Browsing Tag

Brand Modeling

Being the Apple of Their Eye

PhotobucketBy now you’ve heard the news that Apple has been recognized as the world’s largest company. We can’t say we’re surprised. We’ve been fans of Apple for years. Our enthusiasm isn’t tech-based (although we love our iGadgetry as much as anyone), but is instead borne out of the intensely intimate focus Apple has on understanding and serving their best customers.

The Power of a Cult Brand

Ask any analyst or industry insider what Apple sells, and they’ll rattle off a list of items: the iPhone, the iPad, the Mac. They’re all right, and they’re all wrong. What Apple really sells, and the reason why Steve Jobs was able to steer the organization to such a dominant position, is creative empowerment.

Human beings are complex creatures. We like to think we’re logical, and that all of our decision making comes from a rational, objective place. What Apple, and other dominant organizations like Harley Davidson, Ikea, and Nike—companies we call Cult Brands—realize is that while logical considerations certainly have some weight, they’re hardly the most pressing factors guiding consumer decisions. The feelings and emotional associations consumers have with your brand is the ultimate driver of purchasing behavior and enduring customer loyalty.

In many ways, the consumer views brands the same way they consider their own personal wardrobe. They choose outfits for many reasons: to project a particular image, to attract others, to express their personality—clothing is, ultimately, an expression of identity. They form brand relationships the same way, choosing the organizations they view as the best extension of their selves.

No one stands in line for three days to buy a cell phone because it offers better coverage or has a longer battery life. People stand in line for three days to buy a cell phone because they love the way it makes them feel.

Apple commands fanatical loyalty because they’ve identified and found a way to represent what many, many people consider an integral part of their very best self. This best self is creative, focused on appreciating beauty in many forms. This best self is social, centered on connecting with friends. This best self is generous, sharing everything from personally penned profound thoughts to funny pictures snapped on vacation. Unconsciously or consciously, most of Apple’s customers believe that they are already creative, social, and generous. Unconsciously, they believe that owning an Apple product makes them more so.

If you’re going to be a dominant organization, you need to know, intimately and in great detail, who your customer’s best self is. Delving into and defining the qualities they see as most important in themselves (a process we call Brand Modeling) will help you understand the qualities and type of experience they want from you. Apple does this at every touch point, on and off line. That’s not saying they do everything perfectly; there are always bugs to be discovered. But they address the imperfections in a way that their best customer’s best selves recognize and appreciate.

One is left to wonder what’s left for Apple. After you become the biggest brand in the world, what’s left?

August 28, 2012 by

Playing Chicken With Your Brand: The Need for Authenticity

If we ever needed an illustration of how social media has changed the dynamic of corporate communications, we need look no further than Chick-fil-A.

It’s no secret that the leadership of the quick-service chicken chain is openly hostile towards same-sex marriage; they donate millions of dollars to anti-gay organizations. Dan Cathy, son of the founder, uses what he calls Biblical principles to run the business. The restaurant is not open on Sunday; they operate debt-free.

How does this play out on social media?

Putting the Social in Social Media

We talk a lot here about the need to belong, and why participating in groups is so important to people. Right now, let’s talk about the mechanics of how people get into groups in the first place, and what they do to stay well-positioned in the group, once they’re in.

Groups are formed by affinity; like-minded people gravitate toward each other. One way for the individual to be welcomed into the group is to announce they have the same values and beliefs as the rest of the group. Chick-fil-A does an exceptional job articulating its organizational values to the public. Customers who find these values in alignment with their own will favor Chick-fil-A. Customers who find these values counter to their own obviously will not.

Social media provides the platform where groups form and engage with each other. After Dan Cathy’s statements confirming the organization’s committed negative stand on same-sex marriage, the Jim Henson Company decided it no longer wanted to work with Chick-fil-A. They made their decision public on Facebook.

In response, the next day, Chick-fil-A posted paper signs in their franchises, announcing Jim Henson toys would no longer be available at Chick-fil-A due to a mysterious safety recall.

That’s the type of incredible coincidence the internet just loves. Gossip and speculation flew faster than the speed of light. There are countless articles, blog posts, and social media postings questioning the sincerity of this voluntary recall. Chick-fil-A did not present as credible. The bad impression compounded when it became obvious that someone was manufacturing sock puppet Facebook accounts to defend the brand.

