The Art of the Apology

As children, we are taught the laws of forgiveness and encouraged to verbalize three simple words that are often the hardest to say, “I am sorry.”No one likes to admit when they’re wrong. It makes us feel vulnerable, exposed, and defenseless. We have a hard time putting down our armor long enough to see what we’ve done to the other person. As we move from the playgrounds of childhood to the “workgrounds” of adulthood, uttering those three words doesn’t get any easier.

Why are apologies important in business? Relationships are the bedrock of your business; and apologies mend relationships damaged by mistrust. Ethics expert Jim Lichtman, as quoted in Why We Talk, commented, “In business and in public life today … the thing you erode away faster than anything else is trust. Once the credibility is gone … you’re going to have to work two, three, four times as hard to get it back.”

This echoes conventional wisdom that it takes years to build up trust, and only seconds to destroy it. With such odds stacked against companies, how can they repair relationships and win back the trust of their customers?

The Power of the Pardon

Jennifer Robbennolt, professor of law and psychology at the University of Illinois College of Law, studied the relationship between apologies and legal settlements. In her experimental study, participants were asked to read a vignette describing an accident in which they were injured in a collision with a bicyclist and offered a settlement that covered their medical expenses.

Robbennolt found that when the bicyclist didn’t apologize, 52 percent of subjects indicated they would accept the monetary settlement. When the bicyclist gave a full apology and took complete responsibility for the accident, 73 percent of subjects accepted the offer (a 21-percentage point increase compared to receiving no apology). More interestingly, when the bicyclist offered a partial apology, expressing sympathy but not accepting fault for the accident, only 35 percent of subjects accepted the settlement.

In other words, full apologies are better than partial apologies, but partial apologies may be worse than no apology at all.

The Art of the Apology

Trusted brands are just as susceptible to lapses in judgment as any another brand. One difference prevails: they’re not afraid to admit when they’re wrong. They acknowledge their offenses, are slow to blame others, and often take full responsibility for their actions. To these brands, nothing less than a full apology will do.

The DVD-by-mail company Netflix sent an email on March 26, 2008 to their customers with the subject line “We’re sorry your DVD was delayed.” Netflix encountered an unexpected problem in their system, delaying their shipment of DVDs by one day. They apologized for the inconvenience, and automatically issued a 5% credit to every customer’s account. Now this minor glitch may have fallen under the customer’s radar, but the admission by Netflix was guided by higher principles of integrity and truthfulness, which further solidified a customer’s sense of loyalty to the brand.

Steve Jobs, CEO of Apple, was bombarded with emails from customers expressing their consternation about the sudden $200 price drop two months after the iPhone hit the market. The die-hard early adopters felt shafted and wanted their voices to be heard. Jobs acknowledged the oversight, “We need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price. Our early customers trusted us, and we must live up to that trust with our actions in moments like these.” Jobs then offered a $100 store credit to those early iPhone buyers, with a sincere apology and a claim for wanting “to do the right thing.”

Southwest Airlines has taken a dynamic approach to handle the myriad frustrations intrinsic to air travel. As Senior Manager of Proactive Customer Communications, Fred Taylor Jr. has mastered the art of the apology. Taylor devotes his workdays finding out how Southwest disappointed its customers—in flight delays, lost luggage, diverted landings—and takes proactive measures to remedy the situation, sending out earnest letters of apology within 76 hours of the event.

Taylor believes that “an apology provides the opportunity to offer the customer an assurance that you care about their feelings.” Taylor threw out the form letter because “cookie-cutter responses water down your product,” and replaced it with a “heartfelt, homespun correspondence” peppered with personal touches.

In a real life example of Robbennolt’s study, Taylor understands that a partial apology doesn’t hold a candle to a full apology, because people, whether a customer or an accident victim, have finely tuned radars for insincerity

It’s those customer service calamities with high emotional impact—laden with frustration, irritation, and anger—that leave an indelible mark in our memories. Yet, companies have a choice. They can get defensive, use denial, play ignorant, or take the higher road and utter those three simple words.

Remember: It’s not just an apology, but an apology that comes straight from the heart, that will be the salve for your transgressions, no matter how big or small.

And yes, apology accepted.

***

See the full experimental study: Robbennolt, J. (2003). Apologies and legal settlement: An empirical examination. Michigan Law Review, Vol. 102, pp. 460-516.

May 20, 2009 by

Please Trust Me: Trust in the Workplace

It has often been said that trust is the critical element of social bonding—the glue that binds relationships.

