Measuring Trust in the Starbucks Brand

A few months ago, I wrote an article for the Human Resource Management Association magazine, explaining the importance of trust in organizations and brands. The article drew on our recent study that explored the level of trust in 30 highly prominent brands:

“As a concept, trust has been shown to influence the effectiveness of leadership and the very function of an organization (including things like co-operation and effective working relationships). Try getting a staff member to remain loyal without trust, or convince a customer to buy without trust.”

Perhaps the most interesting part of the article was a brand trust case study, highlighting trust metrics for two major coffee brands in Canada:

“When compared to Tim Hortons, Starbucks is facing significant trust issues. Across all six drivers of trust, Starbucks scored considerably lower than their direct competitor. By contrast, Tim Hortons is Canada’s most trusted brand and is reaping rewards that include positive word-of-mouth and loyalty.”

Above is a model from our research, illustrating how the six drivers of trust have influenced the competitive situation for these two brands.
Although over supply and the current economic environment may have contributed to the negative Starbucks situation, the brand experience also appears to be a factor. Our research has shown that brand trust and recommendation are key challenges for Starbucks in the Canadian coffee market.

For those of you who enjoy a more detailed read, here’s a full copy of the article that appeared in the HRMA quarterly magazine:

Interesting Vancouver: The Six Drivers of Trust

Back in October, we were invited to speak at a multi-disciplinary conference called Interesting Vancouver. The conference brought together an eclectic bunch of speakers, who shared their information and obsession on a range on topics. My personal favorite was Jer Thorp, Contributing Editor of Wired UK, whose presentation on infographics and aliens was hilarious (here’s a video link).

The topic of our presentation was trust, or more specifically, the psychology of trust. Using our brand trust research, we helped explain how trust builds for people, businesses and brands. If you’re interested in a 10-minute overview of trust, check out the following video:

Heavy Metal Gangs of Wadeye

Just watched an Australian documentary on 'heavy metal gangs' in the remote Aboriginal town of Wadeye. It's a pretty interesting look at culture and social identity; worth a watch if you have some spare time.

Episode One (25min):

Social Media: Online Body-Building?

Over the past year, we’ve been involved in a lot of qualitative research for clients including Dell and Intel. When studying technology motivations, it’s impossible not to explore people’s everyday behavior - and when it comes to their computer, people’s behavior is deeply personal.

Online body-building

One particularly interesting phenomena described by participants, was the process of ‘self-design’ that occurs in social media; we termed it body-building. Like a child playing dress-up, social media lets people re-design their identity in digital reality.

But unlike the fleeting nature of childhood games, social media can turn this fantasy into physical reality. Want to be popular? Craft yourself into a Facebook fashionista, and soon enough you’ll be invited to the catwalk. Want to be a marketing expert? Claim to be a social media maven, and soon you’ll be speaking at conferences.
The modern day dream factory
In morphological research, there’s a belief that society (within reason) permits people to pursue opportunities, or goals, that transcend their current capabilities. This drive for development and growth is a fundamental part of human motivation.

But what’s fascinating with body-building, is the extent to which digital society permits the ‘re-design of identity’. Social media is providing a mechanism for turning fantasy into reality; like adult dress-up, or a modern day dream factory.
Social media can re-design reality; with one click you can change your life.

A brand as a person, not just a personality

Imagine if a brand was a person. Not just the caricature of a person, a brand personality created and draped over an organization or product - but a real walking, talking, breathing person. A person with dreams, values, networks and knowledge.

When we think of a brand as a personality what lies below the surface can seem inconsequential. Brand personalities have become the business equivalent of changing your name via deed poll. So what if the product fails or the organization lies; just change the brand personality, and bingo, a new brand is born.

Example: Unilever’s campaign for real beauty in Canada (Dove)

When we think of a brand as a person the game changes. Trust, loyalty, word-of-mouth, these are new metrics for a brand but they’re old metrics for people. People may be aware of Richard Nixon, but would they trust him? People may recall Lehman Brothers, but would they recommend them? The answer is no. Because the true measure of a person, or a brand, goes much deeper than a personality.

Example: Unilever’s campaign for skin whitening in India (Pond's)

The game is changing. Social media is giving consumers the power to pull-away brand personalities and reveal what lies beneath. If what lies beneath your current brand personality is a legacy of previous brand personalities, product failures and marketing misrepresentations, then your business has some tough questions to answer. After all, who really cares how many customers are aware of you, or can recall your latest logo? If they don’t trust you, and aren’t loyal to you, then you’re in a pretty bad place.

Trust, loyalty and recommendation aren’t the measures of a good personality; they’re the measures of a good person. If organizations are serious about embracing these new metrics, and seriously growing their business, they need to start thinking about a brand as a person, not just a personality.

For more information on building a brand beyond personality, check out this previous post and presentation.

Insight without borders: Interview with Ginger Grant PhD

Ginger Grant PhD, is the Managing Partner of Creativity in Business Canada, a consultancy that specializes in creativity and innovation with both individuals and organizations.

Part of the teacher/trainer group from Stanford’s GSB “Creativity in Business” program, she is the only Canadian on the team.

