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luni, 7 iulie 2014
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How To Tap Into Social Norms to Build a Strong Brand
How To Tap Into Social Norms to Build a Strong Brand |
| How To Tap Into Social Norms to Build a Strong Brand Posted: 06 Jul 2014 05:15 PM PDT Posted by bridget.randolph In recent years there has been a necessary shift in the way businesses advertise themselves to consumers, thanks to the increasingly common information overload experienced by the average person. In 1945, just after WWII, the annual total ad spend in the United States was about $2.8 billion (that's around $36.8 million before the adjustment for inflation). In 2013, it was around $140 billion. Don't forget that this is just paid media advertising; it doesn't include the many types of earned coverage like search, social, email, supermarket displays, direct mail and so on. Alongside the growth in media spends is a growth in the sheer volume of products available, which is made possible by increasingly sophisticated technologies for sales, inventory, delivery and so on. What does this mean? Well, simply that the strategy of 'just buy some ads and sell the benefits' isn't enough anymore: you'll be lost in the noise. How can a brand retain customers and create loyalty in an atmosphere where everyone else has a better offer? Through tapping into the psychology of social relationships. Imagine that you are at home for Thanksgiving, and your mother has pulled out all the stops to lovingly craft the most delicious, intricate dinner ever known to man. You and your family have enjoyed a wonderful afternoon of socializing and snacking on leftovers and watching football, and now it's time to leave. As you hug your parents goodbye, you take out your wallet. "How much do I owe you for all the love and time you put into this wonderful afternoon?" you ask. "$100 for the food? here, have $50 more as a thank you for the great hospitality!" How would your mother respond to such an offer? I don't know about your mother, but my mom would be deeply offended. New scenario: You've gone to a restaurant for Thanksgiving dinner. It's the most delicious dinner you've ever had, the atmosphere is great with the football playing in the background, and best of all, your server is attentive, warm, and maternal. You feel right at home. At the end of the meal, you give her a hug and thank her for the delicious meal before leaving. She calls the cops and has you arrested for a dine-and-dash. And herein lies the difference between social norms and market norms. Social norms vs. market normsThe Thanksgiving dinner example is one which I've borrowed from a book by Dan Ariely, Predictably Irrational: The Hidden Forces that Shape Our Decisions. Ariely discusses two ways in which humans interact: social norms and market norms. Social norms, as Ariely explains, "are wrapped up in our social nature and our need for community. They are usually warm and fuzzy. Instant paybacks are not required." Examples would be: helping a friend move house, babysitting your grandchild, having your parents over for dinner. There is an implied reciprocity on some level but it is not instantaneous nor is it expected that the action will be repaid on a financial level. These are the sort of relationships and interactions we expect to have with friends and family. Market norms, on the other hand, are about the exchange of resources and in particular, money. Examples of this type of interaction would be any type of business transaction where goods or services are exchanged for money: wages, prices, rents, interest, and cost-and-benefit. These are the sort of relationships and interactions we expect to have with businesses. I've drawn you a very rough illustration - it may not be the most aesthetically pleasing visual, but it gets the point across: Market norms come into play any time money enters into the equation, sometimes counter-intuitively! Ariely gives the example of a group of lawyers who were approached by the AARP and asked whether they would provide legal services to needy retirees at a drastically discounted rate of $30/hour. The lawyers said no. From a market norms perspective, the exchange didn't make sense. Later the same lawyers were asked whether they would consider donating their time free of charge to needy retirees. The vast majority of the lawyers said yes. The difference is that, when no money changes hands, the exchange shifts from a poor-value market exchange to an altruistic and therefore high-value social exchange. It is a strange psychological quirk that 'once market norms enter our considerations, the social norms depart.' Mixed signals: when social and market norms collideIn a book called Positioning: The Battle for Your Mind by Al Ries and Jack Trout (originally published in 1981), the authors describe the 1950s as the 'product era' of advertising, when 'advertising people focused their attention on product features and customer benefits.' It was all about the unique selling proposition (USP). In this case, the USP is mildness: "not one single case of throat irritation!" (image source) However, as the sheer volume of products on the market increased, it became more difficult to sell a product simply by pointing out the benefits. As Ries and Trout put it, 'Your "better mousetrap" was quickly followed by two more just like it. Both claiming to be better than the first one.' They describe the next phase of advertising (which hit its peak in the 1960s and 70s and which we can probably all relate to if we watch Mad Men) as the 'image era', pioneered by David Ogilvy. In this period, successful campaigns sold the reputation, or 'image' of a brand and a product rather than its features. Ries and Trout