E x c h a n g e o f I d e a s | November/December 2009 | $10.95
M A G A Z I N E
A publication of Reveries.com and Cool News of the Day
P I VOT P OINT
M A G A Z I N E
Truth, Lies &
L et’s just get this straight once and for all: There is
no such thing as brand loyalty.
Each of us likes certain brands and may even love
them. We may buy them most of the time, or perhaps
even every time. But the idea that we have a true bond Happy @ Zappos
with any brand, like the kind of commitment we have Tony Hsieh whips up a happy culture and enviable
in real life with our friends and family, is a farce. loyalty for Zappos. An exclusive Q&A interview
This doesn’t mean we shouldn’t by Tim Manners.
Loyalty is try to create that kind of loyalty; most
what we of us tell ourselves that’s the end game
make it. and it’s always important to aim high.
What it does mean is that we
should take a harder look at how we go about creating
what we call loyalty. ROUNDTABLE
We need to admit that coupons, discounts, points
and prizes are just beanbags. We ought to spend more High Fidelity
time thinking about the stuff that really matters to
Creating loyalty is a multi-layered challenge.
people, and serve that up each and every day. A discussion featuring Richard McDonald of
That means products and services that really and Fender, Steve Rotterdam of DC Comics, Peter
truly solve problems and help people live happier lives. O’Reilly of the NFL, Joe Dobrow of Sprouts
Providing a helping hand when someone really needs Farmers Market and Spencer Hapoienu of
it, and smiling because we truly mean it. Insight Out of Chaos.
It’s not because the customer is always right (nobody’s
perfect). It’s because it’s up to us to make it right.
We may not get the same kind of loyalty we enjoy
with our family and friends, but we’ll have more fun,
and so will everyone else.
W h i T E PA P E R
Shopping for Value
Let’s give shoppers more value than they pay for.
By Al Wittemen.
ALSO Peter F. Eder
4 COOL NEWS
Amoeba Music, Glazier’s Marketplace, Ford Lately, Jeffrey’s Meat Market,
Kroger Customers and Glass Asda.
Alexander Isley Inc.
6 R ESEARCH R EPORT
Crock of Loyalty | Is there any such thing as brand loyalty at the
supermarket? An executive summary of a Reveries.com survey.
John S. Dykes
W H I T E PA P E R
Think Big! | Embrace strategic planning as the great opportunity to build Brain Trust
loyalty that it is. By Jim Doucette. Active International
Euro RSCG Discovery
20 R ESEARCH R EPORT Henry Rak Consulting Partners
Hoyt & Company
Precision, Prudence & Passion | A study of multichannel shoppers yields Insight Out of Chaos
valuable insights. By Masha Sajdeh and Nick Jones. Landor Associates
31 CASE STUDY
Real-Time Loyalty | Green Hills Market builds loyalty where the shopper,
product and store converge. By Richard Guha.
Triad Digital Media
34 W H I T E PA P E R
Six Appeal | Marketing can help build strong shopper-strategies six ways.
By Chris Hoyt.
BVI Networks, Inc.
38 R ESEARCH R EPORT
Stand by Me | A year ago we were angry. Now we’d like some tender, loving
care. By Dori Molitor.
David X. Manners Co.
107 Post Road East
Westport, CT 06880
42 W H I T E PA P E R
Citizenship Branding | Loyalty grows when brand values and strategy
align. By Scott Osman.
203-227-7060 ext. 227
n Brought to you by the editors of Reveries.
com and Cool News of the Day, The Hub
magazine is dedicated to exploring insights,
W H I T E PA P E R ideas and innovation as the ultimate drivers
of business success.
Leading with Loyalty | Brand rituals build loyalty and drive growth.
By Zain Raj. n Published bi-monthly since July
2004, The Hub’s circulation is exclusive
to Reveries’ proprietary database of
approximately 3,500 senior-level, client-
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COOL NE W S
“Big chains went under because they lost track of core
customers,” says Marc Weinstein of Amoeba Music.
Virgin Megastores, says Marc, “were almost like banks or
something . They didn’t showcase the product. It was always
just so sterile.”
Amoeba, which Marc co-founded in 1990, bills itself as the
world’s largest independent record store, with its flagship
located “in the heart of Hollywood on Sunset Boulevard.” It is
anything but sterile.
Offering “a massive collection of diverse new and used vinyl
LPs, CDs and DVDs,” Amoeba “also doubles as a popular live
performance venue, hosting the likes of Paul McCartney and
Marc says the real difference is that Amoeba has “so many
people who love music on both sides of the counter. We don’t
have a real corporate hierarchy. People really get the passion
when they come in the store. It’s an infectious feeling.”
He also attributes the store’s success to its multilayered
connection to the local culture.
“A lot of collectors come in and buy hundreds of records off
the wall, and lower-income families come in and buy VHS
tapes. All kinds of culture is being recycled,” he says.
Meanwhile, Marc is planning to launch a digital store early
next year. His idea is to “create the ultimate indie version of a
digital store with a lot of data and ways to look things up.”
[S o u r c e : Amy Kaufman, The Wrap, 8/20/09] Ford Lately
Ford Motor’s marketing chief, Jim Farley, thinks people are no
longer brand-loyal to cars because quality has become a commodity.
Glazier’s Marketplace “Brand loyalty has shrunk because of widespread improvements in
the products,” says Jim. “The ‘trust factor’ is more or less the same
for most cars.”
A single-store supermarket in Las Vegas is betting that a
distinct personality will win shopper loyalty. But Jim also thinks winning us back is more about the future than
the past. “I can’t tell you how many car clubs I have been to where
Perhaps most notably, Glazier’s Food Marketplace “will try to
they own old Mustangs and vintage T-Birds, but they drive Camrys,”
lure shoppers partly by moving front and center some of the
fresh food preparation normally done behind the scenes.”
At least for now: “So far this year, only about 20 percent of car shoppers
The store will also stock “a broader-than-average assortment
stayed with the same brand when they purchased a new vehicle,”
of items, such as mustards and seafood, a salad bar and a sit-
according to CNW Marketing Research. That’s quite different from the
down dining section with a player grand piano.”
1980s, when “nearly four in five Americans were repeat buyers.”
Glazier’s will also have classical music in the store, hoping
Some suggest that automakers invested too heavily in advertising that
it will “calm shoppers into taking their time and perhaps
promoted corporate brands rather than individual models (e.g., “Have
picking up a few more items.”
You Driven a Ford Lately?”). But Toyota found, for example, “that
The retailer has no plans “to join the pile of fliers stuffed into the rock-solid quality that made its Camry sedan the top-selling car in
mailboxes,” but does intend to “try some community-relations America did not lure many buyers to its full-size Tundra pickup.”
tactics, such as making a meeting room available to local groups.”
Jeremy Anwyl of Edmunds.com says the focus these days is on
“What we have attempted to do is take into account all “value,” and cites Hyundai as having done a particularly good
the things we found that we did or didn’t like about the job with that message. Hyundai and Kia, not coincidentally, have
supermarket,” says William Glazier, the store’s founder, who replaced Chrysler and Pontiac in the top ten of the best-selling cars
had previously built and sold four stores near Philadelphia. in America.
[S o u r c e : Tim O’Reiley, Las Vegas Business Press, 9/28/09] [S o u r c e : Bill Vlasic, The New York Times, 10/21/09]
Jeffrey’s Meat Market Kroger Customers
“I’m a piece of antiquity, kept alive,” says Jeffrey “We don’t need to draw in others So, Kroger pays attention to small
Ruhalter of Jeffrey’s Meat Market. Jeffrey was who don’t shop with us because details, “such as sending a Jif peanut
born into the butchering business, 54 years ago. the biggest opportunity is with our butter coupon to a mom who buys
His early memories include being wheeled on a loyal customers,” says Kroger chief only Jif,” for example.
handcart “through hook-hung sides of beef.” He executive officer, David Dillon.
Kroger has also grown loyalty by
has very definite ideas about what it really means building “larger stores with more
David says Kroger realized this
to be a butcher, too. products at cheaper prices ... cleaner
almost ten years ago, and has been
“A butcher is a member of your family,” says on a path ever since “to put the aisles and short lines ... $4 generic
Jeffrey, “who makes sure that what goes into customer first, and permanently.” prescriptions, organic food selections
your children’s stomachs is fresh, healthy and Most famously, Kroger engaged with ... and a 3-cent reward for using a
precisely what they need to survive.” London-based dunnhumby to build a reusable shopping bag.”
database of 45 million shoppers.
He also thinks being a butcher means being part It has further tightened bonds by
of the community. And so he lectures, offers food Kroger’s loyalty program has avoided “launching breast cancer awareness
tours, writes recipe books, teaches classes and turning its “customer into someone campaigns using local women, and
hosts art shows. He once fed steaks to 100 people always looking for the next deal” by giving away its Deluxe ice cream to
at local hotel, for free. He’s also now starring “in creating “anticipation and excitement loyal Twitter followers.”
his own pending reality show on TV.” over savings, letting its customers
Ultimately, David says creating
experience great value,” says Chris
The show will chronicle Jeffrey’s days behind the loyalty is all about “the importance
Allen of the University of Cincinnati.
counter and also follow him as he ventures out of honesty and accepting feedback,”
into the neighborhood. “There’s no such thing The database has also taught saying, “You can’t grow if you don’t
as ‘just being a butcher’ anymore,” says Jeffrey. David Dillon “that even Kroger’s recognize the need for that ... We were
“Community. That’s what I mean.” best customers are still buying not as good as we thought we were.”
many items that the retailer sells
[Source: Alan Feuer, The New York Times, 8/20/09] [S o u r c e : Laura Baverman, Cincinnati
The U.K.’s second-largest food retailer plans to open its first
“transparent” supermarket in South West Wales. The store will
have glass walls instead of the usual brick, “to expose areas of the
supermarket normally kept out of view.”
It’s part of a larger effort by Asda Group Ltd. to build shopper
loyalty. Andy Bond, Asda’s president and chief executive, also
plans to “try to gain customers’ loyalty by giving them more say
in how the stores are run.”
Beginning in January, 18,000 regular Asda shoppers will be given
access to products before they are launched in its stores.” Andy
says he wants to “lift the lid on how we do things, and enable our
customers to help make decisions that have an impact on what we
sell and how we sell it.”
Asda plans to “reward customers who come up with the
‘brightest idea’ that saves the business money. If a suggestion is
implemented ... a customer could be in line to receive a check for
... five percent of the first year’s savings.”
As Andy explains: “It’s about entering a new partnership, working
with customers rather than simply working on behalf of them.”
[S o u r c e : Lilly Vitorovich, The Wall Street Journal, 10/2/09]
Cool News of the Day, a daily e-mail newsletter of marketing insights, ideas and inspiration, is edited by TIM MANNERS. For a free subscription, visit www.reveries.com
RE SE ARCH REP ORT
is there any such thing as brand loyalty
at the supermarket?
Earlier this year, the CMO Council and the
Pointer Media Network came out with a study
reporting alarming erosion of consumer loyalty
to brands bought at the supermarket.
How many brands have your loyalty
“For the average brand, 52 percent of highly at the supermarket today?
loyal consumers in 2007 either reduced loyalty
or completely defected from the brand in 2008,”
the study said. More than 25 13.9%
Wow — and this was before the recession
kicked in. So, we thought it would be interesting Ten or more 41.1%
to ask our readers — predominantly senior-level
marketers — if they thought brand loyalty was BS Five or more 27.7%
where supermarket brands were concerned.
The survey seemed to generate more than its One or more 15.3%
share of comments and controversy. Some of the
controversy surrounded the questions themselves, None 2.0%
particularly one where we were trying to get at
degrees of loyalty in various product categories.
The critics had a good point. We simply
How many brands had your loyalty
listed 20 popular categories and asked respondents
at the supermarket a year ago?
to select those in which they usually purchased
more than one brand. Some respondents noted
that an unchecked box might mean they didn’t More than 25 19.3%
shop the category, not that they were loyal to a
particular brand in it. Ten or more 42.1%
That said, out of the 20 categories, only
nine — ketchup, colas, deodorant, toothpaste, Five or more 25.7%
frozen dinners, laundry detergent, toilet paper,
canned vegetables, and yogurt — registered as One or more 11.9%
die-hard, single brand, “loyalty” categories by
more than 50 percent of respondents.
Based on respondent comments, it’s possible
that ketchup and colas made the cut because Heinz
and Coca-Cola dominate their respective categories.
It is also possible that frozen dinners, canned How has your loyalty to private-label brands
vegetables and yogurt scored well because these changed over the past year, if at all?
categories might be less popular than some others.
Other respondents also took issue with our Increased 24.9%
definition of loyalty as “a brand that you buy at the
supermarket every time, without fail, and to which Stayed the same 59.2%
you have an emotional or rational attachment.”
Some said they didn’t buy the same brand
every time because favored brands weren’t always
available. Others said they were on a loyalty hiatus
from some brands because of the recession. Still
others said they were loyal to more than one
brand in a category and liked some variety.
6 THE HUB NOVEMBER/DECEMBER 2009
THE HUB NOVEMBER/DECEMBER 2009
In which of the following categories do you usually
An open-ended question, in which we
asked respondents to name the brands to which
they were most loyal, was notable for intense
“loyalty” across a large number of brands. As
one respondent put it, “Loyalty, not monogamy.”
So, perhaps the prevailing definition of
“loyalty” is different in marketing than it is
in ordinary life, where loyalty usually means
purchase more than one brand? Pick as many as apply.
long-term emotional devotion beyond reason,
sometimes at odds with one’s own best interests.
Bread 68.3% Maybe marketers (and shoppers) have their
own definition of loyalty that’s a step or two
Breakfast Cereal 68.3% removed from its traditional meaning. Could
be that’s a result of so many years of marketers
Ice Cream 67.8% defining “loyalty” as discount programs whose real
objectives, ironically, can be to promote disloyalty.
Potato Chips 62.4% In fact, although a solid majority (67 percent)
of respondents said they use a loyalty or retailer
Beer 61.9% charge card at their favorite supermarket, a nearly
equal number (64 percent) said that their
Pasta 61.9% supermarket’s loyalty or charge-card program
did not make them more loyal.
Cookies 60.9% Meanwhile, our survey also found remarkable
stability in levels of loyalty with 41 percent saying
Bottled Water 59.4% they were loyal to “ten or more brands” today,
versus 42 percent a year ago.
Chicken 58.4% And despite conventional wisdom that private-
label brands have enjoyed a sales bonanza during
Paper Towel 53.5% the recession, 59 percent of our respondents said
their loyalty to private-label brands had “stayed
Fruit Juice 52.5% the same” over the past year. Respondents also
said they were more loyal to brands (54 percent)
Yogurt 47.0% than to the supermarkets where they buy them
Toilet Paper 45.0% Finally, to the bottom-line question of whether
brand-loyalty is BS, a whopping 86 percent said,
Canned Vegetables 44.6% “no.” But don’t get the idea that just because we’re
“loyal” to your brand means we’re going to buy it.
Laundry 44.1% Respondent pRofile
A total of 203 survey respondents included
Frozen Dinners 42.6%
brand marketers (24%), consulting firms (19%),
and agencies (16%). Twenty percent worked
in packaged goods firms, 13% in media/
entertainment and seven percent in retail. A
majority were senior-level executives with 72%
reporting more than ten years of experience in
Ketchup 26.7% Survey Results:
NOVEMBER/DECEMBER 2009 THE HUB 7
NOVEMBER/DECEMBER 2009 THE HUB
is a multi-layered challenge.
how do you build selling and the care and feeding of advertising or customer service
the customer along the way. to build something that’s bigger
loyalty in the store? than your four walls. I think loyalty
Peter O’Reilly: We’ve tried to
programs help, and I’m a strong
Richard McDonald: We look take advantage of our retail
believer in them. They keep some
at retailers more as business opportunities by giving our
customers shopping because they’ve
partners than just outlets for our fans the type of selection and
built up some points, but that’s more
products. It’s really about long-term personalization opportunities at
affinity than true loyalty.
relationship building and it can’t retail that allows them to customize
be a one-size-fits-all approach. their apparel and products and then I try to use words and language to
A We equip the salesperson to connect that with the game. generate a deeper connection. If
R oundtAble communicate our message, or else
F eAtuRing they won’t talk about us.
