strategies for maximising the return on investment in marketing in 2022

The 2022 series of D John Carlson Strategic Advisory newsletters will address three themes:
• 16 practical habits of great marketers in 2022.
• 16 strategies great marketers use to minimise costs in 2022.
• 16 strategies great marketers use to maximise value in 2022.
Over the last 30 years I have worked with and studied some great marketers and far too many average marketers. Without exception the great marketers – like Steve Jobs – think differently.
Great marketers are marketers who focus maximising return on investment by minimising costs and maximising income. Great marketers build value into products, brands, and businesses.
2022 will be rich with opportunities as we arise from the ashes of COVID 19, address significant advances in marketing technology and come to grips with changing consumer expectations.
Each week in 2022 we will examine one way in which great marketers think differently and how we can apply the lessons learned from them in 2022 and 2023.
Each week we will also discuss 5 things every great marketer should know or a business principle every great marketer should consider when developing the optimum marketing strategy.
You will receive this newsletter FREE of charge from January 17 until February 28. To continue receiving it and a range of other benefits after February 28, 2022 – CLICK HERE.
Which aspect of marketing cost the most? The answer is almost certainly – advertising? Here is another question. What aspect of marketing has traditionally been the least accountable? The answer again is – advertising. While advertising budgets worldwide have declined up to 15% in 2021, overall advertising budgets increase year on year. This prompted retail magnate John Wanamaker to comment –” Half my advertising spend is wasted; the trouble is, I don’t know which half.”
Despite this, advertising remains the primary focus of many marketers, with many businesspeople still believing that the terms “marketing” and “advertising” are interchangeable. But marketing is so much more than advertising, and an increasing number of marketing strategies don’t involve advertising at all. Here is a third question. What do Zara – the world’s fifth-largest fashion brand, Krispy Kreme – the world’s most sugar-laden doughnut brand and Rolls Royce – still the world’s most prestigious automotive brand – all have in common? The answer is – none of them has an advertising budget.
Philip Kotler, the father of modern marketing, defines marketing as – ‘Marketing identifies unfulfilled needs and desires. It defines, measures, and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company can serve best, and it designs and promotes the appropriate products and services.’
Kotler’s definition is better than most because it looks well beyond advertising and indeed communication. It focuses on the ‘needs of a target market’, recognises both an ‘art’ and ‘science’ involved, and highlights the discipline’s complexity. Consistent with this, I would argue that marketing is all about
• the management of human behaviour.
I would argue that the central purpose of marketing is to cause a behaviour to occur:
1. For the first time
2. For the last time
3. More often
4. Less often
Some marketing strategies are designed to cause a behaviour to happen for the first time, say – shop at your store. Some marketing campaigns are designed to cause a behaviour to happen for the last time, say – smoking. Some marketing campaigns are designed to make a behaviour occur more often, say – visit your store. Some marketing campaigns are designed to make a behaviour occur less often, say – drinking alcohol.
I would most certainly argue that focusing on behaviour instead of advertising or communication will ensure a more cost-effective marketing approach. In this regard, the critical questions are:
• What outcome am I looking for?
• What behaviour is required to deliver this outcome?
• Whom do I want to behave this way?
• What is the most cost-effective of ensuring that the market behaves as I need?
To answer these questions, it is essential to”
• Define the primary target market as precisely as possible.
• Understand that target market as well as it can be understood.
• Understand the customer journey.
• Focus on behaviour change ahead of all else.
The customer journey provides the points in the purchase process at which the behaviour of members of the target audience might be influenced.
A problem for many public facilities is the cleaning requirements of toilets. Spillage from men using urinals is apparently a significant problem requiring more frequent cleaning. To address this, managers of public facilities have traditionally used signs imploring men to take better aim. This has proven to be an ongoing example of unsuccessful advertising. In a United States study, researchers painted an image of a fly at the base of a urinal. What followed was a stream (pardon the pun) of men aiming at the fly when they used the urinal. This led to a 50% drop in spillage on the floor – significantly reducing cleaning costs. A second study conducted at the University of Louisville in Kentucky involved the emblem of a rival University of Kentucky being painted at the bottom of the urinal in some of their changing rooms. Similar results were achieved.
These studies suggest that a simple nudge can, in some instances, cause more behaviour change, more cost-effectively than advertising. Students at Roskilde University in Copenhagen undertook a study looking at littering. In the first part, they handed out lollies in wrappers in the streets of Copenhagen and counted the number of wrappers on the ground afterwards. The second part preceded the lolly distribution by placing ‘green footprints’ on the ground leading up to rubbish bins. Then they handed out the lollies – and found a 48% decrease in littering.
They found that the ‘green footprints’ on the ground caused people to visit the bin more often, rather than just dropping the paper. They also found that after the initial people followed the ‘green footprints’, there appeared to be a social norm developing. This, in turn, further increased the proportion of people who walked over to the bins and deposited the wrapper in them. Again, a small nudge or psychological trigger was more effective in changing behaviour than advertising.
The fact is, advertising and communication, more broadly, are very often necessary. Still, suppose you want your marketing to be cost-effective. In that case, it is essential to focus on the behaviour rather than the advertising – or more specifically – replacing the question – “what would an optimal advertising campaign look like” with – “what is the most cost-effective way to achieve the behaviour needed to achieve the outcomes I require. There are, for example, more than 20 cognitive biases that can influence behaviour – often without advertising.
There are many tools that should be considered before advertising or communication more broadly. They include – product, price, brand, packaging, and access. New York University professor Scott Galloway once noted that the one thing that sets Facebook, Apple, Amazon, Netflix and Google apart from their competitors is not great advertising but – a “fucking great product.” This is contrary to the view propagated by most advertising agencies that it is “great creative” or” a great media plan” that sets a great business apart. The starting point of every great marketing strategy or campaign is a “great product”.
Once you have a great product, with great defined by the primary target market, it is important to get the price, packaging, branding and access issues right before thinking about advertising. Then, if advertising is necessary, it will almost certainly be more successful. Once you have a great product that your target market is truly attracted to, you can determine where in the customer journey they can be influenced.
Reinforcing the message from the earlier studies discussed here – in Britain, residents signed up to a scheme that involved receiving points based on the weight of their rubbish bin. The more they recycled, the more points they earned and the more points they made, the more they could spend at Marks and Spencers and other local retailers. Recycling rates rose by 36%, despite the maximum annual points value being just 135 pounds Stirling.
According to the programme designers, ‘What’s really important about this scheme is that it treats people like adults. There’s no compulsion to participate, no penalties for opting out. It works because there’s a clear incentive to get involved. You put something in; you get something back.’
Great marketers in 2022 understand that while advertising can be beneficial and even necessary, it should not be the first, second or even third consideration. It is more important to focus on behaviour. Human behaviour, not communication, will ultimately deliver the outcomes marketers are looking for. CLICK FOR MORE
Great marketers in 2022 know that there are very often strategies for delivering the behaviours that will deliver the outcomes that are more cost-effective than advertising or, indeed, communication. CLICK FOR MORE
• Define the target audience as precisely as possible and keep that target audience small enough to enable you to understand it very well indeed.
• Develop the understanding of the primary target market required to define a “great product” and the optimum pricing, packaging, access, and branding.
• Understand the customer journey and identify the points along that journey when it is most cost-effective to influence consumer behaviour.
• Clearly define the outcomes you seek and the behaviours that will deliver those outcomes – paying particular attention to the customer journey.
• Only look at advertising and communication in general when all other aspects of that marketing strategy are optimum, thus minimising waste.
• Research suggests that the smaller your market, the better. What is the optimum market size for your brand?
• Research suggests that the starting point of any great marketing strategy is a great product – as defined by the market. How does your target market-rate your product?
• Research suggests that it is more cost-effective to address some customer journey points than others. Which points in the customer’s journey should you target?
• Research suggests that ‘more than 25 cognitive biases influence purchase behaviour. Which cognitive biases influence your customers, and how?
• Research suggests that “nudges” or psychological triggers can be more effective than advertising in influencing behaviour. Which psychological triggers might work best for you?
• 87% of shoppers now start a significant purchase with an online search.
• 75% of consumers now expect a consistent experience across all channels.
• 82% of consumers now expect an immediate response to enquiries.
• 59% of consumers say their service expectations have increased in the last 12 months.
• 32% of social media users expect a brand to answer questions in 30 minutes.

Intuition would suggest that for the same input, most people would prefer remuneration of $100,000 ahead of $50,000. My intuition tells me that this preference would be even more significant for educated professionals who know the value of money. It appears, however, that this is not always the case. Indeed, a Harvard University study suggests that it is not always the case.
The study in question, researchers asked students and faculty to choose between two options:
• Option 1 – earning $50,000 a year when everyone else around them makes $25,000
• Option 2 – earning $100,000 a year when everyone else around them makes $200,000
Of those surveyed, 50% chose option 1 – thus placing a higher priority on earning more than others than their own income. By any measure, this is counterintuitive.
Would you have guessed this outcome? Probably not. But now that you have seen these findings, you can, with some confidence, suggest what they mean – price drives the perception of value because, with products they don’t understand, people use price as a measure of quality.
Dan Ariely of Duke University undertook studies in which he gave away variously:
• A free ice cream or $4.00
• A slab of beer or $35.00
All options were tested, and it was found that:
• Consumers will line up for a free ice cream but not $4.00 cash.
• University students will complete charity work for a slab of beer but no $35.00.
Given that the cost of the ice cream is $4.00 and the cost of a slab of beer is $35.00, and cash offers more flexibility than an item – both outcomes are counterintuitive. As counterintuitive as the findings from all of the studies might be, they have been replicated, and they are just a small proportion of the studies highlighting the counterintuitive nature of consumer behaviour.
Would you have guessed this outcome? Probably not. But now that you have seen these findings, you can suggest what they mean? I suspect so. You might also appreciate that it is more effective to apply your intellect to this question than it would be to use guesswork before you have the data.
Marketing decisions and indeed all business decisions should be based on data. Where intuition is applied, it should be applied in the analysis of data, not in place of the analysis of data. The days of relying on intuition – or gut feelings – are for effective marketers coming to a close as we move into a more scientific era of marketing. To quote Eric Bonabeau in the Harvard Business Review:
• The trust in intuition is understandable. People have always sought to put their faith in mystical forces when confronted with earthly confusion. But it’s also dangerous. Intuition has its place in decision making—you should not ignore your instincts any more than you should ignore your conscience—but anyone who thinks that intuition is a substitute for reason is indulging in a risky delusion. Detached from rigorous analysis, intuition is a fickle and undependable guide—it is as likely to lead to disaster as to success. And while some have argued that intuition becomes more valuable in highly complex and changeable environments, the opposite is actually true. The more options you have to evaluate, the more data you have to weigh, and the more unprecedented the challenges you face, the less you should rely on instinct and the more on reason and analysis.
Research suggests that the practical value of data in marketing decision making include:
• Campaign targeting – 59%.
• Content personalisation – 48%.
• Customer journey analysis – 44%.
• Sales attribution – 41%.
• Predictive analysis – 37%
• Account-based marketing – 28%.
• Market research – 23%.
In a world where business people are being told to become more customer-centric, and with good reason, the best sources of data are your consumers and potential consumers, including:
• Behavioural data.
• Customers surveys.
• Social media surveys.
Real-time behavioural data drawn the customer and potential customers interaction with your business and progression through the customer journey is readily collatable and potentially insightful. Critical sources include:
• Customer behaviour instore.
• Digital advertising responses
• Landing page and website behaviour.
Most of this data is readily available and should ideally be gathered automatically and reported in a dashboard for easy analysis.
Customer surveys, formal or casual, also provide valuable insights. They might include:
• Focus groups – qualitative.
• Quantitative surveys – quantitative.
• In-depth interviews – qualitative and quantitative.
This research can be face to face, by phone or online. It can be completed in-house by consultants.
Monitoring social media is perhaps the most underrated and least used of the consumer research options. It is also among the most cost-effective tools. Facilitating the flow of social media data can be a – brand community.
In addition to being a potential driver of sales, a brand community is also a potentially powerful source of data that can be used to make reliable decisions. Consider:
• 86% of businesses report brand communities provide insight into customer needs.
• 66% of companies say they turn to brand communities for product development.
• 64% of companies state that the brand community has improved their decision-making.
Other critical and prediction enabling sources of data include:
• Customer insights.
• Census data.
• Industry statistics.
Much of this data is available on the internet and can be accessed using Google. Other, often more in-depth sources include industry and association reports, government reports and academic journals. Research suggests that this data facilitates:
• More accurate decisions – 54%.
• More cost-effective decisions – 27%.
• More competitive decisions – 14%.
And here is what some of the gurus are saying about data in marketing:
• “No great marketing decisions have ever been made on qualitative data.” – John Sculley
• “With data collection, ‘the sooner, the better is always the best answer.” – Marissa Mayer
• “Without big data, you are blind and deaf and in the middle of a freeway.” – Geoffrey Moore
Here is another story that should question any faith you put in intuition – or second-guessing consumers.
In studies completed by Nobel Prize winner Daniel Kahneman, two scenarios, each with two options, were tested with separate samples of consumers as follows:
• Scenario 1 – consumers can purchase specialist earthquake insurance or a general insurance policy that includes an equivalent level of earthquake coverage – for precisely the same price.
• Scenario 2 – the consumer choose between travel insurance policies – one with specialist terrorism cover and one with general cover, including the same level of terrorism cover.
It was found that:
• People in California (an earthquake zone) overwhelmingly opted for the earthquake only insurance
• People travelling to Thailand (after a terrorism incident) overwhelmingly opted for the ”terrorism only” insurance.
I would argue that this is further evidence of the dangers of intuition and the importance of gathering and basing marketing decisions on hard data, not intuition base guesswork.
And if you think business is any more rational, consider this story Reflecting the sunk cost fallacy:
• A colleague of mine who resisted selling for $5000 a piece of equipment worth less than $5000 and taking up space – all on the basis that he paid $80,000 for it three years ago.
• A share trader buying a stock for $1.00 per share, one month after purchasing the same stock at $2.00, all on the basis that they want to ‘average down.’
Once again, would you have guessed this outcome? Probably not. But now that you have seen these findings, you can, with some confidence, suggest what they mean.
Great marketers in 2022 understand that intuition is an unreliable tool before the data is considered. Applied after data has been gathered, analysed and evaluated, intuition can be a very powerful tool. No matter how smart business people think, they are human beings.
Great marketers in 2022 know that intuition should only ever be applied to data, not instead of data. Businesses need a strategy for ensuring it has the data to facilitate cost-effective decision making. CLICK FOR MORE
• Put in place the tools to automatically gather and present the customer behaviour data needed to better understand customer behaviour on a dashboard.
• Establish a programme for monitoring social media comments and social media data relevant to marketing decision making.
• Establish a brand community, not just to promote to customers but also to gather data that can be used to facilitate optimum decision-making cost-effectively.
• Establish an annual primary research programme to examine qualitatively and then quantify trends and attitudes that should guide decision making.
• Bring together the consumer insights, census data and industry data required to facilitate optimum decision making.
• Research suggests that psychographics are now more important than demographics. What is the psychographic profile of your primary target market?
• Research suggests that referred customers are more readily converted and spend more. What information are you gathering to help drive referrals?
• Research suggests that consumers prefer Pepsi to taste – but buy Coke based on image. Why do your customers buy your product?
• Research suggests that price drives the perception of quality more than quality drives the perception of price. What role does price play with your products?
• Research highlights the importance of data in driving effective content personalisation. How are you using data to personalise your content?
• 67% of customers prefer self-service over speaking to a representative.
• 59% of customers now use multiple channels to get questions answered.
• 80% of consumers say value customer experience highly
• 51% of smartphone users change behaviour as a result of mobile research.
• 41% of consumers now shop daily or weekly using their mobile phone.
The attraction of religion to so many human beings over the centuries highlights the attraction to stories. Whether or not you believe them, each religion involves a series of stories that attempt to explain all or at least a big part of life. Historian Yuval Noah Harari, in his book Sapiens, highlights the importance of stories to the development of human civilisation and indeed individual humans.
Stories are central to being human and operating in communities. It would be very difficult for humans to function without stories. Take money, for example. A dollar bill or even a $100 bill has virtually no inherent value. If a $100 bill per se is worth anything, it is just a few cents. That we ascribe value to a $100 bill and that this value can fluctuate based on market fluctuations requires a story that we all buy into. As Harari points out in his book, most humans buy into the money story. Even Asama Bin Laden, who had no time for US culture, values, and politics, bought into the story that ascribes value to the US dollar.
Humans cannot exist without stories. Stories give meaning to human lives and provide a framework for a society to operate. Stories are also the most powerful form of communication. Stories are fundamental to being human. Stories enable human beings to share information in a way that creates an emotional connection. They help us understand that information and each other, making the information memorable. Stories are most certainly a more effective way to communicate and indeed educate than providing statistics or a clever infographic – as important and valuable as they might be.
Stories are as important in marketing and business more broadly as they are in just about any aspect of life. In marketing and especially branding, stories are important to:
Establishing an emotional engagement
• Building a memory.
• Developing positive associations.
• Building deeper connections and relationships.
Stories can also:
• Make content more exciting.
• Make what is old – new again.
• Overcoming media fragmentation.
• Maintaining consistency.
In business more generally, stories can:
• Attract the best staff.
• Motivate staff.
• Engage investors.
• Reassure communities.
Stories also have the benefits of:
• Being easier for the presenter to remember the statistics.
• Giving context to statistics and infographics.
• Providing a foundation for writers and designers.
• Enabling business to project a personality.
It is interesting to note research findings suggesting that:
• 63% of people recalled a story from a presentation.
• 5% of people recalled a statistic from a presentation.
• Facts are 22 times more likely to be remembered if they are part of a story.
• Statistics are understood, while stories are felt.
To quote prolific author and marketing guru, Seth Godin, ‘’marketing is no longer about the stuff you make but about the stories you tell’’.
More and more marketers, business people, and influencers realise the importance of story-telling and is power as a communication tool. This is being reflected in:
• The encapsulation of the vision and mission for an enterprise in a story that engages all stakeholders, including investors, customers, the board, staff, and the media.
• The articulation of a ‘brand story’ addressing the vision, mission, values, personality, and capability of an enterprise in a way that attracts staff, customers, and investors.
• Documenting stories about the evolution of a product build interest and emotional engagement, especially for marketers and their communication targets.
• Developing communication tools that, instead of relating facts and figures, connect with audiences by telling a story that the audiences relate to.
The first story that most businesses need to develop is the ‘brand story.’ A brand story is – a cohesive narrative that encompasses the facts and feelings created by your brand (or business if you prefer). Unlike traditional advertising, which is about showing and telling about your brand, a story must inspire an emotional reaction. A great brand story:
• Articulates how the brand improves the consumer’s life.
• Incorporates both facts and an emotional hook.
• Connects with the audience, addressing issues that concern it.
• Tells the truth in an interesting way.
Ideally, your brand story will:
• Have a hero – the audience – at the centre.
• Incorporate a problem and a solution.
• Highlight a guide – your business – to the solution.
• Provide a plan for achieving the solution.
Ultimately, developing and consistently communicating a sound brand story will:
• Drive revenue up by engaging customers and building relationships.
• Drive costs down by providing a common threat through communication.
• Increase productivity by attracting, engaging, and motivating the best staff.
• Increase stakeholder support by
Try this for a good brand story from one of the world’s great businesses.
Warby Parker was founded with a mission: to inspire and impact the world with vision, purpose, and style.
‘’We’re constantly asking ourselves how we can do more and make a greater impact—and that starts by reimagining everything that a company and industry can be. We want to demonstrate that a business can scale, be profitable, and do good in the world—without charging a premium for it. And we’ve learned that it takes creativity, empathy, and innovation to achieve that goal.
Every idea starts with a problem. Ours was simple: Glasses are too expensive.
Our founders were students when one of them lost his glasses on a backpacking trip. The cost of replacing them was so high that he spent the first semester of grad school without them, squinting and complaining. (We don’t recommend this.)
The others had similar experiences and were amazed at how hard it was to find a pair of great frames that didn’t leave their wallets bare. Where were the options?
It turns out there’s a simple explanation. The eyewear industry is dominated by a single company that has been able to keep prices artificially high while reaping huge profits from consumers who have no other options.
Warby Parker was started to create an alternative. By circumventing traditional channels, designing glasses in-house, and engaging with customers directly, we’re able to provide higher-quality, better-looking prescription eyewear at a fraction of the going price.
We believe that buying glasses should be easy and fun. It should leave you happy and good-looking, with money in your pocket.
We also believe that everyone has the right to see. 2.5 billion people worldwide need glasses but don’t have access to them; of these, 624 million cannot effectively learn or work due to the severity of their visual impairment. To help address this problem, we work with a handful of partners worldwide to ensure that for every pair of glasses sold, a pair is distributed to someone in need. To date, over eight million pairs of glasses have been distributed through our Buy a Pair, Give a Pair program.
There’s nothing complicated about it. Good eyewear, good outcome.’’
• Great marketers in 2022 know that believe them or not, each religion involves a series of stories that attempt to explain all or at least a big part of life. The attraction of religion to so many human beings over so many centuries highlights the attraction to stories.
• Great marketers in 2022 know that every enterprise should have a brand story that its audiences relate to. Develop a brand story and reflect the underlying theme in all marketing. CLICK FOR MORE
• Develop your brand story from the perspective of the audiences you are communicating with, highlighting the issues most important to them.
• Ensure your brand story reflects the vision, mission, values, personality, capabilities and positioning of the enterprise.
• Keep your brand story simple, authentic, credible, relatable, and Human – avoiding jargon, platitudes, hyperbole and evangelism.
• Rewrite and possibly redesign your website around your brand story. Tell that story in an interesting and engaging way.
• Ensure your brand story is consistently and accurately reflected in all communication and promotion – both online and offline.
• Think back to the last presentation you attended. What key statistics do you recall? What story do you recall? Which had more impact on you.
• Think about your favourite restaurant. What story would encourage you to recommend it?
What statistic would encourage you to recommend it?
• In 100 words or less – why I should buy your product rather than that of your direct competitor? What makes your product better able to meet my requirements?
• In 500 words or less, what brand story makes your product more attractive to your target market?
• When your optimal customer, a member of your primary target market, tells a friend about your product or brand – what story will they tell?
• 40% of consumers want to hear how brands are responding to the pandemic.
• 64% of consumers expect brands to respond and communicate differently during the pandemic
• 65% of consumers report that brands’ actions significantly impact their trust in a time of crisis
• 33% of consumers say they will trust brands that don’t take advantage of a crisis to maximise their profits
• 24% of online consumers trust that businesses are prioritising the health and well-being of their customers
The laws of supply and demand dictate that when prices go up, demand goes down. This is one of the many laws of supply and demand that have reduced the profitability of all manner of business for decades. Like other laws of supply and demand and indeed traditional economics – this one is often wrong. A famous Stanford University study considered two groups and wines at two price points each. Consumers were asked to rate the wines on a scale of 1 to 6 – giving rise to the following findings:
Wine 1
• Priced at $5.00 – received an enjoyment rating of 2.25 out of 6.
• Priced at $45.00 – received an enjoyment rating of 3.5 out of 6.
Wine 2
• Priced at $10.00 – received an enjoyment rating of 2.5 out of 6.
• Priced at $90.00 – received an enjoyment rating of 4.1 out of 6.
The traditional view, the one that seems to dominate thinking in Australia, is that price is simply a barrier to purchase – and, in line with supply and demand theory, that the higher the price, the lower the demand. This Stanford study suggests that price can also drive the perception of value. More than being a barrier to purchase, price is (some might say irrationally) a measure of quality – at least in the minds of consumers. More than anything, this study suggests that price is more complex a variable than many think.
The facts are:
• Price can be a barrier to purchase, with higher prices reducing demand or driving customers to purchase competitive products.
• Price can be a driver of the perception of quality, with higher prices driving sales, at least among people who can afford that price.
• Price can also impact customer satisfaction and, in turn, repeat purchases and referrals, where paying for quality reinforces a view of no compromise.
Effective approaches to using price to drive the perception of quality include:
• Re-categorising the product and, therefore, its competitors and pricing accordingly.
• Providing an anchor that demonstrates value and justifies the pricing.
• Avoiding the use of pricing tactics like $12.99, instead asking a rounded $13.00.
• Understanding and catering to customer expectations.
With the last point in mind – before launching a new generation of its Olay brand, Proctor and Gamble tested three price points
• $12.99
• $15.99
• $18.99
At $12.99, the sales were good. At $15.99, sales tanked. Finally, at $18.99, sales peaked, causing P and G to price Olay at $18.99, generating $2.4 billion with ongoing annual growth. It seemed that consumers expected to pay more than $15.99 for a quality product and, as such, purchased more at the higher price of $18.99.
Some would suggest that Joshua Bell is among the two or three greatest violinists in the world today. He is undoubtedly good – playing regularly at the greatest venues, including – Lincoln Centre. Kaufman Music Centre and Carnegie Hall. Tickets to his concerts sell for many hundreds of dollars, with box tickets attracting an even higher price.
In an experiment in 2007, Bell played his violin in the Washington subway, busking in front of thousands of people. Bell had a grand total of $52.17 in his busker’s hat during this busking concert. One of those contributing to the hat recognised Bell and, thinking he was “down on his luck”, put $20.00 in the hat – meaning that all the others gave just $32.17 – even though they were listening to one of the best violinists in the world. The latter would normally attract a ticket price in the hundreds.
It appeared that appreciating the quality of Bell’s playing was dependent on knowing who he was. The fact is only one person, the one giving $20.00 recognised Bell and, without knowing whom they were listening to, heard nothing in the music that they considered exceptional or worthy of a bigger contribution into the hat. This suggests, to me at least, that despite what they say, human beings are not very good at judging quality – an observation born out in hundreds of focus groups I have moderated over the years.
The inability to judge quality accurately means that consumers will actively look for signals of quality – signals that a product is good enough for them to purchase and feel satisfied with. In the case of Olay – price was used as an indicator of value, while in the case of Joshua Bell, his name, the venue, and price were the indicators of value. Consumers don’t understand value, and price is often an indicator used without this understanding.
In a study, Harvard Business School’s Max Bazerman earned $17,000 auctioning $20 bills to his students, with at least one student paying $204 for a $20 bill. It is reported that in all the years Bazerman ran the auction, he didn’t lose a cent.
In other studies, psychologists have tested the auctioning off $20 bills, where the bidding started at $1.00 and rose to $20, then $21 – and in some cases (Adam Grant) rose to as high as $500.
Studies like this create questions about our traditional understanding of how price works. Why on earth would people bid more than $20.00 for a twenty-dollar bill? While there might be several explanations for this behaviour, it would suggest that the competitive environment makes winning more important than the potential financial gain, at least to a significant number of people.
As with the previous studies discussed, this one flies in the face of traditional supply and demand theory. It suggests that price is more complex than many marketers and business people think. It points to the importance of understanding how much consumers will pay and what drives how much they will pay. It indeed suggests that consumers are willing to pay more than the face value of a product in the right circumstances.
Factors that might encourage consumers to pay more than the face value or obvious value of a product include:
• The sales method – such as an auction where the focus shifts from the purchased product to the competition of an auction.
• Reframing the value proposition in a way that effectively changes what the customer is buying -or at least paying for.
• Developing an emotional connection.
Creating an emotional connection is possibly the most effective way of causing the behaviour to occur. Education creates an understanding, but an emotional connection creates motivation. Emotional connections are also good for business more broadly. A study reported in the Harvard Business Review found that emotionally engaged customers are:
• Three times more likely to recommend.
• Three times more likely to re-purchase.
• Less likely to shop around (44% rarely shop around).
• Less price-sensitive (33% wanting a 20% discount to change).
Forrester Research found that an emotional connection:
• Facilitates a 26% increase in margins.
• Facilitates an 85% growth in sales.
Strategies for creating an emotional connection include:
• Creating a personal human connection.
• Demonstrating values consistent with the target market.
• Engaging customers in the story behind the brand.
There are few things more powerful in marketing than an emotional connection. An emotional connection will almost always have a more significant impact than a cognitive connection created by education.
• Great marketers in 2022 understand that price is more complex than many marketers and many businesspeople think. Price can be much more than a barrier to purchase. It can be a facilitator of sales.
• Great marketers in 2022 know that price can be used as a tool to increase the perception of value, cause consumers to pay above the face value and ultimately drive both unit sales and margins.
• Categorise your products and, therefore, their competitive environment in a way that facilitates premium pricing.
• Provide an anchor to demonstrate the value your product offers to justify or help the consumer rationalise the pricing.
• If you want to create the perception of value and position your product upmarket replace pricing tactics like $12.99 instead of asking a rounded $13.00.
• Understand customer expectations, implement strategies to manage those expectations and then use pricing to communicate your capacity to maximise value.
• Recognising that consumers find it difficult to judge quality, give them the tools and then use price in a way that helps them do so.
• With the right strategies in place, how much more could you increase the price of your product without diminishing sales?
• What are the expectations of your customers and potential customers. What is it worth to them to get exactly what they want?
• Which product categorisation might best drive the perception that your product offers superior value and should attract a premium price?
• What tools do your customers, and potential customers have to judge quality and the value of your product?
• How might you reframe your product offering and perhaps the customer experience to enable you to market a premium product at a premium price?
• 76% of consumers are adjusting their shopping habits because of COVID-19 concerns
• 69% of consumers reported purchasing household goods online for the first time because of the pandemic
• 67% of people living with kids under 18 said fast delivery is important to them
• 20% of consumers are spending more money on supplies than they can afford.
• 83% of consumers intend to continue buying health supplements and focus on health