It did not help matters that the Consumer Safety Protection Commission has reported no known safety issues with the puppets.  The CSPC is the governmental agency that usually handles this sort of thing.

It’s hard to be taken seriously as an organization guided by Biblical principals when you look like you’re bearing false witness. This, more than anything, is what may do real, lasting damage to Chick-fil-A’s brand equity. People believe what they believe about equal rights for all: a chicken restaurant is not going to change their mind—no matter how good those Waffle Fries are!

But now an element of doubt has been introduced into the equation. Chick-fil-A’s biggest fans (the people we’d call their Brand Lovers: the most profitable, engaged customers) and those who are favorable toward the brand are faced with uncomfortable questions.

An Alignment of Values

Were they lied to? And if they were, why? The customers who adhere to this brand and its values are not people who would leave over a forthright statement that acknowledged that the chicken restaurant parted ways with the Jim Henson company over political differences.  Lying is bad enough.  Lying for no discernible reason is worse.

Not every Chick-fil-A customer will ask these questions.  But some of them will, and they’ll talk to their family and friends. Brands are built on trust between the customer and the organization. There is a vital and critical sense that the values of the brand are in alignment with those of the the customer.  Right now, Chick-fil-A’s knocked the cart right off the rails. Even if they’re not lying, it looks like they are.

It’s obviously a tumultuous time at the company. Don Perry, VP of Public Relations, recently died. To move forward, especially in the arena of social media, it’s essential that the brand focus on bringing its actions back into alignment with the values their customers know and expect. Honesty is the best policy. And in today’s fast paced social media environment, verifiable honesty is even better.

What do you think? What advice would you give Chick-fil-A as they move forward?

August 8, 2012 by

Beyond Batman: Understanding The Events That Shape Our Customers

We join with the world in sorrow and grief over the Aurora, Colorado massacre.

As a culture, we’ll be a long time figuring out what went wrong, and why. As business leaders, we have to understand the impact of events like this have on our customers.

For the owners of movie theaters, this is a huge and immediate concern. But what does it mean for the rest of us? You may not think there’s an immediate connection. If you’re selling women’s clothes or automobiles or the finest financial planning instruments, at this point, you’re thinking, “Exactly what does this horrible shooting have to do with my customer base?”

Culture, Community, and The Ties That Bind

We’ve talked before about the fact that our customers don’t exist in isolation. Approaching business from a humanistic perspective means understanding that we’re all connected: every single customer is part of a family, a neighborhood, a larger culture. The groups we belong to partly define us. Our behaviors, decisions, and world views are partly shaped by the behaviors, decisions, and world views of the people we associate with.

It’s important to remember that systems—all systems, every system—move inevitably from stability to instability. Entropy is a universal force. Things come undone. We see this on the physical level as well as the social level.  Once great institutions—the central forces that guided and shaped every decision that people made—are not so powerful anymore.

People no longer identify as strongly or as wholly with their church, country, or community as they once did.  This process can take place over the course of time—an in-depth examination of American Catholicism is a good example here—or it can happen very rapidly. How many people applying to work for your organization this week are going to have Penn State proudly listed at the top of their resume?

The groups may falter and fail, but the need to belong remains. Let’s bring our attention back to Aurora for a moment. Examining the coverage of this horrific event reveals one surprisingly strong narrative thread: outrage that this shooting happened specifically in a movie theater. People go to the movies to be entertained, surely, but they go for other reasons: to be anonymous in the audience, free from the responsibility to be aware of and engaged with others, and to give over one’s attention wholly to a story. The setting may be secular, but the experience is close to sacred. To be violated here, in this fashion, is not a trivial thing.

Right now, our customers are largely conscious of this. We know a woman who told her mother she was going to a midnight showing of Batman, to show solidarity with and compassion for the Aurora victims. Her mother’s advice? Wear sensible shoes. Just in case you have to run. You never know.

A year from now, two years from now, those words may have faded, but the sentiment will remain, tucked away in the collective unconscious of our customers. The spaces we assumed were special and sacred, different from the rest of the world and free from the world’s worries, aren’t, really. This will shape their decision making in new and complex ways. We see this after every large scale traumatic event, even if it appears that our customers aren’t directly affected.