Richard McDonald This includes product descriptions, Customer service needs to rock as
photography, packaging, web tools,
videos, staff training, cool and
hard as our guitars and amps.
innovative promotion ideas — and R IC H A R D MC D oNA L D
Steve Rotterdam the more turnkey it is, the better.
DC Comics Brands need to take responsibility
to empower retailers with the tools We’ve also expanded our product you can create a certain tone with
National Football they need. line to hit our female, youth and the language that you use, you’ll
League Steve Rotterdam: Retail is where urban fan base with product get customers who recognize it
our brand comes alive. This is lines that are fresh and unique. because it resonates with them.
Joe Dobrow It’s about making sure that the They will perceive that there are
where the over-the-counter debates
Sprouts Farmers intensity and meaningfulness of some real people behind that store
happen over what’s exciting and
Market the NFL and individual teams and they are their kind of people.
what’s really rocking people’s
connect with fans at retail. And then you’re in business.
Spencer Hapoienu interests. It is a place where you
Insight Out of Chaos can have conversations amongst There is such a social dynamic Spencer Hapoienu: Retailers have
peers who have similar interests. around our game, around bringing a big advantage over every other
With very, very rare exception, our people together both at home and industry because they have the
retailers are also fans themselves. at the stadium, that we need to opportunity to talk to the customer
When a comic or graphic novel sells make sure that our retail and our on a regular basis, one-to-one. They
well it’s because the retailers have licensing portfolio taps into those can build a behavioral transaction
expressed their confidence in what elements of our brand essence. database that can tell them what
we are doing to support the books. their customers respond to, what
Joe Dobrow: The question is
It’s really a business built on hand their customers like and don’t like.
whether you can use programs,
8 THE HUB NOVEMBER/DECEMBER 2009
It’s an enormous advantage that When our consumers
most retailers don’t tap into. But
I think that’s starting to change are having a conversation,
because those companies are we’ve done 80 percent of our job.
having so much success in a very
difficult marketplace. S T E v E Ro T T E R DA M
More and more companies are
taking advantage of retailers that O’Reilly: Across the history of information or offers to people, so
have data on what their customers the NFL, great technology has that they will have an affinity for
do, and are using that to be much made the fan experience better or our stores.
more relevant. more convenient. This September
Now, Sprouts is a little bit
we launched our new Red Zone
unusual because we have an over-
how can technology Channel, which allows fans to
representation of senior citizens
watch every touchdown of every
promote loyalty? among our shopper base. So, we’ve
game on Sunday afternoons.
got a lot of customers who don’t
McDonald: Fender is unique in Our NFL Mobile Live product with want an in-store kiosk or a mobile
the sense that we’re creating tools Sprint enables streaming of NFL app. For them, ironically, what’s
for musicians to make music. Network games and provides every generating some loyalty is that my
We’re known for our vintage tube stat and every play of every game. store is not techno-heavy.
amplifier technology that’s still the We also continue to look at in-
Hapoienu: As the ability to store,
choice of most professionals. It’s stadium enhancements — whether
analyze and interpret large volumes
a lot of the same technology that that’s ordering food or seeing replays
of data has accelerated, it has become
we developed in the ’50s and ’60s, —we make sure that our most loyal
easier to use technology to talk to
but at the same time the needs of fans that go to our games have an
customers on a one-to-one basis.
the contemporary artist may be incredible experience.
completely different. You can produce printed materials
We also have a very sizeable
that talk to customers one-to-one,
As a result, we’ve had to evolve database, compiled across all of
and you can reach the customer
technologically within the company our different touch points. We use
in the store with vehicles on a
from a product development that to connect to fans on a one-
targeted basis. You can use the
standpoint and offer digital products to-one basis and customize our
internet, email and Twitter.
to meet the needs of new players. communication by favorite team.
So, sustaining loyalty is about We’ve got so many fans whose There’s another opportunity to
evolving with technology to fill a favorite team is not their local build loyalty by putting new
latent need that musicians have to team. So, our database and other technology into products. For
create something new. forms of online communication example, Nike put a chip in its
help keep them connected. sneakers and then attached that to
Rotterdam: Technology has
an iPod. That’s a huge advantage
changed the dynamic. It is no Dobrow: I’m a lifelong believer in
when you integrate technology into
longer a situation where you can database marketing. In the past,
the product and then tie that back
expect your consumer to find you. you had a lot of little mom-and-pop
to everything else you’re doing.
Consumers expect you to meet stores and they knew who their
them where they are. customers were. And that was
Those brands and channels that really the relationship on which how can social media
ignore the tools miss out on commerce was built. influence loyalty?
opportunities for growth and to Today, we use technology to
McDonald: Fender is all over social
build loyalty. They are losing that identify and get to know our
media. We are directly linked to
core customer who will continually customers. The trick, of course, is
Facebook, Twitter, MySpace and
come back to your brand even when that you don’t want to cross the
YouTube. We also have a very
it’s not convenient or financially line of privacy. But we do want
active community section on
conducive for them to do so. to be able to serve up relevant
Fender.com. We’ll post a question
NOVEMBER/DECEMBER 2009 THE HUB 9
If we go deep into areas that are Once you know who your customers
are and how they divide themselves
authentic to our brand, we’ll have the up in various segments, you can
most success with building fan loyalty. create affinity groups through
social media that really provide
PE T E R o ’ R E I L Ly that segment with interesting
information or opportunities. Then
it becomes a platform to build
on our social media networks as The other thing — and this is not retention and sell more product,
if we were sitting with each other, something you traditionally see but in an indirect way.
and I might ask you: What’s your from a sport league — is that we’re
favorite guitar? really digging into the youth space how about loyalty
and focusing on our next generation
We’ll get thousands of people,
of fans. For example, we’ve created
literally, in hours — and that creates
a virtual world, NFL Rush Zone, McDonald: Everything that we
loyalty. If you measure loyalty
which is a great home for NFL kids do as employees at Fender is for
through engagement and retention
to connect, to chat with their the customer because that’s the
of our customers — which is a great
friends across the country. only thing that matters. It’s not
way to grow your business — social
media is a great way to do that. Dobrow: With social media, you for your boss or the CEO; it’s for
can’t look like you’re marketing — the customer. That is emphasized
Rotterdam: We include Comic-Con
and you can’t look like you’re trying from the top to the bottom every
and other fan conventions in our
to look like you’re not marketing. day here; it is a mantra of the
definition of social media. Such
What you have to do is consider company. When you do that, then
events are not just opportunities to
what this technology has done: It’s your mission is pure and people
bring our talent and fans together,
brought us back to an old way of appreciate it.
but also serve as forums in which to
doing business where humanity The other thing that works for
break news that radiates out to fan
and transparency, sincerity and me is that I hire my customers. I
press and mainstream media.
honesty actually matter. hire people who dig this brand,
Our daily blogs are also key
But when you think about the understand it, love it and know
elements of our communications
language used in social media: you what the experience is like for
strategy. They, in turn, feed
follow somebody on Twitter, you the dealer, distributor or the
information into our Facebook and
link with someone on LinkedIn, or consumer. We bring those people
you friend someone on Facebook in and it gets into our tribal gene
This ensures that our message — that’s not deeply felt stuff. pool. Customer service needs to
gets out to those who might not rock as hard as our guitars and
True followers of the Grateful Dead
partake of blogs or conventions, amps. That’s our culture.
followed them around from venue
but are still plugged into their
to venue. That was loyalty! That’s Rotterdam: One of the first
own social network communities.
not what we’re talking about here. questions I was asked when I met
When our consumers are having a
The challenge is to figure out how our sales team here had nothing
conversation, we’ve done 80 percent
to bring substance to it to get that to do with where I’d been or what
of our job.
longer-term affinity, or loyalty. my plans were. The question was:
O’Reilly: Delivering information in So, what are you reading? I rattled
Hapoienu: Twitter is going to
real time, whether that’s through off titles of comics I read regularly
be a huge opportunity for a lot
Twitter feeds to communicate the and I distinctly remember one
of businesses to drive people to
“inside” information our fans want guy saying to me, “Okay, that’s
their products based on a sense
on what’s happening at the league acceptable. Pedestrian, but
of urgency. If you can create an
and with our clubs, is critical. acceptable.”
affinity with a group of customers
We’re really staying on top of how
because you know what they buy, Turns out I wasn’t reading enough
our fans want to connect with the
you can create an environment independent stuff. But I am now.
game and the league.
that people are drawn to. With comic-based literature, you
10 THE HUB NOVEMBER/DECEMBER 2009
have to have that level of personal
The question is whether you can
engagement if you hope to have
any credibility with your fans, build something that’s bigger
creators and staff. than your four walls.
O’Reilly: Commissioner Goodell is JoE D oBRoW
building an innovation culture at
the NFL, and giving everybody a
voice. more relevant relationships with aligned with your business. For a
customers, whether that’s in the company like Fender, that’s going to
The whole organization is part
store, on the web or on the phone. be music education, especially with
of a team — from the folks on the
the arts under siege in the schools.
business side to those out on the If you’re a salesperson at retail
field — the NFL is one unit with and your company has given you Little Kids Rock is one of our
one mission. It’s an organization tools so that you know who your philanthropic programs. We have
with incredible loyalty among its top customers are, to recognize the Fender Foundation that gives
employees, and that culture of and acknowledge them, that’s a grants to everything you can
innovation that the Commissioner great way to build loyalty.Anything imagine that results in people
established is one of the core that makes the employee feel giving the gift of music.
reasons that it remains so strong. more satisfied and gratified about
How do I keep a 60-year-old brand
their role makes them much more
Dobrow: Shopper expectations about relevant to a group of young,
interested in staying with that
employees are now so low that even emerging guitarists who, in
a little bit of a customer service spark defining themselves, are going to
can make a huge difference. Of It also creates more energy for the dismantle everything their parents
course, it cuts the other way, too; a store owners because they’ve got thought was cool? The only way I
little bit of a customer service more control over the business, can do that is through loyalty. And
problem can be devastating. and have more confidence to do the only way I can get loyalty is
more merchandising, to expand, through honest, sincere, authentic
I like to spend time training the
and to remodel. It’s about giving engagement with my customers,
cashiers before a store opens
the employees tools to make them the people who use our products
because that’s my marketing
better at what they do as it relates and depend on them for a living.
department! I want those cashiers
to the customer.
to know what kinds of questions Rotterdam: Our characters have a
customers might ask about our long history of being utilized for
marketing programs, and to interact how does social good causes. Dating back to World
with those customers so they can responsibility create War II, Superman, Batman and
give — and get — feedback.
loyalty? Wonder Woman enlisted kids to
get their parents to support various
Employees are just a unique kind
McDonald: When we talk about bond efforts. We’ve also put them
of consumer who happen to see
social responsibility, we’re talking and the rest of the Justice League
the company from inside and out.
about the responsibility of being to work on behalf of many social,
They are blogging and Tweeting
honest in our communications, civic, health and fitness related
when they’re not at work so their
the brand promise we make and organizations.
perspective can be a source for
building tremendous consumer how we keep the brand promise. As a company, we’re supportive
loyalty. That kind of responsibility returns of an initiative called the Comic
in loyalty. So, if you treat your Book Legal Defense Fund, which
Hapoienu: Developing strong
customers like you treat your addresses various issues related
relationships with customers
friends and you treat your family to censorship in our industry.
energizes employees and makes
(hopefully you do that well), And, where we can, we will also
them more comfortable with
you’re making it. support cause-related efforts of
the products they are selling.
Now, if you have a cause that’s local retailers, especially those
It galvanizes them to be more
pure, it should be something that’s concerning literacy.
creative and find ways to create
NOVEMBER/DECEMBER 2009 THE HUB 11
T HOUGHT L E ADER S
At the end of the day, our costumed after selection and quality; value;
heroes are champions of good. and the shopping experience. But
These are characters whom parents a table can stand on three legs,
and grandparents can feel good and while social responsibility
- talking to their kids about, and provides stability, it’s not yet
that builds loyalty as well. critical for building loyalty.
RICHARD MCDONALD is For example, up until recently,
svp of global marketing for O’Reilly: About two and a half
99% of the bags we gave out at
Fender Musical Instruments years ago, we looked at everything
Sprouts were plastic. Now we
Corporation, responsible for that we’re doing in the corporate
marketing, advertising, product offer paper bags that cost four
social responsibility space. We
development, artist relations, times as much, but it was the right
were doing a lot of things well,
product education, promotions thing to do. No one came up to us
but that audit led us to going deep
and events. afterward and said, “Thank God
in areas where we knew we could
you made the switch. Now I’m
have the most impact, and that
STEVE ROTTERDAM is svp of sales not going to shop anywhere else!”
and marketing for DC Comics,
were very authentic to who we are
But over the long haul, it will help
running both the direct and as a major sports brand.
book trade sales departments,
That has led us to a major
supervising marketing and Hapoienu: Too often the ideas
publicity while also overseeing
commitment to youth-health and
smack of transparent marketing
advertising-sales and custom fitness under our NFL Play 60
PETER O’REILLY is vp, fan Developing strong relationships with
strategy and marketing for the
National Football League, and customers energizes employees.
also leads the NFL’s corporate
SPE NC E R H A P oI E N u
social responsibility initiatives.
He previously was a director
of marketing for the National
campaign. The goal is to encourage on the coattails of a charity.
kids to get at least 60 minutes of Developing ideas that are either
JOE DOBROW is vp, chief marketer
physical activity every day. borne from the DNA of the
and “tofu” peddler at Sprouts
Farmers Market, a 40-store,
retail brand or the culture of the
We’ve gotten tremendous traction
Phoenix-based chain of natural customers are the most effective.
— nationally, across 32 clubs and
foods stores. He previously
with employees, as well — because Saks is running a program to sell
led marketing at Whole Foods,
Balducci’s and Flexcar.
it is so authentic to who we are as coats by providing 25 percent off a
a brand. new coat if the customer brings in
an old coat that Saks can donate to
It is something that our athletes
SPENCER HAPOIENU is president the appropriate local charity.
live every day, and it has given us
and co-founder of Insight Out
a major impact with kids, families While that promotes coat sales
of Chaos, a database and direct
and schools. So, whenever we at Saks, it is possible that many
marketing company. He can be
reached at email@example.com or think about social responsibility, customers might not think of
(212) 935-0044. it needs to be so core to our donating an old coat and now
overall mission and part of our would. Or, they might not have
business. If we go deep into areas thought about buying a new coat
that are authentic to our brand, and now would.
we’ll have the most success with
Either way, charities will get the
building fan loyalty.
benefit of coat donations and
Dobrow: Social responsibility is Saks and its customers have
the fourth leg of a table on which done something for the local
consumers make buying decisions, community. n
12 THE HUB NOVEMBER/DECEMBER 2009
WHI T E PAPER
Embrace strategic planning as the
great opportunity to build loyalty that it is.
Think Big! By Jim Doucette they yield actionable plans, according to the McKinsey
Quarterly. At the heart of this dissatisfaction:
H e n r y r a k c o n S u l t i n g Pa r t n e r S
n The approach to investment prioritization is
uilding strong consumer loyalty to not systematic.
your brand represents the Holy Grail n Growth targets are not driven by consumer or
for marketers. Strong consumer loyalty category realities.
gives the marketer the ability to do n Growth strategies are overly reliant on white space,
all sorts of things that we marketers — and our acquisition, etc., versus “controllables.”
firm’s shareholders — love! Strong loyalty enables n Growth options are not systematically quantified,
making comparisons across franchises and operating
a brand to grow through line extensions and
groups difficult, if not impossible, to make.
new innovation, to price against weaker
n The financial plan is often disconnected from the
competitors, and employ other strategies that strategic plan, leaving the most carefully crafted
deliver ever-higher levels of volume and profit. strategies starved for implementation resources.