Sigmund Freud was one of 20th-century psychology’s most interesting and provocative writers. He was perhaps the father of modern perspectives on ego. He identified three elements of the human conscious, pre-conscious, and unconscious mind:
• The ID – the primitive and instinctive component of the mind.
• The EGO – the awareness of self and the realities of life.
• The SUPER-EGO – the voice of conscience and source of self-criticism.
While all three concepts are relevant to marketing in 2022, the EGO focuses here. In a similar vein to Plato, Freud suggested that the ego ‘brings about harmony – the part of the brain mediating between the conscious and unconscious.’ Both viewed it as the rational part of the human mind. More contemporary definitions focus on ego being – ‘a person’s sense of self-esteem or self-importance. In 2022 ego is most commonly associated with self-importance, self-esteem, self-image and self-confidence. This more contemporary definition underpins this discussion.
Few forces are more powerful, productive, and destructive than the human ego. Ego reflected in realistic self-belief can drive a human being to do great things. Equally, overconfidence and an unrealistic self-belief can cause humans to make enormous mistakes. Ego can also drive consumer behaviour and can be leveraged to increase sales and margins.
When most texts talk about ego marketing, the authors refer to ‘making your marketing endeavours more about yourself, your brand or even your goods than the people you are trying to sell them to. This involves telling prospects what to think and that they should follow the same thought process in appreciating the value being offered, rather than catalysing and supporting the prospect’s buyer journey to ascertaining this for themselves. This kind of marketing tends not to deliver optimum outcomes because:
• The customer is more interested in themselves.
• It makes no allowance for individual differences.
• It involves working through the sales tunnel backwards.
The fact is, while all too common, ego marketing is not at all customer-focused – focusing on the product and the business that is marketing it. Ego marketing is the antithesis of customer-centric marketing, which focuses on ‘offering customers value based on their needs and interests at every interaction.’ Customer-centric marketing facilitates:
• Customisation and, therefore, higher customer satisfaction.
• Product and brand differentiation.
• Identification of growth opportunities.
There is inevitably more potential for any business in owning a market instead of owning a brand. Owning a market facilitates:
• Reducing effective competition.
• Facilitating permission marketing.
• Reducing marketing costs.
More than ego-marketing, customer-centric marketing drives initial sales, repeat sales, margins, and average sales.
Ego also has an unfortunate role in many business decisions, especially those based on intuition. As discussed in an earlier article in this series – intuition is a highly unreliable basis for decision making – especially when applied in the absence of data. It is most often ego that drives business people to rely on their intuition ahead of data.
Thus far, the point is that ego in marketing and, more broadly, in business can be and often is dangerous – impacting both marketing expenditure and sales income. Telltale signs of traditional ego marketing include:
• Talking at, not with an audience.
• Leaving social networks on autopilot.
• A lack of authenticity.
• Talking about yourself.
• Spamming.
In marketing, however, there is a different side to ego. This side related to the ego of the customer. While ‘ego-marketing’ reflects the ego of businesspeople and thus should be avoided, the leveraging of the customers ego can form the foundation of a powerful and potentially cost-effective marketing strategy. Consider these examples:
• Psychologist Adam Alter looked at donations made by citizens of the United States after a hurricane. One of his findings was that the name given to the hurricane directly impacts the names of the people donating. People tend to donate more when the hurricane’s name has the same first letter as their name and even more when they have the same name.
In her research, psychologist Jesse Chandler found that for hurricane Rita in 2006, people named Robert, Ralph, Rose, or some other name beginning with ‘R’ donated on average 260% more than other people with other names. Alter found that in 2013 – Hurricane David (shared by 3.5 million Americans) resulted in significantly higher fundraising than hurricane Joyce (shared by 6000 Americans) or hurricane Dorian (shared by 9000 Americans).
These are just two of the many studies that support the observations of Alter in his papers and speeches. They highlight the fact that the name of a hurricane or, indeed, the first letter of that name can provide a nudge or represent a psychological trigger that will encourage a desirable behaviour – in this case, donations. Wise meteorologists will surely take these findings into account when naming future hurricanes.
• In a series of studies, Coulter and Grewal demonstrated the positive effect linked to name-letters and birthday-numbers transfers directly to consumers’ price predilections and ultimately affects their purchase intentions.
It was found that consumers like prices (e.g., “fifty-five dollars”) that contain digits beginning with the same first letter (e.g., “F”) as their name (e.g., “Fred,” “Mr Frank”) more than prices that do not.
Prices that contain cents digits (e.g., $49.15) that correspond to a consumer’s date of birth (e.g., April 15) also enhance pricing liking and purchase intentions. Across groups of consumers, the authors’ findings demonstrate that implicit egotism effects can result in greater purchase intentions for a higher-priced product compared with a lower-priced product.
These studies and many others like them highlight how conscious consumers are of themselves and how this can impact – often unconsciously on their behaviour – and, more specifically, their purchase behaviour. Another great example can be found in the literature on networking and sales – where the point is made repeatedly that potential prospects like to talk about themselves and that effective selling is much more about listening to consumers talk about themselves and much less about telling them how good you are.
Appealing to the ego of a potential customer, or indeed an existing customer, can be highly beneficial. Take brand, for example. There are several types of branding, including:
• Product branding.
• Ego branding.
Businesses pursuing product branding include – Gatorade – ‘the sports fuel company.’ Gatorade positions itself as a brand that can give a sportsperson an edge. It has ingredients that, when consumed by a sportsperson, can give them additional strength. Gatorade apparently rehydrates and helps prepare the sportsperson for sustained optimal performance. It positions itself as a requirement of success.
Businesses pursuing ego branding include – Nike – ‘just do it.’ Nike does not claim to enhance performance – but rather positions itself as the natural choice of sports gear for people already at the top of their game. It targets people’s egos in and out of sport, suggesting that ‘if Michael Jordan wears Nike – so should you.’ Nike positions itself as a measure of success – something the successful wears.
It has been said that product branding works best for well-differentiated products, while ego branding works best for brands poorly differentiated, at least in terms of product attributes. While I would not suggest it is this black and white – there is some merit in this theory. Indeed, brands that cannot differentiate themselves based on product features may well opt for ego branding.
While traditional ego-marketing revolving around the brand or business is very limiting and potentially ineffective – more contemporary ego-marketing, leveraging the consumer’s ego can be very effective. Indeed, it is the foundation stone for most luxury brands. Consumers are often attracted to a luxury brand because it is seen as a:
• Mark of success.
• Demonstration of style.
• Symbol of masculinity.
Brands of this type are rarely purchased for purely functional reasons. The power of this approach lies in the following:
• The emotional connection; goes beyond features, advantages, and benefits.
• Friends and colleagues reinforce the ego message – and, therefore, the purchase.
• A decreased reliance on product development and innovation.
Moreover, appealing to ego can help maximise brand loyalty.
Human beings have an innate drive to fit in, to conform with social expectations and to behave in a manner that will attract the approval of their relatives, friends, colleagues and indeed the broader community. The propensity human beings have to follow social norms is also driven by ego. Consider:
• Students at Roskilde University in Copenhagen undertook a two-part study looking at littering. In the first part, they handed out lollies in wrappers in the streets of Copenhagen and counted the number of wrappers on the ground afterwards. The second part preceded the lolly distribution by placing ‘green footprints’ on the floor leading to rubbish bins. Then they handed out the lollies – and found a 48% decrease in litter afterwards.
They found that the ‘green footprints’ on the ground caused people to visit the bin more often than just drop the paper. They also found that after the initial people followed the ‘green footprints’, there appeared to be a social norm developing. This, in turn, further increased the proportion of people who walked over to the bins and deposited the wrapper in them.
• A 2008 study by Noah J. Goldstein, Robert B. Cialdini and Vladas Griskeviciu found that the rate of bath towels in hotels increases significantly when patrons are told that other patrons reuse bath towels, even where the alternative is an environmental message. It was found that – an environmental message alone led to a 35% reuse rate and – a message that 75% of people reuse bath towels led to a 44.5% reuse rate.
This highlights the power of social norms and the extent to which knowing what others have done impacts the behaviour of consumers. Furthermore, it suggests that following the lead of others is more important to many people than doing what might be considered the ‘right thing’.
• Intuition suggests that most people would prefer remuneration of $100,000 than $50,000. My intuition tells me that this preference would be even greater for educated professionals who know the value of money. It appears, however, that this is not always the case. Indeed, a Harvard University study suggests that it is not always the case.
In the study in question, researchers asked students and faculty to choose between two options – 1. – earning $50,000 a year when everyone else around them makes $25,000;
earning $100,000 a year when everyone else around them makes $200,000,
Of those surveyed, 50% chose option 1 – thus placing a higher priority on earning more than others than their own income. This demonstrates the power of social standing/norms.
Social norms are why teenagers who think they are individuals and unique dress much the same and often in a way that is indistinguishable from their peers. This is because they want to believe they are individuals and unique – but at the same time want to fit in and be seen as part of the tribe.
Social norms are why consumers will walk past a supermarket display without stopping or purchasing – when no one else is viewing the display – but will stop and look and often make a purchase when a crowd is assembled in front of the display. This finding has arisen in numerous studies.
Social norms are all about ego. Consumers want to feel that they fit in.
Tools for a customer-focused approach to contemporary ego-marketing include:
• Controlling your own ego.
• Identifying with the consumer.
• Giving the consumer hope.
• Talk in the consumer’s language.
• Demonstrate authenticity.
• Engaging consumer passions.
• Great marketers in 2022 avoid ego-driven decision making and the reliance on intuition.
• Great marketers in 2022 avoid traditional ego marketing, preferring a come customer-centric approach.
• Great marketers in 2022 embrace and leverage the ego of consumers, often making it a focus of their branding.
• Stop talking about yourself and start listening to your customers.
• Apply your intuition to interpret data – not instead of sourcing data.
• Consider ego-branding as a powerful alternative to product branding.
• Embrace the power of social norms and the ego driving this.
• Replace traditional ego-marketing with contemporary ego-marketing.
• Why would customers be interested in you when you are not interested in them?
• How can we be arrogant to think our intuition is more reliable than hard data?
• How would you describe your branding strategy – ego-branding or product branding?
• What drivers of consumer behaviour do you think are more powerful than ego?
• How effectively are you leveraging the enormous power of social norms?
• 1.2 billion people worldwide are active on TikTok.
• 69% of people aged 16 to 24 use TikTok.
• 22% of people aged 30-49 use TikTok.
• 60% of all TikTok users live in China.
• 58% of TikTok users are female.
Canadian Paul Bloom, perhaps the world’s leading researcher and author on developmental psychology, has questioned the merits of empathy. Indeed, Bloom’s best-known book is entitled, ‘Against empathy – The case for rational compassion.’ In this book, Bloom suggests:
“It is easy to see why so many people view empathy as a powerful force for goodness and moral change. It is easy to see why so many believe that empathy’s only problem is that we don’t have enough of it too often. I used to believe this as well. But now I don’t. Empathy has its merits. It can be a great source of pleasure, involved in art and fiction and sports, and it can be a valuable aspect of intimate relationships. And it can sometimes spark us to do good. But on the whole, it’s a poor moral guide. It grounds foolish judgments and often motivates indifference and cruelty. It can lead to irrational and unfair political decisions; it can corrode certain important relationships, such as between a doctor and a patient, and make us worse at being friends, parents, husbands, and wives.”
In the book, Bloom points to the dangers of empathy and its capacity to hinder rational thinking. Consider, for example, two occurrences:
• Next door to your home, the child of the family has a degenerative disease that can be fixed if you donate $10,000 to the family.
• Two thousand of the 10,000 children who die each day in Africa from starvation can be live a full and healthy life if you donate $10,000.
While donating to the children in Africa will benefit significantly more people and therefore deliver a significantly higher return on investment, empathy will drive most people to donate $10,000 to the family next door. While causes are worthwhile – it is empathy, not rational thinking, that will drive the majority of people to donate to the family next door. To my mind, this tells us two things:
• Empathy can inhibit rational thinking when rational thinking is so critical to optimum decision making. Rational compassion almost always trumps empathy.
• When looking for optimum behaviour management strategies, marketers need to be cognizant of the power of empathy and how to leverage it.
Rational compassion involves – ‘objective, logical analysis of costs and benefits, with a sympathetic but detached and dispassionate concern for the wellbeing of individuals or communities.’ While rational compassion leads to better decision making – empathy is more commonly used by consumers when deciding what to purchase – or how to behave more generally. While making business decisions based on empathy is almost certainly to be avoided, empathy base marketing is a powerful tool in the toolbox of great marketers in 2022.
Empathy based marketing can manifest itself in two ways:
• Marketers develop an empathy for the consumer, allowing them to understand their needs better, wants, and expectations.
• Marketers leverage the emotion of empathy when creating communication designed to influence consumer behaviour.
In the American Marketing Association, Sarah Steimer notes – ‘research shows that empathy helps designers create more unique and innovative products, and there’s reason to believe it can help marketers move away from fixation and better relate to consumers.’ To understand the power of empathy in communication, one need only consider advertising for the Smith Family or World Vision, where images of starving children are used to encourage consumers to donate.
Developing empathy for consumers in the primary target audience involves ‘walking a mile in their shoes’ understanding the drivers of their behaviour, the customer journey and the decision-making process well enough to:
• Customise the product and service delivery in a way that meets or exceeds expectations.
• Identify opportunities for cost-effectively influencing consumer behaviour.
Achieving the level of empathy-based marketing that delivers these outcomes involves:
• Observation – watching consumers use a product in context.
A business developing a new home improvement product talked to 35 participants to find out what they were struggling with within their yards. Each participant narrated a video tour of their yards using their smartphone. They specifically discussed what they liked and disliked about various products – in the content of their own backyard and their requirements. The research team then reviewed the transcripts focusing on what consumers thought of products while seeing them active in their yards. The process enabled the research team and, ultimately, the business to gain critical insights into how participants were thinking and identifying opportunities.
• Learn from ‘consumer insights’.
Research suggests that most products’ optimal choices are between three and seven, depending on the product category. Research undertaken at Columbia University found that when presented with a choice of 24 jam flavours, 3% of subjects made a purchase. By contrast, 30% made a purchase when presented with just six flavours. While intuition might tell us that the more choice we offer, the better – this is just one of the hundreds of research and empirical studies that demonstrates that purchases are higher when the number of options is fewer.
• Undertake your own research.
Research suggests that the three most important considerations for consumers buying a brand for the first time are – quality – 85%; convenience – 84%; value – 84%. That said – what constitutes quality? What delivers convenience? What delivers value? While many marketers think they can define these terms intuitively, research suggests they cannot do so accurately. The only way to reliably answer these questions is to get very close to the consumer and develop the empathy required to determine precisely how customers feel and what they want. Research is required to define these terms.
• Pilot testing.
Creating scenarios and testing them with consumers can be very effective in facilitating empathy-based marketing. With the last point in mind – before launching a new generation of its Olay brand, Proctor and Gamble tested three price points: $12.99; $15.99; $18.99. At $12.99, the sales were good. At $15.99, sales tanked. Finally, at $18.99, sales peaked, causing P and G to price Olay at $18.99, generating $2.4 billion with ongoing annual growth. Intuition might have led to a different and less profitable pricing strategy – but pilot testing created an empathy for consumer expectations that could be leveraged.
In addition to understanding and having empathy for the customer, empathy-based marketing can also involve leveraging empathy to influence the behaviour of consumers. Consider these examples:
Research suggests that as many as 85% of human beings suffer from low self-esteem at one time or another. Understanding this, Dove (the soap brand) ran a campaign in 2013 called – ‘Real Beauty Sketches.’ Using a video campaign, Dove considers how women and men tend to struggle with low self-esteem. A woman describes her facial features to a sketch artist behind the screen. Immediately after this, a second person is asked to describe the same woman while the artist sketches another portrait. When presented with both the results, the portrait based on how the second person saw the woman made her look much younger, more beautiful. And more likeable than the one sketched using the self-description. The campaign had the tagline ‘You’re more beautiful than you think’ evoked quite an emotional response from the viewers, without even once mentioning or showing any of its products. The response to the campaign was extraordinary. Online view exceeded 8 million, and sales spiked.
According to the National Autistic Society, 99% of people in the UK have heard of autism, but only 16% understand the condition in a meaningful way. I suspect it is no different in Australia. To increase the understanding of autism among the broader population, The National Autism Society developed a VR-driven campaign. The campaign and resulting VR experience enabled users to experience what it is like for a child with autism to navigate a busy shopping centre. Showing flickering lights and overwhelming sound effectively highlights the sensory overload in busy and stressful environments.
Unlike other charity strategies that raise sympathy or compassion, this approach puts the viewer in someone else’s shoes – shocking them with the disarming reality of dealing with autism. It enables the consumer to gain a greater insight into how the autistic child feels in a shopping centre. This, in turn, creates a more profound sense of connection. Even watching somebody else have the VR experience provides enough insight to evoke genuine empathy and emotion.
Critical considerations in terms of launching a successful empathy-based marketing campaign include:
• Authenticity.
Research suggests that 90% of millennials believe authenticity is important when supporting a brand, compared to 85% of Gen X and 80% of Baby Boomers. Another study found that 59% of shoppers prefer to buy from the brands they trust, honestly being a key driver of trust. Research has also highlighted the importance of empathy in marketing and branding while reporting that only 30% of marketers were proficient in experiencing the world from someone else’s. One study found that 18% of consumers had stopped using a brand in the last 12 months because of the gap between marketing and experience, with 32% believing the gap is widening. Overall, this gap represents a fundamental empathy deficit among brands out of touch with what it feels like to use the brand.’
• Content.
Cyber-security is arguably the most significant threat to business continuity in 2021. Ransomware damages costs were expected to reach US$20 billion in 2021. Research suggests that around 95% of cyber-security breaches arise from inadvertent employee error. Microsoft created the ‘autonomy of data breach’ website with these kinds of statistics in mind. To educate customers and potential customers – making it clear why its products are essential, Microsoft created this interactive website addressing cyber-security issues through the lens of a ‘data heist’. The site put users in a hacker’s shoes, taking them through the stages of a data breach and showing them exactly how the data is stolen. Relevant statistics were also provided.
• Stages.
Research suggests that there are three stages of empathy-based marketing – Cognitive, emotional, and compassionate. Cognitive empathy involves understanding the emotional state of the target audience. This most often requires listening and market research. This equates to understanding – an issue discussed in more detail later in this article. Emotional empathy involves connecting with the target audience emotionally – engaging with the target audience and sharing emotions. This equates to engagement – an issue discussed in more detail later in this article. Compassionate empathy involves addressing the emotional state of members of the target audience. It consists in encouraging action from the audience. This equates to MANAGEMENT– an issue discussed in more detail later in this article. The critical point here is that empathy starts with understanding, requires engagement and, when fully formed – facilitates action. Once marketers feel what the audience feels, managing the audience’s behaviour becomes more straightforward and cheaper.
• Mindset.
Empathy-based marketing involves the long-term strategies that can deliver and maintain a connection between the business and its target audiences. It involves a long-term commitment to understanding, engaging with, and managing the target audience’s behaviour. It most certainly requires a commitment to this cause by all customer-facing staff. The mindset required to establish an empathy-based approach to marketing involves:
• An absolute orientation to putting the customer first.
• A total commitment to understanding consumer behaviour.
• An absolute commitment to engaging with the target audience and genuinely listening.
• An absolute commitment to customising and personalising all marketing.
Mark Cuban, the venture capitalist, once suggested that before he invests in a business, he must feel assured that the business owners and managers know that ‘the customer owns their ass’.
• Co-creation.
Co-creation enables the target audience to work with the business to develop a product they will purchase and repurchase – and design an environment where they will feel comfortable making a purchase. Another strength of co-creation is that it is not expensive or difficult to organise – and can be used just as effectively by small businesses as it can be the largest. Co-creation also fosters empathy through collaboration. It assists with: generating ideas, identifying and solving problems, developing implementation plans, product development and fine-tuning, customer experience design and fine-tuning, developing a pricing strategy.
• Community.
Many successful marketers use a tool to address both understanding and engagement in the brand community, which offers the added advantages of reducing marketing costs and helping the target audience identify with the brand to foster brand loyalty. Consider these statistics: 66% of US businesses turn to brand communities for product development; 71% of US businesses use customer collaborations for market research; 64% of US businesses say a brand community has improved decision-making; 86% of Fortune 500 companies say brand communities provide insight into customer needs, and 80% of marketers indicate that building brand communities have increased traffic.
Great marketers in 2022 understand the dangers of applying empathy (emotion) in decision making when rational thinking based on data delivers superior decision making.
Great marketers in 2022 understand that establishing a customer-centric business involves placing the highest priority on empathy-based marketing.
Great marketers in 2022 leverage empathy in communication with the primary target market, embracing authenticity, content, stages, co-creation, and community.
• Embrace empathy-based marketing without applying empathy when making a decision that requires rational thinking. Empathy can inhibit rational thinking.
• Recognise empathy and the centrepiece of customer-centric marketing. Marketing cannot be customer-centric without empathy.
• Facilitate the use of empathy-based marketing by observing the customer journey and testing the various product design options.
• Create a product that optimises profitability through co-creation facilitated by a brand community. A brand community can facilitate empathy-based marketing.
• Reduce communication costs by embracing empathy-based marketing, both understanding and communicating with consumers.
• How could you possibly understand my needs and expectations if you lack empathy for my circumstances and journey?
• How well do you engage with someone you think has no empathy for you and your circumstances? Why would your customers be any different?
• How much time do you spend observing your customers in-store and out to understand their journey? Could you leverage a better understanding?
• Would you not be able to create better products and a more compelling customer experience if you co-created both with the people you want to buy them?
• Given the power and importance of customer loyalty, why have you not yet established a brand community – the most cost-effective driver of loyalty?

