The Optimism Opportunity: Why Leading Brands Say Things Are Looking Bright

There are, of course, many different ways to approach trend-watching. I personally like to pay attention to what the leading top-tier organizations within the branding and marketing space think is important and see how that plays out over the course of time. 

Case in point – both Pantone and Adobe opened the year by going all in on optimism. The public, they declared, was already tired of being tired and depressed – and that’s before war, increased economic stresses, and other global problems kicked in. The suggested remedy: fun, whimsy, and play. 

From Pantone, this means the release of Veri Peri  – a color that has carefree confidence and a joyous attitude – along with a year’s worth of optimism-based collaborations with brands like Twinings (the hue in question is actually called “Optimism”) and Canva to get a more upbeat palette used by small business owners. 

Adobe, for its part, dove into the data to see what type of stock imagery was most in demand by their customers. Powerfully playful, with an undertone of gritty determination, topped the list of trends, followed by a dynamic motion and caring for the planet and self. Environmentalism and self-care are inherently optimistic, but it’s important to understand that the emphasis is on fun. 

What Does This Mean For You?

Over the course of the year, we’ve seen that customers are responding positively to fun offerings from brands. McDonald’s launched Adult Happy Meals this month, only to see the offering sell out nationwide very quickly. Disney’s going all in on the immersive experience angle, offering guests two full days in the Star Wars Galactic Cruiser, during which they’re the heroes on a custom adventure replete with light saber training, sabaac lessons, and planning a smuggler’s heist. At nearly $6,000 a room, this isn’t for everyone – but the guests who are enjoying it are having the time of their lives. 

Now, obviously, you might not have the budget of Disney, or even McDonald’s. But the customer hunger for fun and delight is still there. It’s time to look at your organization and say what can we be doing to make people smile?

Before you stop and say there’s absolutely nothing fun about my company and what we do, I’d like to stop and say Owens Corning to you. Building insulation is about the least entertaining product on the marketplace – and it’s made out of spun fiberglass, so you can’t even really touch it without regretting it – but they successfully developed a strong brand identity and some meaningful degree of customer loyalty via the use of the Pink Panther as a spokesperson. Is the use of a cartoon character in marketing childish? That’s a fair question, but I would ask also weren’t all of your customer’s children once?

If you’re planning on strengthening your customer relationships over the coming year, it’s a good time to think about how you’re going to integrate optimism and playfulness into your brand messaging. 

At Cult Branding, we help leading companies achieve their marketing and branding goals every day. To learn more about how we can help you bring optimism to your brand click here.

October 24, 2022 by

Digital Trust & Branding

If you had to guess, how many customers take into account how well they feel their personal information will be protected when making a purchase? McKinsey has done the research, and they put the number at 85%. 

Data protection is just one component of what’s being called Digital Trust. Also included in this suite of customer expectations: are cybersecurity, trustworthy AI-powered products & services, and transparency surrounding AI and data usage. 

Every Function Plays a Role in Creating a Trustworthy Brand

Let’s say you want your brand to be perceived as highly trustworthy. What’s involved in making that happen? Often, you’ll hear conversations focused on storytelling and the impactful nature of superior customer service. At the same time, the more nuts and bolts issues that go into running the organization each and every day are only discussed within their respective silos – IT being perhaps the prime example, with HR and purchasing following close behind. 

When we don’t tell the stories of what happens within these siloed departments, we’re losing opportunities to build trust with our customers. The infrastructure of our organizations is critical to building and keeping customer trust. It’s worth considering how to include this in brand messaging effectively. 

What the McKinsey study points to – I’d encourage you to read the entire piece, it’s quite excellent – is how IT issues, in particular, deserve a central role in organization-wide conversations about building trust and love with the consumer. As the public develops an increasingly sophisticated understanding of data and AI, it will be more and more important for brands to be very transparent about what they’re doing.

What do you think? I’d love to hear your thoughts.