When should we start down the path to this land It is easy to see the path that leads to such
of brand nirvana? Well, in a word … now! Now is dissatisfying strategic plans. A good strategic
the time of year when many marketers are creating planning process should be a dynamic, creative
their strategic business plans, which is the essential discussion about discovering the possibilities to grow
starting point for creating a stronger consumer consumer loyalty and take your brand to new heights.
proposition and, ultimately, more loyal consumers. However, when you are embroiled in a business,
The bold executives among us will plot a course it is hard to get “out-of-the-business” and challenge
for dramatically accelerated growth. That is certainly conventional thinking. Further, the breadth and
the intent of the “strat plan.” Too often, however, depth of consumer insight needed to drive the strat
strategic planning becomes a derivative exercise. The plan is often not present. How can you make sure
last strategic plan is dusted off and developing the not to fall into this trap? There are two fundamental
new plan essentially becomes a process of making steps for creating a successful strategic plan and,
incremental changes to the prior one. consequently, strengthening consumer loyalty to your
The results of strategic planning processes are brand: 1) Understand consumer behavior and the
certainly not adequate. Fewer than 50 percent of senior drivers of behavior in a precise, detailed way and use
executives are satisfied with their current strategic the behavioral foundation to organize everything else
planning processes and fewer than 25 percent think you know about the consumer (i.e., needs, attitudes,
NOVEMBER/DECEMBER 2009 THE HUB 13
etc.) and 2) Build a plan upon this behaviorally-based between the core business, new innovation and
foundation. acquisitions/divestitures across the portfolio.
A comprehensive understanding of consumer
behavior starts with an in-depth analysis of A GRowth Action plAn
consumer usage and purchase patterns. There are Before we get to balancing activities across the
two very powerful analyses that allow marketers to portfolio, it’s time to create growth action-plans at the
understand, validate, and leverage these behaviors brand level in six areas:
empirically: A usage domain that analyzes the largest Marketing Strategy. Two critical questions need to
viable set of competitive/substitutable products; and a be answered: What is the right strategic positioning
purchase structure that defines the drivers of purchase for my brand and how should the positioning be
behavior in close-in, specific, product categories. communicated to my brand’s target consumers?
Each one provides distinct and vital insight into If the consumer behavior analysis determined
how consumers behave. The combination of usage that your brand’s actual competitive frame is broader
and purchase behavior gives you the foundation to than previously imagined, your new strategic brand
develop much clearer strategic decisions to make your positioning should reflect this broader competitive
brand the one that best meets consumers’ needs. set. The strategic brand positioning should be very
When integrated with targeting, need state, specific with regard to competitive frame, target,
product performance, brand benefit and brand-equity benefits, reasons-to-believe and brand personality.
information, you have the insights to create a framework A well-defined positioning easily lends itself to
for accelerating the growth of your business. The a copy strategy that is the linchpin to making sure
framework should define a future in which your brand is your brand’s messaging is synchronized across all
more differentiated versus your competitors and creates marketing, public relations and selling touchpoints.
stronger loyalty with a wider consumer base. Even marketing and sales programs that sometimes
Where should your brand compete to establish have more of a short-term, tactical objective (such as
a competitive advantage? Your brand’s strategic many consumer promotions and in-store promotions)
positioning should answer that key question. For should be linked to the strategic positioning to
example, does the brand compete in soup or simple reinforce the brand’s new message.
meals; OTC medicines or pain management; isotonics Getting the positioning right, and consistently
or refreshment beverages? reinforcing the positioning through the entire brand’s
Furthermore, do you have a strategic brand messaging, is a key to strengthening loyalty. And,
positioning that is clearly articulated and precisely once you have the right positioning, stay with it! A good
defined? Is it understood and embraced by the entire positioning should last for years: Tide’s In — Dirt’s
business unit and your business partners? Does the Out; and It’s Not Delivery, It’s DiGiorno — are examples
positioning enable your brand to stand apart from of positionings that grew those brands for many years.
your competition in a highly relevant way? Spending Strategy. A precise positioning also
Answering those critical questions with a yields efficient growth for established brands because
consumer behavior-based approach is the key starting you can calculate the profit-maximizing point of
point for strategic planning. In addition to providing marketing spending — across advertising, consumer
clear direction for each brand, defining the strategic promotion and trade (or customer) promotion —
brand positioning ultimately allows you to define the against your brand’s new competitive frame.
roles for each brand in your portfolio. In cases where the competitive frame for your brand
Against the newly defined competitive frame, is much larger than previously imagined, the brand
you will be able to evaluate each brand’s ability to likely should be spending more on marketing to reach
grow revenue and deliver on margin requirements by the broader audience with your new, more relevant
assessing the brand’s competitive effectiveness and message and build consumer loyalty to your brand.
the attractiveness of its core categories. The Goldfish brand has increased its marketing
You are then able to calculate the expected future spending behind its tasty, fun and wholesome treat
value of each brand. The results are role definitions for positioning, which allows the brand to source volume
each brand in your portfolio in a way that is rigorous, far beyond the kids’ crackers category. With the ‘mom
quantitative and rooted in consumer’s actual behavior. appeal’ of being a baked (not fried) snack and its fun-
Once consumer behavior is well-understood, for-kids message of the “snack that smiles back,” the
the second key is to balance strategies and activities brand has enjoyed rapid growth in recent years.
14 THE HUB NOVEMBER/DECEMBER 2009
innovation Strategy. In addition to growing the base Several years ago, the Tylenol brand was
business, growth through innovation is part of the able to grow profits while maintaining volume by
lifeblood of any successful brand. The key question to understanding the brand’s true competitive frame and
answer is: How and why will the new product replace pricing within that competitive context.
consumers’ existing behavior with a new behavior? Selling Strategy. Even well executed, great
While creativity is important in any innovation marketing strategies cannot be fully realized unless
process, it should be directed after a thorough the consumer concept is taken all the way to the
understanding of the existing consumer behavior point-of-sale.
that must be changed, the benefits consumers seek At this point, you need to translate the brand’s
through this behavior, the attributes that support consumer strategies to category leadership platforms
the behavior, and the parts of their current behavior with shelving, assortment and promotion strategies
consumers are willing to change and not change. All that reflect consumer behavior and are tightly linked
of these facets should be understood by the consumer to marketing strategies.
behavior foundation you built at the beginning of the For example, by bundling the right items together,
strategic planning process. a promotion can address a larger set of consumer
Once the V8 brand clearly understood its unique needs, different users or different usage occasion,
vegetable nutrition benefit within the world of juice, so it will tend to be more incremental. For example,
it allowed the brand to expand into vegetable/fruit a pain relief promotion might include headache,
blends, such as V8 V-Fusion, as well as soup, with V8 body pain and muscle pain remedies, or powdered
Soup. Each new product contributed to the overall V8 soft drinks could be packaged in stick or multi-serve
trademark’s position of “another delicious way to get canister forms.
your vegetables.” In an era where many consumer purchase
Comparing the innovation opportunities you have decisions are made at the shelf, getting selling
defined with your company’s in-house development strategies right is often the critical link in driving
capabilities also can form the basis of an acquisition loyalty to your brand.
strategy. On the other hand, if segments of the business Portfolio Strategy. After brand-level strategic
no longer fit well with the brand’s competitive frame, plans are developed, it is time to integrate the brand
you may want to consider divesting those segments. plans into a portfolio plan. This is where the brand
Each strategy — smart innovation rooted in actual roles, which you determined earlier in the strategic
consumer behavior, strategic acquisitions, divestiture planning process, come into play.
of non-strategic assets — sharpens your brand’s Meshing brand roles with the brand-level core
relevance to the consumer and strengthens loyalty. business (marketing/selling/financial), innovation
Financial Strategy. The essential questions to and acquisition/divestiture plans should lead to the
answer at this stage are: What activities truly drive right blend of activities that are sequenced to deliver
profitable volume growth and what is the optimal accelerated top-line growth while delivering bottom-
pricing for my brand? line commitments.
A thorough brand “due-to” analysis will Strategic planning season is the time to step
identify the activities that truly drive growth for the back from the day-to-day activities of managing the
brand. This is an especially important step. In our business and assess your business in a holistic, yet in-
experience, activities that are within your control depth manner. This is the time to be bold and create a
often play a large role in determining the success of plan that strengthens consumer loyalty to your brand
your brand. and puts your business on a new, higher-growth
A clear and precise understanding of your brand’s trajectory. n
competitive frame identifies the competitors consumers
are likely to switch to and forms the basis for a brand
pricing strategy. For a more accurate measure of price
elasticity, consider brand (not item) elasticity within JIM DOUCETTE is a managing director
the context identified by the competitive frame. with Henry Rak Consulting Partners,
a growth strategy consulting firm.
Once the pricing architecture has been determined,
Jim can be reached at jdoucette@
the final step is to identify the “right” spend back that hrcpinsights.com or (203) 698-7712.
maximizes revenue and earnings while protecting
volume and equity, which in turn drives loyalty.
NOVEMBER/DECEMBER 2009 THE HUB 15
WHI T E PAPER
By al Wittemen
tr a c y l o c k e
hen i think of loyalty, i don’t think of brands. i think of people. i think
bout what it is that a person does that makes him or her so special that it
makes me loyal. it’s the intellectual, spiritual and emotional connections
that make the difference. For me, loyalty is having lunch with my friend Tim
at the Little Kitchen in the Compo Shopping Center on Route 1 in Westport, Connecticut.
Mitch Albom had his So, we’re having lunch,
lunch with Morrie, which
had an impact on his life,
Let’s give shoppers more and as usual, I always get
around to asking Tim about
and my lunches with Tim
do the same for me. Our
value than they pay for. the next issue of the Hub.
It’s not like I shouldn’t
lunches are always about remember. But this time
making people think, smile, and realize that sometimes the issue is going to be about brand loyalty. And my
there’s a different way of thinking that can lead to a first thought was, “Hey, piece of cake.” Hell, that’s
These lunches are always about the truth. They
more creative solution. who I am and what I’ve done my entire life.
In fact, my career was built on making people
retailers and their collaborative relationship. In
always begin with what’s new with shoppers and loyal to brands. So, whether it’s Heinz ketchup,
Finlandia cheese or Swift beef, it’s all about creating
years past, when we talked about brand loyalty, our brand loyalty, and I know how to do that.
assumption was that whatever you wanted to do at But the truth is that there really is no such thing
retail could be done. as true brand loyalty anymore. Almost nobody buys
That’s not true today. We now also have to the same brand all the time. Even fewer people will
consider what can be done with the retailer, and that bother to find a different store if their favorite brand
affects what we can do to build brand loyalty. isn’t available. That’s the real acid test of brand loyalty
The second issue concerns the difference between and it’s a test few brands, if any, can pass every time.
what retailers and brands say, and what they do. Loyalty is bull when you apply it versus those
This dichotomy intrigues me. The reality is that some definitions, especially in consumer packaged-goods,
marketers develop plans based on who they are, how ever since the Great Recession. Never before have
they live and what they do, versus whom they are we seen life in general — not to mention ingrained
marketing to and what they can do for them. purchase behaviors — so disrupted.
Last but not least, when Tim and I have lunch, we’re And yet, everyone has an answer to the question,
always looking for who’s doing it best and the results “Which brand are you most loyal to?” Often, it’s a food
achieved, because it’s always about keeping it real. item. Some people are addicted to the taste of Tabasco
16 THE HUB NOVEMBER/DECEMBER 2009
sauce, Heinz ketchup clutching their coupons,
or Diet Pepsi. Others and checking their
are hooked on personal circulars. Nobody looked
items, like Dove soap particularly happy.
or Head and Shoulders It’s not just at the
shampoo. supermarket. You could
So, this isn’t just pick almost any brand
another Hub issue about in America and it is at
loyalty, or another time risk. General Motors used
in space where we’re to be a brand everyone
going to talk about brand aspired to. The Gap used
loyalty. This is really a to sell what everyone
watershed moment where was wearing. We all
never has the concept of remember the Marlboro
brand loyalty been so important to achieve, and yet so Man. And who didn’t want an account at Merrill Lynch?
difficult to accomplish. Most people don’t even mention these brands in
There is no “normal” where loyalty is concerned polite company today, much less trust them enough to
dramatically changed shopping behavior.
today. There’s only a new book, yet to be written, on be loyal to them. This collapse in consumer trust has
I decided that the only way to attack brand
Whom do we trust anymore? We used to
loyalty in a fresh way, is to go back to the three things implicitly trust brands, but now it’s almost as though
Tim and I talked about at lunch: The truth about brands are guilty until proven innocent. A few have
shoppers and retailers; the reality that brands have held onto their equities — Walmart, McDonald’s, Nike
more price pain; and the fact that, despite all of this, and Apple, come to mind. But most others are slipping.
people still believe they are loyal to certain brands To restore trust, marketers have to think about
the cost-to-benefit ratio. The challenge is that it used
even though those loyalties may have shifted. re-framing value differently. They have to think about
A MAtteR of tRus t to be easy to identify the number-one attribute of
The truth about consumers and customers can be a brand, develop a positioning based on that, and
summed up by this quote from Kelton research: “This communicate it.
recession has accomplished what markets spend But today, it’s harder than just identifying
lifetimes trying to do: disrupt ingrained purchase an attribute; we have to create value and do so
behaviors and encourage change.” on a consumer’s and shopper’s terms. That’s not
We marketers used to make a living on creating necessarily what we think the attribute is, but it’s not
demand through increasing impulse purchases, for that complicated, either: It all comes down to value.
example. That’s not as easy anymore. One recent Shoppers will shop less unless we’re providing them
survey found that 74 percent of shoppers have with value. However, often that’s a category decision,
changed their shopping behavior and are making not a brand decision.
fewer impulse purchases, using more coupons and
buying more private label. RetAileRs ARe RespondinG
I saw this with my own eyes while doing in- The truth is that retailers, more than brands, are
store intercepts last Saturday. Most shoppers had responding to these shopper changes. Just look at
their heads down, reading their shopping lists, their ads. My most favorite thing on Sunday morning,
NOVEMBER/DECEMBER 2009 THE HUB 17
after going to church, is this classically, based on
pulling out the newspaper insights and research. It all
ads and analyzing what The Book of Loyalty looks perfect, except for one
retailers are doing. There’s thing. You don’t make your
Let’s write a new book on brand loyalty,
a difference today. based on three things: numbers.
Traditionally, retailers What to do? Try this:
lowered prices to clear 1. Prove our value every single day. If we want Go shopping for a week’s
inventory. You could almost brand loyalty, we need to give loyalty, and groceries for a family of four,
we need to give loyalty in terms of what
predict the ad, year after on a budget of $100. Dinner
the shopper wants in terms of value.
year. Today, they’re cutting for seven nights. This is no
prices because consumers 2. Meet the basic needs of your shopper. In joke: Most of America makes
are demanding it. They’re the past, we tried to create wants through just $45,000 a year. When
just not buying unless they impulse purchasing and demand creation. you look at what they’re
Today, people want what they need,
see the value and many spending on other things,
a week’s worth of groceries.
nothing more and nothing less.
retailers are providing it. that’s what they have left for
You know, I always 3. Communicate how our solutions solve
thought Kroger had too their problems within budget with better By Tuesday, you’re going
I think Kroger doesn’t have
much private label, but now packaging, displays and most of all, a to have a headache and
better, higher-value product.
you’re going to need pain
enough, even though they’ve relief, so that has to come
increased their private-label out of the $100. Would you
line by 15 percent. Kroger’s buy your own brand? Not
private label is selling and why wouldn’t it? A “Big K” a chance. You’re going to buy the value brand, the
Kroger-brand soda sells for about half the price of a private label.
name brand. The conventional way of building brand loyalty
There’s a big difference between 10 percent and isn’t working. If we want to get real about building
50 percent when it comes to prices. It is the difference our brands, we’ve got to get real about what shoppers
between thinking you have brand loyalty and living think not only about our brands, but the brands
in the real world. Some marketers, such as Procter & they’re buying. That private-label brand, to them, is
Gamble understand this. more important than ours; they’re more loyal to it
P&G had forever dismissed the idea of cutting because they see the value in it.
prices for its brands, whether it’s Tide or anything
else. But in September they announced price cuts cleARinG puRchAse huRdles
across 10 percent of their global line. They’re going I did a few store checks to help me think through
to increase promotions and emphasize value benefits, how loyalty has changed, and saw several purchase
and are introducing a value offering through a new barriers. The first one is quality and performance.
line called Tide Basics. Shoppers think the private-label brand is just as good
Unless your brand is making a difference in terms as ours. That’s what they think. When it comes to
of how that shopper and retailer defines value, it won’t cost, they cannot afford a branded product even if it
be around very long. It probably doesn’t even deserve did have a slight advantage. They have $100 to buy
to be on the shelf. seven meals for the week.