• 70-80% of people ignore paid search results, choosing to only click on organic search results.
• 75% of people never scroll past the first page of search engines.
• 72% of people who conduct a local search will eventually visit a physical store.
• 68% of online experiences begin with a search engine.
• 40% of the search results reaching Google’s first page are HTTPS format.

Have you ever sat up late watching a movie on commercial television feeling and perhaps even articulating frustration with the commercials that are effectively stretching the movie out and in so doing, diminishing the time you have available to sleep? I have. I have even found myself vowing never to buy the products being advertised. I have certainly had the experience of listening to my partner suggesting that late at night there are more ad breaks with more advertisements in each break.
Have you ever found yourself infuriated when a brilliant piece of music you are listening to on You Tube, is interrupted by a banal commercial? I know I have. While I realise this is how You Tube makes its money and that they are probably interrupting my favourite music to encourage me to buy an advertising free subscription, it nonetheless pisses me off. Scott Galloway, professor of marketing at New York University’s Stern School, used even stronger language describing an advertisement on television, radio or social media as being akin to – ‘’a turd floating in a swimming pool’’ – something no-one wants to experience.
While I recognise the value and importance of advertising in some circumstances and while I admit to having once made a living producing advertisements, there is no doubt that most advertising is, for most consumers, an unwanted intrusion in their lives. Even entertaining and informative advertising is an intrusion on the viewer or listener’s time. It is an example of the advertiser taking up the consumers time to sell them something. While such advertising influences some people, it can alienate others. Most of all, it is an example of the advertiser TAKING. It is certainly not about being customer centric.
This is perhaps one of the reasons why content has become such a popular and effective communication tool. Good content, on a blog, in an advertorial, on social media, or indeed in any other format and media, serves to inform and educate and it does so in a way that delivers value to the consumer. While most advertising ads little if any value to the lives of consumers, content can add a great deal of value. Good content while still making a point or indirectly selling a product or service is an example of GIVING. It is an example of giving in the hope of receiving.
A related approach to communicating without TAKING up the time of consumers is a brand community. Online communities are increasingly used to developing closer relationships with customers and generating sales by GIVING rather than TAKING. Further, the benefits of a brand community can be substantial. Consider:
• Branded communities are 21% more likely to see an increase in brand SEO than social media communities.
• Branded communities are 16% more likely to successfully foster brand loyalty than social media communities.
• 58% of online communities says that their customers are more loyal to the brand because of their community.
While TAKING can work, research suggests that GIVING can work a whole lot better. It is often less expensive and can deliver better returns. While in some respects creating content is harder than producing commercials, it an increasingly powerful, cost effective and moral approach to communication. Consider these statistics:
• Only 35% of the average TV break is actively viewed.
• 67% of males and 63% of females actively ‘skip’ advertisements.
• 96% of consumers do not trust advertising.
• Only 47% of public sentiment towards advertising is positive
• 82% of marketers report actively using content marketing in 2021, up 70% from last year.
• Media uploads increased by 80% in 2020, as consumers spent most of their time at home passing time by watching content
• 96% of the most successful content marketers say that content marketing has helped them build credibility and trust with their audience.
These statistics and many more like them suggest that content is not only GIVING can be more effective in engaging customers and in generating sales. Perhaps to most effective approach to disseminating content that engages customers and potential customers involves a brand community. A brand community is an online community formed on the basis of attachment to a brand or marque. The power of a brand community is evident from the following statistics:
• 86% of Fortune 500 companies report communities provide insight into customer needs
• 96% of companies see the value that customer collaboration presents for the marketing department
• 64% of companies state the brand community has improved their decision-making
Advertising is all about TAKING. Quality content and a brand community are oriented towards GIVING.
TAKING or steeling the time does not just occur in advertising. Indeed, it is just as prevalent in the customer experience. Consider these examples:
• If you are silly enough to shop at Myer, your time will be TAKEN while the staff consider whether or not they are going to serve you. Of course, these staff are not assisted by staff reductions – delivering lower costs to the business but longer wait times for the customer.
• If you have been to JB Hi Fi, you might have been stopped by a security person at the door on your way out. This security person is TAKING up your time – making you responsible for proving you are not a thief.
• If you have ever shopped for Fig Gin on Booze Bud you may have found, as I did, that the estimated delivery times are a fantasy. You might also find, as I did that you have to follow up numerous times before your order is delivered. Again, my time was TAKEN.
Contrast this with:
• If you go to the Apple store, you are approached immediately by an assistant who establishes you need and GIVES to a recommended course of action, while estimating the delays and suggesting remedies.
• When you go to Roadbend, the people who service my car, they GIVE you a loan car, GIVE an estimate before significant work, GIVE you the choice of paying by card on the day or having an invoice issued and ensure the result at least meets expectations.
• When you shop at Zappos, the world’s biggest shoe store, service is guaranteed. Unlike many online stores – they deliver when they say they will.
Which three of these businesses are you more attracted to? GIVING almost always generates more sales than TAKING. Further, GIVING almost always generates greater customer loyalty and therefore repeat business and referrals that TAKING. It is interesting to note that – globally, 54% of all consumers say that they have higher customer service expectations than they did just one year ago.
In 2022, great businesses like Apple, have a relatively modest advertising budget, provide a customer centric service and go out of their way to add value at each and every touchpoint. The Apple example also reminds us that part GIVING is delivering at or above consumer expectation. This is when real value is realised.
The importance that consumers place on GIVING rather than taking is reflected in the growing attention given to ESG (Environmental, social and governance) and before it TBL (triple bottom line) and CSR (corporate social responsibility). In response corporations of all shapes and sizes are engaging in community activities that enable them to GIVE back to the community, or segments of it – and most importantly- be seen to do so. What is more, there are some very good reasons why businesses are investing in CSR. Consider:
• 77% of consumers are more willing to purchase a brand if the business demonstrates a commitment to addressing social, economic and environmental issues.
• 73% of investors agreed support the views of consumers on the first point.
• 94% of Gen-Z now think companies should address pressing social and environmental issues.
• 76% of millennials consider CSR when deciding where to work.
• 33% of consumers choose philanthropic brands.
There is a growing consumer expectation that businesses will give back to their communities. Some 58% of Australian consumers have been found to believe that business has a CSR responsibility. Some 55% of Australian consumers would be more likely to recommend a brand that gives even a small portion of its annual profits to charity. The caveat her is that the CSR claimed is sincere – with some 52% of consumers now wanting proof of a brands CSR bona fides
This is perhaps not surprising in the light of the investment of Rio-Tinto in community causes – while at the same time in 2020, destroying the Juukan Gorge.
This action by Rio-Tinto s an example of a business TAKING what it wanted to increase its profits. The reaction from the community, and government was profound – and while Rio-Tinto may have only a passing interest in community sentiment, it cares a great deal about government sentiment and investor sentiment – both of which are impacted by consumer sentiment. The impact on Rio-Tinto’s customers is less clear, this can also be impacted by consumer sentiment.
Whether it be consumer time or community benefit, we are living in a community where consumers are increasingly receptive to GIVING and less and less receptive to TAKING. Further to this, marketing is increasingly about GIVING rather than TAKING. Content is becoming more important than advertising, service is as important than ever – if not more so, and corporate social responsibility is almost an expectation.
• Great marketers in 2022 are placing a higher priority on GIVING value by way of content, rather than TAKING by way of advertising.
• Great marketers in 2022 are developing business practises that TAKE as little as possible from the consumer and GIVE as much as possible back.
• Great marketers in 2022 adopting a sincere approach to corporate social responsibility – GIVING back to the community their customers live in.
• Place a higher priority on GIVING content to consumers than TAKING their time with advertising
• Stop making customers wait for service. GIVE them their time back and remember it is more important than yours.
• Establish a brand community to maximise customer engagement without spending a cent on advertising.
• Contribute to the community in which your consumers like and do so in a manner that positions you as a GIVER instead of a TAKER.
• Ensure your approach to CSR, TBL, ESG or whatever you want to call it, is sincere and self-evident to your audience.
• What do you think of the advertisers when you are forced to watch their banal commercials when you just want to see what happens in the movie?
• How much attention do you pay to the drivel passing as advertising at the start of a You Tube clip?
• How inclined are you to go back to a store when you have been kept waiting 5 or 6 minutes because that store is short staffed?
• Are your customers aware of your contributions to the community and do they view your business as a good corporate citizen?
• Is your business a TAKER or a GIVER – and could you generate greater sales by being seem as a GIVER.
• 35% of television ad breaks are actively viewed.
• 67% of males and 63% of females actively ‘skip’ advertisements.
• 96% of consumers do not trust advertising.
• 53% of public sentiment towards advertising is negative.
• 42% of people believe ads can change the world
It might surprise some to learn that Elon Musk was not the only founder of Pay Pal. Other founders included Luke Nosek, Ken Howery, Max Levchin, Yu Pan and Peter Thiel. After Elon Musk, Peter Thiel is perhaps the best known, working in Silicon Valley as a venture capitalist and author. With Blake Masters, Peter Thiel authored the book – ‘Zero to One’. A core message in this book is that great businesses have no competitors.
Quotes attributed to Thiel include:
• ‘Competition is overrated. In practice, it is quite destructive and should be avoided wherever possible. It is much better than fighting for scraps in existing markets to create and own new ones.’
• As you craft a plan to expand to adjacent markets, don’t disrupt: avoid competition as much as possible.’
• ‘All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.’
As far as the broader community is concerned, high levels of competition may be a good thing, especially if this competition serves to drive innovation and competitive pricing. However, as far as businesses are concerned, competition can damage profitability by putting pressure on prices and the need to invest more in promotion.
The importance of eliminating competition might be the only subject about which Thiel and I will ever reach an agreement. Limiting direct competition is most certainly an important consideration for marketers and an increased focus of great businesses. Working to eliminate or at least minimise the competition should be a key focus of marketers in 2022.
While I am not advocating the systematic execution of the teams working for your competition, I will argue that competition can be a choice in many and perhaps most cases. Indeed, there is no doubt in my mind that every business should strive to limit the number and quality of competition and that most businesses are in a position to reduce and potentially eliminate direct competition.
Another high-profile American venture capitalist, Mark Cuban, once noted that he only invests in businesses that satisfy three criteria:
• They target the smallest possible market.
• They have a tangible strategic competitive advantage.
• They understand that the ‘customer owns their ass.’
I would argue that these three criteria – addressed as strategies – are central to eliminating or at least minimising the competition. This is perhaps what makes these criteria so important to Cuban.
Cuban suggests that while most businesses like to boast about their market size, he prefers to invest in businesses that target the smallest sustainable market – that is, the smallest market possible that will generate acceptable and sustainable profitability – what is often called the ‘smallest viable market’. This is, in effect, an extension of the well-used marketing mantra – ‘it is not possible to be all things to all people’. Not only is it not possible to be all things to all people, but it is far better to be one really important thing to the right people – people who will pay a premium and buy your product repeatedly.
Renowned marketer and author Seth Godin also weighed in on this subject, commenting, variously:
• ‘It’s about targeting the people who will particularly benefit from what you are offering.’
• ‘Begin instead with the smallest viable market. What’s the minimum number of people you would need to influence to make it worth the effort?’
• ‘Focus on a small audience you can possibly live with and make a difference. If you can change 10 lives, you can get the next 50.’
Targeting the smallest viable market has several advantages, including:
• The smaller the market, the more homogeneous it can be.
• The more homogeneous a market, the easier it is to understand.
• The easier it is to understand, the easier a market’s expectations can be met.
• Meeting and exceeding expectations drives sales repeat sales, referrals, and margins.
The smaller the market, the easier it is to identify and exceed its expectations. The more a product exceeds customer expectations, the fewer competitors will have.
Seth Godin, as do others, takes this principle a step further when he suggests that:
• ‘Don’t find customers for your products; find products for your customers.’
The point here is that it is better to focus on a market than focus on a product. It is better to understand and address the needs and expectations of a market than it is to develop a product and then find someone to buy it. Owning a market has the added advantage of facilitating permission marketing – marketing that respects a customer’s explicit consent when sending marketing information. The business develops such a relationship with the market that the market is happy to be promoted to.
Permission marketing involves understanding a market so well and developing such a relationship that they expect and want the brand to communicate with them and sell them additional products and services. This is only possible with a smaller market – a business can own – and therefore have limited competition.
On this subject, Seth Godin notes:
• ‘Invest your budget into turning your smallest viable market into your marketing department. That’s the future. That is how every successful brand is built.’
Allied to this, the other great benefit of targeting the smallest viable market is lower marketing costs.
The smaller market is, the easier it is to understand and get close to. The smaller the market, the easier it is to:
• Study and define its expectations.
• Engage in product co-creation.
A smaller, more homogeneous market is easier to study and ultimately understand. The better the market is understood, the easier it is to identify its expectations and build products that exceed those expectations. The smaller the market, the easier it is to work with it to co-create products that meet and exceed customer expectations.
Two approaches to leveraging a market and ensuring that expectations can be exceeded are:
• Co-creation marketing
• Customer journey marketing.
‘Co-creation, in the context of a business, refers to a product or service design process in which input from consumers plays a central role from beginning to end. Less specifically, the term is also used for any way in which a business allows consumers to submit ideas, designs or content.’ In other words, co-creation marketing involves working with the customer to:
• Develop a product or service that meets or exceeds their needs and expectations.
• Innovate a product or service that meets or exceeds their needs and expectations.
• Develop next-generation products that are ahead of the market and command a premium.
Co-creation is all about working in partnership with customers to achieve an outcome that maximises the benefits to all. One of the most effective approaches to co-creation marketing involves establishing a brand community that facilitates a continuous discussion between the target audience and the business. This is best achieved when the market is as defined and therefore as small as possible.
Co-creation marketing embraces Mark Cuban’s concept of understanding that the customer ‘owns your ass’ – and doing everything possible to reflect this in every aspect of the marketing. Moreover, co-creation helps to develop a relationship with the target market in a way that significantly disadvantages – and potentially lessons competition – as clients consider just one brand – yours.
Understanding the customer journey – along the way to purchasing, repurchasing and referral – is central to:
• Identifying and targeting touchpoints.
• Identifying and eliminating pain points.
In every purchase process, there are touchpoints – points where critical information is sorted and key decisions made. Understanding this journey and the touchpoints makes it easier to customise the marketing to address them. Identifying and eliminating pain points makes purchasing easier. Together these strategies help develop a closer, more cost-effective and productive relationship between a business and its customers.
When I start working with a new client, one of the first questions I ask is – why should I buy your product rather than that of the main competitors? What I am essentially asking is – what is your strategic advantage, what is your point of difference and what sets the client apart. I believe this is perhaps the most important question in marketing, as it can reduce actual or perceived competition and substantially reduce marketing costs.
It is important to note that perception always matters more than reality in terms of consumer behaviour and, more specifically, purchase behaviour. Perception, not reality, drives consumers and, indeed, human behaviour.
The point here is that while differentiating a product from its competition might be beneficial – being seen as different is much more important. Differentiation is the business of using a strategic competitive advantage to set a product apart from its competition. It is the business of:
• Positioning a product so unique that it is viewed as having little competition.
• Uniquely categorising a product, it is seen as distinct from the competition.
For a time, despite the multitude of brands on the market, there was only one vacuum cleaner – the Hoover. While there were many options, there was effectively only one ballpoint pen on the market – the Biro – by Bick. There was only one smartphone to speak of initially – the I-phone, so much so that mobile phones are often called I-phones – regardless of the brand. These are just some of the many examples of a product effective having no competition – due to effective differentiation.
While a Rolls Royce and a Mini are both cars – they are not competitors. While they have a lot in common, they are very distinct regarding what they offer and target. The same can be said for a Rolls Royce and a Ferrari. These are both high priced cars, but they are not competitors are. They are different classes or categories of vehicles targeting different markets. This is true for so many products. A silver service restaurant does not compete with a takeaway restaurant. Again, they are various categories of products.
The right strategy can be very effective in setting a product apart from would-be competitors and reducing or even effectively eliminating the competition. Such a strategy might involve differentiating based on:
• Product characteristics.
• Pricing
• Application.
• Prestige.
• All of the above.
Perhaps one of the best examples of effective differentiating a product is Coke. While the flavour of Pepsi is preferred by up to 80% of consumers in taste tests – Coke well and truly outsells Pepsi. Coke has a 45% market share, while Pepsi has a 26% market share. While Pepsi is a soft drink, competing with other soft drinks – Coke is a lifestyle product, competing with almost no one. Coke owns the lifestyle space.
Differentiating a product limits effective competition. It also reduces the cost of marketing. There is an inverse relationship between product differentiation and marketing costs.
There are also dangers in not differentiating. Most consumers I know complain about the poor internet service they receive. When I asked a provider representative about this on one occasion, he noted that all the services were substandard because they all compete directly and therefore fight on price – with the effect being that prices are now so low that none of them can afford to provide a good service. While I cannot vouch for this theory, it makes sense. Also making sense is the proposition that if one of these businesses effectively differentiated, they might charge a premium price for a superior service.
In closing, I would note that targeting smaller markets does not mean having a smaller business. It simply means having a market orientation and developing different products or products perceived to be different for each smallest viable segment. It means customising the product to meet the market rather than finding larger and larger markets for a product.
• Great marketers in 2022 are targeting the smallest viable market and developing different products for different segments for growth.
• Great marketers in 2022 understand their market and engage with it better than the competition.
• Great marketers in 2022 develop a strategic competitive advantage and differentiate their product – thus reducing effective competition.
• Targeting the smallest viable market – often prioritising margins ahead of volume.
• Implement a co-creation marketing strategy that enables them to consistently exceed customer expectations.
• Establish a brand community to build a relationship with a market that drives co0creation and an understanding of pain points.
• Establish a tangible strategic competitive advantage and use it to clearly differentiate their product from the competition.
• Establish their product in a category that separates it from its competition, thus reducing effective competition and potentially enhancing margins.
• To what extent can your business target the smallest viable market and use this to effectively ‘own” a market the way Coke does?
• How might your business benefit from a brand community providing low-cost continuous input that enabled you to be seen to be best able to exceed customer expectations?
• To what extent might your business benefit from a low-cost co-creation marketing strategy designed to ensure your product always meets expectations?
• What is the potential for you to differentiate your product in a way that builds customer loyalty and reduces marketing costs?
• How might your business benefit from the effective elimination of your competition, or at least the extreme limiting of that competition?
• 86% of consumers say that authenticity is a key factor when deciding what brand they buy.
• 66% of consumers think transparency is one of the most attractive qualities in a brand.
• 73% of consumers say customer experience is important to their purchasing decisions.
• 77% of consumers buy from brands that share the same values as they do.
• 64% of consumers said they would buy from a brand or boycott it because of its position on social or political issues.