It is our role, as business leaders invested in providing superior service to our customer base, to be aware of the changes in group behavior. Some people are going to buy running shoes in the wake of Aurora. Some people are going to buy guns. What about your customers? You need to know what they’re are going to do and why they’re going to do it. That’s the type of awareness that separates leading organizations from the rest of the pack.

July 24, 2012 by

Up In Smoke: What To Do When Your Market Disappears

Last week, we talked about a powerful Thai campaign designed to encourage people to stop smoking. There are lots of people who get pretty happy when folks kick the cancer-causing habit, but we have to admit that the sentiment is hardly universal.

Tobacco farmers aren’t big fans of the stop-smoking movement, as you might expect. Fewer smokers means a smaller market for their crop.  Other companies are feeling the pinch too. Cigarette and pipe manufacturers, ash tray makers, and lighter companies are all experiencing dramatically declining domestic sales.

What’s going to happen to these brands if the whole planet eventually goes smoke free?

Let’s look to history for some answers. After all, it’s not the first time consumer demand for a product has dropped off precipitously. Markets can and do disappear.  Have you tried to buy an 8-track player recently? Good luck with that. The same thing can be said for floppy disks and manual typewriters. Try locating a pay phone somewhere near you. It might take a while.

When a market disappears, the companies that depended upon that market tend to choose from three options. One option is to hang in there, catering to the nostalgic customer. Markets never disappear entirely. Did you know that there are still zeppelin manufacturers? Another option is to go out of business entirely, and a third option, far more popular, is to stay in business but change what you do. The Royal Typewriter company, for example, today specializes in consumer information technology, including cash registers, shredders, and copier supplies.

Understanding Your Customer’s Unconscious Expands Opportunities

There is another option for companies facing a dwindling marketplace, but it’s only open to those brands who have a deep and comprehensive understanding of the unconscious psychological motivators that drives their customers to choose them over all other competing brands. In this strategy, you continue to do what you do, but you present it to your customers in a whole new way.

For example, let’s look at Zippo. Full disclosure: we wrote about Zippo in Customers First, discussing their dubious brand extension into the world of fine fragrances. Now, however, we think the brand is on the right track as they embrace a new strategy.

Zippo built their brand by positioning themselves as the lighter of choice for the rugged, resourceful man. Their customers saw themselves as can-do guys, who wouldn’t let something like a little bit of wind stop them from enjoying a cigarette when they wanted one—or from being there for a damsel in distress who needed a light.

That wasn’t all. Zippo lighters made it possible for the average Joe to tap into his inner MacGyver. Portable, dependable fire is a handy tool to have. You can start a signal fire. You can smooth the end of a fringed, frayed rope. In a pinch, you can warm canned food with a lighter. In a really bad pinch, you can even cauterize a wound—although we, ourselves, would never recommend such a thing!

Zippo understands that their best customers may never, in fact, use their lighters to do any of these things. Chances are that they’re much more Yogi Bear than Bear Grylls. That doesn’t matter. They’re far more likely to do these things than they are to smoke, and having a Zippo makes it possible.  What Zippo is selling here is empowerment. When a man uses a Zippo, he’s able to connect with a powerful archetypal masculine image that resonates on a deep and primal level. It’s a tangible way for consumers to connect with an internalized vision of their best self.

You’re just not going to get that from flicking your Bic. We’ll see what happens over the coming years.  We’re fairly confident that the smoke-free trend is going to continue. Habits change, even deeply ingrained habits like smoking. But unconscious psychological motivators? Those are constants—and those constants can be used to ensure brand longevity, even when an entire market goes up in smoke.

July 10, 2012 by

Hungry Like the Wolf: Winning the Battle of the Bands

What do you call a brand that has enjoyed long-term success, remaining profitable and vibrant for over 30 years, while the vast majority of their early competition struggles for relevancy?

In the music world, you’d call that brand Duran Duran. Get ready for your 80’s flashback! We’re going to talk about what it takes to create enduring customer loyalty.

What Happens Tomorrow: The Evolution of a Brand

In the 1980’s, Duran Duran was hitting every note perfectly. They were one of the most successful bands of the decade. Fans loved their New Romantic sound. The fact they were the prettiest boys in rock didn’t exactly hurt the situation.