quote Ogilvy as saying that 'Every advertisement is a long-term investment in the image of a brand'. Examples include Hathaway shirts and Rolls-Royce. Rather than the product benefits, this ad focuses on the 'image' of the man who smokes Viceroys: "Viceroy has a thinking man's filter and a smoking man's taste. (image source) But yet again, as more and more brands imitate the strategy of these successful campaigns, the space gets more crowded and the consumer becomes more jaded and these techniques become less effective. According to Ries and Trout, this brought the world of advertising into the 'positioning era' of the 80s, which is where they positioned (hehe) themselves. As they described this, "To succeed in our overcommunicated society, a company must create a position in the prospect's mind, a position that takes into consideration not only a company's own strengths and weaknesses, but those of its competitors as well." This one's all about positioning Winston's in opposition to competitors: as the brand with real taste, as opposed to other brands which 'promise taste' but fail to deliver. (image source) And yet, despite this evolution of advertising strategy over the course of the 20th century, all of these different approaches are ultimately based on market norms. The 'product era' sells you features and benefits in exchange for money; the 'image era' sells you on an image and a lifestyle in exchange for money, and the 'positioning era' sells you on why a particular company is the right one to supply your needs in exchange for money. Social norms and loyaltyWhen does cheap not win? When it comes to social norms. Social norms are about relationships, community and loyalty. If your sister is getting married, you don't do a cost benefit analysis to decide whether or not you should go to her wedding or whether the food will be better and the travel cheaper if you go to your next door neighbor's BBQ instead. If anything, it's the opposite: some people take it to such an extreme that they will go into massive debt to attend friends' weddings and bring lavish gifts. That is certainly not a decision based on monetary considerations. Therefore, if the average brand wants to get out of the vicious cycle of undercutting competitors in order to gain business, they need to start focusing on relationships and community building instead of 'SUPER CHEAP BEST LOW LOW PRICES!!®' and sneaky upsells at the point of sale. This is something my colleague Tim Allen spoke about in a presentation called "Make Me Love Your Brand, Not Just Tolerate It". And this is what a large number of recent 'advertising success stories' are based on and it's the whole premise behind many of the more recent trends in marketing: email marketing, personalization, SMS marketing, good social media marketing, and so on. Some of the most popular brands are the ones which are able to find the perfect balance between:
One example of this is John Lewis, who have good customer service policies around returns etc but also offer free perks to their shoppers, like the maternity room where breastfeeding mothers can relax. One of my colleagues mentioned that, as a new mother, his girlfriend always prefers to shop at John Lewis over other competitor stores for that very reason. Now if this is purely a convenience factor for her, and after her child is older she stops shopping at John Lewis in favor of a cheaper option, you could argue that this is less of a social interaction and more market influenced (in some sense it serves as a service differentiator between JL and their customers). However, if after she no longer requires the service, she continues to shop there because she wants to reciprocate their past support of her as a breastfeeding mother, that pushes it more firmly into the realm of the social. Another thing John Lewis do for their fans is the annual Christmas ad, which (much like the Coca-Cola Santa truck in the UK) has become something which people look forward to each year because it's a heartwarming little story more than just an ad for a home and garden store. Their 2012 ad was my favorite (and a lot of other people's too, with over 4.5 million Youtube views). But usually anytime a brand 'do something nice' for no immediate monetary benefit, it counts as a 'social' interaction - a classic example is Sainsbury's response to the little girl who wrote to them about 'tiger bread'. Some of my other favorite examples of social norm interactions by brands are:
The catch is, you have to be careful and keep the 'mix' of social and market norms consistent. Ariely uses the example of a bank when describing the danger of bringing social norms into a business relationship: "What happens if a customer's check bounces? If the relationship is based on market norms, the bank charges a fee, and the customer shakes it off. Business is business. While the fee is annoying, it's nonetheless acceptable. In a social relationship, however, a hefty late fee--rather than a friendly call from the manager or an automatic fee waiver--is not only a relationship-killer; it's a stab in the back. Consumers will take personal offense. They'll leave the bank angry and spend hours complaining to their friends about this awful bank." Richard Fergie also summed this issue up nicely in this G+ post about the recent outrage over Facebook manipulating users' emotions; in this case, the back-stab effect was due to the fact that the implicit agreement between the users and the company about what was being 'sold' and therefore 'valued' in the exchange changed without warning. The basic rule of thumb is that whether you choose to emphasize market norms or social norms, you can't arbitrarily change the rules. A side note about social media and brands: Act like a normal personIn