map to these two systems, with each playing a role With the right conditions in place, a brand can in social interactions. move beyond a purely transaction-based relationship to The first system — often referred to as System become a platform for an experience that feels to con- One, “reflexive thinking,” or the Thinking Fast system sumers like friendship. Great marketers have known — manages habitual thought. When people take men- strategy+business issue 68 how to do this for decades, of course, but it is now pos- tal shortcuts, have a gut reaction, or form a rapid first sible to make authentic connections more consistent- impression, they are using this system. Thinking Fast ly. Tapping into the social nature of a brand this way seems to operate effortlessly, often generating first im- means thinking differently about the expectations that pressions within a tenth of a second. These impressions consumers have for the product or service, their view are shaped by other ingrained and automatic thoughts
  • 5. — current emotional states, prior experiences, habitual Thinking Fast. As habits develop, consumers reach for attitudes, and social norms — any of which may be re- that brand with less conscious thought. Their percep- lated to products or brands in some contexts. The snap tions of themselves using the brand, and of others who judgments of Thinking Fast don’t necessarily register use the brand, may also change. as conscious impressions or decisions, but they can be Imagine setting out to buy a relatively complex powerful and self-reinforcing; every time a person acts product, like a mobile telephone. You might walk into automatically, a neural pathway is invoked and the a retail electronics store with an expectation based on thought is made a little stronger and more accessible. years of experience and perceptions, ingrained in the However, the quick impressions of Thinking Fast reflexive (Thinking Fast) networks of your brain, about are not sufficient on their own to meet the challenges of “geeky” technology, manipulative service contracts, and even a relatively uneventful day. People therefore rely on unhelpful salespeople. This pattern of thought arises the second cognitive system — known as System Two, instantaneously when you enter, making you skeptical “reflective thinking,” or the Thinking Slow system — of sales arguments. to process their thoughts, reactions, beliefs, and expec- But if friends have told you ahead of time that they tations more deliberately. The Thinking Slow system had a positive experience at that store location, you is not exclusively rational; it is also influenced by emo- may slow down your thinking a bit. Then suppose the tions. But it comes to the forefront in a more conscious salesperson you encounter is skilled and knowledgeable way when people are sufficiently motivated or attentive. enough to describe other uses for the phone that reso- features title of the article & sales features marketing, media The Thinking Slow system takes place in parts of the nate with your needs — for example, as a navigation brain (for example, the prefrontal cortex) where thought system that can help you find restaurants in unfamiliar processing can feel relatively demanding or draining. neighborhoods. The reflective, Thinking Slow parts of The brain has a limited capacity for reflective thinking your brain might come to the forefront. Repeated ex- at any one time. periences with a salesperson who is honest and knowl- Although they occur in different parts of the brain, edgeable might lead you to develop a feeling of trust to- the reflexive (Thinking Fast) and reflective (Thinking ward that retail store. If you keep returning, you might Slow) systems operate together. Each influences the oth- sooner or later revert to Thinking Fast, but now with a er. Social psychologists studying persuasion — such as higher degree of brand loyalty embedded in your day- Richard Petty, John Cacioppo, Robert Cialdini, Alice to-day behavior. Within the brain, loyalty can become Eagly, and Shelly Chaiken — have long observed this a habit. phenomenon in experiments; when people are distract- The flip side of the coin also holds; for example, if ed or don’t care much about the issue in question, they you can’t easily return a garment or resolve a frustrating revert to reflexive thinking. But when the stakes are banking problem, your brain might register the same 4 high or there is less distraction, people tend to engage type of conflict and negative emotion that it would if a in more reflective thought. Social neuroscientist Wil- friend betrayed you. Distaste for that company’s brand liam Cunningham has suggested that these two systems would then color the starting point of your future in- work together iteratively; the brain balances their rela- teractions with the brand via the Thinking Fast system. tive influence according to a number of factors, includ- In either case, when the brain is motivated to expend ing how motivated the person is to think hard and how energy on the Thinking Slow system, and there is good much experience he or she has in a given situation. reason to change basic attitudes about the company How does this apply to marketing? Because people and its products, the consumer is more likely to feel are rapid meaning makers through Thinking Fast, and that change. deliberate meaning adjusters through Thinking Slow, the development of brand loyalty is a complex and shift- The Social Nature of the Brand ing process. Both thinking systems are involved in pro- Brand loyalty, when ingrained this way, also makes an cessing each impression, and every impression matters. individual more likely to talk about the brand with oth- Initial decisions to select or change a product or service ers — which, in turn, reinforces the loyalty. Thinking is may involve the Thinking Slow system. But over time, social or at least deeply affected by human interaction. as people integrate that product or service into their Some brands, such as BMW, Burberry, Coca-Cola, routines, the decision to purchase or use it migrates to Heineken, Lego, Nike, Starbucks, Virgin, and Volks-