Taking a sociological perspective, Barbara Misztal explains in her book Trust in Modern Societies that trust has three social implications: 1) it makes social life more predictable, 2) it creates a sense of community, and 3) it allows people to work together. Without trust, social interactions are unpredictable, community building is thwarted, and people are unable to collaborate effectively.

Businesses aggressively strive to establish trust with their customers, but oftentimes neglect the need to cultivate trust in their own workplaces. In their myopia, they create antagonistic work environments with a ‘me versus you’ mentality, where employees feel the constant need to watch their backs. In this space, loyalty, creativity, and innovation are sure to die.

I am reminded of one of my first jobs as a teenager, working in a family-owned framing shop at the local mall. When the owners suspected a thief was lurking among us, they installed a surveillance camera to monitor our every move, without explanation. To add insult to injury, the family would huddle at the back of the store and sit around the television, voyeuristically watching tape after tape of us working. The minimum wage, coupled with the Big Brother culture, created zero commitment to the business. I left the job within a few months. Within a few years, the frame shop went out of business.

Think about how the owners could have chosen the higher path, using the money they spent on the surveillance system and the time they took to watch the videotapes, and invested that back into their workforce. Instead, they succumbed to the trap of conventional wisdom—trust no one, especially not your employees.

Trust Begets Trust

Economist John Helliwell researched the determinants of workplace happiness, and found that trust is the greatest contributor, beating out pay, workload, or perks. A one-point increase on the trust scale can mean the equivalent of the psychological benefits associated with a 40% wage increase. When employees trust their managers, and feelings of trust are extended to co-workers, they tend to be happier. The pay off for managers? More productivity, less turnover, less absenteeism. And when employees are satisfied, customers tend to be satisfied too.

The Container Store, the nation’s leading retailer of storage and organization products, landed its position on Fortune Magazine’s annual list of “100 Best Companies to Work for” for its 9th consecutive year. The company consistently embraces their ‘do unto others’ business philosophy, where trust is foundational at the top levels of management, and penetrates all levels of the organization. With Enron and WorldCom scandals lurking in our collective memories, we as employees expect to remain ignorant and uninformed. In contrast, the Container Store embraces a transparent business philosophy, and makes their financial statements available to everyone in the company. They simply believe that employees have a right to know. In their ‘nothing to hide’ spirit, the Container Store practices values of trustworthiness, starting at the very top.

Like the Container Store, Southwest Airlines proudly takes the higher road with their employees. Under the wings of founder and former chairman Herb Kelleher, Southwest thrived in an industry notorious for low employee morale and bad customer service. He professed, “The only way that you ever get people to respond with trust and fidelity is to treat them as if you trust them and believe they will be faithful … You have to give everyone the opportunity to show their best qualities.”

Other great brands, like DVD-by-mail provider Netflix and the entertaining and educative financial information provider The Motley Fools, expect that their employees will put their best qualities forward. Both offer unusual vacation policies, allowing employees to take whatever time off they need, as long as they get their work done. They not only give employees the freedom and flexibility to choose their work schedules, they also send a powerful message of trust.

In fact, The Motley Fools proclaim, “Just do your job and do it well. We trust you.”

Netflix also tossed out their policy manual on travel expenses, and simply tell employees to “travel as you would on your own nickel.” Netflix doesn’t enforce a per diem rate or impose restrictions on the amount employees can spend on business travel. They trust that their employees will be honest and spend within reason, as marked by the bounds of their conscience.

When companies like Netflix, The Motley Fools, The Container Store, and Southwest Airlines embrace the B-values of truth and honesty, they nurture workplaces empowered by higher principles. Trusted employees pay it forward through first-rate customer service.

It’s not enough to create trust with your customers; you must cultivate the feeling of trust from within your organization. So take an honest look inside. It’s the confluence between the inner and outer expressions of higher values that will ensure your brand’s long-term success.

So what do you say: Are you going to trust me or not?

April 28, 2009 by

It Takes More than Respect to Win Your Customer

Are you on the journey to create a Cult Brand? Then you must understand that respecting the customer is very important. “Treat others as you want to be treated,” As the Golden Rule instructs. It takes a lot more than respect, however, to win the heart of your customers.

Most companies think that showing your customer respect is conveyed in the trade of money for goods that come with a warranty. That barely hits the minimal standard in today’s business world.

Southwest is a great example of how a company can go above and beyond the norm. Southwest Airlines continues to grow its business in a struggling airline industry because they have a commitment to their customer. They respect the customers’ time and money by having on-time arrivals and departures. They respect the customer’s trust by misplacing their luggage. They show the customer love by cultivating an entire company devoted to serving them.

