Creating a brand in the 21st century

Today has started off well. Last night, you slept like a log and, when you pulled open the curtains this morning, the sun streamed pleasantly into your bedroom. As you enjoy your coffee, you download today’s newspaper on your tablet. Straightaway, a headline on the front page grabs your eye: “Google announces its closure!”.

image: artchandising

What face would have you pulled had this -completely fictitious- news story been true? What would you have felt?
If your overriding feeling in the face of such news was that somehow things were going to be worse from that point onwards, Google now forms part of your life.

Now change one aspect of the news story. Instead of Google, imagine the article was about your company. Would your customers feel the same way?

If the answer is yes, congratulations! But if the answer in no, it means that they can do without your brand.

What is all this brand stuff about?

When we talk about brands, there are almost as many different definitions as there are articles on the topic. Some of these are along the lines of Jerry McLaughlin’s proposal (2011): “what a customer thinks of when they hear the brand name”.

I feel reasonably comfortable with this approach, although, as I have stated in other articles, we know that we make the vast majority of decisions subconsciously using the ultra-fast limbic system, and we later dress the decision up with reasons and justifications. Therefore, rather than “what we think of when we hear the brand name”, we should say “what we feel when we hear the brand name”.

Lots of writers develop ideas along the same lines, such as Marty Neumeier in his book ‘The Brand Gap (2005)’: “‘Brand’ is the gut feeling people have about your product, service or company”. This very widespread approach focuses the issue on the emotions that a company, product or service generates in its customers.

In our hyper-connected society in which our saturation with stimuli is matched only by our attention deficit, emotion is the key resource to ensure that a product (or service) gets noticed. When something triggers an emotion, our attention is activated and, as such, it becomes visible, and perhaps later something we may buy.

Is triggering emotions enough?

However, is stimulating customers’ emotions enough to make them buy our product repeatedly?

The answer is obviously not. An emotion has a short-term effect on the body. In contrast, customer loyalty requires long-term energy.

For this reason, I find the proposal of Iglesias and Alfaro (2009) more accurate when they say that a brand is a “set of values, sensations, emotions and experiences that have value insofar as they have a meaning that is relevant to the customers”.

I would probably tweak this definition a little. A powerful brand, rather than having “meaning”, can convey a particular “feeling” at certain moments of the customers’ lives.

Nevertheless, the best aspect of Iglesias and Alfaro’s contribution is that the different elements it mentions pave the way to transform a fleeting emotion into feelings, which, by nature, last longer. A purely emotional brand would be a brand with little scope.

Are values enough to create feelings?

Iglesias and Alfaro introduce the idea of the meaning being “relevant” to the customers. In my opinion, this aspect is key.
There are two methods by which a meaning can be relevant, which ideally should be combined:

  • (A) Sharing really significant human values with customers, which are expressed through different media. For instance, ranging from traditional television channels, on to social media (what an impact this has in terms of persuading a customer to say good things about a brand!), right through to the most influential medium, according to Amancio Ortega, the founder of Inditex: “The store is the most powerful medium for creating a brand”. His statement is technically very accurate, because a message perceived through various senses simultaneously is more persuasive. Neuroscience tells us that experiences are more convincing and memorable than a PowerPoint presentation.
  • (B) Providing a solution that really makes their life better. The second approach for making a brand really relevant is for it to be associated to a solution or, in other words, a product or service that really improves the customer’s life in some respect.
    The Google brand is so powerful because it helps you avoid getting lost in an unfamiliar city, because it lets you find valid information in an instant, etc. The Google brand is extremely relevant, despite its logo changing constantly (What a contradiction for classical textbooks on Corporate Visual Identity!).

Creating a brand in the 21st Century is not so much a matter of corporate colours, a witty slogan or even advertisements to trigger occasional emotions, but rather tuning into your customers’ lifestyle and ensuring that the solution that bears the brand name truly enhances their quality of life.

To sum up, creating a brand today requires three essential elements: awakening the emotions required for them to pay attention, creating lasting feelings by sharing deep-rooted values and designing solutions that improve customers’ lives.
This gives rise to the three roles of marketing professionals in the 21st Century: a philosopher contemplating their customers’ lives, an engineer of solutions and a scriptwriter creating a movie of emotions and feelings.