  • 6. wagen, have tapped into consumers’ hearts and minds broadly emotional associations related to that product at various times because they are associated with a sense or service will proliferate. When Aaron perceives that of community. others value his information, he is more likely to con- Since Aristotle, philosophers have identified social tinue sharing it, and to attract others to jump on board. relationships (in addition to reason and emotion) as im- This social sentiment about brands need not be limit- portant factors in persuasion and influence. Starting in ed to a fan site like methodlust.com; it can appear in the 1930s, social psychologists verified experimentally any context, facilitated directly by brands and retailers the importance of social relationships in influencing at- across both digital and physical touch points. titudes and behavior; beginning in the 1970s, behavior- How, then, can your company shift to a relation- al economists confirmed that market interactions also ship-driven approach to marketing — anchored in au- have a strong emotional and cognitive component. thenticity, trust, and multifaceted connections? There Now, a growing number of social psychologists and are four tenets, which form a convenient acronym: marketing researchers use social media to study the link Reframe, Understand, Listen, and Engage (RULE). between social norms and purchasing decisions. They are finding that the context of a community influences Reframe: Focus on the Whole Person how people interpret their experiences, and may shape Many companies are still learning how to design every their willingness to have an authentic relationship with touch point to generate a greater level of social interac- a brand, rather than just engage in a transaction. For tion and participation. The new forms of marketing, features marketing, media & sales example, when people expect others they know to re- grounded in building relationships, are to conventional act with approval to a product or service, they are more marketing what interactive games are to television dra- likely to react positively themselves. ma. Instead of a single, point-to-point narrative, present- Neuroscience research also suggests that social cues ed the same way to every audience member, the cam- shape the way the brain responds to information. Social paign is an immersive experience, in which the play is cognitive neuroscientists and neuroeconomists, includ- unpredictable and both players — the consumer and the ing Greg Berns, Daniel Campbell-Meiklejohn, Vasily marketer — may respond quickly. It is less scripted, and Klucharev, Malia Mason, Michael Norton, Hilke Plass- consumers have an active hand in shaping the outcome mann, and Jamil Zaki, have shown that preferences — of the game. The authenticity of connection is critical; a and the neural responses involved in computing those brand that is not trusted cannot survive in this milieu. preferences — tend to change depending on whether To develop this level of authenticity, marketers people have been told what other people think. must learn to connect with the consumer as a whole The brain doesn’t process all people equally. It has person, including those drives and motivations that long been known by social psychologists that human were formerly considered irrelevant to product con- 5 beings cognitively favor some people over others. Wil- sumption. One useful body of work for this is the liam Cunningham and Jay Van Bavel (director of the four-drive motivational theory developed by two or- social perception and evaluation lab at New York Uni- ganizational science professors at Harvard Business versity) have found that the systems in the brain that School, Paul R. Lawrence (who died in 2011) and signal motivational relevance are more active when peo- Nitin Nohria (currently dean of the business school). In ple see other people who are members of their team or their book Driven: How Human Nature Shapes Our group, in comparison to outsiders. Choices (Jossey-Bass, 2002), they proposed that people The social nature of thought, combined with the are motivated and make choices as a result of four in- neuroscience of brand loyalty, should be a major factor nate drives: the drive to acquire possessions and status; in marketing priorities. Every touch point in a consum- the drive to bond and relate with others; the drive to er’s life should be treated as a pivotal moment, an op- learn and understand the world; and the drive to defend portunity to reinforce the connection between the con- what they consider important. Marketing has long at- strategy+business issue 68 sumer and the brand. Touch points that encourage the tempted to address these drives, but different campaigns sharing of social sentiment may be especially powerful have focused on different ones. The more drives that are reinforcers. Thus, the more often that people like Na- taken into consideration by marketers — not just the than Aaron post their recommendations online through drives to acquire and defend, but also the drives to bond ratings, reviews, tweets, and commentary, the more and learn — the more loyal consumers become. With