Few subjects are discussed more and misunderstood more that ‘brand’ and ‘branding.’ These terms can of course, mean different things to different people. Additional terms for consideration are – ‘actual brand’ and ‘optimum brand.’ For the purposes of this discussion, I will define these terms as follows:
• Brand – what your target market says about you when you are not present.
• Actual brand – what your target market is currently saying and you or your business.
• Optimum brand – what you target market should be saying to ensure optimum outcomes.
• Branding – reducing the gap between the actual and optimum brand.
Jeff Bezos defined brand as – what people say about you, your product, or your business, when you are ‘not in the room’. What matters most of course, is what your target market or audiences is actually saying (what your target market actually thinks and feels), about you, your product or business. An organisation’s ‘actual brand’ is ultimately central to:
• Conversion rates.
• The average sale per customer.
• Margins (by maximising the perception of value).
• Repeat business rates.
• Referral rates.
The actual brand also influences:
• Enquiry rates.
• Staff recruitment and retention rates.
• The return from each staff member.
• The support of other stakeholders.
• Community support.
The optimum brand, on the other hand, is the one that will deliver the optimum outcomes for these criteria. The optimum brand is the one that accurately reflects the needs, wants and expectations of the target market and how these might be exceeded.
Branding is the process of changing the perceptions of your brand within your target market – to the point where the ‘actual brand’’ is the same as the ‘optimum brand’.
Effective branding involves:
• Defining the actual brand.
• Defining the optimum brand.
• Living the optimum brand.
• Communicating the optimum brand.
Simple exploratory research is required to define the actual brand – what the target audience currently thinks. More complex qualitative and quantitative research is required to understand the expectations of the target audiences and gather the data to develop the definition of the optimum brand.
Once the actual and optimum brands have been defined, the gap can be defined and the strategy for eliminating that gap can be implemented. Eliminating this gap involves – living the brand, or reflecting the brand in the:
• Design and quality of the product.
• Customer experience and service.
This in turn involves creating a culture that reflects the brand. Only once this culture has been developed, is it appropriate to begin communicating the brand, at least to external audiences. To demonstrate this, consider three examples.
Apple is either the most or second most valuable brand in the world. One recent valuation suggested the Apple brand is worth – US$309 billion. The only brand likely to eclipse the value of Apple is the Amazon brand, which has been valued at US$300 billion. First second or third – the Apple brand attracts an extraordinary value. That value drives – conversion rates, the average sale per customer, margins, repeat business rates and referral rates.
This value, in part, explains its ranking as the world’s largest corporation and its ongoing record of record profitability.
This brand has not however been achieved through promotion. As a percentage of revenue, Apple spends 10% as much on advertising as Telstra. In relative terms, Apple is not a big advertiser. It is however a business that invests heavily in culture. It is the people who design and manufacture the products, together with those who sell and deliver the products that have brought the optimum Apple brand to life through its culture.
Consider these questions and the answers from consumers:
• Does it offer superior products? – YES
• Does it offer superior locations? – YES
• Does it offer superior pricing? – Who cares – it is not about price.
• Does it offer superior service? – YES
• Does it offer superior convenience? – YES
Research demonstrates that the Apple brand is built on:
• Responsiveness – to a well-defined market
• Distinctiveness – especially in terms of innovation and design
• Culture – bringing the brand to life
• Consistency – in the delivery of the brand across channels
• Positioning – making it distinctive.
All of these characteristics are communicated by staff behaviour – the culture. You only need to visit an Apple store to appreciate this.
Myer was established in Bendigo in 1900 and was considered one of the great retail experiences in Australia. It was most certainly considered to be one of the great Australian retail brands. In 2020 Myer has 60 stores across Australia and is considered anything but an example of great retailing or a great brand. If anything, Myer is now viewed by many as a failing business with a very short life expectancy. Many, including me, have already written the epitaph of this once great brand. Mine will read – ‘hear lies a business that forgot what is important’.
Myer relisted on the Australian stock exchange with a price of $4.10 in 2009 and has never traded above this price. By 27 July 2020 Myer was trading at 20c. While I am not a stock market pedant, I see no reason why Myer will ever trade above 50c again.
Many reasons have been offered for the spectacular demise of Myer including poor management, a changing market, increasing rents and poor economic conditions. It may well be that each of these factors has contributed to Myer’s fall from grace, but I would argue that no reason has contributed more than the culture of the business and the fact that no matter what Myer say in advertising, the staff rarely if ever deliver.
Consider the following questions and answers:
• Does Myer offer superior products? No.
• Does Myer offer superior locations? No.
• Does Myer offer superior pricing? No.
• Does Myer offer superior service? No.
• Does Myer offer superior convenience? No.
Myer promise the world in its advertising, but the culture is such that it delivers none of these things and lacks the culture to bring the brand to life. To understand the gap between the reality and the potential at Myer, one need only go in to a store and experience the dreadful service – or lack there -of. In such an environment, it is fair to ask:
• What does Myer stand for?
• What is the Myer point of difference?
• Why shop at Myer?
• Does Myer have a cogent brand?
In 2009 Amazon purchased Zappos for US$1.2 billion. Ten years earlier, Zappos had sales of just US$1.6 million. By any measure, this valuation suggests that the previous ten years had been stunningly successful for Zappos. What is more, that success has been sustained since 2009. In 2020, Zappos is the world’s largest shoe store (albeit – online). Global sales in 2019 were US$568 million.
Behind the growth of Zappos has been Tony Hsieh. On many occasions, Tony has been asked to explain the success of Zappos. Here are some of his suggestions:
• “At Zappos, we really view culture as our No. 1 priority. We decided that if we get the culture right, most of the stuff, like building a brand around delivering the very best customer service, will just take care of itself.” -January 9th, 2010, The New York Times

• “I made a list of the happiest periods in my life, and I realized that none of them involved money. I realized that building stuff and being creative and inventive made me happy. Connecting with a friend and talking through the entire night until the sun rose made me happy. Trick-or-treating in middle school with a group of my closest friends made me happy. Pickles made me happy.”–from his book, Delivering Happiness: A Path to Profits, Passion and Profits

• “We’re willing to give up short-term profits or revenue growth to make sure we have the best culture. In fact, after orientation, we offer people $2,000 not to work at Zappos. The ones who stay are right for our culture.”–January 7th, 2010, Forbes

• “We believe that it’s really important to come up with core values that you can commit to. And by commit, we mean that you’re willing to hire and fire based on them. If you’re willing to do that, then you’re well on your way to building a company culture that is in line with the brand you want to build.”–November 15, 2010, The Huffington Post
• Does Zappos offer superior products? Yes.
• Does Zappos offer superior locations? Not relevant.
• Does Zappos offer superior pricing? Who cares – it is not about price?
• Does Zappos offer superior service? Absolutely – second to none.
• Does Zappos offer superior convenience? Absolutely.
Also ask yourself this:
• Was this offering created with advertising? – No.
• Was this offering created with culture? – Absolutely.
The quotes from Tony Hsieh clearly points to the importance of culture in developing a great business and a great brand. Hsieh, who has alas since died, build a great brand and business by creating a culture able to ensure that staff live the brand.
Of course, Hsieh is not alone in his comments about the importance of culture.
• “I think as a company, if you can get those two things right — having a clear direction on what you are trying to do and bringing in great people who can execute on the stuff — then you can do pretty well.” Mark Zuckerberg, CEO, Facebook

• “Determine what behaviours and beliefs you value as a company and have everyone live true to them. These behaviours and beliefs should be so essential to your core, that you don’t even think of it as culture.” Brittany Forsyth, VP of Human Relations, Shopify

• “I used to believe that culture was ‘soft’ and had little bearing on our bottom line. What I believe today is that our culture has everything to do with our bottom line, now and into the future.” Vern Dosch, author, Wired Differently
Three critical issues in creating the brand that creates the culture are:
• Selecting the right staff.
• Engaging all staff.
• Retaining the right staff.
For most employees, income is a major consideration. That said, the vast majority are looking for more than that. Research suggests that 80% of potential employees are influenced by the brand of the business they are considering working for. At the same time, employers are looking for staff who will engage with the organisation and its brand. Research shows that such engagement can deliver a 21% increase in profit.
In his book ‘Good to Great’ Jim Collins highlights the importance of employing only the ‘right’ staff – not the best available – but the ‘right’ staff – those ideally suited for the job in question. Further to this, Collins suggests that if a business cannot find the ‘right’ person – they should not employ anyone at all. He highlights the high cost of employing less than optimal staff. The ‘right’ people will be attracted to the brand and will make an ongoing contribution to bringing that brand to life.
It is people, and not promotion that brings a brand to life. This is evident to just about anyone walking into a Myer store and experiencing the lack of service or customer experience compared with those walking into an Apple store and experiencing the high standard of service and market appropriate customer experience. It is not possible to create the ‘optimal’ brand without the ‘right’ staff and attracting the ‘right staff’ requires an ‘optimal’ brand. Brands attract staff and staff create brands.
If you are to bring your brand to life, you first need to recognise that it is your staff who will do this job. The last blog in this series addressed employing the ‘right’ staff – staff who can bring your brand to life. This blog addresses the importance of engaging the ‘right’ staff, retaining them, and getting the best out of them. Research suggests that 71% of executives believe employee engagement is critical to research and has a role in:
• Increasing productivity
• Improving morale
• Reducing absenteeism
• Delivering better customer service
Engaged staff also bring the brand to life – understanding and embracing the behaviours that are consistent with the brand, and never exhibiting behaviours that are not consistent with the brand. Only engaged staff will create your brand by bringing your brand definition to life. Engaging staff can be facilitated by:
• Ensuring they understand the vision and the expectations it creates
• Ensuring they understand the core values and the expectations they create
• Ensuring they understand the brand personality and the expectations they create
• Providing the education and training required to ensure staff have the requisite skills
• Provide the incentives required to ensure consistent behaviour of all staff
To live your brand, staff must first:
• Understand the brand and its implications for their behaviour
• Have the skills to consistently exhibit optimal behaviour
• Be incentivised and provided with feedback
Great brands are built by the ‘right’ people (as suggested in previous blogs in this series), who are fully engaged with the business and its brand. Great brands are created by long term employees – the ‘right’ staff who are engaged with the brand to the extent that they choose to stay with the business for the long term.
The benefits of long-term staff are numerous and include:
• Reduced recruitment costs
• Lower training costs
• Retention of intellectual property
Long-term staff are also better placed to understand, embrace and live the brand – providing the customer service and customer experience promised by the brand. Retaining the best staff requires:
• Employing the right person in the first place
• Providing a clear and engaging vison and leadership
• Maximising the level of engagement with the brand
• Maintaining attractive remuneration packages
• Monitoring staff and providing feedback and training
Critical to retaining the right staff is a brand that reflects the values, personality, and capabilities of the staff member concerned – making the working environment one they feel proud of, rewarding and a pleasure to work in. Ideally, staff members need to feel pride in their employment, and nothing will inform this pride more than the organisation’s brand – ‘what people say about it when the owners of the brand are not in the room’. Vision, values, personality, and positioning are as important to staff as they are to purchasers.
• Great marketers in 2022 are defining an optimal brand based on the needs, expectations and needs of the target market.
• Great marketers in 2022 are defining their actual brand and the gap between it and the optimum brand.
• Great marketers in 2022 use culture as the primary strategy for eliminating the gap between the actual and optimum brand.
• Great marketers in 2022 work with people – HR and staff – to bring the brand to life and create a sustainable brand.
• Understand that your actual brand not your optimum brand determines outcomes.
• Define the businesses optimum brand and the gap between it and the actual brand.
• Create a culture – not a campaign – to bring your optimum brand to life.
• Bring your brand to life by eliminating the gap between the actual and optimum brand.
• Create their brand by attracting, retaining, and getting the best out of the best people.
• What influences your purchase behaviour more – how the vendor sees his or her brand or how you see it? Is your market any different?
• What do you feel when your experience as a customer falls short of the expectation caused by advertising? Is your market any different?
• How do you feel when your expectations are exceeded? What is the probability of a repeat purchase or referral?
• How much cheaper might it be to create the culture that delivers the optimum brand, rather than relying on advertising?
• What has it cost you to not to have a culture that attracts, retains and gets the best out of the right staff?

• 73% of customers say their experience with a brand drives purchase decisions.
• 60% of shoppers will tell friends and family about brands they’re loyal to.
• 43% of customers love to spend more money at brands they like.
• 91% of shoppers prefer brands they perceive to be more authentic.
• 52% of customers did not return to a business due to bad branding and overall design.

It may sound absurd, but no matter how much they might think they do, consumers don’t know what they want. Indeed, Henry Ford once said:
• ‘If I had asked people what they wanted, they would have said faster horses.’
Expressing a similar sentiment Steve Jobs once said:
• ‘Some people say, “Give the customers what they want.” But that’s not my approach. Our job is to figure out what they’re going to want before they do’.
I was engaged by a multi-residential property developer to undertake research to determine what the target market for a project wanted in an apartment. Far and above anything else, the most common thing consumers in the majority of focus groups wanted was – ‘quality.’ In an apartment, members of the project’s target market wanted:
• Quality design.
• Quality fittings.
• Quality finishings.
• Quality features.
While hardly astounding (who would not want quality) this desire for quality makes sense, I guess. But this all gets more interesting when the participants in the focus groups were asked to define ‘quality.’ What is quality design? What do quality fittings look like? What are the characteristics of quality finishings? What features represent quality? These are, I would suggest, very important questions. These questions, however, were not – and are not – easily answered. While consumers think they know what they want – they don’t.
Both Ford and Jobs were right. Consumers don’t know what they want. What is more, they don’t even know what determines what they want. Behavioural research suggests that consumers tend to base perceptions of quality on and indeed perceptions of what they want on:
• Taste.
• Peers.
Consumers, and indeed human beings more generally, tend to think that if they like something it is quality. More importantly, consumers are social animals, which means that their perception of what represents quality, is largely determined by social norms – what they peers say. Indeed, the taste of consumers has also been found to be directly impacted, if not determined, but their peers. What consumers want is invariable influenced, if not determined by their peers.
Further, most consumers do not appreciate the impact on social norms on their purchase decisions. When asked what impacts on their wants, tastes, and perceptions – most consumers think they do. They think that while others may be impacted by social norms, they are not.
The ‘introspection illusion’ is a cognitive bias in which people wrongly think they have direct insight into the origins of their mental states, while treating others’ introspections as unreliable. The introspection illusion occurs when consumers believe they have freewill and that their purchase decisions are self-determined – while accepting that this may not be so for others. The fact is all consumers are influenced by social norms and these social norms more often than not determine what they want. Here are two studies exemplifying the impact of social norms on behaviour.
A 2008 study by Noah J. Goldstein, Robert B. Cialdini and Vladas Griskeviciu found that the rate of bath towel in hotels increases significantly when patrons are told that other patrons reuse bath towels, even where the alternative is an environmental message. It was found that:
• An environmental message alone led to a 35% reuse rate.
• A message that 75% of people reuse bath towels led to a 44.5% reuse rate.
This highlights the power of social norms and the extent to which knowing what others have done impacts the behaviour of consumers. Furthermore, it suggests that following the lead of others is more important to many people than doing what might be considered the ‘right thing’.
Most studies have found that consumers struggle to differentiate the various brands of cola – including Coke and Pepsi – when participating in a blind taste test. For example, the findings in round one of a recent study involving a blind taste test were:
• 41% identified Coke correctly.
• 38% identified Pepsi correctly.
• 35% identified RC cola correctly.
In the second round of this same study, participants were given three rounds of the same cola. The findings were:
• 45% identified Coke correctly.
• 32% identified Pepsi correctly.
• 25% identified RC cola correctly.
Despite this apparent inability to accurately differentiate brands of cola, another study found that:
• 83% of people in the US say they prefer Coke over Pepsi.
Consumers who buy Coke are buying everything they associate with the brand. They are buying into the fun lifestyle, youth, and vitality associated with the Coke brand. They are even buying into the images of slim models drinking Coke – even though if these models consistently drank Coke, they would not be slim. The purchase behaviour of these consumers is influenced by social norms.
The point here is that what people want, is most often determined by social norms. It has been suggested that purchase decisions are also based on what they need. But research has shown time and again, that what consumers need – or think they need – is largely determined by social norms and beliefs – which are largely determined by external influences. How often have you heard someone suggest that they ‘need’ something you can clearly see they don’t need? When I was a teenager, I ‘needed’ Levi Jeans, when quite clearly, any brand of jean or indeed, any form of trouser might have done the job of providing modesty, warmth, and protection. The fact is I need Levi Jeans because of social pressure, and I considered them a quality product because of social norms.
The impact of social norms in the 21st century are well addressed in the book – Change – How to make big things happen.
Human beings don’t even choose what they believe. The fact is – nothing we believe is a choice. Every belief is the result of one or more external influences and social norms. This has led many a philosopher to suggest that freewill is an illusion.
• Free will is an illusion. People always choose the perceived path of greatest pleasure. – Scott Adams.
• As far as I can see, it’s not important that we have free will, just as long as we have the illusion of free will to stop us going mad – Alan Moore
Social norms have been found to be so powerful that they effectively negate freewill without most consumers even knowing it. Human beings are social animals, and nothing impacts their behaviour more than social norms. Nothing determines what they want more than social norms.
Human beings are also easily – and unconsciously – influenced by apparently small nudges. The concept of a ‘nudge’ was first documented by Richard Thaler. He chronicled the example of a Swedish study in which the behaviour of male tavern patrons was influenced by painting a fly in a white urinal bowl. This simple innovation led to a 30% drop in spillage. This study was repeated at a university in the United States – using the logo of another university instead of a fly. In this case, spillage was decreased by 50%. These are two examples of nudges used to influence behaviour.
More commercially focused examples of nudges include:
• Asking hamburger customers ‘will you have fries with that?’
• Making healthier foods easier to buy than unhealthy foods
• Showing people the amount of power they are using – to reduce consumption
In a study of the National Health System in the United Kingdom, it was found that 11.1% of patients were simply failing to show up for scheduled appointments. In response, the NHS began sending a text to patients a day or two before the appointment, advising them that a missed appointment would attract a fee of 160 pounds. Missed appointments immediately fell to 8.4%.
In essence, a ‘nudge’ is a small action orb ‘psychological trigger’ designed to have a large impact on decision-making. The discussion of nudges by Thaler and others has led to the development of ‘nudge marketing’. Examples of nudge marketing include:
• Driving sales by demonstrating that others are buying the product
• Limiting options to drive consumers towards a favoured option
• Using games and competitions to engender a competitive response
The potential for nudging is substantial, and the options in terms of potential nudges are almost limitless. Some nudges are obvious, for example. competitions, while others are quite subtle such as the fly painted in the bowl of a urinal. Effective use of nudges requires a deep understanding of human behaviour – but it can be a very inexpensive way of driving sales.
The consumers referred to here were not consciously impacted by these ‘nudges.’ They were impacted at an unconscious level. They were impacted in the brain stem and limbic system rather that the conscious and thinking neo-cortex. These nudges impacted what consumers want, without them knowing. Again, consumers are not determining what they want. Nudges represent a very powerful tool kit of psychological triggers that can be readily used to influence consumer behaviour.
Further impacting the capacity of consumers to know what they want are the 25 or more cognitive biases that impact their behaviour. Consider these examples:
• The availability bias involves making decisions based on how easy it is to bring something to mind. This involves the human propensity to conclude whatever is top of mind – including media reports. Hence the importance in marketing of awareness and being top of mind. Consumers are biased towards reacting to or basing judgements on what is top of mind.
• The representativeness bias occurs when the similarity of objects or events confuses people’s thinking regarding the probability of an outcome. People frequently make the mistake of believing that two similar things or events are more closely correlated than they actually are.
• The anchoring bias involves an individual’s decisions being influenced by a particular reference point or ‘anchor’. Once the value of the anchor is set, subsequent arguments, estimates, etc., made by an individual may change from what they would have otherwise been without the anchor.
• Physicist Lawrence Kraus suggested that the difference between scientists and creationists is that while scientists are actively seeking facts, they can prove them wrong. Creationists seek evidence that supports their fixed opinion. This is an example of the ‘confirmation bias,’ – where consumers prioritize information that confirms their previously existing beliefs or biases.
The fact is, human behaviour is significantly impacted by these 25 or more cognitive biases, and they impact without consumers even knowing they exist. While consumer think they are making an objective assessment of what they want, most often they are not. Most often consumers are influenced by one or more cognitive bias.
In closing this discussion, I wanted to refer to the early comments about quality. The reality is – consumers find it very difficult to define quality design, fittings, finishes and features, in apartments or indeed with any other product. Further, what the developer defines as quality may be different to what the consumer defines as quality. Research highlights this. The results of a Wall Street Journal – Gallup survey conducted in September 1981, published in the Wall Street Journal in 1981 found that – three out of five chief executives of the country’s largest 1,300 companies said that their quality is improving (only 13% said it is declining). Another study by the American Society for Quality Control and published in the Boston Globe that same year reported that 49% of 7,000 consumers surveyed said that the quality of U.S. products had declined in the past five years. In addition, 59% expected quality to stay down or decline further in the upcoming five years.
Quality is a very qualitative concept.
• Great marketers in 2022 understand that consumers don’t know what they want and there is little point asking.
• Great marketers in 2022 the forces most impacting on consumer behaviour are social norms, even when consumers deny that effect.
• Great marketers in 2022 rather than asking about needs and wants – use observation to identify problems and innovative thinking to solve them..
• Great marketers in 2022 understand that quality is a largely unhelpful term that most find hard to define and about which stakeholders have varying views.
• Don’t ask people what they want. Instead, solve their problems.
• Before you talk about quality, find out how the consumer defines it.
• Embrace the power of social norms. Nothing impacts behaviour more.
• Embrace the power of the ‘nudge’ or psychological trigger in changing behaviour.
• Beware introspection illusions – they cloud the drivers of consumer behaviour.
• What are you doing to understand and address social norms impacting on your sales?
• Which of the 25+ cognitive biases are impacting on the returns from your marketing?
• How much might you save on advertising by leveraging nudges?
• To what extent is your behaviour influenced by psychological triggers?
• To what extent are you influenced by introspection illusions?

• 88% of publicly traded companies have ESG initiatives in place.
• 79% of venture and private equity businesses have ESG initiatives in place.
• 67% of privately-owned companies have ESG initiatives in place.
• 77% of small and mid-caps have a formal purpose statement related to ESG.
• 76% of consumers will stop buying from poor environment or the community citizens.