October 17, 2022 by

Understanding the Components of Trust: Is Objectivity Essential?

Right now, the American public trusts businesses more than they trust the government or media. Obviously, both groups are interested in rebuilding trust with the public. What’s involved in making that happen?

The Columbia Journalism Review recently hosted a panel discussion called The Objectivity Wars, which you can watch on YouTube here. The central point of discussion was the relative value of objectivity in the media – in other words, does clinging to some aspirational judgment-free standard diminish the value of the journalistic work being done? While you might not think this is relevant to your day-to-day existence as a brand manager, the larger question here applies to all organizations: are the values we’re adhering to the right ones, and does clinging to them strengthen or weaken our bond with the customer?

Ironically, perhaps, Fox News, which has at best an incredibly marginal claim on objectivity, has the largest, loyalist audience. So if the metric for success is viewership, then no, objectivity is clearly not essential for success. There are fascinating conversations being had about what the appropriate metrics are, including the inclusion of marginalized voices in national conversations and driving social change, but these two require journalism of the highest order without the pretense of objectivity.

Will rebuilding trust in the media require changing our collective understanding of the value of objectivity? I think it might. It’s a fascinating question, and I’d love to hear what you have to say about it.

October 10, 2022 by

12 Reasons Why Core Values are Important

Core-Values-Life-is-Good

Back in 2014, I joined Life is good CEO Bert Jacobs on the main stage of the National Retail Federation’s Big Show to illuminate the powerful effects core values can have on businesses. Core values helped Life is good build a $100 Million lifestyle brand. Our talk rated the highest of all keynotes given at NRF that year and is available to watch here.  

To get started let’s think about…

What Are Core Values?

Core values are part of a company’s DNA. They define what an organization stands for, highlighting an expected and ultimate set of behaviors and skills. A company’s values lie at the core of its culture. Values are fundamental, enduring, and actionable.

Driving priorities and decisions, values help determine how a company spends its time and money. The actual values of an organization are determined mainly by where it invests its resources and how its employees behave, not what the leader says or what’s posted on company walls.

When properly executed at the leadership level, core values play a fundamental role in attracting and retaining talented employees, making difficult decisions, prioritizing resources, reducing internal conflict, differentiating the brand, and attracting the right breed of customers.

Why Brands Need Core Values

Human capital is the lifeblood of today’s enterprises. Attracting top talent in a fast-changing global marketplace—and retaining them—takes more than high salaries and benefits packages. Talented people want to work in environments where they can develop and thrive. Top performers seek out organizations with values that match their own.

As a consequence, the importance of a company’s culture is becoming more apparent.  Numerous research studies have highlighted that corporate culture is a primary driver for innovation.

When core values are successfully integrated into an organization, they set the foundation for its culture. Values set the climate of the workplace and help determine how success is defined and measured.

12 Reasons Core Values Are Important

Taking core values serious is a major organizational initiative. Wondering if establishing an authentic set of core values can impact your business?

Here are 12 reasons Brands should take core values seriously:

  1. Core values can set a foundation for the organization’s culture.
  2. Core values can improve morale and can be a rich source of individual and organizational pride.
  3. Core values can align a large group of people around specific, idealized behaviors.
  4. Core values can guide difficult decisions by determining priorities in advance.
  5. Core values can help positively influence how employees interact with one another.
  6. Core values can help you attract, hire, and retain the right type of employees.
  7. Core values can help you assess performance (both individually and organizationally).
  8. Core values can help prevent conflict and mitigate conflicts that do arise.
  9. Core values can help you improve innovation.
  10. Core values can help differentiate your brand in the minds of your customers and partners.
  11. Core values can impact how the organization serves its customers.
  12. Core values can help you attract the right breed of customers.

Are you looking for new ways to think about your own Core Values? Do you aspire higher? 

Our firm uses Core Values to help companies attract more profitable customers. Core values play a major role in inspiring leadership and building powerful brands that resonate with employees and customers.