To bring this reality to life, suppose your brand is From a sentiment standpoint, they are seeing two
in the pain relief category. How can you build loyalty products on the shelf that, based on the appearance of
in a category where the fastest growing brand is the product and package, seem similar. But one brand
retailer’s private label? The retailer’s own pharmacist is charging $4-$5 more than the next. From a business
recommends the store brand as just as good and standpoint, shoppers do not like a brand that charges
lower priced. Whom do you trust more than your so much more for no apparent reason.
pharmacist? From an ethics standpoint, this kind of price gap
So, you come up with a new positioning, complete makes them angry. They see it as borderline illegal or
with advertising and digital campaigns. You go about immoral for a brand to charge a higher price with no
18 THE HUB NOVEMBER/DECEMBER 2009
apparent difference in quality. Actually, sometimes that what we need is more health and wellness, and
the private-label brand looks better. The package less health care. If we had more health “well” as
is easier to read. Sometimes it’s easier to find store opposed to health “care,” we wouldn’t be having such
brands on the shelf, giving them an advantage in a big debate about health care.
terms of “shoppabilty.” So, I went back to the basics. When I think of
In fact, the retailer’s private label is not health care, whom do I rely on as an expert? The truth
necessarily a “price” brand; it might be part of its is that I started thinking about Whole Foods. The
“health care” brands. Some retailers are building reason I shop there is that I fundamentally believe
tools and diagnostics. I got my flu shot while I was
reputations for education and information. They have that health care is as much about healthy eating and
exercise as anything, and I can control that.
doing my store check at CVS. That demonstrates a I can control that, in part, by shopping at Whole
patient advocacy that says they care. Foods, eating less sugar, more fresh foods, organics
trusted brand whenever, wherever there are shopping
If branding today is trust, then we’ve got to be the and a Mediterranean diet. I now see Whole Foods as
best chance at controlling my health-care costs. Whole
my best chance at improving my health, which is my
decisions. We’ve got to create that relationship along
the path to purchase, and we’ve got to take away the Foods is a great example of a retailer and a brand
de-selection barriers. We’ve got to give them reasons coming together to understand my needs and provide
to buy our brands. benefits that help me live a better, healthier life.
If the purchase barriers are quality and True, the cost is higher. One of the raps against
performance, we need to differentiate. If the barrier Whole Foods is that it’s expensive, and it’s true that
and service. We need to build a brand affinity program,
is cost, we need to sell our product benefits, expertise I can’t buy what I need for $100 a week. But go in
there on a Saturday now. It’s almost like a Costco with
or cause marketing. If there’s an ethics issue, we need samples and meal solutions that offer surprisingly
to create confidence around the research. good value.
If there’s a problem with “shoppability,” we’ve But Whole Foods solves my problem, and
what retailers do with their brands at the store.
got to make solutions of our products, very similar to therefore earns my loyalty. So, to me, the value of
being healthy outweighs the few extra dollars I’m
Lastly, from a communications standpoint, we paying. If you think of branding as the ability to
need to join the conversation as health-care experts. charge a little bit more for a solution, then Whole
To be successful, we have to understand how and Foods is a great example.
why consumers buy our brands in our categories (the The bottom line is that because of the Great
path to purchase) and what our brand equity really is. Recession, power and control has shifted to consumers
Then we have to take the purchase barriers away and shoppers as never before. It’s up to us to give
and offer shoppers more value through expertise to consumers more innovation and more value than
and service. we’re asking them to pay. That’s what we need to
create loyalty now. Let’s write a new book on brand
whole foods Rocks loyalty (see sidebar).
Since loyalty is personal, I’d like to share that By the way, if you’ve never had lunch with Tim,
Whole Foods is the brand I’m most loyal to today. I I’d highly recommend it. The chicken curry is great! I
drive right past Kroger, Walmart, Tom Thumb and an hope you enjoyed this article … start writing your own
Albertson’s to go to my Whole Foods. new book on brand loyalty! n
I’ve always loved Whole Foods, although I did
shop at other stores before the Great Recession. As a
retail expert, I’ve watched Whole Foods since they AL WITTEMEN is managing director of
today. Now I only shop at Whole Foods, and I’d like to
began. But I look at them through a different lens retail strategy for TracyLocke. He has
35 years of experience in marketing,
sales and shopper marketing of
tell you why. consumer packaged goods. Al can be
After the Great Recession hit, and the national reached at firstname.lastname@example.org
discussion turned to health care, I started thinking or (214) 259-3531.
about things differently. Like many others, I believe
NOVEMBER/DECEMBER 2009 THE HUB 19
RE SE ARCH REP ORT
By maSHa SaJDeH
anD nick JoneS 60-minute interviews with more than 5,600 respondents
in the United States, United Kingdom and France.
arc WorlDW iDe
Their shopping behaviors, attitudes, motivations and
barriers were studied across 10 channels such as
et’s dispel the misnomer that stores, online, phone, catalog and flyers.
shopper marketing is just in-store The research illuminates who multichannel
shoppers are, why they shop across channels, what
marketing. A growing number of role the different channels play in the shopping
shoppers “shop” in more places than process, and how these shoppers behave in 20 specific
categories and industries.
just the store. So, contrary to popular belief,
shopper marketing must be viewed as more An enGAGed shoppeR
Multichannel shoppers are driven by a need to
than just marketing in-store.
make an informed purchase decision and put in due
People used to walk into a store and buy a diligence to ensure they are getting exactly what they
television, but times have changed. Today, a shopper want. They are driven to get the best price possible
may research TVs in magazines and online, browse and will shop around to find it.
a store circular delivered in the mail, go to the For them, it’s worth spending the time and they
store, and while there check for online prices on a enjoy the hunt. Shopping is not a chore for multichannel
smartphone, maybe even order the set online, and shoppers; it’s, in fact, quite a delight. They enjoy
pick it up in the store. immersing themselves in the experience and are on a
Forrester Research predicts that by 2012, nearly constant lookout for great deals and new trends.
50 percent of transactions will be executed with the Whether they are shopping everyday
consumer crossing channels. This trend represents a consumables or the occasional big-ticket item, heavy
fundamental change in the way people shop, but there multichannel shoppers spend more time shopping,
has been a dearth of insights for marketers to leverage. and shop in many more places than light shoppers.
Arc Worldwide recently completed a research While the store is a common place for both heavy and
study that uncovers new insights into the light multichannel shoppers to shop, differences
multichannel shopper. This study provides a look emerge depending on the category. Light shoppers
at cross-channel shopping across a broad scope of stick to the store for packaged goods, while heavy
categories studied, including durables, services and shoppers also shop alternative channels such as
consumer packaged-goods. online, circulars and infomercials, tripling the time
The study was conducted online, and included spent shopping for packaged goods. When shopping for
20 THE HUB NOVEMBER/DECEMBER 2009
M ay /June
de a s |
HUB �e Excha
as | Se pt
A Z I
M A G M A G A
Z I N E
f I d e a s | July
/Aug ust 2009
M A G A Z I N E
n of R
e Da y
on of Reve
nd Cool Ne
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COVER S TORY
bell rang and applause rippled just as Tony Hsieh began answering
a question about his future with Zappos. Either his staff was really
happy with his answer or something else was going on.
If his staff could hear him, they probably would have applauded since Tony
said he planned to stay with Zappos for many, many years. Some trepidation
about that would be understandable, given Amazon’s recent acquisition of the
company for $847 million.
But they couldn’t hear him and, as it turned out, the commotion was just part
of the prevailing élan at Zappos, the online emporium whose fortunes
do not depend on selling things so much as spreading happiness
from its employees to its customers (see sidebar).
It’s hard to imagine anyone happier to fulfill that vision than
Tony Hsieh, who, about 10 years ago, sold his first dot-com for
$265 million, at age 24. Don’t you hate him already?
After that, Tony became a venture capitalist, and at first
Zappos was just another of his investments. But he soon saw
the company as a platform to deliver extraordinary customer
service and became its chief executive.
Most famously, Zappos has a 365-day return policy, with free
return shipping. But the deeper story is about science — the
science of happiness — which infuses the Zappos culture and
explains its astonishing success.
That bell rang because a tour group was visiting the Zappos offices,
headquartered near Las Vegas, and someone decided it was a good
moment to ring it, make a confession and hope for some applause. This
is perfectly normal “fun and weirdness” at Zappos.
Tony said he couldn’t hear this particular confession, but volunteered
some of the top confessions posted next to the bell: One of them was:
“I forgot my deodorant.” Another was: “I keep my phone in my bra.”
And: “I slept in four beds with three guys this week.”
26 THE HUB NOVEMBER/DECEMBER 2009
Tony hsieh whips up a happy culture
and enviable loyalty for Zappos.
What does the “science of over it. Then a few years ago in the call center we
happiness” do for Zappos? implemented what we call “skill sets” — it’s kind of
There’s this whole field called “positive psychology” like merit badges in the Boy Scouts. There are 20
that did not exist before 1998. Prior to then, all the different skill sets they can train for, acquire and get
psychology was pretty much about how to make certified on. Associated with each skill set is a small
people who had something wrong with them feel bump in pay.
more normal. But no one really studied how to make So, it really puts employees’ pay and training
normal people happier. under their own control. Employees who have
So, over the past 10 or so years, there has been a higher interest in making more money can go
research into positive psychology, and some of the after all 20 of those skill sets. If they are perfectly
findings are pretty interesting. Probably the number- happy staying at the same pay and not learning any
one most important finding is that people are very additional skills, that’s fine too.
bad at predicting what will bring them happiness in
the long run. how about perceived progress?
There have been studies of lottery winners, for For perceived progress, in our merchandising
example, where you look at the happiness level right department, for example, we hire people at the
before winning the lottery and then a year later. Most entry level. A few years ago, you’d come in as a
people would think that if they won the lottery a year merchandising assistant — we call that an MA.
later they’d be happier, when actually their happiness You would do that for 18 months and get certified.
level drops right back down to where it was before Along the way you’d become an assistant buyer, which
winning the lottery, or sometimes even a little lower. we abbreviate as AB, and do that for 18 months. Then
you become a buyer.
isn’t that also true when It’s a three-year process and we did it that way
something bad happens? for a while. But then we ended up breaking it down
Yes, that’s true. So, given that people are bad at so that instead of just being an MA for 18 months,
predicting what will actually make them happy, you you were MA1 for six months, an MA2 for another six
can’t just rely on asking employees what would make months, an MA3 for six months and then AB 1, 2, and
them happy. The same thing is true of customers. 3 for six months.
A few different frameworks have come out of It was the exact same certification — nothing
the research in terms of what actually matters when really changed. But we broke it down into six-month
it comes to making people happy. It’s a purposeful chunks instead of 18-month chunks and found employees
approach that’s backed by research. were much happier because there was that sense of
how has that been applied at Zappos?
Some of this we stumbled into accidentally, but What’s the story on connectedness?
now that we have the frameworks we understand why In terms of the connectedness, our number-one focus
it works. and priority as a company is company culture. If you
One of the frameworks is that happiness is about come into our offices, you’ll see that this whole team and
four things: perceived control, perceived progress, family atmosphere that we have here really contributes
connectedness (meaning the number and depth of your to employees being more engaged and happier.
relationships) and being part of something that is bigger There’s plenty of research that employee
than yourself that has meaning to you. engagement leads to better productivity. One of the
For example, for perceived control, we used to best predictors of employee engagement is whether
give our control center and warehouse workers an they have a best friend at work or how many friends
annual raise; they really didn’t have much control they have at work.
NOVEMBER/DECEMBER 2009 THE HUB 27
And the larger vision is? Leadership have found is that it doesn’t actually matter
For the first few years, we were just about what your values are as long as you commit to them.
becoming the number-one online retailer of shoes, and Committing means you’re willing to hire and fire and do
then we decided we wanted to be about customer service. the performance reviews based on the outside of what’s
We found that once we shifted into something typically considered your normal job performance.
that was more meaningful and a larger vision for
employees that they were a lot more passionate and What would someone have to
engaged about the company. do to get fired at Zappos?
We’re expanding that now to where our company One is just job performance like any other
believes in delivering happiness, whether it’s to company, and two is not living up to our core values.
employees or customers or even our vendors.
Do you also fire customers?
is it really just the sum total of those four We do shut down some customers’ accounts if
things that makes Zappos a happy place? they are verbally abusive to our reps or if they have a
I think it’s the sum total of those four things, consistent pattern of returning items that clearly have
but ultimately the number-one thing is the culture, been worn. We make sure to educate our customers
which we’ve formalized into ten core values. It’s about that we are a shoe company, not a shoe-rental company.
making sure that we only hire people whose values
match the corporate values. Some say that your most loyal
customers are also the least profitable.
Don’t you sacrifice creative tension when I don’t know that I would make a blanket
everyone conforms to that culture? statement like that. But I do know just anecdotally
That’s a possibility depending on what the values that the customers who are the most vocal are not
are, but one of our values is to create fun and a little necessarily the ones who are the biggest spenders,
weirdness. That’s just a fun way of saying that we and vice versa. I don’t know why that is. Maybe it’s
believe everyone is a little weird somehow. We really that people who spend a lot of money just have a
recognize and celebrate each person’s individuality higher expectation of better service so they’re less
and creativity, so that’s how we get around that. wowed by their interactions with us.
What is the right amount of weirdness? is your focus on customer service
Well, if you’re at zero or one then you’re probably the ultimate in branding?
a little bit too uptight and straight-laced for us. If Not necessarily. Walmart is a brand that’s all
you’re a ten, you might be a little bit too psychotic. about low prices, and last I heard they were doing just
fine. Apple’s primary benefit is design and they are
is the Zappos culture entirely homegrown? doing well. Service is just what we want to build our
It’s entirely homegrown and it continues to evolve brand around, but I don’t think it’s the only possibility.
as the company grows. It’s literally homegrown because
I sent an email out to the entire company a few years Are there other branding
ago and asked them what our values should be. I got a concepts that intrigue you?
bunch of different responses back and compiled them. I think all of them are intriguing. There are
probably different values or cultures that would be
Can a happy culture be rehabbed or more likely to succeed. I don’t know what the Apple
does it have to be built from scratch? culture is like, but I’m guessing it’s a culture that
I definitely think it can be changed. Ultimately, it really celebrates design and product innovation,
just comes down to a complement of values. A lot of which is different from our culture.
companies have values or guiding principles that read
like a press release or that you see on a meaningless Do shoes trigger more happiness than
plaque on the wall. Maybe you learn about it on your most other product categories?
first day of orientation and then that’s it. I know for a lot of women, at least, shoes can be
So, what books like Good to Great or Tribal a very emotional product. I, myself, am probably the
28 THE HUB NOVEMBER/DECEMBER 2009
THE HUB NOVEMBER/DECEMBER 2009
Viva Los Zappos
ony Hsieh “once described Zappos as ‘a service bellow greetings as visitors pass their desks” (if you’re
company that just happens to sell shoes.’’’ In interested in a tour, you can sign up on Zappos.com).
fact, Zappos no longer just sells shoes — it has
There’s also $2,000 for any employee who quickly
expanded into “clothes, consumer electronics and
decides this zappiness isn’t for them and quits. The
idea is to weed out cultural misfits, but so far, only
But the point is that Tony’s “goal is to create a three employees have cashed out.
corporate culture that allows Zappos to prosper no
“Zapponians” also get lots of training so they
matter what business it is involved in ... He reckons
can solve customer problems without managerial
Zappos can cultivate a reputation for outstanding
guidance. “You have as much power to help a
service to the point where it, too, can become a
customer as Tony does,” an employee says.
springboard into several markets.”