Myths are pervasive in marketing. Three big myths that seem to be doing the rounds over recent years are:
• Education is the key to behaviour change.
• Viral marketing changes behaviour.
• Influencers change consumer behaviour.
Great marketers understand that education is rarely enough, viral marketing does not work like COVID-19, and influencers are rarely as influential as many people seem to think.
One of the many dangerous myths in marketing is that education changes behaviour. There is a view that the more people know, the more likely they are to behave as we ca=want them to. While it would be convenient for this to be true – all evidence suggests that it is not valid.
While this is often the case, education is not always an effective tool for managing human behaviour. All too often, people know the facts and know what they should do (they have the facts) but ignore what they ‘know’ and behave as they choose. Their behaviour is often inconsistent with their education. Consider:
• 58% of teen motor vehicle crashes are due to distraction.
• 97% of teens ‘agree’ that texting while driving is dangerous.
• 43% of teens who know it is dangerous – and text anyway.
Another 2018 study looked at teens texting while driving. It found that the effects of anti-texting education are short-lived. After a short period of behaviour change, most consumers return to their usual practice of texting while driving – despite knowing the dangers.
While these two studies focused on teens, ask yourself:
• Have you ever driven under the influence of drugs or alcohol?
• Have you ever driven tired (which is as bad as driving drunk)?
• Have you ever used your phone while driving?
Education can be an important tool when managing human behaviour. However, most often, it is not enough. Education is an important starting point and little more. Managing behaviour also requires an emotional connection
Unfortunately, the impact of this education was small and short-lived. In this same study, the teenagers were also introduced to a once attractive woman of their own age who had been badly injured in a crash in which both of her parents were killed. A teen driver texting caused the crash. The effect of this meeting on the texting behaviour of the teens in the experiment was long-lasting – very long-lasting, indeed.
Meeting with an injured woman of their own age created an emotional connection for teens in this study and resulted in a determination to stop texting. Meeting the woman made the issue of injury caused by texting real rather than a statistic. The devastating result of texting for just a few seconds created a fear of texting while driving. The empathy with the injured woman made the dangers of texting real.
Creating an emotional connection is possibly the most effective way of causing the behaviour to occur. Education creates an understanding, but an emotional connection creates motivation. Emotional connections are also good for business more broadly. A study reported in the Harvard Business Review found that emotionally engaged customers are:
• Three times more likely to recommend.
• Three times more likely to re-purchase.
• Less likely to shop around (44% rarely shop around).
• Less price-sensitive (33% wanting a 20% discount to change).
Forrester Research found an emotional connection:
• Facilitates a 26% increase in margins.
• Facilitates an 85% growth in sales.
Strategies for creating an emotional connection include:
• Creating a personal human connection.
• Demonstrating values consistent with the target market.
• Engaging customers in the story behind the brand.
Education alone rarely changes behaviour, especially complex behaviours like purchase behaviour. An emotional connection is as important, if not more important, than education. Combining education and emotion can be highly effective in changing consumer behaviour.
All too often, human beings, including marketers, draw on analogies from the natural world to explain outcomes in the human world. Elon Musk is among those who have highlighted the flaws in this type of thinking – correctly advocating the use of First Principles.
‘First-principles thinking is one of the best ways to reverse-engineer complicated problems and unleash creative possibility. Sometimes called “reasoning from first principles,” the idea is to break down complicated problems into basic elements and then reassemble them from the ground up. It’s one of the best ways to learn to think for yourself, unlock your creative potential, and move from linear to non-linear results.’ Mental models.
A relevant example of the reliance on analogies relates to the view that messages spread online similarly that viruses like COVID -19 spread in the real world. This is, of course, the source of the concept of online content – “going viral.”
While this notion might make sense intuitively, research suggests that it lacks substance in the real world. Research indicates that while simple messages can spread online in a ‘virus-like manner’, more complex messages, including those involving behaviour change, do not. In his book Change, Damon Centola highlights the difference between:
• Spreading simple information that can be spread in a similar way to a virus.
• Causing behaviour change by spreading information very differently to a virus.
Research summarised by Centola highlights the finding that simple information or educational content can spread virally, in a similar manner to a human virus – utilising large networks of unrelated people with relatively weak ties. As with a human virus, people in such a network need not know each other or have a trusting relationship. Connections on Linked IN or friends of Facebook might be enough.
On the other hand, where more complex information is required to change behaviour – a network of strong-ties, where people know and trust each other, is essential. Behaviour change, often necessary to derive sales or buy into a cause, is impacted by social norms. Influencing social norms requires reinforcement from multiple sources, which requires a network of strong ties, often with “bridges” to other networks.
Achieving behaviour or even attitude change on issues impacted by social norms (climate change, gay marriage, seat belts, brand preferences, etc.) is rarely facilitated by information simply going viral. It requires social reinforcement, which requires a network of related parties spreading consistent messages and reinforcing those messages. This process is much more complex in nature than the spread of a human virus.
To be effective in changing behaviour, a viral marketing campaign must reach beyond the weak ties that exist in online communities and networks. If the objective is changing behaviour, especially behaviour that can be influenced by social norms – leveraging strong-ties is essential – to ensure reinforcement of the need to change, the benefits of change and the social acceptability of change. Damon Centola recommends what he calls the snowball strategy.
‘The snowball strategy creates stable pockets of legitimacy for an innovation. Again, the emphasis here is on special places, not special people. Incubator neighbourhoods allow a new behaviour to compete against an established norm. Contrary to the lessons learned from decades of research on simple contagions, too much exposure to non-adopters early on is counterproductive.’ Change
A lot has been written in recent years about the power of influencers like Oprah Winfrey, Kim Kardashian and others like them. The contention is that recommendations by such people can drive sales – given that the influencer has a large enough audience and that the audience is consistent with the target market for the product being promoted.
In the past, the use of influencers has involved using a high-profile individual (football star, actor, musician, or industry expert) to promote a product or cause on television, on radio or in the press. More recently, this has involved using a high-profile influencer with a large online network to promote a product or cause. The idea is that – if an influencer is using a product and tells others to use that product – sales will be maximised.
While influencers can be effective in driving sales, research undertaken by and summarised by Damon Centola in his book Change demonstrates that successful influencing depends on much more than the adoption and promotion of a brand by an influencer. Two critical factors are:
• Product relevance.
• Personal relevance.
I remember television commercials featuring fast bowler Denis Lillie promoting Steel Blue work boots. While I knew Steel Blue boots to be of the highest quality, I could never work out what Denis Lillie, a cricketer, would know about work boots. I also recall commercials with journalist Ita Buttrose promoting St Ives Retirement villages. To this day, I cannot understand what a wealthy TV personality and businesswoman would know about retirement villages.
Therefore, it might be understandable that research has found that influences are more effective in driving sales when they are experts on the subject or product being addressed.
Research reported by Centola in Change also highlights the importance of the target audience relating to the influencer. He points to research that demonstrated that far more impactful that an expert is a person ‘just like me.’ Research has consistently found that consumers are more encouraged to adopt a new behaviour or brand if they relate to and think themselves similar to the person making the recommendation – especially with there are social norms involved. Research suggests that consumers are more likely to change their behaviour if the influencer is just like them, rather than an expert who would have no idea about their lives. Accepting a recommendation from someone similar to you – feeds into the need for social approval.
While lazy marketers have used influencers to change consumer behaviour for years, a mountain of research and considerable anecdotal evidence now suggests that influencers should ideally be relevant to the product they are recommending and relatable to the market they are targeting. Only if these two criteria are met can sales be maximised.
• Great marketers in 2022 question marketing myths instead – considering strategies supported by the data.
• Great marketers in 2022 do not rely on education to change behaviour, establishing emotional connections to change behaviour.
• Great marketers in 2022 do not rely on absurd analogies with nature – preferring to use evidence-based approaches to viral marketing.
• Great marketers in 2022 are highly judicious in their choice of and use of influencers in marketing.
• Don’t expect education to change behaviour. Emotion is essential.
• Don’t draw analogies between the natural world and the business world.
• Know the power of social norms in facilitating or blocking behaviour change.
• Prioritise strong-ties/links over week-ties/links when using viral marketing.
• Use influencers that are relevant to the product and the audience.
• When has education been enough to change behaviour? Are you creating the required emotional connections?
• To what extent do you rely on First Principles to guide decisions? Are you relying too heavily on analogies?
• What might cause you to behave in a manner contrary to social norms? Is a series of posts by people you don’t know, on social media, enough?
• How relevant are the influencers you use to the target audience? Why would the market relate to them?
• How relevant are the influencers you use to the product? Why would the market trust them?
• 93% of customers are likely to make repeat purchases with companies who offer excellent customer service.
• 82% of consumers said they stopped doing business with a company due to a poor customer experience.
• 68% of customers stopped buying from a business because they perceive the business is indifferent to them.
• 60% of customers will do business with a business again if it deals with a customer service issue fairly even if the result is not in their favour.
• 68% of consumers say they are willing to pay more for products and services from a brand known to offer good customer service experiences.

While advertising and promotion, more generally, can help build value into a brand, its primary role, in most cases, is to maximise enquiries. Establishing the required awareness of a brand within a target audience, providing the information and emotion required to establish demand – which in turn drives enquiry is essential. That said – it is only a small part of the quest to maximise profitability.
To better understand how small a role enquiry plays in maximising profitability, one need only consider the following statistics:
• Repeat customers spend 67% more in months 31-36 of a relationship than in months 0-6.
• Repeat customers spend 300 times more than first-time customers.
• Referred customers are four times more likely to purchase.
• Referred customers have a 37% higher retention rate.
• Referral customers spend 25% more than un-referred customers.
• The probability of selling to an existing customer is 60 – 70%, while the probability of selling to a new customer is just 5 – 20%.
• 92% of consumers respond positively to recommendations or referrals from friends.
• 52% of businesses cite repeat business as the primary driver of profitability.
• 45% of businesses cited new customers as the primary driver of profitability.
Many reading this have seen these statistics or others like them before. The question is, however, what have they done about it? Allied questions include:
• What is your strategy for maximising conversion rates?
• What is your strategy for maximising the average sale?
• What is your strategy for maximising margins?
• What is your strategy for maximising repeat business rates?
• What is your strategy for maximising referrals?
I would argue that a business has little hope of maximising profitability without having a strategy – and ideally a documented strategy on each of these subjects. That said, I know of very few businesses that have documented strategies in each of these are. This article discusses the potential answers to these questions. It also raises some additional questions that need to be considered – and for which great marketers invariably have answers.
It is one thing to attract an enquiry and quite another to secure a sale. Maximising conversion rates is central to maximising the return on every dollar invested in advertising and, more broadly, promotion. Critical considerations in such a strategy include:
• Monitoring and reporting on conversion rates.
• Understanding exactly what it is the enquirer is buying and why.
• Customising the sales pitch to the enquirer’s needs and wants.
• Having and highlighting a compelling strategic competitive advantage.
• Eliminating all barriers to making a purchase.
Moreover, maximising conversion rates involves establishing and fully leveraging trust.
While an initial sale is great – maximising the size of that sale is clearly in the best interests of maximising profitability. That said, while many salespeople have the skills to convert, few appear to have the skills to maximise the average sale. Critical considerations in a strategy include:
• Monitoring and reporting on average sales.
• Understanding the nature of the enquirer’s needs and wants.
• Targeting specific needs and wants in the sales process.
• Ensuring a product strategy that addresses enquirer needs and wants.
• Ensuring a product strategy that facilitates add-on sales.
Moreover, maximising the average sales requires understanding the customer and the product – linking additional options to customer needs.
I often hear businesses suggest that the only way to increase margins, given the competitive environment, is to reduce costs. Certainly, reducing costs can increase margins, but it is not the only viable strategy. Consideration also needs to be given to:
• Avoiding intuition and using science to set pricing strategies.
• Developing a branding strategy that limits direct competition.
• Increasing the average sale per customer or order value.
• Building into the product, the value required to increase prices.
• Avoid unnecessary discounting and markdowns.
Most importantly, maximising margins is facilitated by differentiating and adding maximum value to a product through effective branding.
While many strategies address customer service and, more broadly, the customer experience, some strategies incorporate incentive schemes, few businesses have a comprehensive strategy to encourage and actively drive repeat purchasing. Considered in this regard should be:
• Monitoring and reporting on repeat business rates.
• Delivering as promised and reinforcing that delivery.
• Maintaining a customer relationship management system.
• Delivering a customer experience that exceeds customer expectations.
Regular and automated customer communication – perhaps using a brand community.
Most importantly, maximising repeat business rates is all about creating an environment in which customers want to buy again.
Very few businesses I have seen place a high enough priority on maximising referral rates. Still, fewer have a strategy to drive referral rates, reducing the dependency on advertising and existing customers. Considerations in terms of maximising referrals include:
• Monitoring and reporting on referral rates (as hard as that is).
• Delivering as promised and reinforcing that delivery.
• Delivering a customer experience that exceeds customer expectations.
• Incentivising customers to refer friends and relatives.
• Actively seek out and leverage evangelists.
Most importantly, maximising referral rates ensures that customers think they are doing friends and family a favour when they recommend the product.
More generally, advertising and promotion are important, but the statistics above and many others suggest that other factors are at least as important and arguably, more important. Certainly, I would argue that the factors listed above are sufficiently important to be addressed BEFORE a business or brand addresses the quest for enquiries. If the return from advertising is to be maximised – conversion rates, the average sale, margins, repeat business rates, and referral rates must first be maximised. This is the only way to ensure that the return on advertising and marketing is maximised more broadly. Enlisting enquires into the funnel is just a start. Once enquirers are in the funnel – their lifetime value to the business needs to be maximised.
Considerations with implications for all five of the abovementioned factors include:
• Co-creation – working with the target market to develop the optimum product and customer experience.
• Co-valuing – developing values and a brand (reflecting those values) that is consistent with the target market’s expectations.
• Community – establishing a rand community to facilitate mutual engagement and leveraging the resulting mutual understanding.
• Customer journey – understanding the customer journey and the touchpoints best addressed to facilitate the consumer’s optimum decision-making.
• Communication – engaging staff to ensure they fully buy into the strategies and have the skills to deliver on their part of it.
Few tools are more powerful, cost-effective, yet less frequently leveraged than a co-creation. Co-creation facilitates engagement and mutual understanding.
Research has found time and again that consumers prefer to buy from businesses that share their values and are far more likely to repeat purchase from or prefer a brand that demonstrates their values.
There are few tools more widely used around the world but largely un-used in Australia than a brand community – which in addition to being a tool to facilitate co-creation, can drive lifetime value.
There are many points on most customer journeys where purchase behaviour can be cost-effectively influenced. Targeting these touchpoints will drive profitability.
Myer is proof positive that defining a brand is not enough. It is essential to ensure that staff be=ring the brand to life. This requires high-quality communication.
• Great marketers in 2022 have documented strategies for maximising conversion rates, the average sale per customer, margins, repeat business rates and referrals.
• Great marketers in 2022 are focused on lifetime value rather than initial sales, addressing critical drivers before addressing enquiry rates.
• Great marketers in 2022 understand the power of co-creation, co-valuing, community, the consumer journey and communication.
• Focus on customer lifetime value, developing strategies to address conversion rates, the average sales per customer, margins, repeat business rates and referral rates.
• Address conversion, average sale, margin, repeat business and referral; strategies before considering the facilitation of enquiries.
• Leverage the potential of product and customer experience c-creation, utilising a brand community to achieve co-creation cost-effectively.
• Understand the customer journey and the touchpoints that should be focused on to maximise customer lifetime value.
• Build a brand that communicates and demonstrates values to which the primary target market is attracted.
• What are the critical touchpoints on your customer’s journey, and how are those touchpoints best leveraged?
• How much could effective c-creation reduce your cost of marketing and maximise the return on your investment in marketing?
• What percentage of your business comes from repeat purchasing and referrals, and are you cost-effectively leveraging the potential of both?
• What would be the cost to and return for your business from establishing a brand community that facilitates maximising lifetime value?
• Do your staff have the skills and orientation required to play their part in maximising conversion rates, the average sale, margins, repeat purchasing and referrals?
• Customers acquired through referrals have a 37% higher retention rate
• Referred customers have an 18% lower churn than customers acquired by other means
• You can expect at least 16% more in profits from referred customers.
• 92% of consumers trust referrals from people they know.
• Referred customers’ lifetime value is 16% higher than that of non-referred customers.


I have written in previous articles about the difference between an organisation’s or, indeed, individuals, optimum and actual brand. The optimum brand is what the target market needs to say about the organisation or individual needs to say about the organisation or individual (when they are not in the room) if sales and margins are maximised. The actual brand is what the target market is saying about the organisation or individual (when they are not in the room) – which is the determinate of what they will actually buy and what they will actually pay.
This demarcation between the optimal and actual brand highlights the fact that consumer behaviour is determined by what they actually perceive, as opposed to what organisations or individuals what them to understand. Further, where the optimum brand is the reality – the demarcation between the optimum and actual brands highlights the difference between perception and reality – and the fact that consumers buy on the former rather than the latter.
While reality is important, in so far as it supports perceptions, it can be more authentic and can be easier to manage – no one buys based on reality. Every purchase decision is made on the basis of perception. While it is desirable on several levels for the perception to be in sync with reality, it rarely is. Indeed, most target market members are not in a position to know what is real, even if they think they are. And, even when the perception and reality are in sync, the perception drives purchase behaviour.
A study by four economists from Penn State, Temple University, and the University of Pennsylvania considered how much consumers were willing to pay for $100,000 travel insurance cover for a trip to Thailand. Participants in the study were offered:
• Option 1 – cover for death caused by terrorism
• Option 2 – cover for death by any cause, including terrorism
The findings revealed staggering irrationality, as follows:
• Option 1 – an average of $14.12
• Option 2 – an average of $12.03
While both products offered the same terrorism coverage and option two offered other insurance benefits – consumer perception drove the purchase of option 1 – a product offering less total value. This finding was very similar to that of a study by Kahneman, which found that participants in California were prepared to pay more for earthquake insurance than they were for general disaster insurance, which included earthquakes. These findings demonstrate the power of perception over reality.
Perception is certainly not everything, but it is the determinate of consumer behaviour. Further, I would have thought that the implications of this are clear; if you want to maximise both sales and margins, it is essential to manage perceptions. To do this, it is, in turn, necessary to:
• Understand the drivers of perception.
• Understand the current perception.
• Implement strategies to manage perceptions.

Information can influence consumer perceptions, but education alone is rarely enough to change behaviour. This issue was addressed in a previous article highlighting that while 97% of teens ‘agree’ that texting while driving is dangerous – half continue to text anyway. Information (or education), when combined with emotions, can be much more effective in changing perceptions and behaviour.
But managing education and emotion still may not be enough to ensure the perceptions or behavioural outcomes sought. All information and education are processed in context. Up to 100 cognitive biases impact how consumers interpret information. What is more, there is not a human being on earth that is not impacted by all or most of these biases. A cognitive bias is – an error in judgment occurring when a person is interpreting information in the world around them.
‘They are mental habits – rules of thumb – that help us make sense of everything around us and reach purchasing decisions with relative speed and minimal mental effort. It’s a way of thinking that is very common and might even appear rational but, in fact, gets in the way of reasonable decision making. An important aspect of cognitive bias is that it affects decision-making, and not always positively.”
Among the more common cognitive biases among consumers are the following:
• The availability heuristic where decisions are made based on the ease of bringing something to mind.
• The ‘confirmation bias’ – where consumers prioritise information that confirms their previously existing beliefs or biases.
• The representativeness heuristic – where decisions are made by comparing the present situation to the most representative mental prototype.
• The affect heuristic – where the emotions strongly influence choices that an individual is experiencing at that moment.
• The ‘anchoring bias’ – where ‘people rely too much on pre-existing information or the first information they find when making decisions.’
• The bandwagon bias – where people have to adopt a certain behaviour, style, or attitude simply because everyone else is doing it.
• The choice bias, also called post-purchase rationalisation – where consumers retroactively ascribe positive attributes to an option selected and/or demote the forgone alternative.
• The placebo – effect is most often a medical intervention — a pill, injection, or sham surgery — that has no therapeutic value.
• The survivor bias – where an assessment is based on the outcomes for what might be called ‘survivors’ or focusing on successful people – ignoring the failures and non-survivors.
• The bias blind spot – recognising the impact of biases on the judgment of others while failing to see the impact of bias on one’s own judgment
• Self-serving bias – where an individual takes credit for positive events or outcomes and blames outside factors for negative events.
• Sunk cost bias – where an individual continues a behaviour based on their investment (time, money and effort) to date.
• Loss aversion – where the avoidance of loss is stronger than the attraction equivalent gains.
• Status quo – where an individual sticks with the current default option irrespective of the results to date.
• Repetition bias – where there is a willingness to believe what we have been told most often and by the greatest number of different sources. Nobel prize winner, Daniel Kahneman, likens this to ‘human gullibility’.
And the list goes on.
While no one expects marketers to truly understand every bias, there are two things great marketers do understand:
• All human beings – including the marketers) are impacted by cognitive biases.
• The most dangerous thing marketers can do is to deny such biases.
At the very least great marketers are aware of the impact of cognitive biases on their decision making and that of members of their target market.
To maximise sales and margins, it is important to understand the target market’s perceptions. It is difficult to ensure that the target market members have a perception that will maximise performance without first understanding what their perception is. Great marketers:
• Understand the current perceptions of the target market.
• Track changes in the target market’s perceptions over time.
These requirements are best addressed by way of market research. This might involve:
• Qualitative research – to determine the range of perceptions within the market.
• Quantitative research – to determine the prevalence of perceptions identified.
Marketing is, to a very large extent, the management of consumer behaviour and the management of consumer behaviour is, to a very large extent, the management of consumer perceptions. As such, it is almost impossible to maximise sales and margins (the optimum behaviour) without first understanding perceptions. If formal market research is, for whatever reason, not an option, consideration might be given to the less structures:
• Observation of consumer behaviour in situ.
• Monitor social media channels and analyse the conversations.
• The consideration of consumer insights generated by academic researchers.
The importance of understanding consumer perceptions clearly and not relying on intuition cannot be understated. Previous articles have addressed at length the perils of relying on intuition. By way of a reminder, consider the following.
Dan Ariely of Duke University undertook studies in which he gave away variously:
• A free ice cream or $4.00
• A slab of beer or $35.00
All options were tested, and it was found that:
• Consumers will line up for a free ice cream but not $4.00 cash.
• University students will complete charity work for a slab of beer but no $35.00.
Given that the cost of the ice cream is $4.00 and the cost of a slab of beer is $35.00, and cash offers more flexibility than an item – both outcomes are counterintuitive. As counterintuitive as the findings from all of these studies might be, they have been replicated. They are just a small proportion of the studies highlighting the counterintuitive nature of consumer behaviour.
Would you have guessed this outcome? Probably not.
Having identified actual perceptions of consumers, marketers can then:
• Identify the optimum perception – if sales and margins are to be maximised.
• Identify the gap between the actual and optimum perceptions.
• Develop and implement a strategy to eliminate the gap.
Identifying the optimum perception involves considering in detail, drawing on research data, what perceptions the target markets hold will lead to sales and margins being maximised. The required research will be similar to those required to identify current perceptions (as discussed above). I may involve adding questions to the survey instrument or your observational parameters. Critical issues for examination include:
• What is the likelihood of you purchasing …. in the next three months?
• What factors do you consider before buying……?
• What are you looking for in ……?
• What are the strengths and weaknesses of existing options?
• What are your expectations regarding service and the purchase experience?
Having determined the critical issues, leverage the available strategic planning expertise (and intuition) to determine the optimum perception and the gap between it and the perceptions.
Marketers can then employ the “5C’s” to change the target audience’s perceptions. They are:
• CONSISTENCY – consistently delivering on the product and service expectations relevant to the optimum perceptions.
• CONNECTION – connecting closely with the target market, possibly through a brand community, to facilitate information sharing.
• CONTENT – using the brand community and social media more generally to disseminate content consistent with the optimum perception.
• COMMUNICATION – using advertising and other channels to communicate the optimum perception consistently.
• CONSIDERATION – the ongoing consideration of data pertinent to the perceptions within the target market.
Ideally, all “5C’s” will be addressed, and perhaps the most efficient way of addressing all 5 C’s on an ongoing basis involves establishing a brand community. The central driver of a successful strategy in this regard involves getting and staying as close as possible to your customer – and few things facilitate that more than a brand community.
• Great marketers in 2022 understand that to maximise sales and margins, perceptions matter more than reality.
• Great marketers in 2022 recognise the potential (and actual) impact of cognitive biases on their behaviour and that of their target market.
• Great marketers in 2022 thoroughly research perceptions within the target market on an ongoing basis.
• Great marketers in 2022 implement strategies to eliminate the gap between the current perceptions and the perceptions required to maximise sales and margins.
• Drive sales by placing the highest possible priority on perception – using reality to support or change perceptions.
• Undertake research to precisely understand current consumer perceptions and track them on an ongoing basis.
• Use research and strategic thinking to determine the perceptions to maximise sales and margins.
• Develop and implement the “5C’s’approach to eliminating the gap between your brand’s actual and optimal perceptions.
• Establish a brand community – the most cost-effective approach to monitoring and managing consumer perceptions.
• What do you really KNOW about vehicle design and mechanical engineering? Very little? Why would your market buy, based on reality rather than perception – just like you?
• How are you currently countering the confirmation, availability, and anchoring biases as they impact your business? What impact are they having on your sales and margins?
• To what extent are your business decisions adversely impacted by anchoring, blind-spot, or sunk cost biases? If you think – not at all – what makes you unique?
• What would the optimum perception of your product or brand look like if sales and margins are to be maximised? Is your answer based on data or intuition?
• What is the gap between actual perceptions of your product or brand and the optimum perceptions? What is your strategy for cost-effectively eliminating that gap?
• In 2022, an average person is predicted to spend 100 minutes per day watching videos.
• 78% of people watch online videos every week, and 55% view online videos every day. In fact, 54% of consumers want to see more video content this year.
• 84% of people are convinced to buy a product or service by watching a brand video.
• 86% of businesses use video as a marketing tool — up from 63% over the last three years.
• 59% of executives agree that if both text and video are available on the same topic, they are more likely to choose video.