We expressed the love Southwest shows to its customer in our Southwest Airlines Cult Brand Profile: “There’s no hierarchy between pilots and baggage handlers. Everyone is working together to best serve the customer and they’re happy to do it. Not only does their state of mind create a positive atmosphere for the customers, but their efficient, communication-focused approach has resulted in fewer lost bags, fewer delays, and, inevitably, fewer complaints.”

Apple stores are another great example of a brand working hard to respect and care for its customer. Apple assembles an inviting store layout that is easy to browse and interact with products for anyone. They constantly have Mac genius’s looking for people to help with any problem no matter how big or small. The same employee that helps you select your products is the same person helping you checkout, trying to create a more personal experience for the customer. The employee is also ready at a moments notice to help the customer checkout from anywhere in the store to avoid waiting in line. The customer doesn’t even have to worry if they have the receipt in the bag since Apple e-mails a copy to the consumer in case they need to return anything.

The Respect Research Group explains, “Respect seems to denote a characteristic of interaction, which is more than acceptance but does not reach as far as love.” That’s why you must show your customer more than respect. Demonstrate that you love your customer as much as your customer loves you. When you show them love they will begin to feel like they are a part of something more. Eventually, they may even feel like they’re a part of the family. (link to, Apple genius bar helping customer or Mac convention)

Build a brand that operates from love, not fear. Herb Keller, CEO of Southwest Airlines says, “An organization bound by love is far more powerful than one bound by fear.” Don’t be afraid to show more than respect to your customer, empower your employees to serve them and show them love. This will build trust* between your customers and your brand, creating a relationship that benefits all.

* Trust drives sales. If a company loses the customer’s trust, three out of four (76%) say they will simply stop buying from them. Conversely, if a company earns consumer trust, 42% will buy more products and over half (54%) will recommend the product to others. Women in particular believe trust is an essential quality in the companies they buy from (56% of females cite this as important versus 47%). (Source: UK Customer Trust index 2007.)

April 17, 2009 by

Ben & Jerry’s: The Meltdown of a Great Brand

On the last leg of our summer vacation, my sister and I drove to Vermont to visit the Ben & Jerry’s Factory—a place we dreamed about as kids. As we approached Waterbury, our hearts were filled with childlike wonder and our stomachs eagerly anticipated the fill of freshly made ice cream. We would join the other kids, young and old alike, and enter the world of the beloved, spectacle-wearing men of ice cream.

As we reacquainted ourselves with their history on the factory tour, we were reminded of the magic of a once-great brand. Although we knew that Ben & Jerry’s was bought out by Unilever in 2000, we didn’t know how a major corporate buy-out could change everything, until now.

The Ben & Jerry’s Story

Ben & Jerry’s was founded by two regular guys with a passion for making the world a better place. Their quirky, lively, creative, and unconventional approach to business made them the golden cows of the ice cream industry. While most corporations succumbed to the materialism and greed of the 80’s, Ben & Jerry’s took a radically different approach with their socially, ethically, and environmentally responsible principles.

In 1989, Ben & Jerry’s spearheaded efforts to raise concerns about the use of Bovine Growth Hormone (BGH) and its adverse impact on family farming. They also introduced Rainforest Crunch as an ingenious way to support rainforest preservation. Then in 1990, Ben & Jerry’s introduced the heavenly Chocolate Fudge Brownie™ ice cream, made with brownies from the Greyston Bakery in Yonkers, New York—an organization committed to empowering disenfranchised people from the local community.

Even with their hearts set on social causes, they never lost their sense of humor. Ben & Jerry’s leveraged popular culture in a way that few brands could, with their wild flavors named Cherry Garcia®, Phish Food®, Neapolitan Dynamite™, Vermonty Python™, Bohemian Raspberry, Wavy Gravy, and even the Seinfeld-infused Festivus™. When you dive into a pint of Ben & Jerry’s, you become part of their culture, sharing a love of ice cream, with a social conscience and a sweet sense of humor.

After getting a bird’s eye view of the production plant, today churning out thousands of pints of Sweet Cream & Cookies, we arrived at the FlavoRoom to receive our free samples. As we savored every lick of the decadent treat, our tour guide told us that Ben & Jerry’s would be celebrating their 30th birthday. During the Q & A, I asked the tour guide about the celebration and how I could find more information. She looked at me, and said, “Well, it’s only open to employees.”

I raised an eyebrow and became a little curious.

My sister and I walked outside into the blazing afternoon heat, sauntering to the ‘Wall of Fame’ which featured posters chronicling Ben & Jerry’s community events and customer appreciation efforts.