  • 7. Brands that grew the most were explicitly connected in people’s minds to fundamental human values such as joy, pride, and the desire to improve society. socially oriented marketing, it’s particularly important page 7.) The reason, from a neuroscience perspective, to balance all four drives, rather than emphasizing only may have to do with the reflexive nature of deeply held one or two. values. When these values are called to mind, the as- features title of the article & sales features marketing, media For example, Kimberly-Clark’s marketers engaged sociated emotions and memories may transfer (through all four motivational drives in their Potty Project cam- Fast Thinking) to other concepts, including some brand paign created for Huggies Pull-Ups training pants. references. Indeed, when information about brand attri- They considered all the stressful dynamics of potty butes tied to values (such as protecting the environment training: the drive to acquire (gaining status as a good or honoring tradition) is manipulated in experiments, parent by successfully training your children); the drive people for whom the value is personally relevant are sig- to bond (by having a better relationship with your kids); nificantly more likely to make decisions focusing on that the drive to defend (by avoiding conflict in the home); attribute. In short, there appears to be a rapid connec- and the drive to learn (by mastering parenting skills). tion in many people’s minds between the relevance of a The Pull-Ups team created a website (pull-ups.com/ brand and the fundamental things they care about. na/) with instructional videos, featuring a community Different values are important to different indi- of parents learning together. It showed ways to make viduals, but values themselves tend to be broad moti- potty training a cooperative, relatively fun-filled task for vational constructs, adopted by people the world over. parent and child. In just three months, the Potty Proj- One of the most comprehensive studies of values was 6 ect became a top destination for potty-training parents, conducted by Shalom H. Schwartz, a social psycholo- garnering 857,000 visits, which totaled 45,387 hours, gist at the Hebrew University of Jerusalem. Schwartz and 1.9 million video views. Even better, parents shared classified human values into 10 types: power, achieve- the experience; the amount of material sent on from the ment, pleasure (hedonism), stimulation, self-direction, site to visitors’ friends exceeded the project’s target by universalism (which includes values like social justice 400 percent. and world peace), benevolence, tradition, conformity, and security. He concluded that group cultures influ- Understand: Align to Consumers’ Values ence the priorities people place on these values; higher- In a study of 50,000 brands, former Procter & Gamble priority values are powerful motivators because they global marketing officer Jim Stengel found that those are central to people’s concepts of themselves, and are that grew the most over a 10-year period (on average, bound to deep emotions. three times faster than the overall group, from 2000 Thus, when people engage in brand experiences through 2010) had one thing in common. They were that activate their high-priority values, they may be explicitly connected in people’s minds to fundamental more likely to identify with the brand and develop an human values such as joy, connection with other people, emotional connection with it. A recent Starbucks cam- adventurousness, pride, and the desire to improve soci- paign on behalf of social consciousness may work this ety. (See “The Case for the Brand Ideal,” by Jim Stengel, way, by connecting perceptions of the chain with the
  • 8. The Case for pressed what we stood for. I brought subconsciously — aligned it with the it back, which was then an unheard- concept of human growth. We became the Brand Ideal of move at P&G. We also created more than a maker of peanut butter. a full-page newspaper ad campaign We were a partner with moms in their by Jim Stengel headlined “The Answer Is No,” which young children’s development. explained that our peanut butter had Any brand is simply the collec- no cholesterol, no preservatives, and tive intent of the people behind it. To T he pivotal assignment during my early career at Procter & Gamble (P&G) was Jif peanut butter. Jif no artificial colors or flavors. It was based on the top 10 questions moms asked us about Jif. In tune with our everyone your business touches, from employees to consumers, the brand defines who you are and what you was a US$250 million business when I overall effort to support their values, stand for as a business. If you want joined its brand management team in we held national promotions in which great business results, you and your 1984. Before consumer engagement we donated 10 cents per jar to local brand have to stand for something became the vogue in marketing, we parent–teacher associations. compelling. And that’s where brand conducted an unusual number of in- These efforts transformed Jif ideals enter the equation. home visits and “shop-alongs” with from a sleepy business to an explo- A brand ideal is a shared intent moms. These occasions sharpened my sive growth story. We achieved rec- by everyone in a