October 3, 2022 by

Elon Musk is Building a Giant Robot Army. Are You Concerned?

If you’re the least bit interested in trust and how our ability to maintain a functional society depends on our ability to rely on other people’s willingness to abide by general cultural norms, Elon Musk provides an almost endless source of material to work with. 

Whether it’s the convoluted twists and turns of his Twitter deal, making sure Tesla owners don’t upgrade their cars without permission, or downplaying the fact Starlink satellites can be hacked with $25 worth of gear, there’s plenty going on that can lead the average, everyday person wondering about the outsized role this one individual has in our culture. Social media, electric vehicles, and national security are currently somewhat subject to the whims and fancies of an individual known to be petty and capricious. 

Are Geniuses Inherently Trustworthy? Just Ask Mileva

There are people who will tell you Elon Musk is a genius. And I have to tell you, they may be right. There’s a lot going on in terms of innovation, industry disruption, and, frankly, truth telling, that’s well worth paying attention to. No matter how the situation has evolved, Musk did something hugely valuable by calling Twitter’s data into question. His methodology is somewhat chaotic – but so too is the approach of the archetypal figure The Fool – the one who is willing to aim high, take great chances, and suffer failure time and time again. 

The reason the Fool is so willing to boldly take chances is that the consequences of bad outcomes generally are suffered by someone other than the Fool. This willingness to externalize negative costs is something Musk has mastered as well. Scandal after scandal follows Musk’s endeavors, but he just keeps carrying on. It is possible to be rich enough to escape meaningful consequences, and Musk consistently does.

Here’s Where the Robots Come In

Now, Reuters reports, Musk is planning to build thousands of autonomous robots to work in Tesla factories. This is only the beginning, apparently, as Musk says these robots could eventually be adapted for home use, doing chores for the elderly like meal preparation, lawn care, and, of course, cleaning up after the grandkids. 

What could possibly go wrong? And when it does, do you trust Elon Musk to make it right?

Maya Angelou famously said, “When someone shows you who they are, believe them the first time.” We are far too late for that – but it’s not too late to have the conversations so critical about trust, innovation, and society that Musk provokes. What do you think? I’d love to hear your thoughts.

P.S.
I would love to be a speaker at your next event and share actionable, engaging, and unforgettable tips with your audience on creating a cult brand that customers and employees can trust. To learn more click here.

September 20, 2022 by

Who Do You Love: A Look at Hot Chicken Takeover

In the course of my research into what makes customers love some brands more than others, it’s become clear that a brand’s relationship with its employees carries a significant amount of weight. 

One of the reasons Publix Super Markets enjoys its dominant position in the competitive grocery industry is the positive relationship they maintain with its employees. Because the employees are well treated, well compensated, and eventually become eligible to take an ownership position in the store, they go out of their way to be nice to the customers. This, in turn, helps build love and loyalty. It’s a strategy that works very well. Showing your employees you care about them makes it easier for your employees and customers to love you back.

But sometimes, it’s hard for people to get into positions where their employers can love them. Bad life decisions can result in criminal records, bankruptcies, and homelessness – all factors that make getting a job extremely difficult. 

One restaurant chain – Hot Chicken Takeover – is gaining much positive attention due to its policy of hiring men and women who need supportive employment. In addition to providing people with jobs, Hot Chicken Takeover also provides mental health referrals, connections to housing services, emergency cash, and a savings matching program. These additional benefits play a pivotal role for people transitioning into better lives – and receiving their results in a workforce that’s loyal and hard-working. Best of all, Hot Chicken Takeover customers love the restaurant for both its food and its mission. 

When Harvard Business Review considered the question of whether or not businesses should hire people with criminal records, they did a good job of examining the structural inequalities currently present in this country. People of color are far more likely to be arrested and convicted of crimes than white people who commit the same offense. While many employers say they will consider hiring someone with a criminal record, the data shows these applicants receive significantly fewer callbacks and are hired very rarely. 