a time when the average American aged 18-64 spends 2-3 hours a day on social media, it is only logical that we would start to see brands and the advertising industry follow suit. But if this is your only strategy for building relationships and interacting with your customers socially, it's not good enough. Instead, in this new 'relationship era' of advertising (as I've just pretentiously dubbed it, in true Ries-and-Trout fashion), the brands who will successfully merge market and social norms in their advertising will be the brands which are able to develop the sort of reciprocal relationships that we see with our friends and family. I wrote a post over on the Distilled blog about what social media marketers can learn from weddings. That was just one example, but the TL;DR is: as a brand, you still need to use social media the way that normal people do. Otherwise you risk becoming a Condescending Corporate Brand on Facebook. On Twitter too. Social norms and authenticity: Why you actually do need to careAnother way in which brands tap into social norms are through their brand values. My colleague Hannah Smith talked about this in her post on The Future of Marketing. Moz themselves are a great example of a brand with strong values: for them it's TAGFEE. Hannah also gives the examples of Innocent Drinks (sustainability), Patagonia (environmentalism) and Nike (whose strapline 'Find Your Greatness' is about their brand values of everyone being able to 'achieve their own defining moment of greatness'). Havas Media have been doing some interesting work around trying to 'measure' brand sentiment with something call the 'Meaningful Brands Index' (MBi), based on how much a brand is perceived as making a meaningful difference in people's lives, both for personal wellbeing and collective wellbeing. Whether or not you like their approach, they have some interesting stats: apparently only 20% of brands worldwide are seen to 'meaningfully positively impact peoples' lives', but the brands that rank high on the MBi also tend to outperform other brands significantly (120%). Now there may be a 'correlation vs causation' argument here, and I don't have space to explore it. But regardless of whether you like the MBi as a metric or not, countless case studies demonstrate that it's valuable for a brand to have strong brand values. There are two basic rules of thumb when it comes to choosing brand values: 1) I t has to be relevant to what you do. If a bingo site is running an environmentalism campaign, it might seem a bit weird and it won't resonate well with your audience. You also need to watch out for accidental irony. For example, McDonalds and Coca-Cola came in for some flak when they sponsored the Olympics, due to their reputation as purveyors of unhealthy food/drink products. Nike's #FindYourGreatness campaign, on the other hand, is a great example of how to tie in your values with your product. Another example is one of our clients at Distilled, SimplyBusiness, a business insurance company whose brand values include being 'the small business champion'. This has informed their content strategy, leading them to develop in-depth resources for small businesses, and it has served them very well. 2) I t can't be so closely connected to what you do that it comes across as self-serving. For example, NatWest's NatYes campaign claims to be about enabling people to become homeowners, but ultimately (in no small part thanks to the scary legal compliance small print about foreclosure) the authenticity of the message is undermined. The most important thing when it comes to brand values: it's very easy for people to be cynical about brands and whether they 'care'. Havas did a survey that found that only 32% of people feel that brands communicate honestly about commitments and promises. So choose values that you do feel strongly about and follow through even if it means potentially alienating some people. The recent OKCupid vs Mozilla Firefox episode is an illustration of standing up for brand values (regardless of where you stand on this particular example, it got them a lot of positive publicity). Key takeawaysSo what can we take away from these basic principles of social norms and market norms? If you want to build a brand based on social relationships, here's 3 things to remember. 1) Your brand needs to provide something besides just a low price. In order to have a social relationship with your customers, your brand needs a personality, a tone of voice, and you need to do nice things for your customers without the expectation of immediate payback. 2) You need to keep your mix of social and market norms consistent at every stage of the customer lifecycle. Don't pull the rug out from under your loyal fans by hitting them with surprise costs after they checkout or other tricks. And don't give new customers significantly better benefits. What you gain in the short term you will lose in the long term resentment they will feel about having been fooled. Instead, treat them with transparency and fairness and be responsive to customer service issues. 3) You need brand values that make sense for your brand and that you (personally and as a company) really believe in. Don't have values that don't relate to your core business. Don't have values which are obviously self-serving. Don't be accidentally ironic like McDonalds. --- Have you seen examples of brands building customer relationships based on social norms? Did it work? Do you do this type of relationship-building for your brand? I'd love to hear your thoughts in the comments. Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read! |
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Seth's Blog : The artist who dances on the edge
The artist who dances on the edge
You are brave.