In 1987, Ben & Jerry’s deployed their scoop vehicle to New York City’s Wall Street shortly after the October 19 stock market crash to serve free scoops of ‘That’s Life and Economic Crunch’ ice cream. In 1991, Ben & Jerry’s began its annual series of One World, One Heart Festivals in Vermont, Chicago, and San Francisco, where people convened over music, arts, and social action. Random acts of appreciation were commonplace with their ‘Free Cones for Mothers on Mother’s Day’ and their ‘Dog Day’ event where canine owners could get a free bowl of ice cream for their pooch.

Then there was the buy-out. On April 12, 2000, Ben & Jerry’s was acquired by Unilever for $326 million. Before the acquisition, Ben & Jerry’s catered exquisitely to their Brand Lovers, celebrating their patronage with festivals and customer appreciation days. But now, it’s their 30th birthday, and we weren’t even invited. I later learned that the Birthday Bash, scheduled for October 11th, is open to Vermont residents and only by contest. If you’re the lucky Vermont-residing winner, you can get in on the fun. The rest of us? Well, we can’t even commiserate over a pint of Festivus™ anymore; it’s discontinued.

I contacted the consumer affairs department to find out what happened to their One World, One Heart Festivals. The woman told me they stopped organizing the events several years ago. When I inquired why, she replied, “There were a lot of reasons. You know, we were bought out by Unilever. The staffing. The costs. There were just a lot of reasons.” Enough said.

Sure, Ben & Jerry’s Scoop Shops still uphold the annual tradition of Free Cone Day, where customers can get free scoops of ice cream all day long. They also retained their Annual Free Outdoor Movie Festival at their Waterbury Factory. Most of all, they’re still working hard to remain true to their social, environmental, and economic missions. But the charm and brilliance of their glory days are sadly gone.

Ben & Jerry’s had the makings of a great lifestyle brand, worthy of Cult Brand status. They showed daring and determination; they were inclusive; and they created customer communities. Most of all, Ben & Jerry were familiar friends, who provided comfort and love with a twist of playful humor. Although the consistency and quality of the ice cream may not have changed, the magic behind the brand undoubtedly faded. And yes, I’ll still buy pints of my favorite flavors, but to capture the Ben & Jerry’s experience of my youth remains an elusive endeavor.

April 1, 2009 by

The 7 Principles of Why We Talk

So how do you produce authentic word-of-mouth? You work hard to create amazing experiences for your customers—experiences worth talking about. Here are seven principles to help you better understand your customers’ World of Talk:

1 – The Principle of Integrity: They know that you know that they know

People know you have an intention and that you know that they know you have an intention. What this means from an advertising standpoint is they know you are trying to sell them a product, and they know that you know that they know you’re trying to persuade them. Unless you are very adept at meeting their needs, you’re going to encounter an impenetrable barrier. Don’t think you can deceive them into believing they’re not being coerced into buying a product. Even if you think the advertising is solid, they’re still going to know. People are much better at detecting deception than they are at being the deceiver.

2 – The Principle of Status: People share what makes them look good

Both negative and positive information reflect positively on the person conveying the information, as both are useful to decision-making. Negative information is perhaps more useful because it is perceived as being highly diagnostic. Supplying accurate information benefits the conveyer, as it confers status upon the conveyor. Supplying inaccurate information quickly erodes the reputation of the conveyer.

3 – The Principle of Cool: Ride in front of the “Cool Wave” or wipe out

In the Hypersonic Word-of-Mouth World, the search for cool is quickly focusing on The Ignored. This means if you see something cool today, you can almost bet it’s on its way out and something else will be cool very soon. But remember, in not-too-much-time, that won’t be cool either. Pogs—the milkcap game that originated in the 1920s—reemerged and was all the rage in the early ‘90s, but has now all but disappeared. Technological advances in communication shorten the cycles of “cool.” Listen to your customer. In order to be on top, you must know what’s cool before it becomes cool. Just like a wave, if you jump too late, you’re not going to catch it.

4 – The Principle of Groups: Small groups—the critical few—dictate the large

Customers can be broken down into two subgroups: the trivial many and the critical few. Avoid focusing on the trivial many and find out who comprises your brand’s critical few. They are the ones who truly influence their subcultures. The same principle that applies to individuals applies to groups—you need the influence of many small groups to create a movement.
A small group of particular importance is teenagers. Do not ignore them because they don’t fall within your target demographic; when you’re not looking, they will eat you alive. They are more Internet-savvy than their parents. They know how to access information, and their parents rely on their opinions about purchasing decisions because teens know how to get around on the Internet. In many respects, teens are both the gatekeeper and the bridge to influencing your customer.