Creativity in Business is a philosophy whose focus is the passion of people and the ability to deliver world-class performance. Ginger is also a highly respected speaker, writer and academic. The author of
Finding Your Creative Core (2009) and ReVisioning the Way We Work (2005), she can be found on twitter or contacted through her website:

Question 1) Describe your area of expertise: What is it, how did you get into it, and why do you keep doing it?

Ginger Grant: My passion is story and studying mythological and memetic systems. Prior to shifting my focus, I specialized in due diligence and competitive intelligence in mergers and acquisitions for several stock exchanges in Canada, the US and Europe. My mid-life crisis took me back to school where I did graduate work at a school founded by Joseph Campbell,
Pacifica Graduate Institute.

After completing my PhD in mythology and depth psychology, I then completed post-doctoral studies at the Stanford Business School in the Creativity in Business program. I have written extensively on Campbell’s Heroic Journey model, using it as a tool to promote psychological change. My work is my passion: I love what I do every day and isn’t that a job description that many of us desire?

Question 2) What’s the biggest lesson you’ve learnt in the last year of business?
Ginger Grant: Our current economic woes stem from a variety of complex issues, one of which is the focus on short-term profitability in North America. Our business schools lean towards models that view long-term planning to be a five year process.

In our dealing with companies in Europe and the Asia-Pacific, long-term can be as much as 100 years, the lifespan of four or more CEO’s. Such an emphasis keeps your strategic intent towards sustainability for the organization. Our businesses need to not only think more creatively but also more sustainably with regards to human capital retention.

Nick Black: Interesting perspective. This idea has also been shared by
Prof. Geert Hofstede who dedicated his career to studying dimensions of culture. He found that US culture was highly short-term orientated, verses cultures in Asia, whose “time perspective was more about persevering and overcoming obstacles with time.”

Question 3) What major trend(s) do you see emerging in Canadian business?

Ginger Grant: Canada has a built-in competitive advantage, as our country is founded in multiculturalism. You are encouraged to be both Canadian AND country of origin. This richness in diversity will continue and can provide a foundation for innovative practices. Creativity comes from diversity in thinking.

A challenge that is upon us is retaining intellectual capital and knowledge transfer in organizations. In most companies, over 30% of the workforce will soon be eligible for retirement and in some cases, the numbers are much higher. We need to re-vision retirement (which is the topic of my next book!) in order to retain valuable human capital.

Innovative organizations are also focusing on the executive development of women in their workforce, who have been under-represented in the past at a senior level. Many organizations are also creating their own university systems, as our business schools do not support innovative thinking.

Question 4) What major trend(s) do you see emerging amongst Canadian consumers?
Ginger Grant: Canadian consumers are becoming more discerning and are demanding not only an excellent product or service but also an excellent experience of the product or service. That is difficult for many organizations as experience is an emotional construct. Any organization that wishes to excel in the marketplace needs to focus on its delivery experience. Price matters yes, but experience matters more.

With the demographic shortages in the workforce, employees are also becoming consumers and will stay with an organization that provides an excellent working experience. I see no difference between external and internal marketing anymore – delivery on the brand promise is mandatory.

Without an emotional link to the product or service, lowest price will prevail. Without an emotional link to the organization, employees will move at will and frequently to wherever they can obtain the best working conditions. Consumers, regardless of what type of stakeholder they may be, are now driving your brand.

Question 5) Insight, strategy or innovation – Which is most important, and what role does it play in Canadian business?

Ginger Grant: What a question! In my view, insight matters most as it drives strategy and therefore innovation. North America is in love with quantification – numbers drive strategy. Europe and the Asia-Pacific start with qualitative means – the insight required to make decisions. If you don’t know where you are going and why you are going there, it doesn’t matter how much money you throw at the problem.

Insight first always. Then measure your results! In order to increase our competitive advantage, we need to quit playing with numbers (I usually phrase that much more rudely) and move towards the vision and values that drive our decision-making.

Question 6) Pick a successful Canadian product, service or brand. Why did you pick it, and what can we learn from its success?

Ginger Grant: One of my favourite examples is Cirque de Soleil. Canada is considered a conservative country but every so often, we surprise the world and deliver something incredible. Cirque de Soleil understands the value of experience, the emotional link to a brand promise.
They never fail to delight. They never fail to deliver. They live their brand – each performer – every day. They have re-visioned the entire concept of a circus while at the same time, paying attention to global issues and concerns such as treatment of animals, etc.

Their attention to detail is legendary but here is a little known example. The children of the performers travel with the troupe. In each new location, their school is built yet again, providing the children with a consistent “experience” in their education. Same room, same walls, same desks. When the troupe moves on, so does the school.

That is consistency in experience and provides an emotional anchor for those children regardless of location world-wide. Do you think that such attention to the children of their employees contributes to the delivery of world-class performance? You bet!

Question 7) If you had one piece of advice for a foreign business or brand attempting to enter the Canadian marketplace, what would it be?