Fashions change, and the fashions in music change faster than most. The collective soundtrack started getting a harder, edgier sound—the first whiffs of Grunge were riding on the wind—and the members of Duran Duran did a very smart thing. They recognized who their very best, most loyal fans were, and they made a substantial commitment to connecting very closely with those fans.

Dominant organizations win because they identify what it is their customers value most about interacting with their brand and then deliver exactly those things comprehensively and consistently.

For Duran Duran, it turned out that what the fans valued most is interaction with the band members and special access. The band provides these things: they recently put on a mystery show in NYC with free tickets for the most ardent fans, and they maintain an impressive social media presence, including a membership site where exclusive photos, videos, and music is posted. Band members share their birthday celebrations with the fans.  There are members-only contests to win autographed copies of music magazines.

Understanding the Peak Emotional Experience

It all has a very gushy, over-the-top Tiger Beat feel. That’s the point! Key to the band’s enduring popularity is understanding the peak emotional experience the fan is looking for.  It’s not enough to hear Hungry Like The Wolf one more time. Repetition of a product is not enough to sustain a relationship. Duran Duran’s fans want to feel the way they felt when they heard the song for the very first time, when the lyrics and beat delivered an intoxicating message designed only for their ears.

Social media has made it much easier for Duran Duran—and any other brand that wants to create sustainable customer loyalty—to connect with their customers. 860,000 Facebook fans are the first to hear news about the band. There are behind the scenes rehearsal pictures, live-blogged media appearances, and more. These efforts help the band’s best fans feel like they have a special status. They belong to the Duran Duran community. They’re heavily invested in the band—most fans have been to multiple concerts and purchase all available music—and the band is diligent and committed to maintaining that connection.

They know that if they keep providing their fans with the peak emotional experience, the fans will keep coming back. They know this because it’s worked for them for 30 years.  Is it great music? We don’t know, but it’s definitely good business!

June 21, 2012 by

Does Robin Hood Go To Starbucks? A Little Matter of Coffee Mugs

In Customers First, we talk about Starbucks and some of the ways that the brand appeared to be heading off track.  It’s only right and fair that we should raise our coffee mugs and salute Starbucks when they get it right.

Check out this NY Times article about Starbucks’ decision to source their coffee mugs domestically.  It’s the tale of how Starbucks, a company with 200,000 employees, started doing business with American Mug. Here’s the Cliff Notes version:

American Mug was a company that was headed toward closure.

American Mug was a company that was headed toward closure in a town full of businesses that were similarly in trouble—or already closed.

American Mug is a ceramics company. The ceramics industry has floundering badly domestically due to competition with China.

Starbucks chose American Mug as their supplier rather than go with a Chinese source even though the American-made mugs are more expensive.

Do you see what they did there?

Right in front of your very eyes, Starbucks has tapped into the power of a contemporary cultural story and leveraged it to strengthen their brand dominance and customer loyalty.

Let’s talk about that contemporary cultural story bit first. As people, we all experience problems—all kinds of problems, all of the time. We have big problems and little problems. We have problems that affect us very, very personally, and some that don’t seem to bother us at all. We identify with the problems of others—of our friends and neighbors, colleagues and countrymen.

All of these problems create a level of tension within us. Tension is no fun. It makes us uncomfortable. It makes us unhappy. We’re strongly motivated to relieve these tensions and we’re keenly aware of and generally resentful about situations where we feel ourselves powerless to effect any type of change that would relieve the tension we’re experiencing. It’s the drive to relieve tension that causes us to seek solutions to our problems.

Cultural stories are the narratives we’ve built up collectively to record and relay relevant information about the best way problems can be solved. Cultural stories contain the solutions to problems, acting as a guide that we can use when making decisions.

Robin Hood and Starbucks

In a time of great hardship and gross economic disparity, people embraced the tale of Robin Hood. He took from the rich, especially those deemed to have wealth unjustly, and gave to the deserving and virtuous poor. Cultural stories are extremely powerful forces in a society. It’s important to understand how these tales influence the listener. Does exposure to Robin Hood result in generations of children who grew up to be bandits? Or do we get, instead, generations of children committed to the idea that inequality must be challenged?

If we look at British society today, and we look at British society at the time when Robin Hood tales were first told, we see that while the situation is by no means perfect, things are a whole lot more equal than they used to be. The arrow may not have hit a utopian bullseye, but it’s on the target.