5 – The Principle of Influence: Everyone is influential—especially on the Internet

Connectivity changed the landscape of influence. Everyone is able to influence people in some way, on some subject. No one can affect people’s decisions in every category. Those who provide more useful input gain more status, and are more likely to be listened to. Knowledge is power, especially on the Internet, where normal social cues like body expressions and facial reactions are not in place. As a result, anyone can say what he or she is thinking. Comments are judged by their accuracy and value rather than the person’s background.

6 – The Principle of Meaning: People talk about what’s meaningful to them

Listen carefully to the critical few to find out what they care about, and give them something to talk about. If you can find ways to amuse them, surprise them, or give them information that will give them esteem among their peers, they will talk. Everyone else will follow.

7 – The Principle of Surprise: People love to share what surprised them

Never underestimate the power of surprise. Let the consumer discover the best thing about you instead of hearing you shout it from the rooftops.

The above is an excerpt from Why We Talk: The Truth Behind Word-of-Mouth. (c) 2007 by Bolivar J. Bueno.

March 27, 2009 by

The Magic of Mystery

Have you ever heard of the city of Atlantis, the Loch Ness Monster, Big Foot, or the Bermuda Triangle? Of course you have. Why? And why have so many people spent lifetimes exploring these so-called myths, trying to uncover their validity? The common factor woven through all of these stories is that they are endowed with mystery.

Mystery is a key element to all great storytelling, and people love to tell great stories. Hundreds of archaeologists have searched for the lost city of Atlantis, movies have been inspired by it, documentaries continue to be developed, and even psychics have gotten in on it. What is the mystery of their people? Of their lost culture? Of their way of living? Why are we so entranced by something that arguably does not have significant relevance to us? Although our psyche fears the unknown, that fear is balanced by the innate drive of curiosity: we want to uncover the wizard behind the curtain.

Without this element of mystery, our curiosity wanes. When you hear someone say, “I saw the ending coming,” you’re fairly sure they didn’t enjoy the movie, and odds are you probably won’t want to see it either. Mystery is the difference between a Sixth Sense and a Stir of Echoes.

The same principle holds true in business. Bad car dealerships apparently don’t understand the power of mystery. Everyone has heard the car dealership advertisement where nothing is left untold: “No credit, no problem. Every car, every model.”

Great companies, however, find ways to hide certain elements and let their customers discover them on their own. These companies show the tip of the iceberg, but their loyal customers love them because of the depths, which lie beneath the surface of the water.

Not every benefit that your company creates needs to be directly presented to your customer. Even though hiding some of your best attributes may go against conventional wisdom, by allowing your customer to discover certain positive qualities on his or her own you’ll increase the chances of the customer talking positively about you.

Mystery helps provide meaning to your brand; it allows people to learn something about your brand they didn’t know before. If we learn something new about a company that no one else knows, we are more likely to talk. However, if everyone already knows about a particular benefit, there’s no reason to talk about it. We talk and gossip about products, services, and brands because it benefits us; we gain status by providing new information. This basic, biologically-rooted drive helps explain why people naturally talk about that which is mysterious and unknown.

Just look at the word-of-mouth sensation that was (and still is) generated by Dan Brown’s best-seller The Da Vinci Code. This fictional story is chock-full of mystery and controversial talking points. The book tapped into a lot of unknowns and fed our innate drive for curiosity.

Pepsi introduced a dose of mystery when they launched Mountain Dew Code Red. They didn’t start with a full-force, our-ads-everywhere-you-look style campaign, or one anywhere close to it. Instead, they introduced the product into convenience stores, a primary destination for their teenager market, And 1 Mix Tape Tour, and the X Games, allowing teenagers to discover the product for themselves, in their own environment. And, they shared it with their friends, who didn’t get there first.

There are two things sure to kill word-of-mouth: (1) everyone knowing the secret or (2) no one caring about the secret. An almost cliché example would be the popular book/film The Secret, which again plays on the basic human need of curiosity. What is the Secret? Because the movie seems to have a secret that appears to be useful and beneficial, people continue to talk about it and we hear about it in the media. If the film was without substance (i.e., no secret), then people wouldn’t have even started talking. Because there was something of substance, Oprah and her weekly 49 million viewers spent a show talking about the practical applications of “The Secret.”

Three Ways to Create Mystery:

So what are some ways you can add mystery to your brand’s efforts?

  • Don’t say every benefit about your business in every business communication. If everyone already knows everything about you, they won’t have anything to tell their friends that their friends don’t already know, aside from how you may not have fully met their expectations.
  • Break a standard rule in your industry. Think back to the standard airline attire that flight attendants used to wear. Then Southwest Airlines breaks the rule and let’s their flight attendants wear shorts, a trademark feature of the airlines.
  • Steal one from your customers. Listen in to what your customers are suggesting and surprise them by actually doing it.

