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Cult Brands

Can Customers Trust Your Brand?

So we’re at an interesting and unique place in our examination of trust and what it means for a brand to be trustworthy. The Russian invasion of Ukraine has had impacts all around the world. What a brand chooses to do or not do now has reverberations that extend far beyond their company’s financial performance.

A brand’s character is demonstrated by its actions. Customers are watching what their favorite brands are doing at this time. This is the moment when loyalty is won or lost on that forever basis.

Knowing What The Right Thing Is Can Be Complicated: The Hierarchy of Trust

Important to remember: we’re less than a month into the invasion. Events are happening very quickly, and brands (just like the rest of us) haven’t had much opportunity to understand what’s going on, never mind craft the correct response to it. Everyone is operating on the fly during a complex, difficult situation.

That being said, what we’ve seen emerging is that this is one instance where size definitely does matter. Small to mid-sized brands appear to be taking inspiration and direction from how larger organizations are announcing their decisions to limit or cease doing business with Russia at this time.

You can see this playing out in many areas, but for this, we’ll use the world of sport as an example. Fairly immediately after the Russians first invaded, FIFA condemned the violence and announced the Russian team would be subject to penalties. This was quickly seen as an insufficient response, with players from Ukraine, Poland, and other neighboring countries refusing to play against the Russian team, no matter what it would be called. FIFA was under great pressure to ban Russian teams from competing entirely but held off saying they would impose a total ban until the International Olympic Committee – IOC made a similar announcement regarding Russian participation in the Paralympics. Over the years, IOC and FIFA have had contentious relations, but in this instance, FIFA seemed ready to let the IOC take the lead.

People Trust Brands More Than They Trust Governments

According to the Edelman Trust Barometer Report for 2022, globally, people trust brands and NGOs far more than they trust the government and the media. Why does that dynamic exist?

We can’t cover all of the answers to that question here, but one cause – illustrated by FIFA’s rapidly evolving response to the Ukraine crisis – is that brands have to respond to their fans and critics in a way that governments do not. If the customer base withdraws its support, the brand fails. Even an organization as large as FIFA needs to pay attention to what its fans expect of them so that trust relationships can be maintained.

Subsequent to the IOC & FIFA other brands, including The Coca-Cola Company and McDonald’s have also announced they’re ceasing operations in Russia. Thinking of this in terms of trust, what brand promises do you think these brands are fulfilling with this decision?

March 15, 2022 by

Nationwide Insurance: Speeding Toward Success

One of NASCAR’s biggest stars, driver Dale Earnhardt, Jr., has been a spokesperson for Nationwide Insurance for many years. Here’s one of the most recent commercials he’s done for Nationwide.

We really like this commercial because it articulates many of the key concepts of Brand Modeling. In the first ten seconds of the spot, Dale Earnhardt Jr. explains (and we’re paraphrasing here) that as a NASCAR owner and driver, he knows that there’s nothing more important than pleasing the fans. Pleasing the fans is the top priority, because without the fans, there’s no NASCAR. Just like without their customers, there’s no Nationwide.

Earnhardt continues to explain that Nationwide reports to their customers, not to Wall Street. Throughout the spot, the message is clear: the Nationwide approach puts customers in the driver’s seat.

Brand Modeling: Key Concepts

Nationwide’s approach is one we’ve seen consistently used by Cult Brands and dominant organizations.  Companies that win are doing so by focusing on the needs of their best customers. Identifying who an organization’s best customers are, learning what psychological factors motivate their decision making, and meeting their needs in the most satisfying fashion possible is a proven formula for success.

Nationwide currently enjoys a reported 4.5% of the automotive insurance market. This market is highly competitive, currently dominated by State Farm and Allstate. Together, the two companies control a little less than a third of the entire market. Nationwide is also vying with Geico, Progressive, and Farmer’s. What’s the best way for this insurance company to stand out from the pack, capture customer attention, and gain market share?

Identify The Most Valuable Customer

NASCAR became a phenomenon by focusing on the needs of their best customers: the thousands of loyal fans who never miss a race, who travel countless miles and spend thousands to see their favorite drivers live, who wear NASCAR apparel and participate in racing fan communities online. By catering exclusively and exhaustively to these fans, NASCAR has thrived. People are passionate about car racing.

They’re not necessarily as passionate about car insurance. Yet Nationwide needs to know just as much about their customers as NASCAR does. NASCAR can articulate, clearly and with pinpoint precision, what leads someone to join the NASCAR Nation. They know their fans love exciting races with fantastic finishes, exhaustive information about their favorite cars and drivers, and the sense of community that has built up around the sport of racing. To thrive, NASCAR needs to keep delivering these essential elements. Otherwise, their fans will find other ways to occupy their attention and command their entertainment dollar.

Nationwide’s focus on the customer could begin with examining what it takes to belong to Nation Nationwide. A percentage of the insurance market will always be driven by nothing more than price and convenience. However, by looking at Nationwide’s best customers—those that have multiple policies with Nationwide, who enthusiastically recommend Nationwide to their family and friends—and identifying what they value most about their car insurance company, it becomes possible to craft strategically targeted marketing messages designed to attract new customers who are very likely to be highly satisfied with (and profitable for!) Nationwide.

Is Nationwide on the right track? It looks that way. If this customer focused approach is implemented consistently, they might even make it in record time!

August 23, 2011 by