Much has been written about the growing divide between right and left – progressives and conservatives – vaccinators and anti-vaccinators, the religious and the secular – in western societies around the world. Since the early 2000’s there has been a growing divide between these groups in Australia, the United States, Britain, and many other first world western countries. Some sociologists and social psychologists have labelled this the ‘culture wars.’
The outcomes of these culture wars have been largely unproductive. Bi-partisan votes in houses of government have become rare. People have become immersed in social media pockets that echo their views – with the confirmation bias running rampant. Civil conversations between members of the various camps have become less common – replaced with aggressive debates that are more emotional than intellectual. Lines of demarcation have become more rigid, and nationalism, rather than being inclusive, has become exclusive – encouraging conflict.
Social psychologist Jonathon Haidt attributes these culture wars to two things:
• The innate disposition of human beings to be tribal.
• The end of the cold war.
It has been well documented in many biological and psychological texts that human beings are innately tribal. In the early days of humanity, tribes were essential to survival. Today, tribes, while not as central to survival, remain a feature of the human condition – a point highlighted by the attraction of sport to people worldwide. Sporting teams are essentially tribes. In 2022, tribes deliver to human beings:
• A sense of belonging and security.
• Social norms and predictability.
• Collaboration and co-operation.
Yuval Noah Harari points out in his landmark book – Sapiens that human beings have got where they are today – to the top of the evolutionary tree – largely due to our capacity to co-operate and collaborate – something we do better than any other animal. This, in turn, has been facilitated by tribalism – belonging to a group with social norms that deliver support, certainty and safety.
In The Coddling of the American Mind, Haidt suggests that the culture wars we are all so familiar with started with the end of the cold war. His theory is that When the cold war between the Soviet Union and the west was in full swing – while right and left, the religious and secular progressives and conservatives ETC while having differing views, came together behind a common enemy – the USSR. While these groups did not always agree – they did work co-operatively together.
Harari suggests that one outcome of Putin’s invasion of Ukraine is that the west is coming together again – with the promise of a decline in the culture wards. When the cold war ended, that all changed, and new tribes emerged, giving rise to new antagonisms. Harari anticipates a decline in the partisanship caused by the culture wars and Russia becoming the common enemy.
The critical point here is that human beings are naturally tribal. They want to belong to tribes – groups of people they identify with. Human beings like the notion of ‘us and them.’ It can be relatively easy to establish a tribe, given the satisfaction of conditions discussed later in this missive. Further, once people are a member of a tribe, research shows that it is relatively simple to cause them to behave in a manner consistent with the expectations of the tribe and create loyalty.
Regardless of the future of the culture wars – it is clear from the work of Haidt and Harari, and indeed, many others, including marketers like Seth Godin, that human beings, and therefore ‘consumers’, are attracted to tribes and are tribal in nature. Whether we know it or not, we want to be tribal, and we actively seek out the benefits of being in a tribe.
As Godin highlights in his book, Tribes, consumers want to belong to tribes, derive a great deal from being members and tribes and can be most effectively marketed to as members of a tribe. In this book, Godin highlights the benefits of establishing a tribe as part of a cost-effective marketing strategy that, among other things, facilitates permission marketing, a subject of another of Godin’s books – ‘Permission Marketing.’
For marketers, tribes deliver several marketing opportunities, including:
• Increased repeat business rates
• Increased referral rates.
• Increased cross-selling.
• Increased average sales.
• Increased margins.
Tribes, like communities, bring people together. More than a community, however, a tribe tends to involve an emotional connection, increasing its potency. This, in turn, has been found to facilitate the maximisation of the lifetime value of each customer/member of the tribe.
As we know from the culture wars, tribalism encourages:
• Significantly greater trust of members.
• The confirmation bias.
Members of a tribe tend to trust each other more than non-members. Members of a tribe are more inclined to believe each other and behave as each other behaves. A business that is a member of a tribe, like Breitbart, Fox and members of the Trump group, tends to be trusted more and purchased from more than businesses outside the tribe like – The New York Times, CNN, and Microsoft – among the conservative, religious, libertarian, anti-vaccination tribes in the United States.
Regardless of the evidence, in many cases, consumers tend to believe what other members of the tribe and especially the leader of the tribe, tell them. I would argue that one difference between Donald Trump and previous conservative candidates for President, Trump established a tribe that believed him, no matter what he said. For better or worse, tribes also tend to shut out voices and ideas expressing views inconsistent with those of the tribe.
There is, therefore, considerable merit in a business establishing a tribe that it is a member of. Great brands demonstrate this, including:
• Apple.
• Ikea.
• Harley Davidson.
All three of these brands have established a tribe based on values and worldview. Consumers are members of these tribes not just because of the products. It is also because of what the brands stand for and what they believe membership of the tribe says about them in the broader community.
In addition to identifying a market, these three businesses and many others like them have implemented strategies designed to convert these markets into tribes. These tribes are established in such a way that they are:
• Easier to communicate with.
• More likely to listen and believe.
• More likely to become loyal.
But it is not just big businesses that can and should establish a tribe. Businesses of all sizes, in all industries, can, if they so choose, cost-effectively establish and leverage a tribe to boost profitability. This generally involves:
• Identifying and truly understanding a market.
• Creating an environment for the tribe.
• Establishing leadership and shared values.
• Communicating with and engaging the market.
It is essential to define the target market that is to become a tribe and understand the needs and wants of that market, along with its values and aspirations as well as possible. Once this is achieved, an environment – public or private, online and offline needs to be established. A brand community is ideal. There also needs to be clear leadership and a manifesto incorporating values and behaviour – that guide the development of the tribe. Finally, there is the need for consistent communication and strategies to engage (not just talk to) members of the target market.
Critical to developing a successful tribe are:
• Listening – using the community as a source of feedback and acting on it.
• Consistency – ongoing communication of a consistent message.
• Generosity – rewarding members of the tribe for their membership.
• Authenticity – speaking from the heart and creating an emotional connection.
• Warmth – welcoming and carefully inducting new members.
• Ease – making it easy to join and remain in the tribe.
• Norms – establishing social standards that create certainty and trust.
• Outsiders – people who do not qualify to be a member of the tribe.
• Identity – having a distinct identity that the target market engages with.
Tribes can most readily be established around the following core ideas:
• A common need or complex problem.
• A common passion or interest.
• Generational dynamics.
• Life events and stages.
• Geography and demographics.
• Psychographic factors.
• Product choices.
A brand community can be the centrepiece of the strategy to establish a tribe, and such a community will help build the brand, especially brand loyalty. A tribe facilitated by an online community can also be the centrepiece of a cost-effective branding strategy. Establishing a tribe around a brand community can also:
• Significantly reduce the cost of market research and product development.
• Significantly reduce the cost of communication and marketing more generally.
• Significantly reduce the reliance on advertising to establish a brand.
While the primary advantages of a tribe built on a brand community relate to increased revenue, of almost equal importance is the potential to reduce marketing costs – further boosting profitability.
A tribe can also facilitate:
• Product development.
• Customer experience optimisation.
A tribe has common interests and a willingness to work together to cost-effectively co-create products and customer experiences that meet or exceed customer expectations with the minimum of waste. This, in turn, can expand the market, along with repeat business and referrals.
The facts are that despite being used less frequently in Australia than in other countries, tribes are in all communities a powerful tool that most businesses can establish and leverage to boost returns.
• Great marketers in 2022 understand the potential of a tribe.
• Great marketers in 2022 leverage a tribe to increase revenue.
• Great marketers in 2022 leverage a tribe to minimise marketing costs.
• Establish a ‘tribe’ to significantly reduce market research and communication.
• Establish a ‘tribe’ to significantly increase the average sale and margins.
• Establish a ‘tribe’ to significantly increase repeat business and referral rates.
• Establish a ‘tribe’ to significantly increase customer lifetime value.
• Establish a ‘tribe’ to significantly increase the size and value.
• Research has consistently found that consumers are most attracted to brands they think share their values. What are the core values of your target market?
• Research shows that co-creation is the key to developing the optimum product and customer experience. What is your co-creation strategy?
• Research shows that a tribe significantly reduces the cost of marketing. How much money are you wasting because you have not established a tribe?
• Research shows that a tribe significantly boosts the average sale per customer and margins. What is your strategy for establishing a tribe?
• Research shows that a tribe cost-effectively boosts repeat business and referral rates. What is your strategy for maximising repeat business and referral rates?
• 26% of US consumers now use adblockers – to clean up their online experience.
• 40% of US consumers avoid certain media due to advertising overload.
• 31% of US consumers find YouTube advertisements helpful.
• 32% of US consumers find Facebook’s advertisements useful.
• 37% of US consumers find direct mail helpful advertising.

If you search business development on the internet, you will find that most of the references and discussions are about client acquisition. Many textbooks and easy read business books also tend to focus on new client acquisition.
While new client acquisition is important for most businesses, it is not, or at least should not be, the primary focus of business development. The focus on new clients in B2B business development is akin to the focus on advertising in marketing more generally. It is narrow and not likely to maximise performance or profitability.
Consider these B2B statistics:
• 78% of B2B marketers say that referral programs generate good or excellent leads.
• 60% of marketers say that referral programs generate a high volume of leads.
• 54% say that referral programs have a lower cost-per-lead than other channels.
• 67% is the additional amount repeat business customers spend in months 31 – 36.
• It costs 5 times more to acquire a new customer than retain an existing one.
• On average, loyal customers are worth 10 times more than new customers.
While these statistics will vary from region to region, industry to industry and business to business, they demonstrate repeat business and referral potential. The potential of referral and repeat business, in turn, highlights the potential of focusing not on sales – but customer lifetime value. Initial sales are all about enquiry and conversion rates while maximising customer lifetime value involves also focusing on:
• Margins.
• The average sales per customer.
• Repeat business rates.
• Referral rates.
Focusing on customer lifetime value is the key to maximising profitability. Driving margins, the average sale, repeat business rates and referral rates are the:
• Product.
• Customer experience.
• Value.
The product, customer experience, and value must meet or preferably exceed customer expectations to maximise customer lifetime value. The keys to meeting or exceeding customer expectations are:
• Strategies.
• Relationships.
Relationships enable the business to get close enough to customers to understand their needs, tailor the offering to address those needs and reinforce to the customer the satisfaction of their needs. There also needs to be a willingness on the part of the business to be truly customer-focused and deliver outcomes that meet or, ideally, exceed customer expectations.
Many B2B enterprises employ specialist business development managers. Very often, these specialist business development managers focus on just two aspects of the customer relationship:
• Enquiry.
• Conversion.
More often, these business development managers are also focused on:
• Projects.
• Revenue.
Focusing on enquiry and conversion, projects and revenue are inconsistent with the requirement to establish relationships and maximise customer lifetime value. Maximising customer lifetime value requires a focus on:
• All the drivers of customer lifetime value.
• Customer – or relationships ahead of projects.
Focusing on lifetime value and relationships requires an account management approach to business development. Maximising customer lifetime value requires account managers to take responsibility for business development and broadening the definition of business development to encompass all stages in a potential relationship. Account managers will ideally:
• Identify and convert the customer.
• Develop an understanding of the customer that enables margin and average sales maximisation.
• Ensuring delivery of a products and customer experience that will drive repeat business and referral.
• Follow up and relationship development that provides feedback and enables customisation of the product and experience where possible.
Central to the account management approach to business development are:
• Focusing on the customer.
• Expertise.
• Responsibility.
While many businesses talk about being customer-focused, few are. Most businesses operate in a manner that suits the business and rely on the intuition of management to determine what the customer will buy, how much they will buy, what they will pay, and the experience required. Being truly customer-focused involves:
• Getting close enough to the client to see the world from their point of view.
• Working with the customer to identify their needs and wants.
• Co-creating the customer experience and perhaps even the product.
Moreover, being customer-focused involves enabling the customer to demonstrate the pathway to and work with you to deliver the maximum customer lifetime value.
This, in turn, requires a relationship managed by a person with the expertise required to understand the client and customise the experience and product to meet or exceed their expectations. Sales skills are rarely, if ever, enough if the customer lifetime value is to be maximised.
Even in environments in which flexibility is limited, the co-creation of the customer experience and indeed the product offering to exceed customer expectations is perhaps the most powerful tool in the arsenal of B2B marketers. Co-creation is all about working with the customer to customise the product and especially the customer experience, which in turn:
• Aligns the delivery with expectations.
• Fosters a relationship that maximises the customer’s lifetime value.
It has surely been established that customer lifetime value is maximised only when a relationship/customer focus is in place that drives conversion rates, margins, average sales, repeat business, and referral rates. That being the case, it is concerning that while the majority of B2B businesses have a business development strategy, it:
• Is rarely fully documented.
• Rarely fully addresses all issues.
Is your business development strategy fully documented?
What is your strategy for maximising conversion rates, margins, the average sale per customer, repeat business rates and referral rates?
While most businesses understand that business development staff need a customer relationship system with relevant software, they rarely ensure these staff have a documented strategy and a clear view of their role in implementing that strategy. Research suggests that such a strategy should have two parts:
The overall business development strategy reflecting all critical issues.
Account manager sub-strategies to address individual differences.
The overall strategy needs to address:
• Objectives.
• Markets.
• Branding.
• Lifetime value.
• Training.
• Priorities.
• Budget.
Individual account manager sub-strategies need to address:
• Objectives.
• Markets and decision-makers.
• Strategies and tactics.
• Resources.
• Budget.
The overall strategy might be developed by senior management, while the sub-strategies should be developed by the account managers and signed by senior management.
I have a model that readers can secure by emailing
The final issue to be addressed here relates to the use of social media in business development. Social media can be a powerful tool for business development if used appropriately. It is essential for business development or account managers to have:
• A presence on key social media platforms, including Linked In and Facebook.
• A high quality and customer-focused profile on each platform.
• Links to and from social media pages to the business’s corporate page.
• A solid base of connections with whom relationships can be developed.
Connections are important but need to be relevant. While most business development and account managers have a profile on Linked In and Facebook, few have an ideal profile. While links are often in place, most corporate pages are average at best.
It is, however, important to note that:
• Connections on social media are NOT relationships.
• Connections on social media rarely lead to business.
• Posting on social media rarely leads to business.
Significant science demonstrates that social media connections are not enough to establish a relationship. Ask yourself – how many of your connections on Linked IN or Facebook could you call tomorrow and have a coffee with. If you cannot call them tomorrow and organise a coffee in short order – you do not have a relationship, and the likelihood of securing business from them is low. Posting is good, but only to raise your profile – building awareness – and engaging interested parties – to start a conversation.
In B2B business development, social media is most important as a tool for:
• Identifying and understanding targets.
• Securing and leveraging contact details.
• Making calls easier through awareness.
It is essential that your social media presence is monitored with a view to:
• Responding to approaches.
• Engaging people who view your posts.
• Better understanding who is who.
Social media has a vital role to play in business development – largely in terms of commencing the process of initiating the process of developing a relationship.
• Great B2B marketers in 2022 prioritise customer lifetime value.
• Great B2B marketers in 2022 prioritise relationships over projects.
• Great B2B marketers in 2022 develop and implement a documented strategy.
• In B2B business development – prioritise lifetime value over sales.
• In B2B business development – prioritise relationships over projects.
• In B2B business development – replace your BD manager with an account manager.
• In B2B business development – replace business focus with customer focus?
• In B2B business development – develop two levels of strategy – group and individual.
• What is your B2B business development strategy for maximising conversion rates? Is it documented, and do all staff clearly understand its implications?
• What is your B2B business development strategy for maximising margins? Is it documented, and do all staff clearly understand its implications?
• What is your B2B business development strategy for maximising the average sale? Is it documented, and do all staff clearly understand its implications?
• What is your B2B business development strategy for maximising repeat business rates? Is it documented, and do all staff clearly understand its implications?
• What is your B2B business development strategy for maximising referral rates? Is it documented, and do all staff clearly understand its implications?
• More than 50% of all B2B buyers are millennials.
• Only 1 out of 50 cold calls is effective in the B2B market.
• Most B2B companies dedicate 5% of their budgets to marketing.
• 70% of business buyers find content directly on the vendor’s website.
• 90% of customers start their B2B buying journey with an online search.
I will never cease to be amazed by the human pursuit of silver bullets. While the concept of a silver bullet is attractive, given the complexity of the world we live in, the quest for one is, at best naïve.
In the late 1950s, advertising was a silver bullet – the key to building a brand and driving sales. By the 1980s, the silver bullet was media relations – driving sales without the cost of media and with greater credibility. Then in the 1990′, we saw the advent of direct marketing – the new silver bullet that enabled message customisation. The early 2000s saw the advent of CRM – the use of databases to make direct marketing more effective. In the mid-2000s, websites became the silver bullet – the 21st-century pathway to driving sales. Then along came social media – the next silver bullet for addressing promotional needs cost-effectively. Then it was SEO that, for many, became marketing’s silver bullet – driving customers to your website using science mere mortals could never understand.
While this is not a complete history of the silver bullets in marketing and covers only a fraction of the silver bullets in business more generally – I hope this list highlights the fascination marketers and business people have with the quest for silver bullets. It certainly highlights the propensity of consultants and academics to develop silver bullets and then present them as the answer to all questions – when the fact is – these are all just tools that have merit but will never be the key to success for everyone. There are no silver bullets in marketing or in business, more generally. There are only tools that marketers and business people need to understand and apply appropriately. While they all have their place – none are silver bullets.
In the 1980’s businesspeople, marketers and academics concerned about values in business and the need for a more ethical approach to business highlighted and indeed promoted the marvels of TBL. TBL or the triple bottom line involved an approach to business that involved addressing and reporting against three criteria:
• Environmental impact and contribution.
• Economic impact and contribution.
• Social or community impact and contribution.
While some were of the view that this list should also include governance. Many viewed the TBL approach as a silver bullet in terms of businesses:
• Behaving ethically.
• Being seen to behave ethically.
• Creating an ethical message to incorporate in marketing.
In the early 2000s, the new silver bullet was CSR. Corporate social responsibility became the focus for behaving ethically, being seen to behave ethically, and promoting an ethical positioning. A broader concept that TBL, CSR was all about businesses:
• Behaving in a manner that is socially responsible.
• Being seen to behave in a manner that is socially responsible.
More recently, we have seen the birth of the next silver bullet in terms of ethical behaviour – ESG. Like TBL and CSR before it, ESG is being touted as something new and a silver bullet. ESG, as you would be aware, stands for:
• Environment.
• Social.
• Governance.
ESG and reporting against ESG standards is viewed by many as a pathway to ethical business and, indeed, more socially responsible business. However, it is not a silver bullet and is, in effect, little different from TBL and CSR. ESG, CSR and TBL are all important, and all businesses stand to benefit from a set of policies and procedures that drive and facilitate reporting on them.
In terms of marketing, the key principle underlying TBL, CSR and ESG is values. A mountain of research demonstrates the link between a business’s values, culture, behaviour, and the values of the customers they serve. Positive outcomes and reporting for TBL, CSR, and ESG result from behaviour, which in turn is largely the outcome of culture, which is largely the outcome of values. Further, there is an increasing body of research demonstrating that performance is maximised when the values of an organisation match and are seen to match the values of the:
• Staff and potential staff – who ultimately determine the culture.
• Customers and potential customers – who buy the product.
• Other stakeholders, including the government, impact business decisions.
Consider these statistics:
• 86% of job seekers avoid companies with a bad reputation (values).
• 88% of job seekers say that healthy workplace culture is vital for success.
• 47% of active job seekers cite company culture as their driving reason for looking for work.
• 71% of consumers prefer buying from businesses aligned with their values
• 64% of consumers say that shared values are the main reason they trust a brand.
The values of a business are of importance to most stakeholders, including staff, customers, government etc. It is the values of a business that are reflected in ESG policies and which should be reflected in:
• Corporate behaviour and reporting.
• Staff behaviour and the culture more generally.
• Promotion and marketing more generally.
Central to addressing these issues cost-efficiently determining’ who the organisation is as a higher priority than ‘what the organisation is,’ and then using the former to inform the latter – and doing all of this with the customer front and centre. Note:
Customer-centric businesses are 60% more profitable than those that are not.
The critical issues in this regard are:
• Understanding the values of stakeholders and customers.
• Establishing corporate values that are consistent with those of stakeholders and customers.
• Ensuring the staff have the capability and willingness to live the values.
• Ensuring staff have the information and resources to live the culture.
• Communicating the core values through behaviour and reporting.
Understanding the values of the d=stakeholders and customers requires getting as close as possible to these people, avoiding the application of intuition, and embracing market research. In my experience, few businesses in Australia use market research to examine the values of their audiences. Most either ignore the issue of values or make a guess. This is despite the critical importance of this issue, as demonstrated by the following finding:
• 89% of shoppers stay loyal to brands that share their values.
In my experience, corporate values are most often set by the board and or management team based on intuition. Its values are to align with target audiences – those audiences should ideally be involved in the decision-making process. Businesses often guess what their values should be or what the target audiences want them to be. They then decide based on a closed discussion.
That said, values per-se’ are of little benefit. What an organisation believes or says it believes is of little consequence to consumers or any audience. What matters is behaviour and how the organisation’s values are reflected in its interactions with consumers and the community more broadly. It is the customer experience – the reflection of the organisation’s values that matters. Note:
• 73% of consumers love a brand because of helpful customer service.
• 73% of customers agree that customer experience helps to drive their buying decision
• 86% of customers will pay more if it means getting a better customer experience.
The customer experience is or should be a reflection of the organisation’s values – as demonstrated by the staff. Having the right staff, ensuring they are engaged with the values, ensuring they have the skills and giving them the resources to live the values and reflect them in behaviour.
Along with behaviour (a reflection of the culture), annual reporting and promotion both play a part in communicating values. Behaviour is far and above the most important form of communication. It is also important to reflect the organisation’s values in reporting and promotion. In 2022, for example, all large Australian corporations must report each year on their efforts to reduce their impact on the environment and become carbon neutral – and consumers are becoming more engaged with and influence by this reporting. Note:
• 56% of US consumers have changed brands due to perceived climate change policies.
• 61% of Australian consumers have changed brands due to perceived climate change policies.
• 66% of UK consumers have changed brands due to perceived climate change policies
On the subject of climate change and the environment more broadly, there are growing concerns among consumers and other stakeholders that most TBL, CSR and ESG reporting activity relating to action to mitigate climate change is little more than greenwashing.
‘Greenwashing is the practice of marketing a company or organisation to appear more environmentally friendly or ecological (more natural, healthier, free of chemicals, recyclable, less wasteful of natural resources) when in practice its activities pollute the environment.’
In terms of ESG, TBL, and CSR, greenwashing is just one example of a lack of sincerity and authenticity on the part of the organisation. It involves an apparent dissonance between what the organisation professes to do and believes in and its perceived behaviour. A great example of this and the fallout it can cause was the dissonance between the values of Rio Tinto and its behaviour at Juukan Gorge in WA. Occurrences like this create doubt in the minds of audiences regarding all ESG policies and values. Note:
• Globally, only 22% of people trust business leaders.
• Globally, some 32% of consumers distrust business.
This goes to two critical components of any effective CSR, TBL or ESG policy:
• Sincerity.
• Authenticity.
Values need to be sincerely held and authentically lived and communicated – with business first accepting that the audience’s inclination is more towards not trusting them than trusting them. It needs to be understood that only after a period of authentically living values – will the messaging of the business in this regard be fully embraced by target audiences.
• Great marketers in 2022 have stopped looking for silver bullets.
• Great marketers in 2022 avoid jargon like TBL, CSR and ESG.
• Great marketers in 2022 embrace, live and communicate values.
• Don’t look for silver bullets and doubt anyone selling them. They don’t exist.
• Get close enough to the target audience to know what values it cares about.
• Customise the business’s values to sync with those of the audience.
• Creates an environment in which the culture lives the values the audience values.
• Drives sincerity and authenticity, never claiming values the business does not live.
• Research demonstrates that businesses that align their values with customers’ values are significantly more profitable. What three values are most important to your customers?
• Research demonstrates that businesses that communicate values that the staff do not live and reflect in their behaviour perform poorer. What values does your culture communicate?
• Research demonstrates that culture is all about values. What values are communicated in the culture of your organisation, and how?
• Research demonstrates that culture is all about values. What strategies do you have to ensure you have staff who can and will your values?
• How many of your staff know your organisation’s values, how they should be reflected in their day to day behaviour and what to do if they find this difficult.
• In 2022, there will be 3.96 billion total social media users across all platforms.
• The average person bounces between seven different social networks per month.
• The amount of time adults use social media is now – 95 minutes per day.
• TikTok is the fastest-growing social network, with a 105% user growth rate in 2 years.
• Facebook’s daily usage and activity are down to 33 minutes, from 39 minutes in 2017.