So if you want your customers to talk about you, surprise them. Delight them. Let them discover you on a totally new level. In essence, give your customers a reason to talk about you.

Learn more about the principle of surprise and the other six principles of Talk in Why We Talk: The Truth Behind Word-of-Mouth.

March 27, 2009 by

Beware of “Word-Of-Mouth Marketer”

Talk is cheap. Gossip is priceless. And while manipulated talk can be useful if you’re selling a film or a novelty that doesn’t need any staying power, it’s practically worthless if you’re hoping to build a brand.

Yet Word-of-Mouth (WOM) Marketing has become all the rage, with “water- cooler talk” becoming a barometer companies use to judge the success of their marketing and advertising campaigns. What were our numbers yesterday? How can we improve them today? If we can’t meet the short-term goals, who cares about the future? Unfortunately, these companies haven’t stopped to consider how driving short-term numbers may be killing their opportunity for long-term success.

Word-of-mouth is like any other form of media. Television is favored for its combination of sight and sound. Billboards are revered for their stopping power, print for its permanency. All forms of media, including word-of-mouth, disseminate information. Word-of-mouth is different from all other forms of media, however, because it is owned by the consumer. They control its content.

Some word-of-mouth marketers claim you benefit from word-of-mouth during specific windows of opportunity. That’s nonsense. Promotions and events have windows; brands have permanence. As long as consumers are benefiting from a relevant experience with the brand, they will talk. Consumers don’t need to be given a marketing cue card; they need an environment that allows them to draw their own conclusions and to define their own experience.

The problem with modern marketing is its overwhelming urge to quantify everything. If it can be measured, you can charge for it, and yes, size does matter: the bigger the measurable impact, the larger the monetary compensation for generating the result. The newest playground for metric maniacs is word-of-mouth marketing. The Word-of-Mouth Marketing Association declared in 2005 that it was now using word-of-mouth units to measure the effect of word-of-mouth on ROI. This is further proof that, to its own detriment, marketing has evolved into an industry more focused on making short-term money than on making long-term sense.

Numerous books on poker have been written to teach players the best ways to behave in certain situations, based on available statistics. However, watch any game and you’ll see that even experts stray from these rules. Why? Because the players in the game aren’t playing statistics, they’re playing other people. The best way to play isn’t always revealed by statistics.

Statistics reveal a glimpse of where people are, but they don’t tell you where people are going or how they will get there. It’s one thing to know what movies are making the most money, but that’s not the same as predicting which ones are going to make the most money. If someone could forecast that, the movie studios would be a lot happier.

Look at what’s happening: Big brands are paying big money to create “buzz” about their products. These companies then insist they don’t pay people to talk, which technically is true—they only give their “buzz” agents free products, coupons, and “points” if they do their homework and report back to the mother ship.

What do you think happens when the buzz campaign ends? Do you really think consumers keep yakking about a product when the incentive to do so disappears? Worse yet, the next product sample shows up in the mail and they’re asked to buzz on a new client’s behalf. That’s not pure word-of-mouth. It’s promotion attempting to use word-of-mouth as a media vehicle, which is no different than using radio, television, or direct mail. Ultimately, it runs into a dead end and is enormously risky for companies wanting to build lasting brands.

Promoting products is a totally different discipline than creating brands. True word-of-mouth is totally different than word-of-mouth marketing. Marketers are in control of communicating a message, but consumers are in control of building brands.

So pick your poison. If you want to sell product in the short term and aren’t worried about building a brand, if you’ve exhausted every other medium known to mankind, pick up the phone and call any of the self-proclaimed word-of-mouth marketers and buzz practitioners. They’ve got the metrics on their side.

But be cautioned: Once you pollute the word-of-mouth pipeline, there’s no turning back. If you’re marketing movies, selling novelties or liquidating books, have at it—these things are not likely to become brands and you will not need the power of word-of-mouth in its purest form. If you are relying on the consumer to turn you into a brand that is embraced by a legion of loyal evangelists, however, don’t pollute the best marketing tool ever to roam God’s green earth.

The above is an excerpt from Why We Talk: The Truth Behind Word-of-Mouth. (c) 2007 by Bolivar J. Bueno.

March 27, 2009 by

A Call for Freedom

Greek historian Thycydides aptly noted, “The secret of happiness is freedom. The secret of freedom is courage.” Choice is the act of making a decision. But it’s more than that. Choice, by enhancing one’s perception of control and freedom, can increase one’s sense of happiness.