When we talk about contemporary cultural stories, we’re talking about the tensions and pressures our customers are experiencing right now.

Starbucks’ best customers are feeling a sense of economic oppression right now. Even if they aren’t in a tough situation themselves, they know and easily identify with people who are. This creates an internal tension: anxiety and worry about one’s economic security is very unpleasant. We are strongly motivated to resolve our internal tensions, but who do you blame for an omnipresent sense of economic peril?

There are a lot of answers to that question, but “Unfair Competition From China” is a very, very popular one. Unfortunately, there’s not much one person, as an individual consumer, can do to impact the balance of global trade. This adds a sense of hopelessness and frustration to the internal tension.

And here comes Starbucks to save the day. Like Robin Hood, they snatch up the gem—the lucrative mug contract—from the Chinese, perceived to be unjustly rich in terms of manufacturing contracts, and award it to the struggling American industry. They’re the hero in this coffee talk.

For the typical Starbucks customer, the mug sourcing change will not affect their lives in any concrete way whatsoever. But by frequenting Starbucks, and allying themselves with the brand, these customers now have their chance to stand up and join with Robin Hood. They’re supporting the company that’s fighting back against China—and they can do it without making any change in a routine they already enjoy. They become heroic by association.

It’s a smart strategy.  To be a hero is a noble thing, an appealing prospect. When we act heroically, we feel better about ourselves. We like who we are. Starbucks has created a way for their customers to tap into that powerful emotional experience vicariously. We think it’s a good move, in the right direction.  What do you think?

June 13, 2012 by

Some of Our Best Friends Are Zombies: The Value of Brand Modeling When Facing a PR Disaster

It’s all fun and games until someone loses an eye!

It was almost a year ago when we wrote this post, highlighting an innovative, effective emergency preparedness educational campaign from the Center for Disease Control.

In an effort to get people to stock up on bottled water, first aid supplies, and other hurricane-season necessities, the CDC urged people to prepare for the most outlandish of possibilities: a zombie apocalypse.

The campaign was very obviously tongue in cheek. But then this happened, and this happened, and this happened. (Warning: don’t read if you’ve got a squeamish stomach!)

Suddenly, the prospect of a zombie apocalypse doesn’t seem so laughable anymore. People are starting to get freaked out. CDC spokesman David Daigle made it clear to the Huffington Post that the “CDC does not know of a virus or condition that would reanimate the dead,” a story that has been picked up by countless media outlets as an official denial of zombies.

The CDC did what it had to do in this situation: answer questions promptly and as completely as possible with scientifically accurate, verifiable information. By providing this information and calming fear, the CDC was fulfilling the community  need for an authoritative voice on public health concerns—even the most ludicrous!

This is in alignment with their Brand Vision, and is, as such, a good decision. Barring the appearance of an actual zombie-causing virus, they’re off the hook from a PR perspective. Almost everyone believes that zombies aren’t real, and it appears that excessive drug use was far more to blame for these gruesome incidents than any potential pathogen.

But sometimes the things that go bump in the night are real. Every organization lives with the possibility of some unforeseen event causing the media to call with all sorts of complicated questions.  What’s the best way to handle these situations? Brand Modeling provides the answers.

Brand Modeling: For Bad Days and Blunders

Some day, somebody who works for your organization is going to screw things up. They’ll say the wrong thing, to the wrong person, at exactly the wrong time. You’ll be let down by your merchandise, or get caught up in a political firestorm, or make a change you think is amazing but that your customer base hates with the passion of a thousand fiery suns. (Reed Hastings, are you even listening?) Bad things happen.

It’s how organizations react to those bad things that separates the dominant organizations from every other company out there. Being on top doesn’t mean your brand never makes mistakes. Ask Apple about that. They’ve had amazing successes—and they’ve had CEO Steve Jobs on stage explaining “We’re not perfect” just days after the eagerly anticipated iPhone 4 failed to amaze.

Instead, dominant organizations thrive because they address even the largest PR disasters in a fashion that fulfills their customers expectations of how the brand should act in an awkward situation. These nuanced expectations are revealed throughout the process of Brand Modeling, which couples in-depth understanding of the unconscious cultural and psychological forces driving consumer behavior with objective analytical tools. When the model is complete, it becomes possible to predict, with a high degree of certainty, how your best customers will respond to anything you do—from opening a new location through handling the bad days and blunders that every company experiences.