Such sentiments are compiled annually in a 500-page
So far, Tony has done well right where he is, last year
Culture Book, “in which many of the firm’s 1,400 staff
recording some “$1 billion in sales even as other
explain what its culture means to them” (you can
retailers were struggling.” He’s done it by creating a
request a free copy by emailing email@example.com).
distinctive culture based on 10 values, starting with
“deliver WOW through service,” and including “create The bottom line is that “three-quarters of Zappos’s
fun and a little weirdness.” sales come from repeat customers, and its revenues
are still growing this year,” even though it sells most
That’s why the Zappos headquarters is festooned with
of its goods at full price.
“jungle creepers that hang from the ceiling” and
its employees “rattle cowbells, shake pompoms and [S o u r c e : The Economist, 4/18/09 ]
wrong person to ask because I’ve never really been i find there are fewer distractions by telephone.
into shoes. Yes, that’s part of it. It’s also much easier to build
a personal and emotional connection with someone
how often do you buy from Zappos yourself? remotely by telephone than by email, for example.
I probably buy running shoes once or twice a
year and then Ugg slippers once a year, and maybe a Are there any other media
pair of dress shoes once a year. you think are underrated?
I would say meetings in casual environments,
Do you ever worry that you’ve created like dinner, or at a bar, or camping trips or hiking,
something that you can’t sustain? or whatever. We encourage our employees to do that
Our whole philosophy is that there are always a lot, not only with each other but also with their
financial constraints on what we can deliver to our vendors. We try to train our managers to spend 10-20
customers. The very best service you could possibly percent of their time outside the office.
imagine would be if you ordered a pair of shoes and
an employee hopped on a plane, flew them to you and Why don’t you like the term “social media”?
you got them three hours later. That would be better I think it puts the emphasis on the wrong thing.
customer service than we’re delivering today but it It’s also the latest buzzword that consultants like to
doesn’t make financial sense, so we don’t do it. use and I’m generally anti-consultant.
The best social media is the telephone and yet
Why are you a fan of the telephone as a medium? that’s boring so no one wants to talk about it. People
I don’t know, probably for the same reason you tend to refer to “social media” as a technology, but
wanted to interview me by telephone. that skips over the actual benefit or purpose of it.
NOVEMBER/DECEMBER 2009 THE HUB 29
NOVEMBER/DECEMBER 2009 THE HUB
For us, it’s more about forming personal and launched 6pm.com, a sister site that’s been much more
emotional connections. effective at liquidating inventory.
You’ve personally embraced is it true you spend almost
Twitter in a big way. nothing on marketing?
Twitter is one example of how I connect with people, It’s true that most of what we would have spent
but people also put Facebook and MySpace under on marketing we put into the customer experience.
“social media” and I don’t really use either of those. But we do buy keywords online and we have an
affiliate program and so on.
Do you see value in Twitter that others haven’t? We do a little offline advertising, but generally
I’m sure there always will be some “next big our whole philosophy toward marketing is that if it
thing,” but ultimately what matters is just embracing pays for itself in the first sale, then we might as well
whatever it is that you would use naturally, even if do as much as we can.
it wasn’t for business purposes. I was using Twitter But the biggest driver of our growth has been
myself — just with my friends — for a year before I got through repeat customers and word-of-mouth. That’s
Zappos involved with it. I see the value in it because why we’ve put most of the money that we could have
we use it just out of the enjoyment of using it. spent in marketing into free shipping both ways, and
That’s why our interactions come across as running our warehouse and call center 24/7. We let
authentic and not annoying. A lot of other marketers our customers do the marketing for us.
are trying to figure out Twitter but they don’t really
use it themselves; they are using it just as a way of What is your greatest frustration at Zappos?
marketing their business. I would say probably just wishing that we could
do things faster, but I think that’s probably true for
Some of your Tweets are pretty funny. every company. I’m the impatient type. I want to
For each of the Tweets I’ve sent out, my goal is think of an idea and have it live in an hour or so.
to try to do one of four things with my followers: That’s not really practical.
inspire them, connect with them, educate them or
entertain them. how big can Zappos get before it gets bad?
So, trying to make my Tweets funny falls under As long as everyone here sees it as part of their
the “entertain them” part of it. But my focus is job to aspire to the culture, then it can scale.
more on how is this going to benefit my followers as
opposed to how this is going to benefit me — which is What will change following
how I think most people approach it. the Amazon acquisition?
I can’t comment beyond a letter I sent to our
is there anything brick-and-mortar retailers employees, posted at: http://blogs.zappos.com/ceoletter.
could apply from the Zappos model?
Oh, definitely. There’s so much opportunity in What are you thankful for?
person. Stores have the total upper hand in terms of A lot of things. At Zappos, it’s all about the
bringing personal and emotional connections. It’s also friendships and relationships. Even if Zappos were to
about creating a “wow” customer experience. go under tomorrow, everyone here would have at least
There are kinds of innovation that we haven’t gotten great friends and relationships out of it. n
even seen or thought of yet. If you think about the
circus, for example, which was basically done the
same way for maybe 100 years, and then Cirque de TONY HSIEH is ceo of Zappos.com,
where he has grown merchandise sales
Soleil came along and reinvented the circus.
from $1.6 million in 2000 to more than
$1 billion in 2008 by focusing on
Would Zappos ever open stores in malls? customer service. Tony also co-founded
I wouldn’t rule it out. We do have an outlet store LinkExchange, an advertising network
in Kentucky to get rid of our old inventory at the end that was sold to Microsoft in 1998.
of the season. While the outlet store is effective, we
30 THE HUB NOVEMBER/DECEMBER 2009
THE HUB NOVEMBER/DECEMBER 2009
C A SE S T UDY
By RichaRd Guha the product and the store converge. This creates
the connection that leads to the perfect moment in
ma x Br anD equit y
retail — the purchase.
Capturing that moment and recreating it over and
reen Hills Market has never settled for
over is the new art of in-store retailing that Gary, who
running with the pack. This independent
launched one of the first loyalty programs in the U.S.,
grocery retailer in Syracuse, New York,
is now pioneering at Green Hills. Knowing that this
has led the way in creating and sustaining
moment is not the same for every shopper in every
customer loyalty in the most competitive of markets
store is the key to building a successful operation that
and the most trying of economic times.
can keep pace with its customers.
With 23,000 square feet of space, this single
Utilizing the most advanced in-store business
store generates more than $18 million in revenue
intelligence system available today to deliver aggregated
each year — twice the revenue per square foot of
data about shopper behavior, Green Hills can now
almost any other grocery store in the country. This
understand everything about how its customers spend
level of productivity and an unsurpassed use of retail
their time in the store.
technology to achieve it have earned Green Hills
This advanced shopper insights system tells Green
admiration from all over the globe (see sidebar).
Hills not just who comes in the door and what they
check out with, but everything that happens in between.
Green Hills Market “This in-between time is where the golden
opportunity lies,” says Gary. “Knowing where they
builds loyalty where go and how they engage within the store is the key
to understanding when, where and how my store can
the shopper, product be managed better and ultimately become the store-
of-choice for meeting their needs. This is something
and store converge. much deeper than getting the right coupon in their
hands in time for their shopping trip.”
So now, when economic pressures are impacting A new ecosysteM
everyday grocery spending as much as discretionary To seize the opportunity to create that connection
spending and touching consumers in every market to the store and the product, a new way of measuring
segment, retailers and manufacturers can once again shopper behavior is paramount. While some great
look to Green Hills. technology exists today to measure human action
While most retailers are grappling with making and behavior, very few are optimized for analyzing
loyalty a two-way street, Green Hills is going beyond behavior in a retail environment.
the traditional methods of creating loyalty. Getting technologies out of the research labs,
Gary Hawkins, the great-grandson of the Green packaged and optimized for the retail store environment,
Hills founder, is doing so by using technologies to is key to bringing these kinds of capabilities to
capture the three-way intersection where the shopper, fruition. The nuances particular to shoppers are the
NOVEMBER/DECEMBER 2009 THE HUB 31
golden nuggets that help retailers and manufacturers The key to truly capitalizing on this kind of
truly affect change and create loyalty. information is to use technologies that live in the store
For example, knowing when a shopper is “thinking,” 24/7, producing insights weekly, daily and hourly.
“engaging” or “comparing” is critical to determining Creating true loyalty and customer value doesn’t come
how to package, present, message and display a product. from taking an occasional snapshot view into the
These attributes are usually, at best, gathered through behavior of a few customers.
observation studies or other temporary efforts that only “The challenge in today’s dynamically changing
look at small sample sizes for short periods of time. customer and product landscape is to keep the data
Gary notes that purchase decisions for consumables and insights coming every day from every store. Even
are moving away from the home to inside the store. Like if you could afford it, the answer isn’t in hiring more
most informational needs today, the new world of “don’t consultants to capture data,” says Gary.
give it to me until I need it” information has caused the Gary refers to his approach as Retail 3.0 and has
concept of the shopping list to be replaced with the “I’m published a series of white papers about the concept
here now, so what should I buy?” shopping mentality. and the various technologies he is employing to make
To meet the needs of this new type of shopper, Gary his vision a reality.
draws on his years of experience in retail technology, For example, Green Hills uses computerized
shopper loyalty and business success to get the blueprint video analytics to get accurate, objective, ongoing,
right for the next wave of running a successful retail actionable information about shopper behavior. This
business. He knows it means being on top of what is system employs some 35 fixed, state-of-the-art IP
going on in the store every hour of every day. cameras to bring the kind of highly granular shopper
T he Green Hills Stor y
reen Hills started 75 years ago, in 1934, when Before long, Gary launched one of the first frequent
Carrie Hawkins opened a summer farm stand on shopper programs in the United States in 1993. He
Route 80 in Odondaga, New York. At first, it was envisioned the program as a way for Green Hills to
just a sideline to the Hawkins’ dairy farming business, mitigate the leverage that larger retailers had enjoyed.
with Carrie selling corn and extra vegetables from her
Over the ensuing years, Gary constantly searched for
garden and the farm.
new and different ways to use technology to serve
But in 1948, the family’s large dairy barn burned its customers more efficiently and effectively, on a
down, and Carrie’s son, Clifford, decided to forget one-to-one basis. Green Hills steadily evolved into
about the dairy business and run the farm stand full- a “laboratory” to test different technologies and
time. Within a few years, Clifford’s son, Keith, joined marketing initiatives.
the family business and began expanding it into a
In the mid ‘90s, as word began getting out about
full-service supermarket, one department at a time.
Green Hills and its success, Gary was invited to speak
Still located on the site of the original farm stand, at various industry events in the U.S. and around the
Green Hills continued to grow through the decades, world. This led to Gary forming a consulting practice,
and today still has customers that shopped the store Hawkins Strategic, for both retailers and manufacturers,
as long as 50 years ago. which he now runs full-time with his son, Sterling.
Keith’s son, Gary, followed in the family tradition Over the past five or six years, their focus has been
shortly after finishing college in the mid 1980s. on the use of shopper data not only as a management
At the time, he began to see other retailers in the tool, but also leveraging that information to move
marketplace growing rapidly and expanding their away from mass promotion and marketing. The goal,
fresh and perishable food offerings while placing says Gary, is to create loyalty through personalized,
greater emphasis on price. relevant and individualized marketing.
32 THE HUB NOVEMBER/DECEMBER 2009
Dwell Events by Area
Number of shoppers
spending more than
15 seconds in each
product area or more
than 10 seconds at
the kiosk. 298
Cereal Aisle Chips End Cap Kiosk Area Soda Area Milk Yogurt Aisle
S ource : BVI Networks RetailNext
behavior data found in the on-line environment to the capability provides the brand manufacturer with
retail store. real-time insights into if and when a shopper can be
Shopper behavior is tracked through analytics influenced by displays, packaging, messaging and
and is integrated with in-store data sources such as product placement.
point-of-sale data. The result is ongoing traffic and This, of course, strengthens the brand part of the
conversion-rate analysis, not only for the store, but connection. It allows the retailer to know who those
also by aisle, display and down to the SKU level. shoppers are, when they come in the store and how
These data allow a retailer or manufacturer to they engage. This means they can manage staff,
optimize layout, shelving, displays, and packaging space, promotions and assortment to optimize the
based on real data, minimizing the guesswork that shopping experience and build efficiencies in the store
has long been an art form in the retail business. while creating an emotional connection that deepens
Green Hills has also implemented a technology shopper loyalty.
that provides employees, suppliers and shoppers Green Hills demonstrates that the best technologies
with detailed access to transaction data. Shoppers for the retail store are those optimized specifically for
actually can log in and view their purchases online, it, and those that automate data and insights to ensure
giving them a window into their expenditures that daily operational use.
they appreciate. The rewards are undeniable. Even though its
Vendors, meanwhile, can open a different view customers have many choices for their shopping needs,
of this transaction data so they can see, in real-time, Green Hills continues to bring in new shoppers every
how their products are moving in-store, and re-supply day while retaining existing customer relationships.
the store as necessary. As the loyalty deepens, the business grows and
Yet another technology triggers email and text the right products are moving off the shelves. For
messages to vendors, alerting them when promoted Green Hills’ shoppers, the products and the store itself
items sell a specific quantity within a specified seem to rise up to meet them, creating that perfect
timeframe. Other solutions include the first on- moment, where connection creates loyalty. n
shelf availability and inventory tracking technology
available in the U.S.
“The answer lies in an ongoing automated capability, RICHARD GUHA is president of Max
that’s affordable and powerful enough to aggregate Brand Equity, a consulting firm focused
across millions of data points,” says Gary. on company valuation growth. He
is also an advisor to BVI Networks,
Systems that provide insights from both a macro
providers of in-store intelligence
and micro level, and do it in an ongoing way as part platforms. Email: richard.guha@
of an operational imperative, are most valuable to maxbrandequity.com or 203-659-0285.
the retailer-manufacturer partnership. This type of
NOVEMBER/DECEMBER 2009 THE HUB 33
WHI T E PAPER
Marketing can help build
strong shopper-strategies six ways.
Six Appeal By cHriS Hoyt functions to some other department within the
organization that appears to be inherently better
Hoy t & c omPa n y l l c
equipped to address “retail.” So why not Category
ne of the issues that is inevitably Management or Sales? “Shopper” = “Retail” = “Sales.”
creeping-up on marketers is the need What could possibly be more logical, right?
to get brand marketing involved with Result: No marketing-trained perspective or input
shopper marketing, regardless of and therefore no truly differentiating or meaningful
whether these companies have already insights for either the manufacturer or retailer. There
created a shopper marketing function that they think is almost no linkage between the category folks
is doing the job for them. responsible for shopper marketing on the ground and
We can assure you that if your marketing the brands they represent.
department is not involved with understanding how Try as they might, category managers cannot
your consumers behave as shoppers, and providing escape the fact that category-based insights are
the balance of the company with a framework for relatively narrowly focused while shopper-based
leveraging this intelligence straight up to the point- insights incorporate the whole enchilada. And it is
of-sale, you are making yourself vulnerable to any of the whole enchilada that gives one’s competitors big
your competitors who are doing this. time indigestion, not the individual ingredients. But
In this context, we suspect that many of you have to dish-up the whole enchilada requires marketing
repeatedly heard really irritating phrases like the expertise because only marketing has all of the
following: ingredients and skill sets to blend them properly.
From a business standpoint, the reasons for the
➜ “Our company views shopper marketing as
marketing department to get involved with consumers
brand marketing in a retail environment!”
as shoppers keep piling up on an almost daily basis.