By taking a stand and being willing to invest in the health and well-being of its workforce, Hot Chicken Takeover has done more than build a strong brand. They’ve changed hundreds of lives for the better. They’ve made it possible for people to build lives of dignity through hard work. And they’ve earned the lasting love of those employees as well as the public, who understands and appreciates the rare opportunity this restaurant provides. 

Who Do You Love?

 Is your organization open to hiring people who have troubled pasts? Is your brand capable of providing the type of supportive environment that allows employees to thrive and grow? Do your brand values allow for second chances?  These are the type of questions that can change an organization’s future – but you have to believe in the power of love to make it work.

September 6, 2022 by

Building Trust By Saying No: On Refusals, Rocket Launches, and Maintaining Goodwill

Living in this part of Florida, it’s possible to grow acclimated to things like rocket launches. There have been 34 launch attempts from Cape Canaveral this year alone! But today’s launch was supposed to be extra special.

Artemis 1 is a super important mission. It’s the first integrated test of NASA’s deep space exploration program, which will result in humanity returning to the moon and then going even further into space. 

The marketing support for this launch has been tremendous. I haven’t been able to get the actual numbers yet, but the budget for the extensive campaign must be literally sky-high. The effort that’s gone into generating excitement about this launch online, via the news media, and even in school classrooms has worked – but it’s also put a lot of performance pressure on NASA’s team. 

We’ve Been Here Before

In 1986, the Challenger was launched, flew a very short time, and then exploded. This resulted in the death of the entire crew. This included teacher Christa McAuliffe, who’d been at the center of the storytelling the public was hearing about America’s future in space. 

Subsequent to the disaster, analysis revealed that NASA’s oversensitivity to public opinion was one of the factors contributing to going forward with a launch that should have been delayed due to mechanical issues. In other words, having promised the public a lot, NASA felt they had to do what they could to keep that promise even though it wasn’t safe to do so. 

In an effort to build trust and love with the public, NASA made a decision that damaged both severely.

Lesson Learned: You Can’t Always Give the Public What They Want. It’s More Important to Do the Right Thing

It’s easy to understand why NASA works so hard at public relations. They need the public to love and trust them, because public funding – ie governmental appropriations – is easier to get when the people actively support what you’re doing. 

However, you don’t create love and trust simply by giving someone everything they want. Life is more complicated than that. As space explorers – and, perhaps more relevant to your daily life, as business leaders – we are often faced with situations where things aren’t going exactly as planned. A choice has to be made: try to fulfill expectations, even though the risk of catastrophic failure is high – or act to address the risk of catastrophic failure and manage the disappointed expectations. 

NASA chose incorrectly in 1986. However, in the subsequent decades, a massive cultural change has happened. While there’s definitely still a significant amount of pressure to perform in place, the decision to take more time and do the job properly is now easier for leadership to make.

That’s what happened with this morning’s launch. Even though many governmental leaders and dignitaries – including Vice President Kamala Harris – were on hand to see the event, along with hundreds of thousands of tv and online viewers, when technical issues emerged during the pre-launch process, leadership made the decision to delay the mission. 

Is this disappointing? Absolutely. Is it the right decision? In terms of building trust and love with the public, absolutely. Succumbing to public pressure is easy. Taking a stand to do the right thing – even when you’re in the global spotlight – can be difficult. But if you want people to trust you, you have to be willing to disappoint them when it’s necessary to do the right thing. Done consistently, that’s how you wind up among the stars.

August 29, 2022 by

Sometimes The Giants Shoot Themselves: Wells Fargo Illustrates the Importance of Trust

As giants go, Wells Fargo was a big one. In 2008 it became a coast-to-coast super-bank with $1.4 trillion in assets and 48 million customers. From there, Wells Fargo grew to the point where it became the largest mortgage company in the country, providing one in every three home loans. 