The Psychology of Freedom

In 1975, Ellen Langer and Judith Rodin conducted their seminal study on the effects of enhanced personal responsibility and choice.

They gave residents on one floor of a nursing home (the experimental group) messages that emphasized their sense of personal responsibility. They had the choice to decide which movie night they would attend, if they chose to attend at all. They also received a plant and given the choice to take care of it themselves.

Residents on a different floor (the control group) were given communication that stressed the staff’s responsibility for them. These residents were told which movie night they were scheduled to attend. They too received a plant, but were told that the nurses were responsible for watering and caring for it.

Results of the study found that, compared to the control group, residents with more personal responsibility reported significantly greater increases in happiness; they were more active and alert; and their movie attendance was higher. A year and a half later, they were still doing better, and their mortality rate was half that of the residents in the control group.

Rules, Rules, Rules

Many of us can relate to the feeling of being in an institution without any perception of control. Remember that job when you were required to punch in and out of a time clock? What about those times when you couldn’t leave the office a minute early, impatiently waiting for the 5 o’clock hour to strike like a school kid waiting for the 3 o’clock bell?

I bet those jobs didn’t bring a great deal of satisfaction or happiness to your life. It’s the ball-and-chain mentality that continues to plague our attitude towards work. We’re bound by rules all day, which are detailed in employee handbooks and passed around in memos, written in a don’t-do-this-don’t-do-that type of prose. We graduate from high school, experience a few years of freedom in college, only to return to the jailhouse mindset of the working world.

Goodbye Rules, Hello Freedom

Like the experimental group in Langer & Rodin’s classic study, several companies who follow the principles of Cult Branding are embracing a radical new way of promoting freedom and personal responsibility in the workplace.

Best Buy, the nation’s leading electronics retailer, transformed their work culture by implementing ROWE, “Results-Only Work Environment,” where there are no mandatory business meetings and no set schedules. Under this new model, performance is based on output instead of the number of hours clocked at the office.

At Best Buy, you can leave the office at 3 o’clock to pick up your kids, take a two-hour work break to go grocery shopping, or not come in at all. People have the freedom to work whenever and wherever they want—at home, in a coffee shop, or on the beach. Jody Thompson, ROWE’s co-founder calls it “TiVo for your work.” The results? Some ROWE teams report that voluntary turnover rates have decreased by as much as 90%, and on average, ROWE teams have demonstrated a 41% increase in productivity.

Last year, DVD-by-mail shop Netflix made a similar unprecedented move among large companies and declared their new vacation policy for salaried employees, an oxymoron really, in that it’s more of a non-policy. It’s simple: Take as much time off, as long as you get your work done.

Netflix explicitly states on their website, “Rules annoy us. We believe in freedom and responsibility, not rules.” They explain that rules inhibit creativity and entrepreneurship, which inevitably leads to a lack of innovation. Without innovation to drive business forward, everyone suffers. The answer? Take care of your employees, foster freedom and control in the workplace, and they’ll give you their best work.

Netflix CEO Reed Hastings calls face-time requirements and vacation limits “a relic of the industrial age.” The “culture of autonomy” is reflected in Hastings’ original vision: “We want our employees to have great freedom—freedom to be brilliant or freedom to make mistakes.”

Like Netflix, financial information provider The Motley Fools embraces this radical vacation policy. In their “work and have a life too” philosophy, they encourage employees to “do an amazing job and take the time you need.” The Fools take pride in their unpretentious workplace where suits, neckties, and pantyhose are artifacts of the past. They have a game room on their premises, which is always open, and they explicitly tell their employees to “take the time to shop online.” What other company do you know encourages employees to take advantage of corporate time for personal use?

In the Cult Branding Workbook, BJ Bueno explains the need to “Sell-In to Your Internal Team.” To sell-in, companies must create a vision that the entire organization can be passionate about. If you pride yourself on upholding B-values like truth and autonomy, those values must be embraced at the organizational level. When these values permeate the entire culture, you have happier and more productive employees who will ultimately serve your customers, the way you serve your employees.

Foolish practice? We don’t think so.

See the full article about Best Buy’s ROWE program in Business Week.

See the full article about Netflix’s Vacation Policy in the Oakland Tribune.

The original psychological study can be found at:
Langer, E. J., & Rodin, J. (1975). The effects of choice and enhanced personal responsibility for the aged: A field experiment in an institutional setting. Journal of Personality & Social Psychology, 34 (2), 191-198.

 

March 24, 2009 by

Customer Loyalty Research Consultancy Unveils New Brand Model for the Retail Sector

Innovative brand model uncovers the psychological motivators that drive the purchase behavior of large businesses’ most profitable customers.