business to improve features marketing, media & sales team’s sense of Jif’s core customers. ord market share, gaining two full people’s lives. The ability to lever- They weren’t simply women between share points in a market in which age this ideal is what separates great the ages of 18 and 34; they were highly fractions of a share point had been all business leaders from good, bad, or engaged moms with young children. but impossible to win without erod- indifferent ones. A brand ideal is a As a result, my guiding thought ing margin. We also attained record business’s essential reason for being, was to make Jif the most loved peanut profitability, with increases in total the higher-order benefit it brings to butter by exemplifying and support- profit and profit margin of 143 per- the world. ing what these moms valued. We had cent and 110 percent, respectively, in Does a shared goal of improving to have the highest quality and make the first year, and even more the fol- people’s lives sound too idealistic for sure there were no traces of carci- lowing year. These results became a the rough-and-tumble of business? nogenic aflatoxins, which are toxins highlight of my career and the careers What about practical, hard-nosed produced by mold, in the peanuts we of key members of our small manage- goals such as making the quarterly used. We had to address concerns ment team. numbers, increasing market share, about health and nutrition. We had to Looking back on these decisions, and cutting costs? All of these practi- 7 have great taste that young kids loved. which seemed largely intuitive at the cal goals are crucial. It’s also neces- Jif had abandoned its famous time, I now recognize that they exem- sary to want to be the best-performing “Choosy mothers choose Jif” slogan plify a critical, but often overlooked, enterprise around, with the highest for “Taste the ‘Jifference’ in Jif.” But principle of marketing: the power of standards, the strongest people, and our deeper understanding helped me ideals. By aligning the business with the most satisfied customers. But the realize that the older slogan better ex- moms’ values, we implicitly — and best businesses aim higher. values of universalism and benevolence, reinforced its performance. He held a leadership meeting in New through visible actions, including the company’s own Orleans that included a day of community service; employee benefit practices. Starbucks chief executive 11,000 store managers worked together in neighbor- officer Howard Schultz started the campaign himself, hoods that had been damaged by Hurricane Katrina. strategy+business issue 68 basing it on the idea that authenticity must be present Since then, Starbucks has created a series of campaigns in any cause-based marketing effort or its influence will that tie its corporate identity to voting, recycling, rain- be limited. forest preservation, economic revival, and other social It kicked off in 2008, soon after Schultz was causes. brought back to the company as CEO to turn around In his own writing, Schultz asserts that Starbucks
  • 9. They don’t get there through vi- only six months. Its core businesses We also had to model the ideal our- sion and mission statements. When were stagnating, and its people were selves. And we had to measure all our you strip away the platitudes from demoralized. activities and people in terms of the those documents, what’s left typically A.G. Lafley, then the CEO, asked ideals of our brands and the company boils down to: “We want our current me to take on the role of global mar- as a whole. The success of that effort business model to make or keep us keting officer to help transform the brought P&G’s extraordinary growth the leader of our current pack of com- culture of the company to one where- from 2001 on. petitors in current and immediately in “the consumer is boss.” I jumped at The business case for brand ide- foreseeable market conditions.” This the challenge, and proposed building als is not altruism or corporate social is a formula for mediocrity. It aims too the best marketing organization in the responsibility. It concerns connecting low, locking an enterprise into a busi- world — attracting the best talent; fo- what happens inside a business with ness model based on the agenda of cusing on growing the market share what happens outside it, especially the business, not that of the customer. of the majority of our businesses; and in the “black box” of consumers’ If such a statement mentions the cus- making our marketing known, recog- minds and the way they make deci- tomer at all, it’s the customer as seen nized, and admired by all the people sions. If you’re willing to align your from the company’s point of view and important to P&G’s future. business with a fundamental human in terms of the company’s agenda. To hit these big targets, we need- ideal, you too can achieve extraordi- features title of the article & sales features marketing, media Truly sustainable business mod- ed an even bigger goal: identifying nary growth. Imagine the possibilities els are linked to fundamental human and activating a distinctive ideal (or that creates for you, your people, and values — an ideal of improving people’s purpose, as P&G dubbed it). We would your community. lives. This clarifies the business’s true improve people’s lives; that would be reason for being, which in turn sup- the explicit goal of every business in Jim Stengel ports open-ended processes that can the P&G portfolio. We could then es- www.jimstengel.com drive many