Ginger Grant: Don’t underestimate the intelligence of the Canadian public. We tend to be a conservative nation and keep a low profile. Deliver on your brand promise and you will be rewarded. Once you have captured our hearts, our passion and commitment are legendary.

Family, Food & Fun: Research on family meals

Back in January 2009, we completed a qualitative research project exploring the topic of food and family meals for the BC Dairy Foundation and the BC Ministry of Healthy Living & Sport.

The existing facts on family meals had already established a link between eating together and a multitude of mental, physical and social benefits. However, in order to properly understand the topic, there was a need to move beyond facts and explore the feelings behind family meals.

Through our research, we found that meals involve much more than food and function, facts and figures. Meals bring together nutrition and emotion in our minds. Meals are about love. Meals are about friendship. Meals are about fun, and, most importantly, meals are about family.

Below is a presentation that shares some of our research on family meals, and the insights it uncovered. If you’d like more information on this research, or tips on how to reconnect family, food and fun, you should check out Better Together BC.

Interesting Vancouver 2009

If you live in or around Vancouver, you may like to check out Interesting Vancouver 2009. It’s a multi-disciplinary conference that’s being held the evening of Friday October 23rd at The Vancouver Rowing Club. According to its founder Brett Macfarlane, the objective of the conference is to “share new knowledge, things you’ve never known, or thought about.”

The evening has attracted a pretty eclectic mix of speakers, including journalists, creatives, foodies and researchers. At some stage during the evening, I’ll be sharing some research on the psychology of trust (how trust builds for people and brands).

If you’re interested in attending, you can get tickets
here. This is a not-for-profit initiative, so the prices are pretty reasonable.

How Brand Trust affects New Products & Services

In a recent North American study on brand trust, we found that when people trust a brand, 78% will give its new products and services a chance.

Why is this statistic important? Because according to Prof. Gerald Zaltman, “approximately 80% of all new products or services fail within six months or fall significantly short of forecasted profits.”
Reducing new product risk

New products and services involve risk. They involve risk for companies who must develop and launch their new product or service, but they also involve risk for customers, who must gamble their salaries and satisfaction on the promise of something new. According to the innovation expert
Robert Cooper, success is all about managing this risk, in fact, “if risk is to be managed successfully, the uncertainties of outcomes must be deliberately driven down as the stakes increase.”

This is where brand trust can play a role for companies and customers, because brand trust helps manage risk by reducing uncertainty. For example, the brand trust built by Apple, reduces the risk and uncertainty of buying a new MacBook Air. Similarly, the brand trust built by Google, reduces the risk and uncertainty for customers when they buy a new online advertising service.

Increasing new product success

When it comes to innovation, companies and customers have a lot in common; they both want something new, but neither of them wants to take a risk. This makes brand trust important, because when people trust a brand, 78% will give its new products and services a chance.

So if your company wants to improve its innovation success rate, or help prepare the market for innovation to come, perhaps you should start by building brand trust.

(If you'd like help measuring and building brand trust,
give us a call).

Informer or Meformer: Which twitter type are you?

There was an interesting comment posted yesterday by Bradley Hughes (thanks mate), highlighting a recent study from Rutgers University. 
The study examined the message content of 350 randomly selected twitter users and found two key clusters (or types) of user, Meformers & Informers. 
According to the researchers, "twitter users represents two different types of content camps; the majority of users focus on the self, while a smaller set of users are driven more by sharing information." So the question is, which twitter type are you?

How Brand Trust affects Brand Choice

In a recent North American study on brand trust, we found that when people trust a brand, 78% will look to it first for the things they want. But what does this data really mean for companies and customers?

In everyday life we’re often faced with an excess of choice; from our groceries, to our relationships and even the articles we read online. With so many choices available, we often feel overwhelmed by selection. Indeed according to Prof. Barry Schwartz“Though modern Americans have more choice than any group of people ever has before, and thus, presumably, more freedom and autonomy, we don't seem to be benefiting from it psychologically.”

Example: Consider the choices we face when trying to select so
me soap 

Because of the volume of choices we face, the role of trust becomes increasing important. Trust gives us a short-cut to decision making, a way to eliminate options. 

For example, if you’re single, you could attempt to seek out and develop relationships with strangers, or you could rely on your friends, family and colleagues to introduce you to people they know and trust. In this case, trust could help you reduce relationship choices.

Similarly, brand trust helps customers reduce choice. If a customer trusts Kraft, they’ll look to them first when they’re trying to make some Mexican food. If a customer trusts HSBC, they’ll look to them first when they’re planning to take out a home loan.

Example: Brand trust affects brand choice, by helping us eliminate options

When people trust a brand, 78% will look to it first for the things they want. In short, trust helps customers make choices. So if your brand is in a competitive category, and your customers have a lot of choice, perhaps you should start building brand trust.

Trendsmap: Tracking trends on twitter

If you’re interested in watching human thoughts as they sweep across the twittersphere, then you should check out this new service called Trendsmap. It’s an application that tracks twitter trends across the globe, and plots them on Google Maps. 

There’s something really powerful about watching a tipping-point occur in real-time. Seeing people in a state, country or community, tweet a word in unison. It’s pretty engaging stuff.