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Bibliography

  • Iglesias, O. & Alfaro, M. (2009) “La marca y la gestión de las emociones” in Harvard Deusto, Nᵒ 90.
  • McLaughlin, J. (2011) “What is a brand, anyway?” in Forbes, 21st December
  • Neumeier, M. (2005) The brand gap. Berkeley: New Riders.

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Lluis Martinez-Ribes

Source: Código 84, number 187

May 2015

IF IT’S FREE, EVERYBODY WINS. Interpreting “free” in business

According to Flurry, a company of Yahoo group specialist in the use of apps, approximately 90% of the apps in Apple Store are free. Google also gives free access to their search engine services. Hours of work of talented people given for nothing!

Let’s explore this business practice and see what we can learn from it.

freemium-14

From a customer perspective

Even if it’s permanently or just for a short period of time, customers are delighted when they find out that a product or service is free. It’s a nice surprise, something pleasant.

For this reason when someone gives us a gift, our body releases dopamine, a neurotransmitter associated with pleasure and reward feeling.

Scientists affirm that human beings need to enjoy small pleasures in everyday life (for instance, a glass of wine after work, leafing through that attractive magazine before going to bed, etc.), not only to make our life more pleasant, but also to prevent depressions, anxiety or poor performance.

There is also another interesting aspect for the customer who is offered a new product for free: if he doesn’t like the product, the risk assumed is almost zero.

Prof. Sandro Castaldo, from SDA Bocconi, explains this saying that the relationship between the company (or product or brand) and the customer can begin with a first stage: new customers must not feel the risk when pondering over a new product. And one of the best ways to get this is by experimenting it for free; being it for a period of time (e.g. two free sessions of fitness), or in a small amount (e.g. a sample of moisturizer inserted in a magazine).

So from these two perspectives -biological and relational- the surprise of seeing that something is free is really good for the people.

From a business perspective

At a first glance it might seem that firms shouldn’t be interested in giving their products or services for free. However, if we go further into the issue this statement can be qualified.

In a society in which the things that are sold are not always “squeaky clean”, if a company gives their customers the chance of getting in touch with their product for free -without risk-, this is the best possible marketing, both for the first product launch and for when new customers are sought. As Ariely (2008) says, the true attractiveness of free is related to the lack of risk of loosing something due to a bad purchase decision.

So, the cost of what is temporally free must be considered by the company as the “seed” of a new customer.

After all, I encourage (most of) the companies to feel like “customers growers”. Like farmers do: they plant a seed, take care of it, they water the plant, and then they harvest the fruits, and if everything goes well, the amount will increase in every harvest.
I think this agricultural approach is more interesting than the one of hunting customers -they are usually called “target”, “hitting” them with a given “intensity” of advertisements and without listening much to them, except when a market research is conducted.

Apart from this temporal investment of giving something for free, there is another approach, this one of a strategic kind. Companies can take a business model which is colloquially known as “freemium”, the contraction of free and premium. Like well-known companies such as Dropbox, Evernote or many games do, it consists of offering a service for free in its basic option, and a much more complete one -usually without advertising- if the customer pays for this premium upgrade.

Once the customer becomes familiar with that service, he usually desires to go further. And then he is willing to pay for that second premium level, in which he won’t find advertising. For this reason, Pujol (2010) says that freemium is a way to generate demand.

There is life beyond freemium

One of the methods I propose to innovate in marketing and retail is to “move away from the trade guild”: instead of selling good products, try to be of customers’ life (including such good products).

If we sell more or less the same as the competitors, the result is clear: due to the similarity, there is an evident risk of a price war. If such a tragedy happened, the gross margin would decrease, and this would reduce the company “energy”, because the gross margin is like the sap of the plants.

There are companies that know how to sell something apparently more abstract, but very relevant for the customers in certain moments of their life. For example, the company Ziferblat has cafeterias with a very relaxing atmosphere in Russia (Moscow and other cities), London, and soon in New York, in which they don’t charge customers for what they consume, but for the time they spend in there. In Moscow an hour costs around 2.5€ and in London, around 3.75€ (*).

