Posting a profit

Likeability has both a top-line and a bottom-line. Social monitoring tends to focus on the top-line: mentions; retweets; likes; comments. Top-line likeability is important because it monitors partiality towards your brand – the prevailing emotion at that moment. But it can be easily swayed, by offers, for example, or news. Bottom-line likeability is the measure of how much and/or how often consumers buy. It’s the money that drips or floods out the bottom of the sales funnel. The other p – profitability.

But just as you can be famous and broke, so your brand can have strong top-line likeability without proportionally strong financial returns. And indeed, vice versa.

Part of the problem, as Brian Solis has astutely observed in this recent post, is that chasing the “soft metrics” of top-line likeability has become as addictive to organisations as chasing top-line revenue can be for sales teams. It provides numbers, sometimes giddy numbers, but not “the insights necessary to glean ROI or deep understanding of what people do and do not want, need or value.” And certainly not the insights to know what is being generated financially. Brands are measuring incidents rather than effects.

But excitement is not cash. If you’re not monitoring your likeability off your bottom line, all you’re really counting is your Facebook effect and that, as Solis so clearly demonstrates with his beer experiment, adds up to fleeting engagement at best. It is quickly eclipsed, diverted or hijacked.

Solis asserts, “Engagement is about cultivating community behavior against a defined vision, mission and most importantly, purpose.” That’s important, but I think it can be pushed even harder. Bottom-line likeability occurs when a community is so engaged with what you offer and what you stand for (through what they’ve learnt socially and/or otherwise) that they gladly buy your brands at your margins … and keep doing so.

In commerce, as in relationships, you can’t be engaged on your own. And although it’s important to like yourself, your assessment of how likeable you are, or appear, is not necessarily the most accurate reflection of how important you are in the lives of those you really count on.

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Brands at the speed of life

What a pleasure to discover the writings of Simon Graj. I very much enjoyed this post on how changes in the speed at which consumers see and recognise brands affect the nature and manner of the relationship.

Graj suggests brands are on a collision course with consumer habits because while brand creators and managers feel increasingly inclined to engineer complexity into their stories in order to give them depth and dimension, consumers are looking for “elegant, plug-and-play simplicity” – brands that are clear, attractive, binding and capable of being absorbed at an increasingly frenetic pace as we dash to work, check our phones and pursue our lives. “Brands are now something we experience out of the corners of our eyes,” he says.

That suggests that in “a world that rockets us from experience to experience”, brands need to be able to collapse their symbolism into smaller and smaller bytes of information. As Graj observes, the 30 second sit and watch platform has all but disappeared. Brands appear in the margins of our search engines, in banners as we check our social channels, on smartscreens on public transport, on posters as we rush between appointments. They are everywhere, and yet increasingly they are subliminal. Those that fail to capture our attention,  he says, (perhaps because they are not distinctive enough or simple enough) are swallowed up in the blur.

I agree with him visually.

But we also know that consumers will put aside surprisingly large amounts of time for brands that do capture their imagination. They’ll queue for hours to be among the first to buy a new gadget. They’ll cross town to shop at a store because of what it means to them. They’ll save and save to acquire something they value. All of this can take hours, even months – during which time they are bombarded by other offers, other ideas, other enticements.

So at the same time as brands are needing to condense in order to be succinctly noticed, they are also needing to expand their presence and their relevance in other circumstances in order to keep customers engaged, sometimes over extended timeframes. Judging when and how to do that in a rapidly rechannelling world strikes me as a major challenge and a fundamental reason why, in my opinion, we will see content curation and management assume increasing importance in the years ahead.

I was discussing this irony just yesterday. On the one hand, brand owners need to be absolutely single-minded about what a brand wants to mean to consumers in order to distil that brand to its most granular. At the same time, they must be able to scale that simple, pure thought into an evolving, inspiring, relevant, competitive and coherent storyline, backed by authentic and consistent experiences, that people recognise and, at some level at least, recall every time they encounter the brand.

Instant. And yet involving.