For example, above Australia, one of the key words appearing in the tweet cloud is Vegemite (an iconic Australian product, produced by Kraft Foods). They’ve just launched a new product called iSnack 2.0, which according to the twittersphere, isn't too popular with Australians.
Example Tweet One: “iSnack v2 for vegemite. Now that makes it sound sexy and marketable to a wider audience…NOT”

Example Tweet Two: “LOL at Vegemite now being called iSnack 2.0. I’ll eat my iSnack 2.0 sandwich while texting in my iPhone and listening to my iPod?”

And here are a few traditional media articles, following up on the product launch and subsequent twitter storm: ABC and Crikey

The great brand trust offensive

Last Thursday, the agency Interbrand released their annual Best Global Brands Study. According to Jez Frampton, the Global Chief Executive of Interbrand, their study found “two trends that stand out above others…an increasing requirement for brands 'I can trust', and an exponential shift in social and consumer networking.”

This study, adds to the collection of companies and marketers who are actively exploring the benefits of brand trust. For those with a need to read, below are some recent posts and articles on the topic:

So why all the interest in brand trust? Is trust just another branding buzz word? The answer is no. In fact, according to our recent North American study, brand trust delivers some very tangible business benefits. Below are some examples: 
Figure 1: Brand Trust Study Findings
Based on the findings from our research, I’d have to agree with Jez Frampton. When it comes to building businesses and brands, “it’s all about trust.”

Insight without borders: Interview with Martin Frech

Martin Frech is the director of Accenture's Customer Innovation Network in Shanghai and a senior manager in Accenture's Strategy Practice in China. Martin has close to a decade of experience in delivering millions of dollars in sales and marketing presence for major brands, while driving growth in emerging markets across the Asia-Pacific.

His experience covers the areas of pricing and trade terms, sales & marketing and corporate strategy in developed and developing economies in Europe, Asia and North America. Martin holds the German Business Administration Masters Degree (Diplom-Kaufmann) and an MBA, both with honours.

Question 1) Describe your area of expertise: What is it, how did you get into it, and why do you keep doing it?

Martin Frech: My experience, most recently, has been supporting clients achieve breakthrough growth - and operational efficiency in Greater China. This has been mainly with established, multi-national brands, but also with clients that are seeking to enter the Chinese market.

Before that, I was working with clients in Western Europe on various topics, including pricing- and trade terms optimization, procurement optimization, pan-European logistics / distribution optimization, retailer turnaround programs, and distribution channel strategy. I’ve focused on the consumer goods and retail industries throughout my career.

Why do I keep doing it? Simple: consumer goods is, to me at least, the most exciting industry in the world. It’s as real as it gets: everyday products, for everyday people, but delivered in a hopefully non-everyday way. What could be better than that?

Question 2) What’s the biggest lesson you’ve learnt in the last year of business?

Martin Frech: Don’t use a recession as an excuse to cut marketing. This is the time when the bold get a chance to overtake the current leaders; this is where, if you have the guts, you can reach out to new consumer segments, build loyalty among your customers, and grow, grow, grow. I know it’s not popular, especially in a downturn, and it’s also not easy. But it can be done – and the rewards are huge. Also, you can use this time to get some real talent (i.e., employees) at a discount.

Nick Black: Well put Martin. In January I posted a similar quote from a financial services executive, who stated, “tough times are when great brands are built; what companies do now will determine their future in the market. This crash has turned the market into a muddy field and washed away a lot of competitive advantage. The brands that make their mark now will have a footprint for a very long time to come.”

Question 3) What major trend(s) do you see emerging in Chinese business?

Martin Frech: While many manufacturers, distributors and retailers are still just trying to get the basics right (For example: Planogram compliance, avoiding out-of-stocks, or even just getting product on shelves), some leading companies are working on more advanced issues.
More and more, retailers and manufacturers alike are building their understanding of individual consumers, as opposed to target groups or segments.

The ability to work through very large amounts of data and the opportunity to communicate to individuals using new technology, combined with the decreasing effectiveness of mass advertising is creating a real opportunity for many companies – and the leaders of the pack are taking advantage of it!

Question 4) What major trend(s) do you see emerging among Chinese consumers?

Martin Frech: Particularly in China, consumers are quickly becoming cynical with regards to mass advertising – and are, correspondingly, increasingly less loyal to large brands that rely heavily on it. Consumers in China, these days, expect to be treated (and communicated to!) as individuals; they expect retailers and manufacturers alike to understand their needs, to anticipate demand, and to develop products and services that serve them. Companies that do this are rewarded accordingly.

Question 5) Insight, strategy or innovation – Which is most important, and what role does it play in Chinese business?

Martin Frech: In China, insight is the most important, but it’s the combination of the three that creates real power. Strategy, in most cases, is far too long-term to serve any practical purpose in China – more often than not, laid-out plans are interrupted by your competition anyway. Innovation is actually quite common in China and there is no lack of new ideas.

Where most companies struggle is on insight: truly understanding the market, gaining access to sufficient data in sufficient quality (which is much harder than in developed markets), and then turning that into action. As anywhere in the world, information is power – when acted upon.