➜ “Brands now need to communicate along the Outside of the obvious — fragmentation, consolidation
entire path-to-purchase — both in-store as well and consumer “tune-out” — loyalty has literally tanked.
as pre-store — right up to the point-of-sale!” In addition to the oft-repeated and somewhat
self-serving POPAI research contending that “up to
➜ “If you don’t understand your consumer as
70 percent of purchase decisions are unplanned,” we
shopper, you don’t understand your consumer!”
now have more current, independent, affirmation from
The problem with these types of broad-brush Consumer Reports (no less!) which finds that unplanned
statements is that they can unwittingly be turn-offs purchases are now up to 84 percent (CRNRC, Aug 1, ’09).
for marketing executives and product managers who Because this is not “new news” to the experienced
feel their plates are already always full. marketing executive, why aren’t more marketing
Because of the massive potential additional work departments becoming involved with shopper marketing,
that these phrases can conjure-up for marketing even though a shopper function may already exist in
department decision-makers, it becomes easy to their companies?
rationalize jettisoning the responsibility for these The biggest roadblock that we see at present is the
34 THE HUB NOVEMBER/DECEMBER 2009
Chart 1: When Marketing Drives the Agenda
Overview of Key Shopper-Based Responsibilities by Department
Brand Marketing Shopper Marketing Customer-Team Marketers
• Ensure marketing expertise extends • Apply marketing expertise to • Market to specific shopper segments
across the entire path-to-purchase consumers within assigned retailer(s)
• Profile target consumers as shoppers • Profile shoppers in different channels • Profile the mutual target shopper and
and formats prioritize growth opportunities
• Understand what target shoppers • Excavate and qualify shopper insights • Develop retailer-specific insights/
are “solving for” — channel or segment Identify knowledge gaps/recommend
• Identify and address universal • Identify and address channel-specific • Identify and address retailer-specific
purchase barriers barriers barriers
• Ensure brand message is sufficiently • Develop differentiating strategies and • Collaborate with retailer to develop
broad and flexible to translate a menu of executions for ‘non-custom’ proprietary shopper-based strategies
in-store retailers to meet shopper needs and initiatives
• Integrate into annual brand plan/ •Define how each brand initiative adds • Identify how our brand(s) can uniquely
Establish discrete budget value to retailers help the retailer differentiate and/or
achieve shopper-based solutions
S ource : Hoyt & Company LLC
lack of definition of just what this involvement entails marketing-trained input. The underlying idea is
for the marketing department — or, more specifically path-to-purchase (or “touch-point”) marketing — i.e.,
— where its responsibilities begin and end, and where creating a predisposition to buy, maintaining top-of-
the hand-offs occur between marketing, shopper mind awareness at each juncture along the shopper’s
marketing and customer-team marketers. journey, and then bringing all resources to bear on
If one understood this better, one might be triggering purchase at the point-of-sale.
motivated to move on this. In addition, the good While many elements are involved in this —
news is that, based on the advantage of many years’ creating awareness, understanding shopper needs,
hindsight, these responsibilities are not nearly as overcoming purchase barriers and leveraging one’s
foreboding as the uninitiated might imagine. In fact, equities — one cannot maximize the potential of this
they can be relatively easily integrated as extensions strategy without proactive marketing-department
of current skill sets. participation.
The way we see it, the marketing department’s Best-practice companies ensure this by assigning
role in shopper marketing can be boiled down to six brand-trained people on a rotating basis to either
responsibilities (see chart 1). Taken together, these their shopper-marketing department or to one of their
responsibilities are meant to establish a strategic customer teams as part of their career training (see
framework for more detailed planning and implemen- chart 2).
tation by the shopper-marketing department and Those assigned to the shopper-marketing
customer-team marketers respectively (as one moves to department act as the interface between shopper
the right of the table, planning becomes more detailed). marketing and the product groups, while those assigned
Specifically: to customer teams provide marketing-trained input
1. Ensure marketing expertise extends across to customer plans and continuity of thinking from
the entire path to purchase. Shopper marketing brands to the point-of-sale. To maintain the integrity
is called shopper marketing because it cannot of this thinking, customer-team marketing managers
be effectively planned and implemented without report directly to the shopper-marketing department.
NOVEMBER/DECEMBER 2009 THE HUB 35
Chart 2: When Marketing Drives the Agenda
Structure & Reporting Relationships of Key Shopper-Based Functions
Group A Group B Group C Group D Group E
Brands / Products Groups to Shopper Marketing
Shopper Marketing Marketing Agency
One marketer with multi-brand responsibility
Retailer V Retailer W Retailer X Retailer Y Retailer Z
S ource : Hoyt & Company LLC
Action item: Identify best prospects for rotation chance in an environment where 84 percent of purchase
and begin the process as soon as possible. decisions are unplanned is obviously not working well.
2. Profile target consumers as shoppers. The Action item: Profile your consumers as shoppers.
whole idea of shopper marketing is to understand Include behavioral data as well as demographics
how one’s core target consumers behave as shoppers and psychographics. Share findings with shopper
and use this intelligence to win at the point-of-sale in marketing to ensure maximum relevancy and targeted
different channels and retailers. initiative development.
The premise — since validated over and over by 3. Understand what target shoppers are “solving-
hundreds of studies — is that once your target consumers for.” What are shoppers trying to solve when they buy
decide to go shopping, they morph into a mindset your brand? If the list says “something easy for Tuesday
that traditional demographically based segmentation night’s dinner” or “snacks for soccer practice,” your
approaches do not anticipate or encompass. Some call competitive set can be very different than what shows
this mindset “shopper needs” or “need states.” up on your syndicated, point-of-sale data report.
The reason it is so critically important for What is your shopper’s decision process? This
marketing people to understand their consumers means more than the classic consumer decision-tree.
as shoppers is that shopper needs often become the This means understanding what influences your
motivation of the moment. This frequently overrides targets at the point-of-sale — how much time they are
the consumer’s predisposition to buy. In addition, willing to invest in finding the right product, what
these needs will often dictate what shoppers will buy, information they need to make a decision, why they
where they will buy it and why. will trade up (or down) and what triggers will activate
Obviously, the more one understands these needs, their purchases.
the better one will be prepared to provide guidance to Why does the shopper choose your brand when
one’s customer-marketing agency, shopper-marketing confronted with a plethora of choices on the shelf?
department and customer-marketing managers on Understanding the equities that resonate most
what types of messages and triggers are most effective strongly with your target shoppers can help them cut
with different shopper segments in different channels through the clutter and make the difference between
and retailers. Alternately, continuing to leave this to winning and losing at the point-of-sale.
36 THE HUB NOVEMBER/DECEMBER 2009
Action item: Identify information gaps and add is important to shoppers when in a particular mindset.
questions about your target shoppers to all research Therefore, it is obviously important that the brand’s
initiatives. Communicate findings to the shopper- over-arching messaging platform be sufficiently broad
marketing department, customer-marketing managers and flexible to accommodate these variations.
and other appropriate departments. Action item: Review the brand message or
4. identify and address universal purchase communications idea for in-store flexibility.
barriers. Purchase barriers are elements of either the 6. integrate into annual brand plan and establish
brand or the retail environment that prevent shoppers a discrete budget. To maximize the potential of
from choosing your brand. Universal barriers are not one’s shopper-marketing function, it should be
store-specific and need to be addressed by the brand integrated into one’s annual brand plans — complete
itself. The most common universal barriers are: with objectives, revenue projections and budget
Low brand awareness. Are target shoppers allocations — just as any other communications channel.
familiar with your brand and what they can do for In reality, most shopper-marketing start-ups
them? If not, are you effectively communicating are funded from a corporate brand tax until they
this via packaging or in-store messaging? If your are well established. The end goal, however, is to
brand comprises many flavors, colors or forms, can incorporate them fully into the brand plans as
shoppers easily distinguish and find what they want? quickly as possible. Only when shopper marketing
Choice confusion. Does your package “pop” on is incorporated into the plan does the brand have
the shelf or is it “lost?” Are points-of-difference enough “skin in the game” to provide shopper
communicated clearly? Do target shoppers have marketing with the information and cooperation it
enough information to determine that your product is needs to be truly successful.
right for them? Can they determine this quickly — Incorporate meaningful metrics for shopper
without having to “work” for it? marketing. Unlike traditional in-store promotion, best-
Poor value perception. Does your brand clearly practice shopper marketing is not measured on lift
communicate its value when compared to competition and ROI alone. Longer-term marketing metrics like
on the shelf? Do shoppers understand the differences share growth, source-of-revenue growth and increased
that justify a premium price for your brand? household penetration can and should be included
Action item: Conduct store checks in different where data is available so one can accurately judge
channels and formats to assess the in-store health of shopper-marketing investments against other options
your brand versus your competitors’ brands. Observe in the brand plan.
how shoppers interact with your brand and which Action item: Meet with shopper marketing during
barriers might be preventing purchase. annual planning to discuss objectives, opportunities
5. Ensure your brand message is sufficiently and metrics.
broad and flexible to translate in-store. So here’s your decision: You can truly market
The fact that 95 percent of shoppers shop for your brand all the way along the path-to-purchase if
packaged goods in five or more different channels or you can carve out time to: 1) identify best marketing
formats every month is a pretty good indication that prospects for rotation into shopper marketing; 2)
different stores address different needs of the shopper profile your consumers as shoppers; 3) add shopper
at different times. questions to brand research; 4) assess the in-store
A shopper’s choice of store on any given health of your brands; 5) review your brand message;
trip is often an indicator of his or her mindset and 6) meet with shopper marketing during planning.
and expectations — quick in-and-out at a drug or Or … you can let those irritating phrases continue
convenience store, healthy choices at specialty food to rent space in your head for free. Your choice. n
stores, value at a Walmart, full family shop at a
To leverage this understanding, shopper CHRIS HOYT is president of Hoyt
& Company, a Scottsdale, Arizona-
marketing crafts messaging that is as relevant as
based marketing/sales consulting and
possible to shopper mindsets when they shop for your training organization that specializes
brands in these different channels or stores. in shopper marketing. Chris may
To be effective for shoppers, these messages are be reached at (480) 513-0547 or
rarely direct translations of the national copy. They are at firstname.lastname@example.org.
frequently truncated and abbreviated to cull-out what
NOVEMBER/DECEMBER 2009 THE HUB 37
RE SE ARCH REP ORT
By Dori molitor
WomanWi Se l lc
bankrupt, AIG got a bailout and the stock market
crashed. But it’s hard to sustain anger for long. This
year, the most popular word used by our respondents
was not greed but honesty:
t feels like an eternity, but it was ➜ “Be honest and forthright with your customers.”
just a year ago that our presumptive ➜ “Do what you say you will. Be honorable.”
prosperity crumbled and fell. We ➜ “Lower your prices and be honest.”
knew then what we know now — And most offered not a scolding but advice.
that the way we view corporations Some of this advice was tactical (“I tend to be swayed
by product placement in the store.”) and some of it
as brands, and ourselves as consumers, more strategic (“Find a way to sell premium products
was forever changed. without the premium cost.”). But almost all of it was
constructive, which is very positive and a significant
Some Hub readers will recall a nationwide, email shift from a year ago.
survey of more than 200 women we fielded to our This doesn’t mean that it’s time to sit back and
Articulate Women network shortly after the economy relax, that all is well and back to “normal.” In fact,
tanked (A Perfect Storm, November/December 2008). this year’s survey not only captured a change in
The survey captured the intense anger and tone from a year ago, it also suggested a change
frustration of the moment, as well as the raw sense of in behavior. In fact, the percentage who said the
fear — of losing jobs, homes, retirement or the means economy had affected their lifestyle jumped eight
to keep kids in college. points, from 23 to 31 percent.
A year later, we fielded the same survey to the Most of all, our women revealed a strong
same 200-plus women, and it’s clear that much has sentiment that they now strongly favor brands
changed over the last twelve months. While our that demonstrate a true sense of caring about their
respondents appear to be no less fearful than they employees and their customers:
were a year ago, their anger is of a much quieter sort.
➜ “Be honest, authentic and truly caring of your
In the fall of 2008, the most popular word among
our women was “greed.” When we asked what message
they’d like to deliver to corporate America, most offered ➜ “Please care about the well being of your employees
and their families.”
➜ “Your employees are your brand. Treat them with the
➜ “Don’t be greedy!”
respect they deserve.”
➜ “Cease the corrupt practices!”
More specifically, this change in attitude has
➜ “Stop inflating your wallets which in turn manifested itself in how our women evaluate brand
loyalty. The percentage who said they were less brand
This wasn’t surprising, given that our survey loyal increased by eight points, from 47 to 55 percent.
arrived only days after Lehman Brothers went The number who said their loyalties had shifted
38 THE HUB NOVEMBER/DECEMBER 2009
A year ago we were angry.
Now we’d like some tender, loving care.
permanently, “in some cases,” increased by 11 points, marketing officer, who at the time was making a case
from 44 to 55 percent. for what he called “purpose brands.” The idea was
These changes are reflected both in terms of the that the brand should have a mission larger than itself.
stores they shop and the brands they buy. They say This points in the right direction, but it all
they have switched to less expensive alternatives in depends on what the mission is. Our survey found
grocery, drug stores, mass merchandise, apparel and little interest in so-called “green” initiatives, for
sporting goods. The percentage who said they had example. In part this is because of a perception — or
not switched to less expensive stores dropped by 12 reality — that green products cost too much. (“Hate to
points, from 30 to 18 percent! admit it, but green costs more and money is tight.”)
Among brands, our women say they have It’s also because many of the women don’t believe
switched to less expensive alternatives in the “green” claims are for real. (“It’s a marketing
pharmaceuticals, cosmetics, insurance, food/ gimmick for most of them.”) As a consequence, there’s
beverage, health/spa, restaurants and entertainment. been no significant change in the affinity for “green”
However, where brand loyalties still exist, they brands over the past year, according to our survey.
remain strong, and sometimes even passionate. However, the opportunity to purchase local brands
Among retailers, the most frequently mentioned is a related area where we did see some movement,
loyalties were to Target, Trader Joes and the Gap. with the percentage of respondents reporting more
Among national brands, Tide, Coke, Barilla, Colgate, purchases of local brands increasing by 14 points.
Kraft and Dove received the most mentions. This interest in “local” may well be indicative
In many cases, the reason given for that loyalty of the most important message from the survey:
was summed up in a single word: Value. Our women are most interested in brands that mean
➜ “Value … is of more importance to maintain brand something to them where they live. Literally.
th e s o c i A l i s s u e is us
➜ “Price/value/quality need to be balanced.” A particularly meaningful attitude informs views
➜ “Value your employees.” of “corporate social responsibility.” The importance
of commitment to a social issue among our women
However, many of the comments were notable for
actually declined by 11 points, from 43 to 32 percent
a lack of mention of specific brand names. Often the
(“It is an added benefit, but not the main purchasing
comments were general, such as:
reason at all.”).
➜ “I have remained loyal to certain brands because of What they’re saying is, the social issue they’re
the quality or taste they provide.” interested in is not some “cause” cooked up in a
➜ “Certain brands I trust; they perform well. I’d rather corporate boardroom: “The social issue is us. We
spend more on them than waste money on products matter.” They are looking for trust, and crying out for
that aren’t as good.” corporations to help them cope with their challenges.
➜ “I’m cooking more at home, so I want food products Over the past year, there’s been a lot of price-
I know will taste good; I’m buying more fresh food cutting, but have there been any quality improvement
and less packaged food.” along with the price-cutting? Are they treating their
And, of course, a good number of our women employees any better? Are they treating us any
say they’ve tried private label, like it, and there’s better? In too many cases, our women think it’s
no turning back: “At the grocery store, I’m buying just the opposite:
store brands.” ➜ “Quit shrinking the size of the item without
So, loyalties clearly are badly shaken, if not shrinking the size of the packaging. Consumers
broken altogether. The question is how to win those aren’t dumb or unaware.”
loyalties back. When I addressed this issue a year ago, I ➜ “It’s frustrating to waste your money on something
quoted Jim Stengel, a former Procter & Gamble chief that doesn’t last or do the job.”
NOVEMBER/DECEMBER 2009 THE HUB 39
How much has the economy affected your How has the economic situation affected your
lifestyle? purchase of local brands?
2008 23% 2008 15%
Greatly Buying more
2009 31% 2009 29%
Somewhat Buying less
Not at all No change
How has the economy affected your brand Has the economic situation affected your
loyalties? purchase of ”green” brands?