Momentary. And yet packed with momentum.

Fast. But still endlessly fascinating.

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Loyal – to what point?

As I write this, I’m sitting about six rows back from where I normally sit on this flight. The space around me feels like it has shrunk – again. They haven’t offered me the nice headphones. I didn’t get a newspaper like I used to.

I’m not grizzling.

After all, they’re such little things aren’t they? And they’re a formula. If you’re a gold flier you get this. If you fly even more frequently than that, you get this.

The thing is that formula of recognition is now well entrenched in my flying experience. I’ve gotten used to it – to the point where I usually don’t even notice when it happens, but I very quickly notice when it doesn’t.

That got me thinking – What happens when your business model clashes with the economics of rewarding your customers? What do you do when it seems like your brand can no longer afford to give people who buy from you the “bonuses” that they are so used to?

First of all, I think it’s important to understand that such a situation constitutes more than just a change of policy. It amounts to a change of buying habit – and habits, as we all know, are infectious and addictive behaviours. If you do need to make a change to a programme, that means you can’t just send out written notice of new measures. You need to seriously think through how you’re going to successfully change the habits for the people affected, and to what.

So many times I’ve watched brands change aspects of a loyalty programme with conflicting results. The pressures on the bottom line might ease (success) but the risk to the topline going forward actually increases (not a success) as people review whether this habit still feels worth it to them.

Given the above, what can you do to adjust the experience so that it delivers as closely as possible to the original feeling, whilst meeting financial targets? To arrive at an answer I sometimes pursue a line of enquiry used in experience design. What do customers feel now, what do we want them to feel, and what can we do/introduce that closes that gap? Focusing on how people feel rather than what they get widens the field for possible answers.

One opportunity that can be overlooked in a change-over are the component elements of the habit itself. Loyalty programme overhauls tend to focus on one feature – qualification for the points system. But the habit around an activity often extends way beyond just what is earned. In facts, points are usually at the end of that process. What people value is how rewarded they feel across the entire experience given the money they have spent. So, on an airline for example, squeezing up seats or making the meals smaller or even using less staff or less experienced staff, can all make customers feel short-changed, regardless of whether the functional aspects of the flight have changed. Even the points system may not have changed, but the experience around earning those points can make people feel they are being economised. The habit as a whole has been adjusted – and that has the potential to shift customers’ perceptions of the whole experience, and therefore potentially compromise their loyalty, regardless of whether or not they get the rewards they’re used to.

So it’s the emotions across all those touchpoints that need to be considered – not just the points themselves. Otherwise you risk reducing your loyalty programme to a policy around entitlements, and at that point, as the Righteous Brothers used to say, you will indeed have lost that lovin’ feeling.

If you do need to make changes, how should you approach it? The temptation is to make cuts across the programme. But there’s a fine line to be negotiated here because one of the clear risks is that you alienate that relatively small percentage of people who transact with you regularly and who can and will take their business elsewhere. On the other hand, if you slash the benefits to those just starting out with you, you risk giving them no incentive to forming and growing the habit of dealing with your brand.

The FlyBuys programme in New Zealand is perhaps the most successful consumer loyalty programme in the world in terms of household penetration. They seem to me to use a successful combination of points, personalisation and customised special offers to make rewards more and more specific to each person over time, as they get to know them. Great approach.

Increasingly, my sense is that brands running rewards programmes will need to abandon “dumb” programmes (buy 9, get one free type programmes – transaction based, no market intelligence gathering, no specific customer insight gathering) in favour of programmes that intelligently offer people experiences/opportunities that feel right to them, within a framework of scarce resources. In terms of maintaining/lifting the perceived quality of rewards that people get for a decreasing budget, that could well mean receiving less rewards but ones that are better tailored to feel just as valuable.

So if, for example, there is a need to take away the headphones from an economic point of view – what did having the headphones telegraph to loyal customers, and is there something else you can now do that sends that same reward message to the brain at less cost to the company?

As always, what people actually get is far less important and influential than what they feel they get.