Founded in 1886, The Coca-Cola Company is today the world’s largest soft drink manufacturer. Demonstrating its power is the 45% share of the US carbonated drink market compared to the 26% share enjoyed by Pepsi. In 2021, The Coca-Cola Company generated revenue of US$38.66 billion, and still higher revenues are predicted in 2022. Highlighting the returns generated by this powerhouse are its largest shareholder – Berkshire Hathaway (the investment business chaired by Warren Buffet) and Blackrock Inc. (the world’s largest investment house).
Despite this success, and perhaps reflecting its insecurity, The Coca Cola Company undertake regular taste tests where its core product – Coke – is compared to Pepsi. Over the years, the outcomes of these taste tests have not looked good for Coke. One series of studies found that consumers found it difficult to differentiate these cola drinks in a blind taste test. One significant study found that:
• 41% of consumers successfully identified Coke
• 38% of consumers successfully identified Pepsi
In most blind taste tests, however, subjects preferred Pepsi over Coke. Some studies suggest that 90% of people in a double-blind test prefer Pepsi. It has been suggested that Pepsi is preferred because it is sweeter than Coke.
In response to findings like these, 100 years after its foundation, on July 23, 1985, the Coca Cola Company launched NEW COKE, a version of the original product that was closer in taste (sweeter) to Pepsi. NEW COKE was supposed to have a taste closer to the original Coke and Pepsi in blind taste tests. Alas, as many will recall, NEW COKE failed and was withdrawn from the market on July 10, 2022, after the business burned millions trying to advertise their way to success with the new product. This failure went well beyond the failure of consumers to buy the product. It was also a huge failure for the Coca Cola Company in terms of:
• Creating the perception that Pepsi had won the cola wars.
• Damaging the image of success enjoyed for so long by Coke.
More importantly, the failure of NEW COKE demonstrates four critical issues:
• Even the biggest businesses get it wrong.
• The dangers of relying on intuition.
• The power of branding.
• The power of co-creation.
Despite 100 years of operation, the stunning successes of Coke and so many other products, some of the best minds in marketing, and enormous resources, the Coca-Cola Company got it wrong when it placed so much importance on blind taste tests. All businesses make mistakes.
The mistake of launching NEW COKE was partly the result of relying on intuition, with the proposition being that – if people prefer the taste of Pepsi to Coke – making NEW COKE taste more like Pepsi sales would be increased. An intuitive assessment was made that taste is the primary reason for buying a soft drink brand. In the end, this intuitive thinking was found to be wrong.
Subsequent research suggested NEW COKE failed because, in essence – cola preferences are not based on taste and that, in fact, taste is not the most important driver of purchases. Research found that purchasers of the original Coke were not buying a soft drink but rather – the Coke brand and everything it represented. Certainly, it needed to taste good – but it also had to be a brand that reflected values the consumer believed were important – one of which was authenticity. NEW COKE failed because it was not COKE – it was not the authentic product consumers had grown up with. Research found that purchasers of original Coke bought into all aspects of the Coke brand – none of which they saw in NEW COKE. It was a bit like trying to replace a Harley with a Honda. The Hinda may well be a better product – but it is not a Harley.
Finally, the failure of NEW COKE indirectly demonstrates the power of co-creation – developing products in conjunction with the target market. If the Coca Cola Company had moved beyond taste tests to look at what consumers were looking for in a soft drink, what they were buying when they purchased a bottle of the original Coke and what values were important to them, it would never have launched NEW COKE.
Over recent years, businesses and marketers have talked a lot about being ‘customer-centric.’ For many, the term ‘customer-centric’ is little more than a catch-phrase. While many highly successful brands like Apple, Amazon, Microsoft, and Google have got where they are today by being customer-centric – few businesses in Australia that I have come across could be accurately described as customer-centric. Further, most of these businesses would be a whole lot more successful if they were customer-centric.
Central to a truly customer-centric approach to marketing is ‘co-creation.’ If the Coca Cola Company had used co-creation to manage its product portfolio in 1985, they would almost certainly not have launched NEW COKE. If the businesses that talk about being customer-centric (and I know of very few who are customer-centric) used co-creation in their marketing strategy – most would have lower marketing costs and higher revenue.
‘Co-creation, in the context of a business, refers to a product or service design process in which input from consumers plays a central role from beginning to end. Less specifically, the term is also used for how a business allows consumers to submit ideas, designs or content. This way, the firm will not run out of ideas regarding the design to be created, and at the same time, it will further strengthen the business relationship between the firm and its customers.’ Wikipedia
Most discussions about co-creation in marketing focus on the co-creation of the product and content. While this is of critical importance, a co-creation strategy can and almost certainly should address the following:
• Product.
• Customer experience.
• Pricing strategy.
• Distribution strategy.
• Lifetime value strategy.
• Communication strategy. (Including content)
The best starting point for maximising sales is developing a product that the target market will buy. Co-creation techniques can offer a powerful tool for moving beyond target market problems, wants and needs – to focus on what the target market will actually buy and what configuration of the product is required to maximise the frequency and size of purchase.
The next step in maximising sales often involves developing the optimum customer experience. The customer experience is central to maximising sales and even more central to maximising the lifetime value of each customer. Many businesses consider the customer experience part of the product, and for many (including food outlets), it is part of the product. The optimum customer experience will bring customers back again and again.
The pricing and distribution strategies should also be considered in a co-creation approach to marketing. While consumers will generally seek to pay as little as they can, co-creation helps define value, identify what consumers will pay a premium for, what they will not pay a premium for, and the overall approach to pricing that works best for the business and the consumers. The same is so for distribution. How important are offline and online sales, pick-up and delivery services, delivery costs, presentation, etc.? Co-creation can address all of this.
Maximising the lifetime value of a customer involves maximising conversion rates, margins, the average sale, repeat business rates and referral rates. This, in turn, requires an understanding of the customer journey and the critical touchpoints in that journey. Co-creation represents a powerful tool for understanding the customer journey, identifying touchpoints, and determining how best to address each touchpoint.
Co-creation is often used to determine the subjects consumers are interested in and the content of social media campaigns. Co-creation can, however, also be used to inform the communication strategy more broadly. It can give rise to a better understanding of how the target market uses various media, the information they are interested in and the best approach the leveraging media opportunities. Co-creation establishes relationships that can be leveraged through digital communication.
Moreover, co-creation eliminates guesswork and helps to identify the optimal approach – maximising sales and minimising costs. It is much more than research – or asking consumers questions. It involves leveraging the potential for open and ongoing cooperative communication between the business and members of its target market. It offers the added value of establishing a relationship between the business and its target market that can be leveraged to maximise the lifetime value of each customer. Many business people view co-creation as a partnership between the business and the customer – a partnership that facilitates long term brand loyalty.
Co-creation can and often does involve market research, including:
• Focus Groups.
• Surveys.
• Observation.
Focus groups and individual interviews are suitable for identifying issues, concerns, and opportunities, while surveys effectively quantify (therefore measuring the importance of) the issues, concerns, and opportunities. Observational research is a less used but often more effective tool for understanding the customer journey, product utilisation, and general behaviour.
Central to effective market research, as used in co-creation, are:
• Identifying the optimum method, given the issues.
• Asking the optimum questions.
• Addressing the optimum market to research.
Errors in terms of these three factors are very common. The last issue is especially problematic.
While research is important and can be a lot more cost-effective than many think. It generally involves the one-way flow of information – that is, members of the target market responding to questions. The co-creation process is best served by a conversation between the business and target market members, that is:
• Trusting.
• Ongoing.
• Authentic.
The parties need to trust each other enough to be open, frank, and honest. The discussions should continue over the longest possible period allowing for changes in the market and the business. Concerns about image need to be stripped away – allowing for all issues to be discussed honestly and creatively. Two approaches that facilitate this are:
Brand community.
Marketing panel.
Regarding a brand community, consider:
• 86% of businesses report brand communities provide insights into customer needs.
• 66% of companies say they turn to brand communities for product development.
• 64% of companies state that the brand community has improved their decision-making.
Providing a forum for discussing all marketing issues, brand communities work well in both the B2C and B2B environments.
A marketing panel is a small version of a brand community rather than being open to all customers and potential customers. It is open to a representative sample. However, the number and individual participants can vary over time. As with a brand community – a marketing panel works for B2B and B2C, although it tends to be more common in B2B.
Both the brand community and the marketing panel can be online or offline – but they will work best when they are both. Online discussions are less expensive to facilitate and easier to make ongoing. Offline discussions can be more personal and better encourage trust and authenticity. The benefits of an online community or panel include the capacity to use digital data. In addition to monitoring discussions, it is possible to monitor what community members are most interested in.
Co-creation should lie at the heart of every innovation strategy. Co-creation has a great deal to offer in identifying when it is time to innovate, and what types of innovations will add the greatest value and drive sales while minimising costs. One area in which co-creation can be most helpful is innovation.
One opportunity that needs to be highlighted is the monitoring and leveraging of social media. Social media forums can provide a quasi or proxy brand community. While less insightful than a brand community, social media forums can nonetheless provide valuable insights into consumer thinking. Social media needs to be closely monitored.
• Great marketers in 2022 avoid a reliance on intuition.
• Great marketers in 2022 embrace co-creation in marketing.
• Great marketers in 2022 establish a brand community.
• Are too smart to rely on intuition or common sense to make marketing decisions.
• Embrace the potential of co-creation to reduce costs and increase revenue.
• Utilise co-creation to develop the optimum product and customer experience.
• Establish a brand community or marketing panel to facilitate co-creation.
• Use co-creation and a brand community to drive innovation.
• In launching NEW COKE, the Coca-Cola Company relied too heavily on intuition regarding the importance of taste to consumers. How heavily do you rely on intuition?
• Successful international businesses routinely use co-creation to develop their product, customer experience, pricing, and distribution strategies. Why don’t you?
• Pricing and distribution strategies. Successful international businesses routinely use a brand community to reduce costs and increase revenue. Why don’t you?
• Successful international businesses routinely use a brand community to drive profitable innovation. Why don’t you?
• Social media can be a free mine of information critical to developing the optimum marketing strategy. How do you incorporate social media into your strategic planning process?
• 71% of mobile phone users expect websites to load as quickly as their phone.
• 74% of mobile phone users will wait 5 seconds or less for a website page to download.
• 60% of mobile phone users will wait just 3 seconds for a website to load.
• 77% of websites take longer than 5 seconds to load.
• 57% of consumers have had problems associated with website pages loading slowly.
The moral of this story – ensure your website home page loads in less than 3 seconds.
Marketing texts and gurus talk a great deal about the importance of a customer-centric approach to marketing – and business in general. The benefits of customer-centric marketing are almost self-evident. These benefits include:
• Maximising demand by creating products and a customer service model that meets or exceeds customer expectations – thus maximising sales.
• Facilitating differentiation and the customisation of the media and messaging strategies – thus minimising marketing costs.
• Facilitating adding value and creating a brand that will readily engage the target market – augmenting margin and the average sale maximisation.
• Understanding the customer journey and identifying opportunities for improving operational efficiency – thus reducing costs.
While many marketers and business people consider these and other benefits of a customer-centric approach to marketing self-evident, few businesses could reasonably be considered customer-centric. While many businesses I come across consider themselves customer-centric – claiming to’ listen’ and undertake market research – few are truly customer-centric. Certainly, few businesses I come across act in a way that enables them to benefit from being customer-centric.
Investopedia defines customer-centric marketing as follows. ‘Client-centric, also known as customer-centric, is a strategy and a culture of doing business that focuses on creating the best experience for the customer and, by doing so, builds brand loyalty. Client-centric businesses ensure that the customer is at the centre of a business’s philosophy, operations, or ideas. Client-centric businesses believe that their clients are the primary reason they exist, and they use every means at their disposal to keep the client satisfied.’
In practical terms, customer-centricity involves treating customers as assets – and indeed, your most valuable asset.
Making the customer the centre of the business’s philosophy is easy to talk about but less easy to deliver. It requires, among other things:
• Recognising that the investment in becoming customer-centric will be more than repaid in the form of reduced marketing costs and an increase in sales and margins.
• Rejecting the tendency to rely on intuition, embracing the truth that the ego that drives a reliance on intuition is unhelpful in the face of data (which is readily available).
• Shifting the focus from expecting the customer to empathise with the brand to the business placing maximum priority on developing an empathy for the customer.
• Recognising that perception and not reality is the driver of all human behaviour. Customers buy on their perceptions – not your reality.
• Understanding that while the customer is not always right – in practical terms, the customer is always right. What customers think, even when wrong, impacts the business.
One of the first questions I ask a new or potential client is ‘Why should I buy your product rather than that of your direct competitors?’ To my mind, this is one of the most important questions in marketing and the more tangible the response – the better. Where customers view a product as being tangibly superior to the competition, the likelihood of maximising the lifetime value of each customer is increased. Further, there is an inverse relationship between having a tangible point of difference or strategic competitive advantage and marketing cost. Effective differentiation can drive marketing costs significantly lower.
I ask this question; the most common answers are related to:
• A better-quality product.
• A superior service offering.
There are, of course, problems with these responses, including:
• Both are claims that can be made by competitors.
• Neither is in the least bit tangible.
• The customer defines ‘quality’ and ‘superior.’
Most brands claim to offer a high-quality product” and ‘superior service.’ Indeed, both claims are ubiquitous in advertising and more and more, research suggests that such advertising is not credible. Research has found that as many as 96% of consumers don’t trust advertising. Glib, intangible, and platitudinous claims about quality and service have served to drive this mistrust.
A question – have you ever believed an advertisement that tells you a product is ”better,” or a service is ”superior?” I doubt it. There is nothing much to be gained from telling customers you offer a better-quality product or superior service unless the claims are specific (Better in what way? Superior in what way?). Such claims are almost never helpful in marketing and can even damage credibility – unless the claims are made tangible. If, however, the advertisement demonstrates the quality (addressing critical factors you are seeking – such as – safety features) or demonstrates superior service (addressing critical factors that matter to you – say – response times), you will be more likely to believe it.
However, the biggest issue here is that, in effect, consumers – not businesses define ‘high-quality’ and ‘superior service.’ While marketers and their masters might think they know what ‘high-quality’ and ‘superior service’ is, consumers:
• Determine the criteria they will use to define ‘high-quality’.
• Make their own judgements about what quality is.
• Determine the criteria they will use to define ‘superior service.’
• Make their own judgements about what superior service is.
Such judgements are often different from those of the business, but they are the only judgements that matter. Customers purchase based on their views – not those of the business or the advertising messages they are subjected to. What you think about your product or service matters little. The only thing that impacts sales is what the consumer thinks just prior to purchasing.
Being customer-centric requires a comprehensive understanding of:
• The criteria the target market uses to determine quality and service.
• How consumers apply these criteria and their conclusions.
Understanding these things facilitates:
• Developing a product that meets or exceeds consumer expectations.
• Offering a customer experience that meets or exceeds customer expectations.
The terms brand and branding have attracted any number of definitions. My favourite definition of the term brand was coined by Jeff Bezos, of Amazon, Blue Origin and The Washington Post fame. Bezos said:
• ‘Your brand is what people say about you when you are not in the room.’
I like this definition because of its focus on the consumer. It is the consumers’ perception of your brand – not your perception – that will determine unit sales, margins and the lifetime value of each customer. This definition highlights the distinction between:
• The actual brand.
• The optimum brand.
The actual brand reflects what customers say about your product when you are not in the room. It is the primary basis for their purchase decision. The optimum brand reflects the perception of your brand that you believe will maximise sales and margins – but more directly addressing those factors that you believe are most important to consumers – and which have the greatest likelihood of maximising sales.
Branding is the process of reducing and ideally eliminating the gap between the actual brand and the optimal brand. Branding is important because there is often a substantial gap between the perceptions of consumers and the perception marketers would like consumers to have. While advertising and communication more broadly can help reduce this gap – it is rarely the whole solution.
The reality is that identifying the optimum brand is essential – it matters little until such time as it becomes the actual brand. Customer-centric marketing requires:
• An unambiguous understanding of the actual brand.
• An evidence-based definition of the optimum brand.
• A branding strategy to eliminate the gap ASAP.
The benefits of this approach include:
• Developing a brand that meets customer expectations, maximising the perception of value.
• Maximising the perception of value and, as such – potential margins.
Being truly customer-centric requires:
• Viewing the world from the customers’ perspective.
• Identifying metrics to monitor customer-centricity.
• Implementing a long-term strategy – prioritising culture.
Developing a product, customer experience, pricing strategy, distribution strategy, and communication strategy that reflects the customers’ view of the world requires an in-depth understanding of the target market. This might be facilitated by:
• Regular market research and an openness to respond to research findings.
• Establishing a brand community or marketing panel to provide ongoing input.
Monitoring progress requires having clear metrics (rather than intuition or guesswork) to monitor the impact of strategies developed and implemented. This also facilitates the fine-tuning of those strategies. Objective metrics might include:
• Retention rates.
• Repeat business rates.
• Referral rates.
• Customer lifetime value.
More subjective measures of customer-centricity include:
• Net promoter scores.
• Customer satisfaction surveys.
• Customer service feedback.
• Market research participation.
Central to being customer-centric is developing a strategy that:
• Places a clear priority on customer-centricity and communicating this to all staff.
• Developing a culture of customer-centricity – led by senior management.
• Gathers and leverages customer data and insights.
• A commitment to addressing customer needs.
• Rewarding loyalty.
It is essential to ensure all staff have a customer-centric ‘mindset’ with all staff knowing that the customer must be put first, and that all behaviour must be oriented towards better servicing customers’ needs. It must also be understood by all staff that while the customer may not always be right:
• They are the key to profitability and their job security and income.
• There is rarely merit in communicating to clients that they are not right.
In this regard, it is also important to ensure:
• Staff know how to be customer-centric in all circumstances.
• Have the skills and training required to act appropriately.
A wealth of data is available on the customer journey and customer experiences that can and should be gathered and analysed to inform strategy development, implementation, and updates. Data-driven rather than intuition driven strategies inevitably generate superior outcomes.
Understanding customer needs is important but of limited value, if this understanding is not used in the planning process. All strategic planning, at least insofar as marketing is concerned, should address known customer needs and the benefits of meeting or exceeding them.
Customers who display loyalty through repeat purchasing and referrals should be rewarded. They play a key role in driving profitability and deserve recognition for such. They should ideally be treated as part of the ‘brand community.’
• Great marketers in 2022 develop a customer-centric strategy.
• Great marketers in 2022 embrace empathy ahead of ego.
• Great marketers in 2022 build a brand community to drive customer-centricity.
• Place a higher priority on the customers’ perception than their own.
• Know that your customer, not you, defines quality and ‘high-quality product.’
• Know that your customer, not you, defines service and’ superior service.’
• Understand the gap between your actual brand and your optimum brand.
• Cut costs and increase revenue by implementing a customer-centric strategy.
• What is the gap between your criteria for a ‘high-quality product’ and your customers’ criteria for a ‘high-quality product’ – and what is this gap costing you?’
• What is the gap between your definition of a great customer experience and your customers’ definition of a great customer experience – and what is this gap costing you?’
• What is the gap between your actual brand and your optimum brand – and what is this gap costing you in lost sales and margins?
• What impact is the customer experience having on each customer’s lifetime value, especially repeat business and referral rates?
• What strategy do you have to ensure all staff understand the importance of customer-centricity and have the skills required to deliver it?
• 60% of customers trust reviews from friends, family, and other customers.
• 73% of customers agree that customer experience helps drive their buying experience.
• 86% of customers say they will pay more to get a better customer experience.
• 87% of business leaders agree that exceptional customer experience is a must.
• 89% of customers have switched brands due to a bad customer experience.
The question is – are your customers’ experiences as good as they should be?
Advertising agencies pride themselves in their ‘creativity.’ Without even taking the trouble to define ‘creativity’, most advertising agencies claim a creative capability their competitors don’t have. They claim to be more creative than each other – while boasting about their awards for creative brilliance. Reflecting on the industry view, Fortuna suggests ‘creativity is the soul of advertising and branding. It gives life to messages about products and services that may otherwise be boring or insignificant in the hearts and minds of consumers.’
When advertising agencies talk about creativity, they are most often referring to the skill of packaging marketing messages in a way that ‘cuts through’, secures consumer attention, facilitates engagement, and maximises the perception of value. Advertising agencies pride themselves and indeed market themselves on the capacity of their creative staff to secure the attention and imagination of the consumer – taking complex information and distilling it in a way that can maximise awareness, identification and ultimately purchasing.
There are, however, three things that these advertising agencies selling the creative capabilities overlook:
• Creativity has a role to play in all aspects of marketing and business.
• Creativity is not the preserve of advertising agencies.
• Creativity is not the key to success in advertising.
While Creativity can be helpful in packaging a marketing message, it is no less important in terms of product innovation, pricing strategy, distribution and access, and customer experience. There can be merit in developing a creative approach to these strategies and more. Indeed, there is generally merit in applying creative thinking to defining strategic options and generating strategies for consideration.
While creative thinking is important to all aspects of marketing and indeed – and business is most certainly not the preserve of advertising agencies. Creativity is also not the rare commodity that the exorbitant fees charged by advertising agencies suggest it is. Contrary to what many advertising agencies suggest, the distinction between creative and other people is contrived. Creativity, like most human traits, is on a continuum. We all have varying levels of Creativity that can be applied with equal variability to different applications.
Twenty years in advertising taught me beyond any shadow of a doubt that while an important skill, creative thinking is not the key to success in marketing. While creative thinking can certainly help to apply the understanding of the consumer to marketing strategy, it is the underlying psychology of the consumer that is the key to success. The key to success in marketing is understanding your target market well enough to develop a product, customer experience, pricing strategy, distribution strategy and communication strategy that will cost-effectively maximise the lifetime value of every potential customer.
The importance of understanding the psychology of consumers can be readily demonstrated by looking at just two factors:
• Product.
• Pricing.
The product is arguable the most important element of the marketing mix. It is essential to know what factors will impact your product’s consumer response, and understanding these factors is central to maximising sales. Consider the following.
A study by four economists from various universities considered how much consumers were willing to pay for $100,000 travel insurance cover for a trip to Thailand. Participants in the study were offered two insurance options:
• Option 1 – cover for death caused by terrorism.
• Option 2 – cover for death by any cause, including terrorism.
The findings revealed staggering irrationality, as follows:
• Option 1 – an average of $14.12.
• Option 2 – an average of $12.03.
Despite the fact that option 1 – the terrorism only insurance policy was a more limited product – consumers valued it more highly. Consumers were prepared to pay more for ‘terrorism only’ insurance. These findings mirror those from a study by behavioural economist and Nobel Prize winner Daniel Kahneman, which found that consumers in California would pay more for earthquake insurance than they were for general disaster insurance, which included earthquakes.
Why would consumers prefer ‘terrorism only’ insurance over a ‘comprehensive’ insurance offering? Why would consumers prefer ‘earthquake only’ insurance over ‘comprehensive’ insurance cover?’ The answer to both of these questions relates to the human susceptibility to a plethora of cognitive biases. The most likely bias impacting here is the recency bias (given that terrorism and earthquakes were in the news at the time of the experiments. Others may also have impacted.
The work of Kahneman and Tversky examined some 25 cognitive biases, including:
• The availability heuristic is where decisions are made based on the ease of bringing something to mind.
• The ‘confirmation bias’ – where consumers prioritise information that confirms their previously existing beliefs or biases.
• The representativeness heuristic – where decisions are made by comparing the present situation to the most representative mental prototype.
• The affect heuristic – where the emotions strongly influence choices that an individual is experiencing at that moment.
• The ‘anchoring bias’ – where ‘people rely too much on pre-existing information or the first information they find when making decisions.’
• The bandwagon bias – where people have to adopt a certain behaviour, style, or attitude simply because everyone else is doing it.
• The choice bias, also called post-purchase rationalisation – where consumers retroactively ascribe positive attributes to an option selected and/or demote the forgone alternative.
• The placebo – effect is most often a medical intervention — a pill, injection, or sham surgery — that has no therapeutic value.
• The survivor bias – where an assessment is based on the outcomes for what might be called ‘survivors’ or focusing on successful people – ignores the failures and non-survivors.
• The bias blind spot – recognising the impact of biases on the judgment of others while failing to see the effect of bias on one’s own judgment
• Self-serving bias – where an individual takes credit for positive events or outcomes and blames outside factors for negative events.
• Sunk cost bias – where an individual continues a behaviour based on their investment (time, money and effort) to date.
• Loss aversion – where the avoidance of loss is stronger than the attraction equivalent gains.
• Status quo – where an individual sticks with the current default option irrespective of the results to date.
• Repetition bias is a willingness to believe what we have been told most often and by the greatest number of different sources. Nobel prize winner, Daniel Kahneman, likens this to ‘human gullibility’.
All of these biases, and others, directly impact consumer behaviour. Understanding their impact is substantially more important than applying creative thinking to advertising preparation.
Price is arguable the least understood element of the marketing mix. The factors impacting consumers’ responses to pricing strategies are numerous – and understanding these factors is central to maximising margins. Consider the following.
MIT researchers had a national mail-order company mail different versions of their clothing catalogue to randomly selected customers at various price points. The research found that, among other things, more units of a dress sold at $39.99 than either – $44.00 or $34.00.
Why would consumers buy more at $39.99 than $34.00, and why would a few syllables make a price seem lower and more attractive?
We have all seen prices such as $9.99 used to attract purchasers by creating the impression that the product is competitively priced. We may have even thought that this is ridiculous – but the fact is, it works – at least with low to mid-market products. As irrational as it might be – consumers have a perception that the number ‘9’ means – cheaper.
As curious as it might seem, a study found that a price tag reading of $1499 outsells a product with a price tag reading – of $1,499. This and other studies suggest that consumers view – or interpret $1499 as being less than $1,499.
Why would a consumer perceive $1499 as being less than $1,499? We don’t really know – although researchers have suggested that it is because there are ten syllables in $1,411 and just five syllables in $1411.
Be that as it may – research has found, time and again, that punctuation can affect the perception of a price point. Punctuation tends to increase the perception that a price is high. It is one of a plethora of simple factors that can impact the consumer’s perception of a price.
How often have you seen a price tag or advertisement with the ‘standard’ price in a small font next to the ‘discount’ price in a large font? Often, I suspect. This is a traditional approach to demonstrating how cheap the discounted price is. As it turns out, however, research suggests that this is the wrong approach for making the discount price appear attractive. The ‘literal human brain’ uses the relative size of the fonts as an indicator of the attractiveness of a price.
Research has demonstrated, time and again, that the effectiveness of a discounted price is enhanced significantly when the ‘standard’ price is presented in a large font and the ‘discounted’ price is presented in a small font.
These studies highlight just a few of the many factors impacting the consumers’ perception of a price and reaction to a pricing strategy. These examples also highlight the fact that consumers are not rational, an observation repeatedly highlighted in research.
As Kahneman calls ‘slow thinking’, rational thinking occurs in the frontal cortex or conscious mind. Irrational ‘thinking’ or what Kahneman called ‘fast thinking’ occurs in the brain stem or limbic system, or unconscious part of the mind. Some call irrational thinking – ‘bottom up’ thinking and rational thinking’ top-down thinking’.
The frontal neocortex is where humans consider facts and respond based on the available evidence. The brain stem is responsible for instinctive thinking, and the limbic system is responsible for emotional thinking’. All are essential. Human beings need fast thinking (to drive, for example) and slow thinking (making complex decisions).
Neurological and psychological research suggests that about 20% of thought occurs in the neocortex and is conscious. 80% of ‘thinking’ (if you can call it) occurs in the brain stem or limbic system and is unconscious. In terms of consumers’ purchase behaviour, research by Harvard Professor Gerald Zaltman suggests that 95% of decision making is unconscious or what he calls ‘subconscious’.
Fortunately, while consumer behaviour is often not rational, it is most often predictable – a point made by Dan Ariely, in his book, Predictably Irrational. In his 2008 book, Dan Ariely that human beings, while irrational, are predictably so. He discusses a range of examples of humans’ irrational decision-making – decision-making that is common in consumer purchase behaviour.
This is further demonstrated in two experiments undertaken by Ariely at Duke University. In the first study, it was found that – consumers will line up for a free ice cream but not $4.00 cash (the amount of money they were saving when they received the free ice cream). In a second study, it was found that – University students will complete charity work for a slab of beer but no $35.00 cash (the price of a slab of beer). The findings from these studies are counterintuitive and arguably irrational.
The fact is – marketing is (or should be) the business of applying psychology and neuroscience to manage human behaviour to achieve a social or commercial objective. Psychology is, of course, the business of understanding human behaviour. When applied with neuroscience to the business of marketing, psychology helps practitioners (or marketers) cost-effectively manage human behaviour to achieve a social or commercial objective.
The application of psychology and neuroscience to the management of consumer behaviour can significantly reduce the cost of marketing and drive a higher return on investment through higher conversion rates, average sale per customer, and margins. Just as a psychologist can influence a patient’s behaviour by leveraging an understanding of how they think, marketers can cost-effectively influence a consumer’s behaviour by leveraging a superior understanding of how consumers think. It is, therefore, important for marketers to understand or have access to the best possible understanding of consumer behaviour.