different business models tablish each business’s true reason is the former global marketing of- in succession. The model will have to for being as the basis for new growth, ficer of Procter & Gamble and is a change with market conditions, and the and we could link them all into a consultant to senior management only sure basis for creating viable busi- strong foundation for P&G’s recovery and an adjunct professor at the UCLA ness models over the long term is when by building each business’s culture Anderson School of Management. a business and its customers share an around its ideal. This essay is excerpted from his book, agenda. To hit higher targets and stay Every P&G business had to com- Grow: How Ideals Power Growth and in front of the competition requires municate its ideal internally and ex- Profit at the World’s Greatest Compa- 8 an ideal. ternally. Lafley and I and the rest of nies (Crown Business, 2011). Procter & Gamble had a remark- the senior management team ex- able run in the first decade of the pected all the business leaders to 21st century. But in 2000, it was in articulate how each brand’s individual big trouble, having recently lost $85 identity furthered P&G’s overarching billion in market capitalization in mantra of improving people’s lives. had foundered in the mid-2000s because in pursuing Listen: Deepen Consumer Insight rapid growth it became disconnected from its own One hallmark of effective marketing has always been values. The perception of Starbucks as a yuppie-style collecting signals and feedback from purchasers; now, gentrifying force, for example, built up negative asso- marketers have richer opportunities for listening to ciations and cost the company the loyalty of some con- consumers and learning what they want, need, and sumers. One result of his new approach is a significant value. Digital media enable this capability; a staggering leap in appeal to both consumers and employees; they amount of data about products, brands, and companies see the company, and its CEO, as making a sincere, sus- can be gathered by tracking and analyzing what people tained commitment. say and do online. But the most significant aspect of
  • 10. Enterprise Rent-A-Car monitors tweets and comments posted on social media sites each day. Whenever a negative comment is posted, the customer care team immediately reaches out. listening is not the technology; it’s the way companies Insights like these can help marketers better understand use what they learn. the implicit and emotionally charged elements that the Consider, for example, the services provided by an consumer took from the experience, elements that can features marketing, media & sales online software company called Bazaarvoice. Founded significantly shape future interactions with or percep- in 2005, Bazaarvoice compiles ratings and reviews of tions of the brand. products and services posted on hundreds of brand Companies need keen customer-insight capabili- and retailer websites, allowing companies to use those ties to make sense of customer feedback and respond insights to strengthen their capabilities for reach- effectively. They need to integrate consumer percep- ing customers. (Its business partners include Salesforce tions gathered from multiple touch points. One com- .com, SAP, and Booz & Company, the publisher of this pany that is building its listening capabilities this way is magazine.) Enterprise Holdings, the parent company of Enterprise Global manufacturer 3M also gathers Bazaarvoice Rent-A-Car, National Car Rental, Alamo Rent A Car, data and uses it in both marketing and R&D. It has and WeCar. Enterprise uses surveys and social media collected thousands of reviews and comments from to track customer experience. Information on factors more than a dozen retail sites and mobile apps, as well such as perceived wait time is gathered, analyzed, and as Facebook postings, using them to improve market- reported from all the branches and representatives. This ing campaigns or create new ones. In one case, the com- drives clear frontline accountability for delivering an 9 pany’s Precision Ultra Edge nonstick scissors were sell- exceptional customer experience. Enterprise’s commit- ing below expectations. 3M changed its product copy, ment to listening led it to create a customer care team quoting the language consumers used online (“they’re that monitors tweets and comments posted on social great for cutting fabric and photos, with a comfortable media sites from 6 a.m. to 10 p.m. each day. Whenever grip”). Among the results was an increase in the click- a negative comment from a distressed customer is post- through rate for banner ads. Customer feedback gath- ed, the team immediately reaches out to the customer ered online also led to the redesign of other products. to resolve the issue. Enterprise’s leaders also consider Listening to customers, both through social media the customer perception information when they rede- and with more traditional research methods, requires sign the company’s services. going beyond what customers say to better understand- ing their emotional experience with the brand. For ex- Engage: Humanize Touch Points ample, Maritz Research conducts some of its customer- The brand experience is no longer restricted to the tradi- strategy+business issue 68 experience research with a “make or break satisfaction” tional organizational silos of advertising and marketing. methodology, surveying customers to understand the Now, the entire company takes part in strengthening key encounters that either made a brand experience relationships and brand advocacy. This might involve great (like finding unexpected treats in a hotel room) or mobile marketing (with the smartphone acting as a broke the connection (like finding bugs in a hotel bed). connection point across the full purchase journey from