Oh excellent. The person in front just pushed her seat back.

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Always be branding

Somehow, it just doesn’t feel right. In fact, to some it feels tantamount to suicidal – spending money on your brand at the very point in time when the company feels like it can least afford to invest in “intangibles”. To all those people who’ve thrown that argument at me over the years, you’re right. Well, partly.

At the “wrong” time, it absolutely doesn’t feel right.

But that’s the thing about counter-cyclical decisions. They’re out of sync with the spirit of the times – or more particularly, they’re not aligned with your spirit at the time. And, actually, if you’re honest, the feeling that you have about the futility of branding in bad times is probably the same feeling you have when things are going well. Except then it feels like you don’t need to spend money on your brand.

Whenever anyone asks me, “When’s the right time to spend money on your branding?”, I respond with, “When’s the right time to be competitive?”. I’m not being a smart-ass. There’s never a wrong time.

So many people misunderstand the role of brand. They think it’s a synonym for marketing, and marketing is a synonym for media spend.

A brand tells people who to value and why.

Marketing tells them how the brand is valued, and where to access it.

The purpose of your brand is to use that perceived value to provide you, through marketing,  with sustained sales at a greater level of return than the market is inclined to give you over the longer term.

The objective of every brand should be to to lift what people are prepared to pay, to motivate people to value you more than they would do otherwise. It doesn’t matter whether you’re a discount brand, a scale brand, a luxury brand or a cult brand, that’s the goal. It doesn’t matter whether these are boom times or bust.

If you’re not a brand, you’re a commodity. You are only worth the value that the market assigns. And in good times, many companies are happy with that. They stop spending, ride the commodity wave and bank the organic growth. They allow themselves to believe the increases are all their own doing.

Things turn pear-shaped though when the wave changes direction. When things get tough, the temptation is to hunker down – to cut expenditure and look to ride out the tough times. The myth of cost-cutting is that it makes you a more competitive company. It doesn’t. It does make you a leaner company, a less expensive company, it does provide you with more cashflow. But it doesn’t generate preference. In fact, it doesn’t generate anything.

If you’re a company in trouble, branding is not a magic bullet. It won’t suddenly save you because it probably won’t lift your perceived value fast enough before you hit the wall. It needs to be used in conjunction with a range of other turnaround initiatives, including efficiency gains. But not branding will almost certainly kill you. Without branding you are, quite literally, nothing special, whether your bank account is telling you that or not.

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How good are you at saying goodbye?

Brands and customers part company for all sorts of reasons. Relationships are tidal. We outgrow the need for a brand or product, our tastes or priorities shift, we don’t live where we lived or work where we worked or spend our time doing what we used to do all the time, perhaps we decide to pass on the latest upgrade.

And, objectively, that’s a healthy thing. Those ebbs and flows provide markets with movement. They ensure that new players can enter and gain new customers and current players can change their position in a sector as they gain or lose followers.

Most brands have their heads around winning new customers. They seem less certain on how to say goodbye with good grace. But how you do that can, in the longer run, and in the context of your brand, be as important as how you welcome customers in the first place. Wishing them well on the next stage of their journey, and assisting them to start that stage in the best light, may well put you a lot closer to  welcoming them back.

The critical thing is to stay true to who you are and what you stand for, whilst keeping your minds open to opportunities to improve. The key question is, why are they leaving and what can you as a brand learn from that?