Question 6) Pick a successful Chinese product, service or brand. Why did you pick it, and what can we learn from its success?

Martin Frech: Touchmedia is an interesting company in China that has managed to scale up very quickly and now reaches millions of consumers every day. They provide screens to reach consumers where previously there was very little communication: in elevators and in taxi cabs.
In fact, the screens Touchmedia have installed in headrests of literally thousands of cabs in China, are touch screens, and consumers can pick and choose which marketing messages are most relevant to them; in addition, the company is now using this medium to collect survey data from consumers. Imagine the possibilities once they close the loop and gather a larger range of data!

Nick Black: According to a recent Wall Street Journal article, Shanghai taxis transport 90million riders per month, and they sit in traffic an average of 18 minutes per trip...a fairly captive audience.

Question 7) If you had one piece of advice for a foreign business or brand attempting to enter the Chinese marketplace, what would it be?

Martin Frech: Remember to adjust your approach to the market. The days of consumers ‘just waiting’ for the foreign brand to finally be available in China are over – actually, those days never existed in the first place. China is a country where everything is possible, but nothing is easy, so expect frustrations, expect longer cycle times, but also expect to open yourself to a whole new world with endless possibilities!

Brand Trust: The Six Drivers of Trust

Trust. The word of the moment. From advertisers to analysts, from the media to marketing, everybody’s talking about trust. In fact, according to a recent Mintel report on the top consumer trends for 2009, “trust is the paramount concern…as banks, food manufacturers and government officials suffer from losing people’s trust.”

So if trust is important. And everybody’s talking about it. What exactly are the benefits of trust, and how can brands and businesses build it?

These are the questions we explored in a recent North American study into the benefits and drivers of brand trust. If you want to know how you can get people to buy more, try more and pay more for your products and services, check out the following presentation on brand trust:

Insight without borders: Interview with Gill Walker

Gill Walker is the Managing Director of Evergreen Marketing Communications, the first advertising agency in Australia and New Zealand dedicated to building campaigns that motivate and resonate with boomers and seniors. Gill founded Evergreen in 2003, after completing a Masters Thesis on Ageism in Advertising. The thesis involved undertaking numerous focus groups and reviewing over 3,500 advertisements.

Before founding Evergreen, Gill was the Managing Director of Sudler & Hennessey Australia, and prior to that was a senior executive at McCann Erickson. Gill has extensive experience across many categories including healthcare, travel, finance and retirement services; and works with blue chip clients including Australian Unity, Fairfax, Great Southern Rail, Sentinel, State Trustees, Stockland, Telstra and the Victorian Government.

Gill is guest lecturer at RMIT University and a founding member of the International Mature Marketing Network (an organisation for all researchers and marketers interested in the 50+ audience). She is a regular presenter and commentator on issues relating to advertising and marketing to boomers and seniors, and has appeared on television programs, in newspapers articles, in trade publications and at industry functions across Australasia.

Gill can be contacted at

Question 1) Describe your area of expertise: What is it, how did you get into it, and why do you keep doing it?

Gill Walker: My area of expertise is advertising and marketing to the 50+ audience. I became interested in this topic while I was working at a healthcare agency, on a campaign that involved segmenting herpes patients by age. Fifteen years ago, advertising that confronted the truth surrounding sex amongst people in their 60’s wasn’t welcomed by healthcare professionals. The campaign was so controversial it became the first sealed section in a medical journal.

Five years later, whilst enjoying my 40th birthday, I decided to take a year out of work to complete a Masters Thesis on Ageism in Advertising. Through this experience, the process of exploring a topic in such an in-depth way, I became hooked on the 50+ audience. It was a revelation to find out that so few people in advertising were interested in the boomer and senior demographics; and yet they have the highest discretionary spend in Australia, are keen to try new brands, and are planning to live another 30 years.

I keep working in this area, because everyday we learn something new. We’re constantly experiencing surprises, both good and bad. When we create advertising that resonates with mature audiences it feels good, it feels altruistic.

Question 2) What’s the biggest lesson you’ve learnt in the last year of business?

Gill Walker: Have credit insurance

Question 3) What major trend(s) do you see emerging in Australian business?

Gill Walker: In Australia, a major trend I’ve noticed within the advertising industry is that the larger agencies are getting larger, yet more commoditized and less profitable. The mid sized agencies, without size or any special offering, are struggling with the potential of being swallowed up. While the specialist agencies are more protected as they have differentiation.

Question 4) What major trend(s) do you see emerging among Australian consumers?

Gill Walker: In Australia, a major trend with consumers aged over 50 is that they’re starting to get noticed. In 2009, 50% of all Australian adults were aged over 45; as such the Australian 45+ audience has now become the consumer majority.

Nick Black: That’s a great statistic, and one that’s echoed in many other developed countries. Try taking a look at some cross-country demographics on NationMaster; 20% of Japan’s population are 65+ compared to just 4.9% of India’s population.

Question 5) Insight, strategy or innovation – Which is most important, and what role does it play in Australian business?