Everything should have been awesome. But it wasn’t. Things began to go catastrophically wrong, and people – Wells Fargo customers and the general public – felt like they couldn’t trust the bank any more.

Side-Eyeing the Giant: What Causes Trust to Be Lost?

In the course of my research into how customers gain and lose trust in brands, I’ve seen several companies – giants, if you will – stumble through a scandal, recover, and emerge smarter and stronger. The opportunity was there for Wells Fargo to move past an admittedly massive fake accounts problem successfully. 

But that’s not what happened. Instead, during the pandemic, Wells Fargo unfairly denied hundreds of struggling homeowners loan modifications. The number of foreclosures, along with heartbreaking stories of families losing their homes, dominated the news cycle for months. The bank blamed their software, but from the public’s perspective, the giant stumbled again. When Wells Fargo had to pay 1,800 homeowners over $12 million in compensation, that made headlines too.

No Trust, No Love: What Are You Going To Do When You’re Your Only Friend?

Wells Fargo lied, cheated, and made little kids homeless. That’s a lot to come back from, particularly in terms of customer trust and love. Wells Fargo is no longer the biggest bank in the country. They’re third – and the new leadership is talking about not being tethered to past ambitions. They’re no longer interested in being #1 simply for the sake of being #1 – which is exactly the sort of sour grapes rhetoric you get from a brand that knows it’s never going to be on top again. 

That being said, there’s a lot to be said for right-sizing an organization during troubled times. If you have parts of your business that carry great potential to leave you looking like a bad guy unless a number of unlikely things happen perfectly, it is a good idea to stop those parts of your business. In other words, make choices that build the trust you have with your customers. 

To this end, it’s encouraging to see Wells Fargo focusing on their existing customer base and communities where their bank already has a presence. Maintaining strong relationships requires effort even when everything is great. When the boat is rocky, it’s a little harder to keep everyone on board. An increased emphasis on customer satisfaction makes a lot of sense right now. 

Will Wells Fargo stabilize after shrinking – or even start to grow again? 

If the answer to either of these questions is Yes, we will need to see the bank begin behaving in a way counter to its behavior for decades now. It will require radical change to bring the brand into a position where they’re both trusted and loved. But in this world, anything can happen – and I can’t wait to see what does. 

What do you think? What does the future hold for Wells Fargo? What would it take, in your eyes, for the bank to become more trustworthy? I look forward to hearing your thoughts. 

Source

https://www.bloomberg.com/news/articles/2022-08-14/wells-fargo-to-cut-back-mortgage-business-after-scandals-take-toll

August 22, 2022 by

The CMO’s Guide to Cult Branding

Loyal customers consistently do business with their preferred brands, often without evaluating convenience or pricing factors. These loyal customers are also more likely to tell their friends and family about the brand (called word of mouth), creating a low-cost stream of new customers.

Given these valuable attributes, it’s easy to understand why loyalty is considered the holy grail of marketing.

Loyalty Isn’t An Accident

It's one thing to create a loyal customer; it's another to foster brand communities where groups of people band together around your brand's message.

Companies that foster brand loyalty go to great lengths to understand their customers’ needs and meet those needs better than anyone else.

These companies seek to create loyal customer evangelists, or what we call Brand Lovers. Creating Brand Lovers requires diligent effort on the part of executives to adopt a highly customer-centric approach to marketing, product development, and operations.

Cult Brands are those businesses that foster an unusual level of brand loyalty among their patrons. Apple Brand Lovers, for example, don’t consider a PC as a viable alternative.

Five Factors that Influence Loyalty to a Brand

Numerous factors and psychological processes are involved in influencing customers’ relationship with your brand:

  1. Repeat Purchasing Behavior: How often does a customer buy from you?
  2. Commitment: How long has a customer been committed to doing business with you?
  3. Perceived Value: How much value does a customer perceive in your offering?
  4. Brand Trust: How much trust does a customer have in your brand?
  5. Customer Satisfaction: How satisfied is a customer with the overall brand experience?