More brand loyal Buying more
Less brand loyal Buying less
No difference No change
If your brand loyalties have changed, do you Given current economic conditions, how
think these changes are permanent? important is a company’s commitment to a social
issue in your purchase decisions?
23% Less important
In some cases
S ource : WomanWise LLC
40 THE HUB NOVEMBER/DECEMBER 2009
➜ “So many corporations are trying to think of crazy absorb the wonderful sensory experience of sights,
products that most don’t use on a regular basis.” sounds and aromas that say “fresh,” you can’t help
but notice that little signs dot the store, flagging a
One of our women singled out Hyundai for
good number of items as “local.” The store’s staff
underscores this with a warmth and friendliness that
➜ “I find a growing interest in organizations that says, “Hey, we’re your neighbors and we care about
understand the economic situation and speak
this place, and we care about you.”
to and offer their audience alternative ways of
purchasing their product … Even after cash for What ought to worry national brands is that there
clunkers ended, Hyundai offered a similar program really is only one brand that sticks, and it’s the Fresh
to their consumers. Chances are, when I buy a car, I Market brand. The retailer is consciously building
will look at Hyundai first.” loyalty to itself, and doing so in new and refreshing
It’s no coincidence that while much of the rest ways that truly align with the idea that loyalty begins
of the automotive industry is struggling, Hyundai at home.
is doing relatively well. According to the Wall Street What is striking is the simplicity of the concept,
Journal, Hyundai’s U.S. sales “increased .8 percent which when you think about it is at the very core of
over the first eight months of this year, while Ford’s what marketing is supposed to be about: putting
dropped 25 percent and GM’s 35 percent.” the customer first. It’s amazing how often we lose
This is especially remarkable considering sight of this.
Hyundai’s reputation for quality problems when it And so it’s a year later — so much has changed
entered the U.S. market in 1986. But starting 10 years and so much remains the same. Women are not ready
ago, following its acquisition of Kia, Hyundai not only to forgive, and they certainly do not forget. Their
addressed those problems but also backed them up values have changed, and they are watching and
with extraordinary 10-year, 100,000-mile warranties. waiting to see what’s up with ours, as marketers.
It wasn’t just a publicity stunt either, because What have we done?
Hyundai’s quality improved dramatically and now Women are saying, “we matter.” They’re saying,
tops the J.D. Power rankings for non-luxury cars. “the social issue is us.”
Earlier this year, during the depths of the recession, Whatever we do, we need to make it highly
Hyundai also introduced an “Assurance Program,” relevant to their values because our ideas of “corporate
which allows its customers to return their cars if they social responsibility” might not be working for them,
lose their jobs within a year of purchase. and therefore it won’t work for us. What women want
So far, only 50 cars have been returned, but the from us is not only to support causes but also to
message is clear: We care. support them.
Unfortunately, it’s harder than it should be to find The perfect storm is over, much of the anger has
examples as good as Hyundai (if you have one, please subsided, and there’s calm after the storm. It’s all
email it to me at email@example.com). about insight. Listen carefully and we can find our
In this issue of the Hub, Zappos CEO Tony Hsieh way back, if only we hear their voices:
talks about the importance of empowering employees ➜ “We are in this world together.”
as a key to building loyalty from within (see page 26). ➜ “Help us … we will remain loyal.”
And Joe Dobrow, chief marketer of Sprouts Farmers
Markets articulates a philosophy of loyalty that’s all ➜ “Remember the little people.” n
about making shoppers feel personally connected to
the store and the people who work there (see page 8).
Another supermarket, Fresh Market, is impressive DORI MOLITOR is founder and CEO of
for its efforts to define loyalty where our women say WomanWise LLC (womanwise.com)
a WatersMolitor Company, a hybrid
it means the most — at home. The chain is based
consultancy-agency specializing in
in North Carolina, but as it stretches North, its marketing brands to women. Dori can be
customers would be hard pressed to find evidence reached at firstname.lastname@example.org
that it is anything but a local store. or (952) 797-5000.
Walk into a Fresh Market store, and once you
NOVEMBER/DECEMBER 2009 THE HUB 41
WHI T E PAPER
By Scott oSman In a world of increasingly commoditized products
and services, values are becoming the feature of
l a n D o r a S S o c i at e S
corporate culture that stands out the most. “Vanguard
companies,” as Rosabeth Moss Kanter of Harvard
uch has been written and Business School calls them, are already reaping the
discussed of late regarding benefits of integrating well-articulated values into the
business. And one of the most important advantages
the value that sustainability they are gaining can be summed up in a word: loyalty.
and corporate responsibility This new approach impacts loyalty with customers,
employees, community and even investors. Naturally,
can create. Although these terms are
this will not have an impact on every person; let’s
defined in various ways, “sustainability” face it, many people are still price shoppers and some
generally is considered the environmental employees will prioritize salary above all else. But
for those who are interested in being loyal to a brand
practices of a company, while corporate and are often influencers, vanguard companies are
responsibility is considered the practices standing out.
Vanguard companies have a sense of purpose,
that contribute to the social good.
are held to higher standards, and are rewarded for
Most often, these practices are considered from their efforts. Isn’t this always the case? Companies
the point of view of the contributions they make that want to be exceptional are always held to higher
to society at large, and secondarily to the business standards than their commodity peers. In this
bottom line. I am a firm believer in their importance new paradigm of good business, the impacts of the
and their future as mainstays of business. However, rewards are felt throughout the value chain.
we should not lose sight of the benefits that accrue Take the case of Dow Chemical. A laggard
to companies pursuing this strategy when the values in loyalty and reputation, the company quickly
expressed align with the brand. We call this approach reinvigorated the brand with its Human Element
citizenship branding. Think of it as brand purpose. campaign, which demonstrated and activated the
Citizenship branding aligns the brand and brand promise of solving some of the world’s most
corporate in a way that validates and reinforces pressing problems. Dow established Human Element
brand values; it identifies and engages authentic through its actions and then articulated the campaign
purpose. Citizenship branding brings the brand to through advertising, the web and print.
life for customers, employees, investors, and partners Dow made sustainability, along with innovation
by leveraging the provision of social benefit and its and technology, part of an integrated corporate
impact. It creates opportunities for developing new strategy. The company then elevated sustainability,
lines of business. Often, citizenship branding applies which distinguished the brand and resonated with
existing investments to create greater benefit for the its constituents. The message is delivered constantly
company and the causes it supports. throughout the organization, showing up on office
42 THE HUB NOVEMBER/DECEMBER 2009
Loyalty grows when brand values and strategy align.
walls, media, and internal communications, even According to old thinking about citizenship
during watercooler conversations. branding, companies should identify causes that were
This message found expression in new product not linked to the brand to avoid the impression that
development in desalination and water purification the brand was trying to gain from the relationship.
and in other improvements to water systems around But companies now must fight this “gut reaction,”
the world. As a further expression of this authentic because when they align the brand and the citizenship-
vision, Dow formed a partnership with the Blue Planet branding effort, good things start to happen.
Run Foundation to increase awareness of the global Causes benefit from increased exposure, long-term
need for safe drinking water. commitment and greater involvement. Brands benefit
Dow’s goal was clear: The company wanted through increased relevance that affects customers and
communities to have a better impression of the brand employees and creates new business opportunities.
that would inspire them to recommend it and defend Leveraging core competencies can potentially create
it. Dow wanted to attract the best employees who, value well in excess of the cash commitment.
more than ever, are looking at the quality of the IBM demonstrates collaboration beautifully when
company as closely as the quantity of the paycheck. it applies its efforts to great effect during natural
Through clear alignment with the corporate disasters. When IBM deploys its global workforce and
values and brand, Human Element has had a technical skills, the company can facilitate disaster
significant impact on those groups Dow cares most relief, making the work much more efficient for all
about — employees, communities and investors. involved. As it does so, it is living its values (“Innovation
For Dow, citizenship branding has become a highly that matters for our company and the world”),
effective strategy, clearly stating the business goals reinforcing them for employees and communities
and how they are brought to life through purpose. while also demonstrating them for customers.
IBM recognized that it could respond to natural
tR A n s pA R e n c y e n h A n c e s l oyA lt y (and man-made) disasters using its unique skills
In a March 2006 article published in the Journal when it participated in relief efforts following an
of the Academy of Marketing Science, researchers earthquake in China in 2001. IBM offered these skills
found that brands benefited from their citizenship- again during its response to the 2004 tsunami that hit
branding efforts if they were based on the brand India and other parts of Asia.
values or if they were aligned with the business The impact of IBM’s services far surpasses the
strategy. If stakeholders perceived efforts as being impact of any dollars IBM may have contributed. More
done only to please them, then stakeholder reaction to important, when disaster strikes, local IBM employees
the efforts was negative. live and reinforce the company’s values and take action.
The researchers also found that efforts were even This act of personal empowerment and corporate
more rewarded if there is a good fit between the core altruism defines IBM to all stakeholders as a company
competencies of the company and the causes with of extraordinary capacity to solve global problems.
which it engages. The researchers concluded that Teams of IBM employees immediately get to
because customers expect companies to seek profits work on securing communications and data centers,
while benefiting society, companies need not hide the networks, operations and logistics. Their actions have
strategic aspects of their citizenship-branding efforts. been instrumental in establishing IBM as a company
In fact, transparency may enhance the value created. that serves the world’s needs as well as its own
As citizenship branding moves into the core of business needs. Of course, governments recognize the
the business, it is showing up in many places in the company’s efforts and turn to IBM to develop and put
company, so collaboration will be key. Every department in place systems in advance of disasters.
has a role to play. It is important to focus and coordinate These and other actions also informed the IBM
the effort to deliver value and maintain loyalty. brand platform, Smarter Planet. Smarter Planet brings
NOVEMBER/DECEMBER 2009 THE HUB 43
the IBM brand to life by connecting its brand values, formed partnerships with Ralph Lauren.
corporate responsibility and sustainability efforts, and When we consider the world of good that all
product offering. By quickly responding to the needs companies provide, it is curious that few people
of the community and promoting the contributions recognize contributions such as those made by IBM and
of its employees in times of disaster, IBM increases TOMS. Of course, the recognition of what contribution
loyalty employees and customers have for IBM. a business makes to society goes back to a time when
philanthropy and other cause-related commitments were
A u t h e n t i c i t y, n o t s A i n t h o o d considered to be more worthwhile when there was no
Greenwashing — the term for companies that appearance of advantage for the company.
purport to adhere to sustainable practices but Now that people are looking to companies to
don’t — is not very common anymore due to the harm provide social good, all that has changed. Aligning
exposure can cause because of increased advocate corporate responsibility with brand values validates
vigilance and the speed of communication made efforts that are core to the company. As with all
possible by the internet. It is worth considering that things, the ever-present internet makes it easier to
people seem to know and care when the efforts are know who’s been bad and who’s been good, so be
honest and when they are not. good for goodness’ sake. The vanguard companies
However, people are not trying to look into the are already stating their values and principles
soul of the company and find a saint. Identifying and producing citizenship-branding reports to
causes and efforts that are true to the brand values or demonstrate their contributions.
strategy (or both) is all that is required. The Play Fair
Alliance (fairolympics.org) continues to pursue shoe t h e wA l M A R t A R t i c u l A t i o n
companies to improve their treatment of workers. As By articulating vision and expressing it openly,
much as they promote the change they are making, companies can have a voice in the conversation. And
these companies cannot garner much credit because remember, the small vocal group that cares about
their actions are forced. corporate-responsibility actions (both good and bad)
TOMS Shoes has built its entire business on the is going to be influential. Its influence often does not
act of authentic purpose. Blake Mycoskie founded the stop with causes and corporate contributions but also
business with the intention of putting shoes on the may extend to sales.
feet of children in emerging markets and is committed Consider how Walmart, by articulating its
to giving one pair of shoes away for each pair of sustainability commitment, has transformed itself
shoes purchased. into a good corporate citizen and a leader of the green
By linking the cause and the company so tightly, movement. Had the chain store merely made the
TOMS has been able to generate far more attention, changes and not articulated them, it would not have
at much lower cost, than traditional shoe companies altered the community’s impression of the company’s
can. As an illustration of the extent of its ability to values, would not have had as great an effect on other
generate attention, TOMS, a small company relative suppliers, and would not have had much influence on
to the shoe giants, has, for the past three years, changing customer behavior.
been represented at the Clinton Global Initiative, As recently as 2005, Walmart was best known
a prestigious organization established by former for its low prices and poor treatment of workers. CEO
President Clinton to turn ideas into actions. Lee Scott decided to make a major shift in Walmart
More important, TOMS received the attention of policies and made green (in addition to low prices)
AT&T, which featured the actions of the shoe company the focus of its efforts. He lured Adam Werbach, the
in commercials beginning in early 2009. As a result dynamic, youthful former president of the Sierra Club,
of this and other attention, the company, which sold with the promise that he could have more impact
150,000 pairs of shoes from May 2006 through Dec. working within the system than outside it.
2008, expects to ship 300,000 pairs in 2009 and has That promise is well on its way to being fulfilled.
44 THE HUB NOVEMBER/DECEMBER 2009
Walmart has made major strides within its stores, authentic mission is core to the company, good for
reducing its energy use, adding solar power and business and a strong validation.
reducing waste. Of course, this all comes with cost The company was very clear articulating its
savings. A greater consequence has been the greening objectives and how it would commit to them, and
of Walmart’s supply chain, for example, its packaging committed the Pedigree Foundation support the
and shipping requirements, among other initiatives. program for long term. To quote the brand, “At
And the company has been perhaps the greatest Pedigree Brand, everything we do is for the love of
force in making low energy use more commonplace dogs, from the nutritious dog food we make to the dog
in the household. The company is currently providing adoption drive we support.”
leadership with new green labeling. As these efforts Finally, the company activates the Pedigree
are aligned with the new Walmart brand value — Save Adoption Drive wonderfully in store and online as
Money, Live Better — they ring true, enhance the a marquee for its shared values and commitment to
brand, open new business opportunities, and change pets and their owners. Statements alone about being
the customer’s perception of the company. a caring company would not have as much impact as
This is where engagement with human resources this action. In 2005, a German marketing application
and various marketing departments (internal and of this program had a measured effect on the brand,
external) can increase velocity and value. Internally, increasing sales by 8.6 percent. It also increased
companies should find ways to involve their employees adoption rates by 20 percent during the first year of
with company social activities and engage their the campaign.
customers with a sense of purpose that creates a new Companies that have blazed this trail find new
kind of evangelism and loyalty. business opportunities, grow the communities in which
Consider what Whirlpool has done with its long- they operate, and create growth in their business. They
term commitment to Habitat for Humanity, activating attract better employees, who are more committed to
its employees and customers and communicating the company because they hold beliefs in common
its values while promoting its products and their with the culture. By aligning brand and corporate
features. The company made a 10-year commitment responsibility, companies are able to open up new areas
to the nonprofit, and employees are involved in of strategic advantage that will affect the company
building many of the homes. This active engagement internally and externally, actively and passively.
underscores the brand values and dedication to the We are living in a hypercompetitive market where
community and low energy use. It also creates a sense companies compete not only with one another, but also
of pride and opens up conversations that engage with a more tightly closed consumer wallet. Creating
around the brand. loyalty in this environment will require companies to
Perhaps one of the best examples of a company compete on all fronts: price, quality, selection and
that puts the idea of citizenship branding all together now values. The first three are fast becoming the
is Pedigree dog food. The company was looking price of entry. For the most attractive customers —
for a way to differentiate itself in a market where women and those under 35 — real loyalty to the brand
it was being squeezed by store brands. By creating will find a home in shared values and beliefs. n
the Pedigree Adoption Drive, the company aligned
its brand with a key value that matters to all its
stakeholders — caring for animals. SCOTT OSMAN is global director of the
The Pedigree Adoption Drive is a fully-articulated citizenship branding practice at Landor
platform that helps millions of dogs in shelters find Associates. Scott previously was with
good homes. The company supports this effort with Hachette Filipacchi and Doublespace.
product and by raising money. Most important, He can be reached at scott.osman@
the company raises awareness and creates a social
network online and in store to inspire action. This
NOVEMBER/DECEMBER 2009 THE HUB 45
WHI T E PAPER
By Zain raJ I posit a response: It is because Jim’s brand
was built in the last millennium and is still being
e u r o r S cg D i S c o v e r y
managed under 20th century marketing principles.