Gill Walker: I think they’re like a plait (or a braid) and should really feed off each other. The example I can share is a communication process we’ve developed called ‘distillation’ where we try to find an ‘essence’. The start of the process is to look for differences and similarities within the audience (insight), we then determine the best time and place to serve up the message (strategy), and from that point the creative ignition takes place (innovation).

Question 6) Pick a successful Australian product, service or brand. Why did you pick it, and what can we learn from its success?

Gill Walker: I’d pick Foxtel, Australia’s largest cable television provider. While many brands stopped spending during the noise from the global financial crisis, Foxtel took an offensive strategy. They created advertising that tapped into people’s desire to ‘stay home and save money’. According to recent reports, Foxtel’s revenue for the year ended 30 June 2009 reached $1.84b, an 11% increase on the previous year.
So the lesson we can learn from this brand is to be bold, take calculated risks, but most importantly do something rather than nothing. Decisions are the only way to move forward.

Question 7) If you had one piece of advice for a foreign business or brand attempting to enter the Australian marketplace, what would it be?

Gill Walker: If a business or brand is interested in entering the Australian marketplace, then I would suggest they have a definite plan to manage their talent and employee requirements; both retention and recruitment. If your company relies on young employees then consider this statistic - by the year 2020, only 18% of the available labour force in Victoria will be under the age of 40.

Nick Black: For those of you who aren’t familiar with Australia, Victoria is its second most populous state with over 5 million residents. If you’d like more information on the demographics of Australia, check out the Australian Bureau of Statistics.

Insight without borders: An introduction

Over the next few weeks, I’ll be posting the first in a series of interviews titled 'Insight without borders'. Conducted with multi-national experts and innovators in the field of marketing, these short interviews are designed to explore practices, trends and insights across geographic and intellectual borders.

Why cross borders? Because this is how organizations and businesses can unearth some of their greatest insights and opportunities. In fact, according to the innovation author Mehrdad Baghai, "the search for new opportunities can easily fail if strategists have their eyes fixed on an image of business as it is today". 

Some of the world’s most successful organizations aggressively cross geographic and intellectual borders in pursuit of insight, like Intel, who employ sociologists and ethnographers who spend months in emerging markets embedded in grassroots communities to identify the latent needs of local consumers” (Harvard Business, 2009).

Conversely, remaining within borders can easily lead to missed opportunities and mismanaged outcomes, as was the case when a “French pharmaceutical company attempted to sell a liver disorder drug in Germany; failing to realise that German consumers don’t actually care about their livers” (Mesdag, 2000).

These two examples of crossing geographic and intellectual borders illustrate the intent behind this series of interviews. Each interviewee has been selected for their depth of insight and country of residence, bringing to bear a combination of cultural and professional experience. 

So if you’re interested in exploring how psychology can influence digital dialogue, or how Asian innovation may transform America business, stay tuned for Insight without borders.

The price is right…or is it?

The price of petrol, the price of property, the price of health care; price is in the media and in our mind. This may seem like a relatively recent phenomenon, born out of economic necessity, but as far back as the 19th Century we were equally fixated on price. In fact, the famous playwright Oscar Wilde once said, “These days man knows the price of everything, but the value of nothing.”

In marketing, price is also a frequent topic of focus. Over the years I’ve seen countless studies showing that customers are primarily motivated by price. From milk, to mainframes and mobile phones, when it comes to customer motivations, the price, apparently, must be right.

But what if price isn’t always right? Price may be what customers are saying in focus groups, and ticking in survey boxes, but what if something else is going on below the surface? Through a number of studies we’ve found that price is often a proxy for deeper motivations; here are two examples where the price isn’t right.

The price of control: 

For many customers, focusing on price can be symptomatic of a desire to gain or exert control over companies and categories. This is a common occurrence in categories like wireless or insurance, where customers feel dominated by large predatory providers, and as such, have a tendency to use price as a tactic to exert control.
Consumer Translation: I’m sick of being kicked-around by these guys; I’m going to shop around for the best price possible and make them work for the sale.

The price of uncertainty: 

Focusing on price can also occur when customers feel overwhelmed or uncertain in a category. This is a common occurrence in categories that require customers to process large amounts of information, or overwhelm them with technical jargon. In these instances, with an inability to work out which product matches their needs, many customers will use price as a form of shopping support.
Consumer Translation: I’ve got no idea which wireless router matches my needs; I’ll just go with the cheapest one and save myself the prospect of buyer’s remorse.

In both of these examples, customers appeared to be using price as a primary purchase motivation. However, in both instances, price was being used as a proxy for a deeper motivation, namely control or uncertainty. By providing the customer with an alternative way to feel in control, or by helping alleviate uncertainty in the category, an opportunity existed to address customer needs without compromising on price.

The role of research in advertising?

When he’s not busy crafting copy or creating brands, Craig Redmond has been writing some interesting articles for Strategy Magazine. His topic of choice; the role of research in advertising.