  • 11. the customer’s couch to the store shelf), store displays A Better Brand Relationship (where brands can engage shoppers with solution-ori- Many marketers — and some consumers — may won- ented merchandising), the anticipation of future behav- der how far companies should go in pursuing enduring ior from past customer behavior data (through vehicles brand-to-consumer relationships. Conventional market- such as frequent-shopper cards), and the redefinition ing, focused on the explicit value of products and ser- of technical support (as in Best Buy’s Geek Squad or vices, is easier and more familiar. Apple’s Genius Bar). In the most farsighted companies, But social engagement is not just unavoidable. It mobile marketing is a means of bringing the commu- represents a far more effective use of marketing effort nity to the shelf. When an apparel shopper photographs and resources, and at its best, it represents a more hu- a garment and texts “What do you think?” to a friend, man approach to engaging consumers. By using the the friend’s positive response may activate social emo- four RULE activities — reframing, understanding, lis- tions that solidify the brand connection. tening, and engagement — companies can invoke the Building a high level of customer engagement kind of social learning that leads to long-term, mutu- through experience can require broad-based cultural ally rewarding relationships of any sort. On their side, change within a company; employees must align their companies will deliver products and services that are actions with the values of the brand. This type of more closely tied to the values and ideals held by both corporate alignment is often perceived in the breach employees and consumers. Of all the moments of truth — when an environmental disaster, quality crisis, or along the total brand experience, the ones that make features title of the article & sales features marketing, media ethical scandal damages the company’s reputation and the most difference could turn out to be the repeated bottom line. By now, many consumers are looking for social connections that create bonds among the people authenticity, and companies can only “walk the talk” who are part of the brand community. The social life by creating cultures where brand values are expressed of a brand can be an integrative force for a more holis- every day. With the right kind of cultural initiatives, tic approach to marketing, in which companies build training programs, and incentive structures, the actions long-term, multifaceted, and fruitful relationships with of frontline employees — who represent the part of the the people who identify with their brand ideals and organization that customers usually see — can be a choose to buy and advocate on behalf of their products critical component of the brand experience. and services. + Embassy Suites Hotels has engaged all its “team Reprint No. 00118 members” (as it refers to employees) in the creation of a socially rewarding brand experience. The company’s culture is focused on this, and is characterized by the Embassy Suites service statement: “Gracious, engaging 10 and caring…making a difference in the lives of others — in ways both big and small.” The ongoing culture Resources initiative, “Make a Difference,” encompasses a number of programs that influence the behavior of employees, Charles Gremillion, Make Their Day: The Power to Make Guests Happy other stakeholders, and guests. For example, new team (Tribe, 2011): By the director of Embassy Suites’ brand culture, on the power of a great customer relationship. members are introduced to The Deal — a booklet that Daniel Kahneman, Thinking, Fast and Slow (Farrar, Straus & Giroux, outlines goals, expectations, behaviors, and “secrets to 2011): Compelling guide to the two overarching systems that govern success” that catalyze the distinctive Embassy Suites thought. brand experience. A complementary program called Paul R. Lawrence and Nitin Nohria, Driven: How Human Nature Shapes “Make a Difference…for you” enables hotel managers Our Choices (Jossey-Bass, 2002): How to build a business that meets the to acknowledge team members for their contributions; drives to acquire, bond, learn, and defend. acknowledgments include certificates of achievement Jim Stengel, Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies (Crown Business, 2011): Research-driven manifesto and a selection of other nonmonetary rewards. The on the link between what brands stand for and how they prosper. payoff for this attention has been dramatic; in 2011, for Maritz Institute: www.themaritzinstitute.com example, Embassy Suites took the top spot in the J.D. For more thought leadership on this topic, see the s+b website at: Power and Associates annual North American Hotel strategy-business.com/marketing_media_sales. Guest Satisfaction Index Study in its category.
  • 12. strategy+business magazine is published by Booz & Company Inc. To subscribe, visit strategy-business.com or call 1-855-869-4862. For more information about Booz & Company, visit booz.com • strategy-business.com • facebook.com/strategybusiness • http://twitter.com/stratandbiz 101 Park Ave., 18th Floor, New York, NY 10178 © 2012 Booz & Company Inc.