The last millennium was about the traditional
ike most of you, I travel a lot. Which
marketing and advertising model. The model invented
means I meet a lot of very interesting
by Procter & Gamble and its acolytes. It was a model
people. Once they find out what I do, our
built in a different era. As we all know, the consumer
conversations tend to drift into the issue
has moved on. The business environment, the global
of brands, business and marketing.
economy, the internet, lack of innovation, and increased
I was travelling from Chicago to the West Coast
complexity all make it difficult to succeed using the
last week and found myself sitting next to a gentleman;
ways of the last millennium.
I’ll call him Jim, the CMO of a Fortune 100 company.
Nothing is as it was. We are living in a new reality
In a conversation that lasted for about three hours, we
and we need to understand it, accept it and deal with
talked about the challenges he is facing in his business.
it. The pressures on the business and the challenges
We discussed everything from changes in
marketers face is resulting in having to do more, deliver
government policies to the impact of the economic
more and do this with far fewer resources. Budgets
environment; from competitive pressures to pricing
are regularly being cut. People are regularly being
disadvantages; media proliferation to media
cut. Expectations are constantly being increased.
Smart marketers are realizing that they need to
Brand rituals build move from just doing traditional “branding” that
will drive acquisition to a more balanced marketing
loyalty and drive growth. program. This should include a higher degree of
emphasis on understanding and retaining their
existing customers and developing a deeper sense of
fragmentation; and from consumers being in control loyalty to the brand.
to the powerful impact of social media. This is a more efficient model, which is critical
Interestingly, the one subject Jim didn’t mention because it costs significantly more to acquire a new
was the changes in the way today’s consumers relate customer than it does to retain an existing one (a
to brands. I found this omission very intriguing. Is cliché based on fact).
this because he did not see this as an issue? I probed An emphasis on customer understanding and
him on this. retention is not new; most companies claim they
As he talked, it became clear to me that he was are doing this already. However, I believe that they
dealing with a significant branding problem. His brand are only scratching the surface. They are executing
has very high awareness levels. It also has very strong tactical add-ons to their mass branding programs
equities. He is at price parity among his competitive instead of leading with a strategy. They are executing
set. But he is losing share. How is this possible? a basic version — one that does not work.
46 THE HUB NOVEMBER/DECEMBER 2009
Chart 1: Brand-Bonded Behavior
15% High Brand-Bonded Behavior States
D edic ated
36% Moderate Brand-Bonded Behavior States
Ut ilit y-Ba sed Value - Ba s e d Resp e c t- Ba s e d Bad g e - Ba s e d
49% Low Brand-Bonded Behavior States
S ource : Euro RSCG Discovery
With the commoditization of brands and has become the industry leader and a financial
homogenization of value propositions, brands need success. As a matter of fact, the program generates
to create deep and meaningful bonds to generate $6.4B (80 percent) gaming revenue yearly.
the kind of loyalty that drives meaningful business
success — over time. This means that brands need to B R A n d - B o n d i n G B e h Av i o R
deliver innovations, marketing, and product choices — What Harrah’s has done is to create, among
first for the benefit of their existing customers before its customers, a set of very meaningful behaviors
they do so for new prospects. This is what Harrah’s where the Harrah’s brand is central to their use of the
pioneered in the casino industry. gaming category. For them, no other brand will do.
According to the Harvard Business Review, Harrah’s I call this phenomenon brand rituals.
has the most devoted clientele in the casino industry, A brand ritual is a brand-bonded behavior that
which is a business that is notorious for fickle customers. customers build with certain brands that makes them
Harrah’s has taken full advantage of its ability a central part of their experience in the category.
to capture the data of current customers to build These rituals go beyond habits and routines to create
tremendous loyalty. a deeper bond. They become an integral part of
Harrah’s uses the data on its customers to enhance people’s lives. They create an enriched experience
customer service. They created Total Rewards, a loyalty in a unique way only that brand can provide. This is
program conceptually modeled after the airline where the brand gets the strongest levels of loyalty
industry’s frequent flier programs, but customized for from its core customer group.
their own business. We can all name some of the brands that are part
These insights improve operations for Harrah’s of our rituals. Some of mine are: Having coffee at
and tailor its reward program and marketing efforts Starbucks; watching TV shows on my iTouch; starting
to appeal to the customers who have the most impact my day with the Wall Street Journal; searching for
on its business. It helps make the casino’s most loyal information on Google; and shopping every other
customers even more devoted. weekend at Costco.
This has helped build the business. After years These brands have created a deeper sense
of being a second-tier player in the industry, Harrah’s of loyalty and bonding than their competitors.
NOVEMBER/DECEMBER 2009 THE HUB 47
Different customers want different things from their finding, given the emphasis on the need to create a
relationships and they evaluate, perceive and use lovemark or trustmark. In this brand-bonded behavior
brands differently. However, despite all of these state, brand users find the brand to be friendly,
differences, making a brand central to their “ritual” attentive, and accessible but are open to other brands.
results in predictable and sustainable behaviors that Supermarkets, gas stations are among the categories
lead to profitable growth. that index high in this state. Warning: likability or
But how do you do it? By fostering a mutually appeal are not necessarily predictive of high brand
committed relationship with your customer, you create commitment.
a branded relationship that enhances and enriches Brand rituals are the highest form of loyalty.
your user’s experience. By establishing meaningful Fifteen percent of the customers of a brand have a
connections with your customer, you continue to make bonded relationship with the brand that qualifies as
your brand more personal in the consumer’s eyes. And a brand ritual. Reciprocal relationships, dependable
that is the essence of a true brand ritual. experiences, experiences that delight, and a sense of
Behavioral data is an important component. It a brand user’s acknowledged value to the brand are
provides insights to inform how to effectively create essential in brand rituals. As in any relationship, you
those bonds while instilling the idea that there is need to nurture it constantly.
simply no other choice or way to do business than
with your brand. te s c o Ge t s it
It needs to be integrated with attitudinal data for a Tesco is another company that really understands
complete picture. Frequency of use is a necessary proxy, the importance of developing customer bonds. Ranked
but is not a strong measure of loyalty. Attitudinal, as the largest retailer in the UK, and the third largest
emotional and satisfaction measures are important, worldwide, Tesco has more than 15 million regular
but are not great predictors of sustainable behavior. shoppers and is the world’s largest online food retailer
To understand this phenomenon, we created via tesco.com. But this wasn’t always so.
and tested (and are still refining) a more holistic, Just 15 years ago, Tesco was a weak number
predictable measure, which we have dubbed the two behind Sainsbury’s. Threatened by discounters,
Brand Bonding Behavior Index (BBBI). Tesco had a low share-price and slow growth. So, the
BBBI is a measure of the quality and nature of retailer looked at ways to retain existing customers,
loyalty. It captures the essence of the brand ritual increase frequency and value and broaden customer
by integrating levels of commitment, of enriched share. What resulted was the creation of a loyalty
experiences, and frequent behavior to let us codify program, Tesco ClubCard, which rewarded customers
various dimensions of loyalty and their underlying in various ways for shopping at Tesco.
drivers. We fielded a study, in partnership with Leo J. The Tesco Clubcard was tested in 1993/1994 and
Shapiro, a leading research company, among 3,000 US launched nationally in 1995. The goal was to capture
customers of 78 brands in multiple categories from retail customer data, allowing Tesco to identify customers
to services to packaged-goods and beer (see chart 1). by name, reward frequency and value, while profiling
What did we learn? Here are a few teasers we customers nationally and locally. In addition, Tesco
gleaned as we looked across categories: planned to use the data to develop new services and
There is more than one kind of loyalty. Our study products to serve their needs better than the competition.
identified nine brand-bonded behavior states with Tesco incorporated offers and promotions from
varying degrees of brand commitment, indicating that partner brands that were targeted based on the
frequency is not a sufficient measure of loyalty. Every customer’s profile. Special interest clubs like Wine,
brand has all nine states at varying levels. Baby and Healthy Living were introduced to give
Nearly half of a brand’s customers are open to consumers a more personal connection to the store.
other brand alternatives. Three of the nine brand- And a budget was set aside for rewards that would go
bonded behavior states consists of users who are open back to customers to spend at Tesco each year.
to alternatives, while some even actively seek them. What Tesco did is to build a brand ritual. They
On average, six percent of brand users dislike the brand showed a commitment to customers by responding
they currently use! Just because they’re using your to their changing needs and created an enhanced
brand frequently doesn’t mean they are loyal to you. and enriched experience for them. Some of the
One of the lowest loyalty states is emotionally- innovations delivered were Points on Petrol introduced
based. You can imagine our surprise with that in 1996. Tesco.com launched in 1999 and incorporated
48 THE HUB NOVEMBER/DECEMBER 2009
Chart 2: Brand Rituals
Neutral – Good Feelings
S ource : Euro RSCG Discovery
the Club Card. The Healthy Living Club and Air Miles why they constantly tout how they have improved
Rewards were introduced in 2002. And Green Club to maintain usage. But for about 15 percent of
Card points were introduced in 2006. consumers, the brand is absolutely central to their
To keep up with technology, the program experience.
evolved from an actual card to a key fob, making it Remember, a holistic, unified approach in your
even more convenient for Tesco’s loyal customers. marketing program is very important. This means
Ultimately, the club itself changed over time and that that you should create synergistic experiences at every
was a crucial part of the strategy to keep it relevant possible touch-point. No one experience should be out
and grow its members. of context from the rest. If you do this well, you move
There are two dimensions for building a your brand up the bonded behavioral continuum to a
brand ritual commitment and enriched experiences. brand ritual.
Commitment is delivered when you understand that And it pays. Tesco went from a struggling retailer to
you need to be loyal to your customer first for them to the largest in the UK and third largest globally. Harrah’s
reciprocate. You have to deliver enriched experiences to has gone on to become the largest, most-profitable
them that are relevant and meaningful. This is possible entertainment company. Apple has been the turnaround
if you use transactional and behavioral data and fuse it darling. Google is worth more than its peer set.
with attitudinal and relational research (see chart 2). Coming back to Jim: Even though he has good
This then allows a larger number of your attitudinal measures on his brand, he has been unable
customers to move up the continuum from habit to create a behavioral bond. My advice: Build a brand
(where the brand is neutral with possibly good ritual … and change your brand’s trajectory. n
feelings) to a routine (where the brand delivers
functional satisfaction) to a bond where the brand
becomes central to their behavior. ZAIN RAJ leads Euro RSCG Worldwide’s
Our study confirms that for a majority of brand global retail practice and is CEO
customers, the brand is part of their habit and in of Discovery, the company’s data
danger of being replaced by a competitor quickly and analytics and customer relationship
easily. For some 36 percent of users, their brands are marketing unit. He can be reached at
part of their routines as long as they perform well.
Many packaged-goods brands fit in here. That’s
NOVEMBER/DECEMBER 2009 THE HUB 49
COOL BOOK S
Freedom, inc. But Viktor is looking at the issue differently. Observing
that “the economics of storage has made forgetting
The problem with many companies is that they
brutally expensive,” he worries that this might inhibit
judge employees on everything except “whether
us in a way that imposes on our sense of freedom.
the job gets done and the customer is happy,” write
Brian M. Carney and Isaac Getz in Freedom, Inc., He frets, for example, that our children might
as excerpted in the Wall Street Journal (10/15/09). not speak their minds online for “fear their blunt
words might hurt their future career.” His solution
The authors draw from the philosophy of Jean-
involves a system of data “expiration dates,” on the
François Zobrist, a former chief executive, who
assumption that “getting people to constrain what
observed that there are two kinds of companies
they desire to share is difficult.”
— “how” companies and “why” companies.
The “how” companies “spend their time telling
workers how to do their jobs,” while the “why” Eating the Dinosaur
companies “replace all the ‘hows’ with a single
In his new book, Eating the Dinosaur, Chuck
question: Why are you doing what you’re doing?”
Klosterman frets over the state of American pop
Where the “how” approach completely ignores culture as he makes “an eloquent defense of it,”
customer happiness, the “why” question has only writes Michael MacCambridge in the Wall Street
one answer, which is “to keep the customers happy.” Journal (10/23/09).
And if you’re keeping the customer happy, the “how”
The book consists of a series of essays, covering a
is pretty much irrelevant.
spectrum of pop-culture topics, “from the lasting
The authors also write about “the hidden cost of appeal of Abba to the annoying staying power of sit-
top-down thinking,” which refers to a failure to com laugh tracks; from the nearly forgotten 1980s
account for “disengaged, stressed out, ill, or even basketball star Ralph Sampson to Garth Brooks’
absent” employees. This hidden cost results in critically dismissed foray into rock.”
“turnover, workplace stress, conflict-ridden labor
He writes a “well-reasoned” essay on “the ethics
relations,” as well as “a lack of innovation and
of time travel,” in which he admits that “there’s an
slumping organic growth.”
inherent goofballedness in debating the ethics of an
They also call for a new kind of leadership, where action that’s impossible.”
leaders eschew status symbols and subordinate
He provides an analysis of the Unabomber’s 35,000-
themselves to their employees. The key, they say, is
word manifesto, and finds “not the lunatic ravings
to make your people feel like “human beings instead
of a terrorist but something more disturbing:
of human resources.”
In addition to being an attack on technological
civilization, the manifesto was a trenchant media
critique that strikes him as more incisive than ever
in the age of the internet.”
It’s becoming more expensive to forget than to
Indeed, the recurring theme throughout the book
remember, suggests Viktor Mayer-Schönberger in
“is that we are so saturated by media that its sheer
his new book, Delete: The Virtue of Forgetting in the
omnipresence not only alters our sense of reality but
Digital Age, reviewed by Adam Keiper in the Wall
also prevents many of us from comprehending the
Street Journal (10/23/09).
degree to which that omnipresence exists.”
This is actually something of a contrarian perspective
Along the way, he raises questions that help re-
because some historians are concerned that the digital
frame our view of “media, truth and discourse in the
era is making it harder to keep permanent records:
modern age,” such as whether “Bob Dylan is a good
“Archivists and librarians have looked for strategies
singer or a bad singer ... That’s the essential question
to preserve digital public records, with mixed
of all criticism, right?”
success,” and some fear a “digital dark age” ahead.
50 THE HUB NOVEMBER/DECEMBER 2009
Where are you on your
journey to becoming
a visionary marketer?
Traditional marketers live in a short-term world where immediate The Shift is a great "how-to" book for Visionary
results outweigh long-term brand building. They are often limited Marketers who want to stand out, help their
company succeed by moving towards true
to running agency relationships and enabling the sales force, and accountability and drive a business strategy that
are constantly being squeezed for funds they do not have. But keeps the customer in mind, while never losing
the days of marketing strategies and business strategies being sight of the P&L.
created separate and apart from one another are coming to an Fisk Johnson, Ph.D.
Chairman and CEO
end. The best marketers are now creating integrated perspectives SC Johnson
that start with the growth aspirations of the entire organization.
In The Shift, Scott M. Davis, author of Brand Asset Management Forget the CMO. Long live the integrated agenda
and co-author of Building the Brand-Driven Business, outlines of the Chief Growth and Visionary Ofﬁcer!
how marketers can take action to engage more effectively with Joseph V. Tripodi
Chief Marketing & Commercial Ofﬁcer
the executive team and ultimately ensure that they take a The Coca Cola Company
leadership role when it comes to the overall growth strategy.
At Zappos.com, we've always approached
business in our own unique way. The Shift
outlines many principles we holistically
embrace. Kudos to Scott Davis for putting
together such a great resource!
Visit: www.prophet.com/shift CEO
Available Wherever Books Are Sold Zappos.com
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We understand why she buys
your brand in their store.
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It’s that approach that helped us be #2 on the HUB Top 12 for 2009.
Get to know us…
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