There’s a significant competitive advantage to be found in the ability to predict customer behavior. When you know ahead of time what type of response your best customers will appreciate the most, you know what approach to take when responding to your PR crisis. This allows you to continually build customer loyalty and strengthen the bonds the public has with your brand.  It really works.  As our zombie-loving friends at the CDC would say, “That’s what happens when you use your braaaaaaaaaaaaaaaaaaaiiiiiiiiiiiiiinnnnnnnnnnns!”

June 6, 2012 by

GM’s Shifting Social Media Strategy: Is Dropping Facebook Ads a Smart Move?

The news that GM has decided to stop using paid Facebook advertising has created a big buzz. If the nation’s third largest advertiser isn’t getting enough bang for their buck from Facebook ads, the conversation goes, what does that mean for the rest of us?

GM reportedly spends approximately $40 million on Facebook. 75% of that investment is devoted to monitoring and maintaining GM’s Facebook presence, through the organization’s Facebook page. The remaining 25%, $10 million dollars, was going toward paid advertising.

Coming days before Facebook’s IPO, this announcement has left many people wondering if the social networking site’s financial model has a fatal flaw. Revenue projections based on increasing revenue from advertising may not bear fruit if dominant organizations—or those organizations that look to dominant organizations as a guide to their own marketing strategies—decide that the advertising on Facebook just isn’t worth it.

Should other organizations follow GM’s lead? Should Facebook advertising be abandoned? Should organizations focus exclusive on direct engagement with users on the organization’s Facebook page? Do those efforts even pay off, or will we see GM eventually pulling back from their $30 million dollar commitment?

Customers First: Brand Modeling to Make Smart Social Media Choices

If you read Customers First (or even one of our earlier books, like The Power of Cult Branding) you’ll see that successful companies gain their dominant market position by focusing intensely and exclusively on understanding their best customers. Developing a comprehensive, holistic view of who a brand’s customers are, with a special focus on the unconscious psychological factors that motivate their decision making, makes it possible to predict, with a high degree of certainty,  a patterns of customer preferences.

Knowing these preferences makes it easier for marketers to create marketing that will really resonate with their customers. It also helps them identify the best mix of marketing vehicles for their brand.  We call the process of identifying those preferences and deriving actionable information Brand Modeling. Put the right message in the right place is the first rule of marketing.

Customers aren’t shy.  They’ll happily tell you what they think about almost anything you ask, especially if you have established a relationship where your customers feel actively engaged with your brand. That’s why we think GM is making a really smart decision with their commitment to a content-heavy, high-touch approach to Facebook engagement.

To fully realize the potential of social media, it’s essential to focus on listening as much as—even more than—you talk. One of the best ways to develop a deeper understanding of your customer base is to listen to what people say when they tell you about themselves.  To do this in the most efficient manner, it helps to be equipped with the analytical tools necessary to derive meaning from conversation.

GM used their Facebook page to survey their fans directly about their Facebook usage and preferences. The data revealed from that conversation surely played a critical role in the decision to pull the plug on Facebook advertising.

Today, it’s the company that listens closely to its best customers’ wants and needs that wins. For GM, that means dropping Facebook advertising. For another organization, it may mean a more enthusiastic embrace of Facebook advertising. Your Brand Model will help you make the right choices for your organization. That’s the power of putting Customers First.

May 22, 2012 by

The French Frontier: The Power of Predictability For Global Brands

PhotobucketStarbucks, it turns out, is not synonymous with seamless, stress-free success. Embracing a global strategy is an integral part of the coffee retailer’s much-talked about turnaround strategy, but after ten years of effort, things still aren’t great in Europe.  Particularly not in France, according to this New York Times story.

Starbucks has embarked on a multimillion dollar campaign to win over the European marketplace. Their efforts are pretty straightforward, and from our perspective, logical: everything from the the coffee recipe to the physical plant is being examined and altered to bring it more in alignment with the tastes and preferences of the local customer.

The changes may help—the strategy, after all, bears a close resemblance to what works for other American chain eateries that have gone global. But it raises one unavoidable question: How would things look different for Starbucks if they had done the groundwork to enter the European marketplace more effectively ahead of time? We’re not privy, of course, to the inner workings of their leadership team, but it seems a fair guess that not having to spend millions of dollars is always better for your financial position than being forced to spend millions in order to remain even vaguely competitive.