Orlando, Florida, March 18, 2009 – The Cult Branding Company, a premier brand loyalty research firm led by brand strategist BJ Bueno, recently unveiled a new innovative brand model. Dubbed “Brand Lover Model 2.0,” this complex methodology centers on uncovering a business’s best customers, or Brand Lovers.

“Smart retailers know that brand loyalty is the primary driver of profitability,” Bueno explains, “but unraveling the loyalty code has, until now, remained elusive.” To uncover the reasons why some customers build long-lasting relationships with certain brands, Bueno and his team borrowed tools and insights from humanistic psychology, psychoanalysis and comparative mythology.

“Brand Lover Model 2.0 helps retailers decode the key psychological drivers of a business’s best customers,” says Bueno. This comprehensive qualitative and quantitative analysis takes approximately 90 days, limiting the number of clients the 9-person Orlando-based firm can serve each year.

Numerous successful businesses are embracing the Brand Lover Model, including Kohl’s Department Stores, Scheels and Turner Classic Movies (TCM).

ABOUT BJ BUENO – Branding strategist, lecturer, and author BJ Bueno pioneered the Cult Branding concept for marketers, documenting his research as the co-author of the highly-acclaimed The Power of Cult Branding(Random House, 2002). Bueno advises major retailers as a board member of the Retail Advertising & Marketing Association (RAMA) and a member of the Chief Marketing Officers board for international retailers.

ABOUT THE CULT BRANDING COMPANY – The Cult Branding Company is the recognized leader in cultivating authentic customer loyalty. Using its trademarked Brand Lover Model 2.0, The Cult Branding Company helps businesses understand, connect and serve their best customers. Visit: cultbranding.com/blog.

March 19, 2009 by

Making the Case: Nintendo

It’s significantly slower than competing system. It has less graphic capabilities. Its controller is reminiscent of game play circa 1985. Yet, it has outsold all next-generation video game systems.

Nintendo has dominated the video game world because it isn’t exclusively for gamers; it’s exclusively for anyone that wants to have fun. Showing the Rule of Openness, Nintendo’s aim has always been to make gaming fun, for people age 0 to 100.

Even prior to the 2005 launch of the Wii, Nintendo was no new comer to the field of gaming. Since the emergence of Nintendo’s first video game counsel, the Nintendo Entertainment System (NES), they have kept a clear focus on making clean, simple, and fun games anyone can play. With perennial classics like Super Mario Bros and Duck hunt, anyone in the family can play video games. By 1995, over 62 million NES systems and 500 million games had been sold.

Nintendo released many different gaming systems over the last two decades. Through its metamorphosis, Nintendo has always kept their brand strong and relevant to the consumer by focusing on fun and lovable characters. Game characters such as Link, Donkey Kong, and of course, Mario have always been a key ingredient of Nintendo’s success. These friendly characters have been featured in every Nintendo system and have become a part of celebrated gaming history.

As of September 2006, Nintendo had sold 275 million Mario games worldwide, easily making the little Italian plumber the best-selling game character of all time. This level of commitment to the brand and its characters has kept Nintendo as one of the top choices and must-have video game systems. With raving fans the world over, it is hard not to believe Nintendo has created a community in love with them.

As Nintendo continues developing new video games and systems, two things are always at the forefront of their efforts: fun and easy to use.

Nintendo’s release of the Wii seemed like a profoundly risky move, but all Cult Brands show courage. With a slower processor and simplistic graphics, many critics and market analysts didn’t see how the Wii could effectively compete with the more powerful gaming platforms offered by Microsoft’s Xbox and Sony’s Playstation3. With over 10 million units sold, however, Nintendo is reigning supreme over its more expensive competitors.

By making the Wii a gaming system for everyone, Nintendo has created a new video game frenzy with its motion detecting controller. “While game consoles typically attract young males, the Wii is bringing people across all demographics together: in nursing homes, for Wii bowling leagues, on cruise ships, Wii-themed parties and, of course, in lines – as hordes of consumers clamor to buy the impossible-to-find $250 machine. Nintendo is churning out over a million units a month and still can’t meet demand.” (money.cnn) Nintendo did not only create a video game system, like all cult brands they have created a lifestyle.

Nintendo’s constant strives to make video games easy, fun, and accessible to all have really paid off. While others video game systems have focused all their energy on graphics and fast processors, Nintendo has focused on what is important: making sure their customers have fun. By following the Golden Rules embraced by all Cult Brands, they have cultivated relationships that can last a lifetime.

Where to go from here
February 24, 2009 by