Four Types of Loyalty

Marketing professor Philip Kotler suggest four groups of customer types that demonstrate similar behavioral patterns in respect to brand loyalty:

  1. Hard-core Loyals: Customers who buy exclusively from a brand.
  2. Split Loyals: Customers loyal to two or three brands in a particular category.
  3. Shifting Loyals: Customers who move from one brand to another.
  4. Switchers: Customers with no sense of loyalty to any brand.1 2

Three Customer Mindsets

There are three primary customer mindsets important to understanding the factors behind brand loyalty. Every customer engages in all of these behaviors at different points throughout their lives.

  1. Transactional Mindset: Logic-driven thinking that weighs the options and makes the optimal decision in the moment.
  2. Relational Mindset: Although logic still plays a role, feelings primarily drive purchasing decisions.
  3. Loyal Mindset: Decisions are based on deeply-held values and ideals.

The Cult Branding Loyalty Continuum

Over nearly two decades at The Cult Branding Company, we have identified three primary patterns of behavior among customers:

  1. Brand Lovers: Customers a brand is especially for; those customers who love the brand the most and who may not perceive any alternative to the brand’s offering. Brand Lovers have an emotional investment in the brand. They feel their values align with the brand’s.
  2. Brand Enthusiasts: Customers who have a favorable impression of a brand but don’t necessarily have any investment or a deeper connection to the brand.
  3. Brand Nomads: Customers with a transactional mindset (see above) who shift from brand to brand without forming any brand allegiances.

The Key to Building Brand Loyalty

The truth is that most businesses struggle to build brand loyalty.

In fact, many executives at large corporations don’t even believe that building brand loyalty is possible, opting instead to exclusively focus on driving the next transaction. In our experience working with major national brands as well as independent retailers, building brand loyalty is most certainly possible.

Of course, we have a lot of evidence for this claim. A quick look at Cult Brands highlights the extraordinary level of brand loyalty some businesses have achieved with their customers.

While not every business may want to go to the lengths it takes to transform into a Cult Brand, every business can cultivate a core group of loyal customers—their Brand Lovers.

Focusing on your Brand Lovers is the key to building brand loyalty.

The Psychology of Mass Movements

Brand loyalty becomes less elusive when you understand the various drivers of human behavior. You don’t need to be a psychologist to appreciate that we, as humans, aren’t always aware of why we do what we do.

It’s one thing to create a loyal customer; it’s another to foster brand communities where groups of people band together around your brand’s message.

When you see groups of people joining a brand’s mission, you see a Cult Brand in action. How does it happen? And what can you do to help your brand build a following of loyal customers?

Using Apple as an ideal example, take a look at how you can create a mass movement:

Onward

If you’re looking to further your knowledge on brand loyalty and how to cultivate it for your business, here’s a hand-picked selection of related articles:

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August 15, 2022 by

Truth and Trust: A Lesson from Shopify

If I tell you when I’m wrong, you’re more likely to trust me to be right.

Shopify is widely regarded as one of the best e-commerce platforms for small business – but Shopify itself is not a small business. There are 3.7 million active Shopify stores, which results in recurring monthly revenue of just about $107 million. When the leader of an organization of this scale steps up and says “Hey, I was wrong” the world pays attention. 

In Tobi’s Own Words

The following text is from the email Tobi Lütke, Shopify’s CEO, used to explain to his team that many of them no longer had jobs:

Before the pandemic, ecommerce growth had been steady and predictable. Was this surge to be a temporary effect or a new normal? And so, given what we saw, we placed another bet: We bet that the channel mix – the share of dollars that travel through ecommerce rather than physical retail – would permanently leap ahead by 5 or even 10 years. We couldn’t know for sure at the time, but we knew that if there was a chance that this was true, we would have to expand the company to match. 