  • If you lose business on price, that probably means your value equation isn’t clear enough or strong enough. Don’t try to re-negotiate the result by radically repricing. That just makes your whole value structure look arbitrary and untrustworthy. If you honestly can’t afford as a brand to deliver what they want for the price they’re prepared to pay, then don’t. Explain why you can’t accept the arrangement and politely walk away.
  • If they’re leaving because of a perceived wrong or shortcoming, that probably means your relationship management and perhaps your problem escalation processes are patchy. Acknowledge that they feel the way they do, and (particularly if they have a point) tell them what you are doing to fix the problem they have identified. At least ask if you can be in touch when you have an answer. That keeps the relationship going and shows good faith in looking to rectify a situation.
  • If they’re leaving because they perceive the grass is greener, then you either have lost profile in the marketplace or you have failed to remind your customer of the value you bring. Try to find out what they think your competitor has that you don’t. You could do this through a survey or an interview. The insights gained from this exit poll can be very revealing.
  • If they don’t take up your latest offer, or they go somewhere else for it, then you either haven’t provided them with a good enough reason to change, you’ve lost ground as a brand or you’ve simply asked too much of your customers. Take a long hard look at what you’ve been asking them to buy and whether, in the context of what you’re asking them to spend, their priorities and what your competitors are offering, it’s really worth it for them.

Lifetime value is pretty much a thing of the past. You have to assume for the most part that customers have a limited loyalty timeframe. You can’t (and often shouldn’t) fight to keep the business at any cost. But you must always fight to keep your good reputation – because at some point, the customer who left you will be ready once again to move on.

How you said goodbye can have a lot to do with whether they boomerang to you or leapfrog to yet another player. Even more importantly, how ex-customers remember you can have a huge influence on whether new customers embrace you.

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New article: 5 things to do when social media reacts to you

Imagine being flashmobbed. Suddenly hundreds of people run into your reception area with chocolates and flowers and sing a song in your honour. What would you do? Or a crowd appears at your company’s gate and each person there shakes their fist and jeers everyone entering the building. Then, just as quickly, they’re gone.

It happens a lot. To firms all over the world. Not literally of course. On Facebook, on Twitter, on YouTube. Brands are hit by a wave of emotion, good or bad, that rolls in, and then recedes, leaving everyone affected breathless and confused.

What the hell just happened?

The force at work is “critical mass”: the impact that many, many people can have when moving together, with purpose, towards a singular point. It can last minutes, hours, days. It can generate smiles and business, or scandal and significant losses. It can transform people and brands into heroes or villains, celebrities or scandals.

Whilst I think a lot of us continue to search for a credible return on investment model for brands employing social media, there is no denying the ability of social media, on occasions, to galvanise people – and there is no denying the huge effects that such gatherings can generate. These channels can bring together consumers from many places to form a significant mass of opinion, in support or against, based around an issue they consider important to them. And they can do so like no other communication means before them. Hence the “mass”. The “critical” components are that participation usually comes with some strong opinions, and your reaction to that influx can be make-or-break. Continue reading to find out whether to step up or step back.

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Critical mass: understanding what drives fluctuations in likeability for brands

Whilst I continue to question the financial returns from social media for brands, there is no denying their ability to galvanise. In fact, social media is the driving force behind “critical mass” – the ability to bring together consumers from many places to form a significant mass of opinion, in support or against, based around an issue they consider critically important to them.

For brands, critical mass can be a powerful forum for advocacy, feedback, testing, support and, perhaps most importantly, a way to stay directly attuned to what Mr and Mrs Consumer are feeling. But a critical mass also makes for a powerful enemy: as we’ve seen this past week, a group of people united by a single idea can turn on a brand with extraordinary ferocity.

Critical masses flock and disperse in response to ideas. People join, leave and link at whim. So these groupings are constantly forming, dissolving and reforming on a global scale. They are not one constituency. And the density of the mass and its duration derives directly from the galvanising strength of the idea, the momentum it gathers, and the response of the brand. These are instant opinion communities that can choose to express themselves as pages, groups, in the wider media or directly through a blizzard of tweets.

Social markets, just like their financial counterparts, are driven by sentiment and the interactions of many. And it is that participation that generates volatility. But unlike the sharemarket, critical mass drives partiality rather than actual value. It helps decide whose on your side and whose not – at any given moment.

For scaled brands, then, the sentiment of critical mass represents your likeability in real time.

Some days your partiality will be up – meaning people generally feel good about you. At other times, the mass of opinion will be negative, impartial or absent. Same for your competitors.

Understanding that, quantifying it and responding to it is significant for its importance and yet it can only be momentary in its interpretation.