Such a generous soul, someone who doesn't hesitate to leap when others shrink in fear. Your work means so much to you and to the people you share it with, we can't help but be inspired at the way you make your magic.
You're a warrior in the service of joy and you never seem to stop standing up and speaking up and doing your very best work.
Sometimes, a particular audience doesn't deserve you. But that doesn't matter in the long run, because of your relentless generosity in sharing your gift.
I can't wait to see your next work, and the one after that.
More Recent Articles
- Discretion
- Bobsourcing
- Is better possible?
- The difference between impossible and nearly impossible
- It's called self esteem
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duminică, 6 iulie 2014
Mish's Global Economic Trend Analysis
Mish's Global Economic Trend Analysis |
| PIMCO's Nonsensical Inflation Analysis; "Brain Worms" Revisited Already Posted: 06 Jul 2014 09:49 PM PDT Mihir Worah, PIMCO's Deputy Chief Investment Officer and head of PIMCO's real return and multi-asset portfolio management teams says Inflation Is Rising, But No Sirens Ahead. Pay particular attention to the third paragraph in which Worah states: "In the developed markets, the U.S. and Europe in particular, inflation is bottoming and poised to move up modestly. We expect inflation in the U.S. to move close to the Federal Reserve's 2% target, though it is still likely to be relatively low over the secular timeframe. However, we have a slight bias to higher inflation since that is what the Federal Reserve wants – stronger economic growth in the U.S. cannot be achieved without higher inflation." Emphasis mine. I nearly choked when I read that paragraph. The idea one needs inflation to have economic growth is ridiculous. Hayek trashed that notion in his work "Paradox of Savings". Interestingly, a discussion about inflation and growth came up in an email conversation I had last week with Pater Tenebrarum at the Acting Man blog. From Pater ... We have become used to think of economic progress in purely monetary terms by the highly inflationary fiat money system, but this is actually not how it should be seen or measured. In fact, every single industrialized society has attained its economic superiority in a time when prices did not rise at all. Economic progress would continue even if the money supply were forever completely fixed. Hayek has demonstrated in 1928 (in the only reply to the Foster-Catchings challenge that actually made sense and completely demolished their assumptions) that profitable production can continue if under conditions of a fixed money supply savings are increased and consumption concomitantly reduced to enable increased investment in the economy's production structure. The interest rate spread between the stages of production will decline, but at the same time physical productivity will rise.Brain Worms and the Paradox of Saving The "Paradox of Savings" is a difficult read, but Robert Blumen offers a relatively easy to understand explanation in Hayek on the Paradox of Saving. Please read it, then send a copy to Mihir Worah. Perhaps Worah picked up a nasty infection of "brain worms" from somewhere. Has Worah been hanging around Noah Smith by any chance? For an discussion as to who has brain worms and who doesn't please see Brain Worms - Bloomberg Writer Noah Smith Has Them, written in response to an absurd attack on Austrian economics by Noah Smith. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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The Big Picture: This Month's Jobs Numbers
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Seth's Blog : Discretion
Discretion
How much do you trust your people to do the right thing?
Consider giving every person on your team a budget—$1000 a year? $200 an incident? and challenging them to spend the money to make things right, to create efficiency, to delight.
If the CFO freaks out, invite her to meet with each employee at the end of the year to hear how they chose to spend the money. $5 extra to park close enough to the airport to not miss a flight. Giving an unhappy customer a refund on the spot. Buying a subscription to an inexpensive web app that dramatically decreases customer service time...
At the Ritz-Carlton, every single employee (even the maintenance folks) has a budget of $2,000 per guest to make things right. On the spot, without asking.