In other words, there’s power in predictability.  One of the key concepts of Brand Modeling is that developing a deep, comprehensive, humanistic understanding of your company’s best customers allows you to predict, with a high degree of certainty, how those customers will respond to your offerings. This allows you to be selective and efficient in your organizational decision making process.

For example, had Starbucks spent the time and energy to fully understand their best customers in France, they likely would have discovered their expectation—framed by the cultural mythos that permeates French life—that one does not walk down the sidewalk with a paper coffee cup in hand. Coffee is meant to be enjoyed in the cafe, at a leisurely pace. Armed with that knowledge, it would have been easier to see that the French Starbucks should include adequate seating space and avoid investing resources in takeaway coffee.

In Britain, incidentally, the situation is reversed. There, takeaway coffee enjoys popularity favorably comparable to the American experience. You can see where this is valuable information to have prior to breaking ground and building shops.

Starbucks isn’t alone in this situation.  Going global has stymied some brands. Burger King was a flop in Europe, whereas McDonald’s, who came very early to the wisdom of listening to local markets comprehensively and in detail, thrives.

It all comes down to customer knowledge. We are all competing in the environment full of empowered consumers. They know they have choices. The French consumer is not suffering from a lack of cafes to visit if Starbucks fails to please them. Dominant organizations are, and continue to be, those brands that are truly willing to step up and put their customers first.

April 10, 2012 by

Nestle: Trust Building Is Essential To Our Success

Nestlé corporate logoAlmost two years ago, Jose Lopez, executive VP of Operations for Nestle, was explaining to the Business Standard why the global foods, health, and nutrition brand, which claims to have a billion customers a day, is so successful. A particular focus of the interview was how Nestle decided to enter a marketplace, as well as their decision to source raw materials and labor in local markets.

What is revealed is that Nestle places a high value on knowing their customers, on a number of levels.  They’ve identified the universal concerns that cause their best customers to choose Nestle brand products rather than any other—product safety and high nutritional value tops the lists—and the local, market-specific criteria that helps Nestle bond with customers on an individual basis.

“Our factories here (in India) use Indian raw materials produced by Indian farmers to make products that are made to Indian tastes and are sold in the country. That is the way we operate.”

Nestle has been successful with this approach. The growth continues, according to this recent Wall Street Journal article, Nestle Projects Growth from Emerging Markets.

Customers First: How Nestle Reached the Top

Photobucket

Lopez is very forthcoming about the reason for Nestle’s growth. “The first thing that comes to mind is clearly the trust that we have been able to build in our consumers. Second, is our passion for quality, and third, simple and clear business processes.”

Building that level of personal, profitable trust with customers is directly dependent on superior levels of customer knowledge.  Before you trust someone, you have to know them, and before that trust can be returning in any meaningful way, they have to know you. Transparent business practices are essential (and if Nestle has had stumbling blocks along the way, it has always been in those areas where they are perceived to be less than transparent in their marketing practices, particularly in the area of infant formula).

In Customers First:Dominate Your Market By Winning Them Over Where It Counts the Most, we examine some of the powerful unconscious psychological forces that motivate customer behavior.  There’s a universal need that we all share: we have a profound need to believe that we belong to a group, that we are valued and cared for as a member of society. We want to know—no, scratch that; it’s that we need to know—that we’re cared about.

This is a message that must reach the customer’s ears, heart, and mind. It’s always good to have the leadership spelling it out. In the Business Standard interview, Lopez said, “We want to provide the consumer a good diet. In addition to formulating such products, we want to teach them what’s good for them. Every Nestle product has a nutritional panel or compass on the pack which helps in understanding its nutritional value. The nutritional aspect of the products is what pleases the consumer, but it is also our responsibility to explain to him why it is good for him. The last thing we want is our consumers becoming victims of lifestyle-related diseases.” (emphasis ours)

Nestle’s making use of every touch point to convey their care and concern for customer health. Couple this with the substantial commitment the brand has made to understanding their customers wants and needs, and it becomes easy to see why the Nestle brand is one of the most successful in the world.  That’s what happens when you put Customers First!

April 2, 2012 by