Here, products are free. Instead of selling what the guild sells (with the risk of similarity and the feared price comparison), this retail chain happens to sell something very relevant to their customers’ life: quality time.

Beneath the pavement, the beach

This famous sentence of May 1968 in France is enlightening of the naughty look we can use in business. Instead of remaining in the surface (“the pavement” – what’s free) some managers decide to transform the reality changing their job: they want to be part of their customers-person’s life.

This business transformation may also be called “innovation”. Actually, this is the core part of a sound neuromarketing strategy.

(*) Calculation made in mid September 2014

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Bibliography

  • Ariely, D. (2008) Las trampas del deseo. Editorial Ariel.
  • Busacca, B. & Castaldo, S. (2002) “Trust in market relationships: an interpretative model” Sinergie, Vol. 58: pp 192-226
  • Flurry, The history of app pricing
  • Pujol, N. (2010) “Freemium: attributes of an emerging business model” Social Science Electronic Publishing.
  • Ziferblat

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Lluis Martinez-Ribes

Source: Código 84, Special number AECOC Congress.
October 2014

“YOU JUST DON’T REALISE IT…” (A draft) Implicitness-based marketing

Image by artchandising (sense of hearing)

Nowadays (May 2013) any scientist would deny the fact that that approximately 85-95% of human decisions are non-conscious or implicit.

When making decisions, we can have a wide variety of doubts: regarding which shop or restaurant to go to, about what product or brand to buy, about which bank to open an account with, about which printer to get, etc.

For decades, we have liked to think of ourselves as “rational animals” and, to an extent this is true, especially when compared with other species. However, the paradox is that only 5-15% of our decisions are conscious.

In the market economy

This conclusion, the result of biological and neuroscientific research, has enormous implications for companies operating in countries with a market economy, in other words across most of the world.

In this kind of market place, every customer has the basic right is to be able to choose where and what to buy. Hence the main purpose of marketing is to try to become, and remain, a customer’s preferred option, so that your company makes a profit.

Being the preferred option is something we have all aspired to ever since we were kids. Do you want to play with me? Do you want to dance? Will you hire me? Will you buy my services?

Up till now, a magic formula

For decades, we have tried to achieve this preference with a kind of magic formula for success, whose recipe varied depending on the magician. In all recipes the ingredients were similar; the only things that changed were the algorithm and the proportions. We have all heard phrases such as “location, location, location” (a simple equation: location raised to the power of three), or else “what is essential is a good quality/price ratio”, etc.

This magic formula has been called ‘the marketing mix’, and it has worked quite well.

However, we now know that it is in the limbic system of the brain where the vast majority of non-conscious and implicit decisions are made – at a rate of 11 Mb per second.

So, it really makes sense to think that the most logical type of marketing should be based on what is implicit.

Image by artchandising

Implicitness-based marketing

The challenge is to outline the territory of this new marketing approach, since we lack a theoretical system to act as a guide for the practical aspects. Rarely have we been more in need of a suitable theory.

What theories we do have are more like single willow rods than a finished wicker basket. There are a large number of serious publications based on the above mentioned cerebral reality, but I have yet to find a single mention of “implicitness marketing”.

Taking on this challenge, I am gong to attempt to give a few clues about marketing without tags: the most human type of marketing is based on what is implicit.

Therefore, I have ordered my reflections based on the functional blocks of retail marketing:

  • The philosophy of the business
  • The input capture phase
  • The “cooking”
  • The output phase: to do and to have
  • The way of “doing marketing”

Given that this is quite an experimental subject, I shall present it by comparing traditional marketing with implicitness marketing. I apologise in advance for any us of generalisations or clichés.

Marketing philosophy Traditional approachImplicitness approach
CustomerHe/she is usually referred to as a “target” to impact.
Sometimes he/she is considered as a “robot with a wallet”: if you do an action, they respond in a certain way.
He/she is considered a person, and moreover, different depending on the context (for example: a person used to sleep less when has a baby).
ObjectiveIn order to sell today, you need to convince people.To be continuously preferred, even when sales promotion ends.
Orientation Market orientation (to be market driven)To drive the market. Innovate and blaze the trail is a service. It appeals to the limbic system.
The jobThere are often conflicts between marketing and sales departments.All the departments should perceive themselves as Customers growers.