Without a doubt, the guest is blown away by this rapid response. A caring person who, instead of saying, "I'll have to ask my supervisor," just makes it right. But even more important, I think, is the effect of trusting your people. You've already given them the keys to your brand, you've already made them the face of your organization—isn't it time to trust them enough to do the right thing?
More Recent Articles
- Bobsourcing
- Is better possible?
- The difference between impossible and nearly impossible
- It's called self esteem
- How will you choose your next project?
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sâmbătă, 5 iulie 2014
Mish's Global Economic Trend Analysis
Mish's Global Economic Trend Analysis |
| Brain Worms - Bloomberg Writer Noah Smith Has Them Posted: 05 Jul 2014 06:55 PM PDT On July 2, Bloomberg columnist Noah Smith wrote a column on Austrian Economists, 9/11 Truthers and Brain Worms. Noah claims ... When the Austrian brain-worm invades, you start believing things like: 1) Federal Reserve money-printing is a government plot to boost big banks, 2) prices are rising much faster than anyone thinks, 3) real "inflation" means money-printing, not an increase in prices, 4) printing money can never boost the economy, 5) academic economics is a plot to use mathematical mumbo-jumbo to cover up government giveaways to big banks, etc., etc. Curiously, and leaving the conspiracy plots aside that many, if most Austrians do not believe, I propose that when the brain-worm invades you start believing things like monetary printing boosts the economy, and inflation only pertains to prices. Noah goes on to brag that a "history-book moment came when David Henderson of the Naval Postgraduate School defeated Austrian champion Robert Murphy of the Ludwig von Mises Institute in a bet about inflation." Ho-Hum. Murphy made a bad bet, and one I would have strongly advised against. David Henderson described the bet in My Inflation Bet with Bob Murphy. I am an Austrian, and I would have made the same bet as Henderson. Want proof? Then consider this debate I had with Murphy. Constraints are Key On November 23, 2010, Austrian economist Robert Murphy predicted "high inflation" in his post Has Mish Deflated the "Inflationistas"? My reply, which clearly carried the day was Failure to Consider Constraints - My Response to "Has Mish Deflated the Inflationistas?" Such debates aside, and unless one has brain worms, precisely how is Murphy's ill-advised bet the be all and end all of anything? Noah rants on about "ShadowStats" as if that ShadowStats speaks for Austrians on inflation. He doesn't. Shadowstats' hyperinflation predictions are as ridiculous as the article Noah Smith wrote. Noah took everything any alleged Austrian ever said that turned out wrong and trumped it up. Noah failed to mention that Keynesian clowns once believed that inflation and recession could not possibly happen at the same time. Here is a sentence at that heart of Noah's brain worm infection: "Massive torrents of Fed "money-printing" failed to budge prices; this fact directly cracked the central foundations of Austrian thought." That sentence is a willful lie, blatant ignorance, or the result of brain worms. No Austrian economist would suggest money printing "has" to result in price inflation. It doesn't. But the money will go somewhere. Where did it go? If you have brain worms, you might not know, so here is the answer: asset inflation. And shocking asset inflation came with the dotcom bubble in 1999 and the housing bubble in 2005. We are back in bubble-land asset inflation again and Noah Smith cannot see it. Why? Either Smith does not want to see it, or he has brain worms. Take your choice. There are no other reasonable choices. For another brilliant takedown of Smith's brain worms and "Bloomberg's Unqualified Smear", please see In Defense of Austrian Economics by Pater Tenebrarum on Acting Man. One never can figure out the timing of such things, but it would be very fitting if Smith's support of brain-worm Keynesianism marked the top of this market and something close to a bottom in gold. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Spain Issues Retroactive 0.03% Tax on Bank Deposits to "Boost Economic Growth and Job Creation" Posted: 05 Jul 2014 10:16 AM PDT Via translation from Libre Mercado, Spain will retroactively tax bank deposits to January 1, 2014 stating the move will boost growth and job creation. Guru Huky correctly labeled the tax for what it is "More than a tax, this looks like a mini seizure of deposits. Someone likely needs a few million and to balance the books." The notion that a tax increase will boost the economy is of course absurd. But don't worry, it's only 0.03%, nudge nudge, wink wink ... for now. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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