To quote from his latest article:

"In this attention-deficit economy, consumers need to feel like they're being listened to and understood more than ever...[this means] mining for those deep psychological triggers and emotional cravings that fuel consumer need. It means finding that product truth that can solder an inextricable bond between a consumer and a brand. But most importantly, it means feeding that insight back in such an engaging way, it feels like they're experiencing their own insight for the very first time."

From these articles, it’s pretty clear that Craig is an advocate of using research as a source of creativity and certainty in advertising. Check out his ideas, and let me know if you have any thoughts on the topic: 

Strategy Magazine, May 2009: 'Here's llama spit in yer eye'
Strategy Magazine, June 2009: 'Mining insights means eating a little coal'

Social Media: What’s the personal price of digital activity?

At the MRIA 2009 National Conference, one of the speakers that caught my attention was Jesse Brown, a respected technology and social media journalist with the CBC. His presentation topic was 'Social Media: The rules of engagement,' where he shared a number of insights gained through his experience reporting on and engaging in social media. 

His overarching theme was about maintaining social etiquette in social media:
1. Don’t front (be honest and transparent with your interactions)
2. Actively communicate (have a point of view, actively respond to comments)

At the end of his presentation, I had the opportunity to ask two questions:
1. Does he actively maintain and respond to the digital conversations he starts?
2. If yes, does he maintain boundaries between his digital and personal life?

His response was fascinating. He is indeed highly active in maintaining digital conversations, but this was no simple task. With a slightly exasperated tone of voice, Jesse ended by saying: “It’s pretty much the first thing I do each morning, and the last thing I do at night.” This got me thinking…digital society is great, but what’s the personal price of digital activity?
Differences between digital and physical society

I love digital society. I love the ability to share ideas and engage with people all over the world. But is it feasible to apply the rules of physical society and social interactions to the digital world? There are countless parallels between the two, but there are also some significant differences. Here are two little ones I’ve noticed:

Difference One: Digital society never sleeps. If you start a ‘digital conversation’, it is not subject to the restraints of ‘physical conversations’. Digital conversations don’t stop at the end of a meal, or when you turn off your computer - they don’t even stop when you’re asleep. They never stop. They are infinite and, as such, can require an infinite commitment of time. This is problematic, since there is nothing more finite in our lives than time.

For Example: If I was having an argument with you in real life, and I suddenly died, the argument would end. But if the same thing happened in digital life, the argument could theoretically continue forever, with thousands of people around the world commenting day and night.

Difference Two: Digital conversations can lack reciprocity. In most meetings, or gatherings of people, there is a social norm that only one person should talk at any one time. This gives each person a chance to express their views, but also allows the topic of conversation to build on itself, to reach a consensus. However in digital society, this norm often doesn’t exist. With no evolution in discussion, no inherent chain of logic, discussions can fail to lead to conclusions. At worst, you can become trapped in cyclical arguments and random comment threads.

For Example: If I was to speak over you in a meeting, it would be considered rude. If you asked me a logical question and I refused to answer it, or instead chose to run to another room and start insulting you, I would be considered un-trustworthy. And if I was to simply yell the same comment over and over again, or go off on my own tangent, ignoring the whole evolution of our conversation, I would be considered insane.

Given these differences, what’s the personal price of being digitally active?

There’s rule of thumb often trumpeted by digital experts linking relevancy with frequency - that to maintain relevancy online, you need to be frequently active. A post a day keeps the readers at bay. This seem logical for those paid to maintain their social platform (like directors of digital agencies), or for those whose platform pays them (people earning money from their sites) – but what about the rest of us?

In my life (and I’m being quite frank here) I have seen a clear link between the amount of time I spend in digital society and the impact it has on my physical reality. Blogging every day, or being super-active on social networks is exciting…but it’s also very demanding. Maintaining all conversations, listening before responding, extending reciprocity to others - if you attempt to apply the ‘rules’ of physical society to digital society it can have a real impact on your life.

To quote a young student I recently interviewed on a similar topic:

"I know a girl that's always online and on Facebook. She never leaves her computer. She's always on Facebook opening groups, events, and when you talk to her, she'll instantly reply to you. She's always there...I'd say that she's more like her computer. She's not a real person. If you talk to her personally, she wouldn't be able to keep up with the conversation because she hasn't felt the outside world. She hasn't looked around other than her computer." - Male (2009)

On this note, I’d love to learn what impact being digitally active has had on the lives of others.

1. Does tweeting every morning and night constitute an addiction?
2. What sacrifices have you made in order to enter digital society?
3. Does Seth Godin sacrifice physical moments for digital moments?
4. Has David Armano ever experienced Twitter anxiety or digital withdrawal?
5. Have you ever lost sleep to LinkedIn, or skipped meals for Facebook?

I don’t have the answer to these questions, but I’m interested in hearing about the experience of others on this topic. What is the personal price of being digitally active?

MRIA 2009 National Conference

Last week, I had the opportunity to present at the MRIA 2009 National Conference in Montreal with Sydney Massey, Director of Nutrition Education at the BC Dairy Foundation. Together, we shared the findings from a recent study we completed titled “Eating together: A study of eating behaviour using morphological psychology”.