 

When looking for inputsTraditional approachImplicitness approach
Market research objective:Usually carried out to obtain information about customers.To understand the customer, visualize, and put a face to them.
SubjectIn many reports and journals, it is told about “the consumer”.Attention is paid to each priority segment, in particular to see how they are influenced by their context.
PurposeIn many cases, market research is carried out “just in case” the project fails: “to ensure that it doesn’t affects me”.In order to find a source of inspiration, you need to hunt for genuine “insights” through the fog. If it were that clear, it would be called “outsights”.
MethodKnowledgeable specialists in very specific and different subjects are required.You need to use specialists, but with a polymathic or multidisciplinary approach where humanistic sciences plays a key role.
WayOften with easy to draw answers that can be tabulated and

Often, by the use of questions demanding answers that can be tabulated and to charted later.

If the aim is to innovate, a qualitative approach must be adopted. In both cases, these approaches include projective techniques. Questions about tell me your reasons are technically in doubt.

 

In the “kitchen”Traditional approachImplicitness approach
What we aim to cookNew products, new services, new advertising campaigns.New solutions, if possible quite complete or with parts that can be fitted in, if it is needed.
Our resourcesBasically, using the company’s own resources.There might be intelligent life outside the company. Comprehensive solutions can be developed working alongside companies in other sectors.
The engineAll the elements of the marketing mix are used.Above all, the aim is to guess the customers’ replies to the following question on the main retail product (the shop and what happens in it):

Where do you fit into my life? Which sense are you providing me with in this moment of my life?

The baseWhat most advertising agencies ask you: “the reason why”…Much better to ask “The sense why …”, linked to the previous point.

This is hard to answer with the traditional marketing mix elements.

 

Output phaseTraditional approachImplicitness approach
CommunicationThe aim is to make the company communicate with them efficiently.The aim is to have a conversation, to listen, to talk and to empathise.
ActionsThe focus is on things and actions, “To do + To have”.First of all, to define “to be” and “to feel”.
Later on, “to do” and “to have”.
Network useBoth offline and online.Instead of multichannel or omnichannel, customer-centricity.

Today, when using smartphones we switch between online and offline without noticing.

ObjectivesTo meet the sales targets for a given period.To increase the Customer Lifetime Value (CLV), since we are all customer growers.
MetricsEx-post, in other words once things happen (except for budgets).Both ex-post and ex-ante.

Using artificial intelligence, we can predict the near future.

 

Managerial styleTraditional approachImplicitness approach
Time spent in shops or onlineSo many minutes: it is increasing.If the customer spends two hours a month, they are giving us two hours of their life.
Customer serviceIt should be correct.With the maximum respect: they pay us with money and with their life.
Tools usageInstrumental use.Targeted towards brain’s automatic pilot: the limbic system.

The cerebral cortex works more slowly and almost always tries to rationalise things that have been decided implicitly.

Tone and styleMake everything that is done and communicated clear, in order to be as efficient as possible.The limbic system likes…

  • Intuition.
  • Things that are subtle and feminine, anthropologically speaking.
  • Things that are grasped easily.
  • Magic and surprises (good ones).
  • The imagination.
  • Empathy.
  • Smiles, even when speaking on the phone or using an app.

Final thoughts

In this bubble I have discussed the changes that have occurred in my field over the last five years, both with regard to academic and consultancy work. In both cases, what I try to do is to think up innovative retail models to improve customers’ quality of life. And the results have been great.

When someone wants to innovate, the main obstacle is not generally the competition, but rather their own non-conscious prejudices, acquired over decades. In the near future, therefore, I hope to be able to improve this draft about implicitness-based marketing in a more comprehensive way.

Bibliography

Nordfalt, J. (2005) Is consumer decision-making out of control? Non-conscious influences on consumer decision-making for fast moving consumer goods. PhD Thesis, EFI, the Economic Research Institute at the Stockholm School of Economics.

Wedel, M.; & Pieters, R. (2007) Visual Marketing: From Attention to Action. New York: Psychology Press, 328 pp.

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Lluis Martinez-Ribes

Source: Código 84, nº 172.