It’s now clear that bet didn’t pay off. What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point. Still growing steadily, but it wasn’t a meaningful 5-year leap ahead. Our market share in ecommerce is a lot higher than it is in retail, so this matters. Ultimately, placing this bet was my call to make and I got this wrong. Now, we have to adjust. As a consequence, we have to say goodbye to some of you today and I’m deeply sorry for that.

The bolding for emphasis is mine. Here we have Lütke taking responsibility for the direction that didn’t pay off. His leadership resulted in negative consequences for many people. Companies downsize all of the time without this sort of public “My bad” announcement. 

So why did Lütke make this messaging choice? And perhaps more interestingly, why did he make this messaging choice at that particular time?

Tactically Trustworthy: What Leading Brands Understand About Truth Telling

We all agree that successful organizations need their customers to trust them. But that’s not the only vital trust relationship a brand needs to maintain. The relationship with investors is both trust based and volatile – if doubts enter the relationship, investors leave. 

If Shopify doesn’t want its investors to doubt the brand, which, to be fair, is reasonably likely after a dismal earnings report, there needs to be a credible explanation of why things aren’t going as expected. Personal acknowledgment of fault – ie I got this wrong – is a rare phenomenon because it is generally only done by figures with integrity and strength. Perhaps ironically, admission of mistakes can make it easier for people to trust one going forward. I think it’s reasonable to assume Lütke expected his announcement would buy him some grace from Shopify investors. 

Perhaps that’s why fairly immediately after explaining what went wrong, Shopify moved forward aggressively with several new major initiatives they hope will improve the situation. Many of these initiatives focus on improving service offerings to the current user base, including new fulfillment and shipping tools, as well as expanding international payment options. 

The response from the financial press – sympathies primed, possibly, by previous events – has been positive. “Losing faith in Shopify? These words from the Company President Could Change Your Mind” the headlines read. 

Wouldn’t you love to have this response when you admit a mistake? This is not a position you arrive in accidentally. This is only achievable when you understand how trust works. 

About Those 3.7 Million + Shopify Store Owners – What About Their Trust?

The most vital trust a brand can enjoy is the trust of its customers. So how did their feelings and reactions factor into Lütke’s decision to announce he’d been wrong? Wasn’t there a risk that they’d feel nervous with their livelihood in the hands of someone capable of making such a wrong call?

Again, we return to the tactical nature of trust. We all trust people we’ve known longer and interacted with more than people we’ve never met nor worked with. You hear people talk about being invested in relationships. Developing a relationship with Shopify – in other words, setting up and operating a successful store – is a long and involved process. 

Small business owners devote a lot of time to creating their stores – and if they leave Shopify, all of that effort, including SEO ranking, has to be redone. Switching e-commerce platforms is a huge undertaking. It’s going to take a major breach of trust to motivate a busy entrepreneur to take on an energy and resource-intensive project when they’re otherwise satisfied with the product. 

Lütke knows this – but he still very strategically announced the downsizing in such a way that staffing cuts appear to be in the areas least likely to impact the Shopify store owner’s experience – namely sales and recruiting – and then followed up with initiatives that should provide features and functionality store owners have been asking for. 

Keeping Trust Levels High Throughout A Pivot is Smart

Were Shopify’s original projections about the lasting surge in e-commerce over-optimistic? Perhaps. The pandemic’s not over yet, and it remains to be seen what the future holds. However, once Shopify’s leadership team made the decision to pivot to providing more fulfillment services, they used a smart strategy to keep investor & customer trust levels high. I think this is pretty smart. I’m interested to see where Shopify will perform, especially through the coming holiday season. I’m also interested in what you think of the whole situation. Please share your thoughts!

Sources:

https://news.shopify.com/changes-to-shopifys-team

https://www.fool.com/investing/2022/08/04/losing-faith-in-shopify-words-change-your-mind/

August 9, 2022 by