The conference also attracted an impressive selection of other presenters from North America, all of whom shared interesting insights and research case studies. However (in my opinion), the three presentations that really stood out were:

1. Social Media: The rules of engagement (Jesse Brown - CBC Journalist)

2. The Disloyal Company: Customers are not always disloyal (Dr. Chuck Chakrapani - Ryerson & Dave Scholz - Leger Marketing)

3. Opening portals of observation: Client-ethnographer collaboration in authentic ethnography (AVA Lindberg - SunResearch & Janine Keogh - Kraft Canada

I’ve been reflecting on all three of these presentations, and I’m planning to post a few additional thoughts on their content over the coming weeks.

Failure of Economic and Marketing Models

One of the biggest issues we are currently facing is not just a crisis of the economy - it’s also a crisis of theory. When the theories and models we use to guide our decision making processes are outdated, or incorrect, then we are likely to make bad decisions. If this is true for economic models, could it also be for marketing models?

Outdated Economic Models:

From an economic perspective, an interview with Prof. Robert Shiller recently addressed this very topic. Conducted by McKinsey Quarterly, the interview raised some fascinating points on the failure of economic models to predict the current economic crisis. Click on the image below for a link to the interview.
If you don’t have time to watch the video, then the following quote summarizes the interview:

"Almost all economists had almost no clue that this crisis was wasn't in their models and it wasn't because they're not in the business of modeling human psychology. We are working on our way to better models, but they may not be the kinds of models that economists know and love. There's an underlying core theory in economics that depends on human rationality, but once we acknowledge that people are not fundamentally rational...then we have a problem with theory."

For me, the three important points raised in this interview were as follows:

1. Economic models didn't predict the crisis, because they didn't consider psychology.

2. Economic models assume people are rational, even when they often aren't.

3. New models that better reflect human thinking are needed.

Outdated Marketing Models:

From a marketing perspective, we are also facing this same crisis of theory, with many widely accepted models in desperate need of an update and an overhaul. The same three points made by Prof. Shiller with respect to economic theory could easily be applied to marketing theory, namely that:

1. Many marketing models don't consider human psychology (or not modern psychology anyway) - and can often fail to predict consumer or customer behaviour.

2. Many marketing models assume people are fundamentally rational (or that rational and emotional thought can be neatly split apart and targeted).

3. New models that better reflect human thinking are needed.

To illustrate this point, here’s one simple example of an outdated marketing theory that could easily lead to bad decision making - the habit of splitting apart rational and emotional motivations:
Contrary to underlying assumptions in many marketing models and theories, human thought cannot be separated into rational and emotional motivations (like layers or levels). In fact, modern science has shown that rational and emotional thoughts happen at the same time, and are deeply intertwined (like a symphony of thought according to famous neuroscientist Antonio Damasio).

So what's the implication for marketers and marketing theory? 

Take a look at your brand model or your marketing brief. Does it require you to choose between rational and emotional motivations, facts and feelings? Is one considered more important than the other? If yes, then you have reason to be concerned. Marketing theory may say these things operate separately, but science would indicate otherwise.

Brands & Cities: What architecture could teach advertising

What do brands and cities have in common? This may seem like an abstract question, but I was reading a book recently that got me thinking (The Endless City). The book presents data and thinking compiled by the The Urban Age Project, an investigation into the future of cities organized by the London School of Economics and Deutsche Bank’s Alfred Herrhausen Society.
Some parallels between brands and cities:

Firstly, brands and cities are both human constructs, reflective of human motivations and desires. Their purpose and use is exclusively human, and they reflect the broad spectrum of human conditions. Ego, fun, love, safety – all are inherently part of brands, cities, and the human experience.

Secondly, brands and cities both represent an amalgamation of design and function. A brand, just like a building, is useless on paper alone and must prove its relevance in practice. Stairs need to be walked up, doors need to be opened and brands need to be experienced. So, given these parallels, perhaps brand planners could learn a thing or two from urban planners?

Applying urban planning principles to brand planning:

One of the best sections of the book was written by Deyan Sudjic, Director of the London Design Museum. Referring to successful cities around the world, Sudjic makes the following conclusion:

"Change is a fundamental part of the human condition. As urban planners, we need to avoid the creation of conditions that serve to freeze a city and cancel out the possibility of further change - cities need to easily contract or expand to reflect change."

In the world of branding, we struggle with this same issue. Many of the mainstream theories and branding models we use actively freeze brands, and limit their ability to reflect change (brand pyramids for example). This is a major issue, since change is such a fundamental part of the human condition. 

As such, it may be worth re-interpreting Sudjic’s words into a sentence on branding:

'Change is a fundamental part of the human condition. As brand planners, we need to avoid the creation of conditions that serve to freeze a brand and cancel out the possibility of further change – brands need to easily contract or expand to reflect change'

Applying this urban planning principle to brand planning, a new theory of branding may emerge. Successful brands, just like successful cities, would work like human lungs. Expanding or contracting easily, based on human motivation:
Instead of just reacting to change, a brand would embrace it. Boom or bust, war or peace, you’d have one incredibly resilient brand.