The starting point of any great marketing campaign is a sound understanding of the drivers of consumer behaviour and, more specifically, the most cost-effective strategies for causing members of your target market to behave in a way consistent with the achievement of your objectives.
• Great marketers in 2022 understand the importance of psychology.
• Great marketers in 2022 embrace and address cognitive biases
• Great marketers in 2022 understand that consumers are not rational.
• Question the value added by the Creativity offered by advertising agencies.
• Apply creative thinking to all aspects of marketing – not just advertising.
• Understand and manage the impact of cognitive bias on purchase behaviour.
• Understand and embrace the psychology of pricing – to maximise margins.
• Understand how their consumers think and how they leverage that understanding.
• Advertising agencies promote their creative skills – positioning them as the holly-grail of marketing. What value do those creative skills add to your business?
• Research suggests that purchasers of Coke are buying lifestyle (for 80% – they prefer Pepsi for taste). What are your customers buying?
• The physical presentation of a price impacts directly on consumer responses. What is the first impression of prices as you present them?
• More than 25 cognitive biases impact every human being. What effects are cognitive biases having on your decision making?
• All human beings behave irrationally. The correlation between intellect and rational thinking is about .05 (nil). What impact is irrationality having on your decision making?
• 59% of consumers have purchased from a new brand since the pandemic.
• 67% of consumers say their online purchasing has increased since the pandemic.
• Online traffic to the top 100 e-commerce websites in Q1 2021 increased 42%
• 55% of the shift to online shipping during the pandemic will be permanent.
• 85% of consumers believe that businesses they interact with use their data.
The fact is, the COVID 19 pandemic has changed us.
Customer experience (sometimes labelled CX) is a hot topic in 2022. It has been a hot topic for some years and will remain so for some years to come. While customer experience is not the ‘silver bullet’ some seem to think, it is nonetheless a critical issue for most, if not all, businesses.
Consider these statistics:
• In 2022, global spending on customer experience is estimated to reach $640 billion.
• 74% of customers will switch brands if the purchasing process is too difficult for them.
• 32% of customers “break up” with a favourite brand after one poor customer experience.
• 86% of customers’ break up’ from a brand after two poor experiences.
While advertising can drive enquiry – the customer experience has a direct impact on every factor relevant to the lifetime value of a customer, including:
• Conversion rates.
• The average sale.
• Margins.
• Repeat business rates.
• Referral rates.
The average dissatisfied customer will share their experiences with 9 to 15 others, and some will share with 20 or more.
Still not convinced, well consider these research findings:
• Maximising the customer experience can increase revenue by 80%
• 88% of customers are prepared to pay more for a good customer experience.
• 49% of customers have made an impulse purchase after an exceptional customer experience.
In a recent Harvard Business Review article, customer experience is defined as follows:
• ….. every aspect of a company’s offering—the quality of customer care, of course, but also advertising, packaging, product and service features, ease of use, and reliability.
This definition is important as it highlights the fact that the customer experience involves a great deal more than the service provided at the point of sale. The customer experience is impacted at every point and every factor in the customer journey. Consider, for example:
• Research suggests that consumers expect a website home page to download in 3 to 5 seconds. Further, it indicates that visitors will not come back if it does not.
• Most people will wait 2-3 minutes on hold before getting upset.
• 57% of customers find long hold times a frustrating part of the service experience.
• 74% of consumers say they are “very likely” to choose another business after having a poor phone experience.
These statistics highlight that the customer experience starts with the first interactions with a business. These statistics also highlight that all avenues for communication can and do impact the customer experience, including:
• The website.
• Social media channels.
• Email communication.
• Telephone contacts.
• Face to face contact.
What is more, research suggests that first impressions are very difficult to change. It takes only a few seconds to form a first impression, and that impression rarely changes. An actual irritation for me is businesses that sell to me while I am on hold. They are wasting my time – but they are also insulting me by using it to sell me more stuff – often before I have even made an initial enquiry. I will not purchase from businesses that do this – and I suspect I am not alone.
Consider these statistics:
• For 66% of customers, instant, on-demand engagement is a critical decision-making factor in purchasing goods and services.
• 67% of customers admit that their expectations for good experiences across all their engagement points with businesses are higher than ever.
• When consumers have negative experiences with a chatbot, 73% will never speak to the chatbot again.
• 82% of U.S. and 74% of non-U.S. consumers want more human contact in their experience as customers in the future. (Source)
• 83% of customers agree that they feel more loyal to brands that respond to and resolve their complaints.
• 70% of the customer’s journey is based on how they feel treated.
These statistics and many others like them highlight the importance of the customer experience throughout the customer journey.
• 96% of consumers say a good customer experience is somewhat more important to their brand loyalty than brand messaging. This statistic highlights the importance of the customer experience over marketing messaging.
What is more, research suggests that the importance of customer experience has grown since the pandemic began:
• 50% of consumers say that COVID-19 has increased their prioritisation of customer service as a factor when deciding to do business with a brand
• 80% of consumers feel more emotionally connected to a brand when customer service solves their problem
• 30% of customers are willing to pay more for excellent service, a 6% increase over 2019
Of course, you might be thinking that the customer experience you offer is very good. Well, might it be, but this statistic is sobering:
• 80% of companies believe they provide excellent customer service—only 8% of customers agree
In my experience, customer experience is the weakest aspect of the marketing of most Australian businesses. I come across few businesses that offer a great customer experience and still fewer that provide an excellent customer experience.
So, what are customers looking for in a customer experience? Research suggests that far and above the number one feature of good customer experience is a customised experience – one tailored to the needs, wants and expectations of individual customers. Certainly, there are factors of general importance (speed, attitude, patience, product knowledge, and empathy), but customising the experience to the target market’s needs when interacting with a particular type of business is the most important pathway to maximising the lifetime value of every customer.
Developing the optimum customer experience requires:
• Understanding the customer journey and documenting each customer touchpoint.
• Understanding the expectations of customers at each touchpoint.
• Developing an experience that meets or exceeds expectations at each touchpoint.
• Where possible, creating a remarkable experience -and thus memorable.
It is important to understand the customer journey and each touchpoint so the strategy can be customised to address each touchpoint – understanding customer expectations at each touchpoint, informing the experience delivered. The more remarkable the customer experience, the more chance it will be remembered and communicated to others. In this regard, it is interesting to note the following statistics:
• 36% of consumers will share their customer service experience, whether good or bad.
• 87% of consumers read online reviews for local businesses.
• 72% of customers will share their good experiences with others.
• 72% of customers will tell six or more people if they have a satisfying experience.
• 63% say they will share information with a company that offers a great experience.
Research would also suggest that great customer experiences are almost always personalised. The importance of a well-researched, personalised approach to the development of the optimum customer experience is highlighted in the following statistics:
• 80% of customers are more likely to buy when they receive a customised experience.
• 59% of customers want the experience to be personalised based on past interactions.
• 71% of customers feel frustrated when the customer experience is impersonal.
• 72% of customers will respond to personalised messaging.
• 63% of customers will drop a brand offering a lack of personalisation.
Curiously, another trend in terms of customer experience is a growing preference for self-service capabilities. Consider the following research findings:
• 60% of customers now prefer digital self-service capabilities online.
• 59% of customers say that self-service options improve the customer experience.
• 81% of customers prefer to resolve an issue themselves if they can.
• 88% of customers now expect brands to offer a self-help capability.
I would argue that the best approach to understanding and leveraging the potential fully in the customer journey and then developing a personalised strategy for the customer experience is to establish a brand community that provides the opportunity to:
• Monitor comments and feedback regarding the current customer experience.
• Ask questions about the customer journey and customer expectations at each touchpoint.
• Test strategic options and fine-tune them based on feedback.
Another approach involves simply mapping the customer journey and determining expectations based on surveys of members of the target market.
Regardless of the approach taken to developing the optimum customer experience, it is worth considering some of the current trends, as follows:
• 25% of businesses intend to combine the marketing and sales customer experience function.
• By 2025, artificial intelligence is expected to drive 95% of the customer experience.
• 40% of all customer interactions are expected to be automated by 2023.
These statistics highlight the growing role of digitisation in monitoring and delivering a personalised and consistently high standard of customer experience.
• Great marketers in 2022 understand the importance of the customer experience.
• Great marketers in 2022 understand and leverage the customer journey.
• Great marketers in 2022 prioritise the personalisation of the customer experience.
• Map the customer journey and identify the critical touchpoints.
• Understand the expectations and needs of the customer at each touchpoint.
• Identify at each customer touchpoint the opportunities for being remarkable.
• Establish a brand community as a pathway to developing the optimal CX.
• Recognise that it is the customer experience that drives customer lifetime value.
• The customer experience is impacted by their experience at each touchpoint in the customer journey. What are the critical touchpoints in your customer’s journey?
• The customer experience is impacted by their expectations at each touchpoint in the customer journey. What are the expectations of your customers at each touchpoint?
• Research suggests that personalisation of the customer experience is central to maximising sales. In what ways is your customer’s experience personalised?
• Technology has a key role in developing the optimal customer experience cost-effectively. In what ways are you leveraging technology to deliver the optimum experience?
• Research shows that the optimum customer experience is central to maximising the lifetime value of a customer. What are your strategies for delivering the optimum experience?
• 36% of consumers will share their customer service experience, whether good or bad.
• 87% of consumers read online reviews for local businesses.
• 72% of customers will share their good experiences with others.
• 72% of customers will tell six or more people if they have a satisfying experience.
• 63% say they will share information with a company that offers a great experience.
The point is – that good customer experiences are shared.
Consumer behaviour, while often irrational, is almost always predictable, given the availability of the relevant data. Thanks to years of research, empirical and anecdotal evidence – there are in 2022 the consumer insights to accurately predict consumer behaviour in most settings. There is also a growing body of evidence pointing to simple cues that impact consumer behaviour and can be leveraged to influence consumer behaviour. Three such cues are:
• Fluency (and symmetry).
• Familiarity (and newness).
• Feelings (and emotions).
This discussion will consider these cues or factors and further highlight the critical role of psychology in marketing.
Highlighted repeatedly in neuroscience research has been the relationship between physical symmetry and the perception of attractiveness. To summarise the observations from one such study:
• ‘Attractiveness increases with an increasing level of averageness and symmetry, which can be understood as evolutionary pressures that operate against the extremes of the population.
Another study observed
• ‘Attractiveness increased when we increased symmetry and decreased when we reduced symmetry.’
Consumers like symmetry and relate it to attractiveness. Human beings and, therefore, consumers are attracted to symmetry, and the more symmetrical a face – or indeed just about anything – the more attractive it is seen to be. What is more, the sense of attraction diminishes as the level of symmetry diminishes. This is so in all cultures and not just with faces.
Symmetry is a subset of the broader concept of ‘fluency’. Human beings like symmetry because they like and respond more positively to fluency. The more fluent something is, the more attractive it is seen to be. Further, this is a critical issue in terms of design, symbols, slogans, sounds, and language. Fluency relates to the following:
• ‘…. speed and ease with which people process information about your brand ..’
Fluency can also be called ‘cognitive fluency.’ Cognitive fluency has been defined as follows:
• ‘In the most basic form, cognitive fluency is the ease with which information is processed. Does the task feel difficult? Was the information easy to understand? Successful digital marketing is all about how we make our target audience feel – we want to use cognitive fluency to effect decision making.’
Underlying fluency or cognitive fluency is the notion that consumers are attracted to inputs that are easy to consume, easy to understand and easy to process. Consumers will rarely put in any more effort than they need to to take in a brand message – and the more quickly a brand message can be taken in, the more likely it will be embraced. To quote yet another source:
• “Cognitive fluency is how scientists describe the ease with which our brains process information. Items that are easily processed are considered “fluent.” The importance to marketers goes beyond the mere speed of taking in the information. Our brains confuse ease of processing with preference and familiarity for things like names, brands, etc. And, when we read instructions, the ease with which we process those instructions translates directly into how easy we think the task itself will be!
Research psychologist and NYU professor Adam Alter notes:
• ‘Every purchase you make, every interaction you have, every judgment you make can be put along a continuum from fluent to disfluent.’
Following on from this, the more fluent the messaging and presentation, the better. Consider these research findings:
• The easier a font is to read, the more likely readers will embrace the message and find it credible.
• The easier it is to pronounce the name of a business, its products and services – the more profitable the business can be.
• The easier it is for an audience to understand communication, the more likely they will buy your products and services.
• The more symmetrical design aspects of the visual branding – the more positive it is that consumers will embrace branding.
Approaches to maximising fluency can include, but are not limited to:
• Larger font sizes.
• San serif fonts.
• Limiting the width of columns.
• Limiting the volume of content.
• Large ‘buttons’ on a website.
• A simple layout.
• Using a compelling subject line on an email.
• Keeping sentences short.
• Using familiar language.
• Asymmetrical logo.
• Tight, meaningful slogans.
It is well established in research, and I have written often about the tribal nature of human beings. Therefore, human beings and consumers are attracted to people that are like them. We are all attracted more to people who look like us, think like us, and behave as we do. Human beings and, therefore, consumers are naturally attracted to the familiar. That is the main reason most people do not like photographs of themselves – because the image in the photo is inconsistent with the image in the mirror that we are more familiar with.
The attraction to familiarity among consumers is also reflected in the fear of or resistance to change. Familiarity creates certainty while change creates uncertainty – and human beings are overwhelmingly attracted to certainty. Certainty created by familiarity tends to lead to higher spending and more investment. It can and does have a direct impact on sales. This is often called the ‘familiarity principle’, which has been defined as follows:
• ‘…the tendency among human beings to develop a preference for things (be they people, products, ideas etc.) which they see more often. For instance, in relationships, it tends to be the case that the more often we see someone, the more pleased we are to see that person and the more we like them – for instance, a partner or child…’
A large body of evidence suggests that this attraction to familiarity and certainty is the result of evolutionary programming. At the same time, marketers are attracted to ‘novelty’ (the opposite of familiarity) because it provides a reason for the consumer to look at a product and purchase. Just as there is an attraction to familiarity, there is an attraction to novelty in most consumers. It is novelty or ‘newness’ that is often used to justify looking at a product and ultimately purchasing it. Fashion is a great example of this. That is why there is a market for new seasons fashion.
This points to a tension between the familiar and the new. In an article by Steve Genco, it is noted as follows:
• ‘The opposing attractions of novelty and familiarity, which seem to tug marketing strategies and practices in two opposite directions, have perplexed marketers since the first marketing messages were crafted.’
There is a dichotomy here between the attraction to familiarity on the one hand and novelty on the other, creating the need to find the ‘sweet spot’ between these two forces.
Steve Genco notes:
• ‘When presented as a dichotomy, there is no obvious answer because good evidence can be cited on both sides of the argument. I believe a more promising approach is to view novelty and familiarity not as a dichotomy but as a continuum. This continuum is the path along which a consumer travels with regard to any product or brand. Novelty necessarily comes first, but over time and through exposure and experience, what was once novel becomes familiar.’
Given this apparent dichotomy, maximising sales will inevitably involve:
• Making the novel – familiar and
• Making the familiar – novel.
Strategies for making the novel seem familiar include:
• Maximising cognitive fluency.
• Sticking within the parameters of a prototype.
• Identifying and retaining core elements of a product.
• Creating a habit of purchasing the latest version.
• Graduated or staged approach to change.
Strategies for making the novel familiar include:
• Favour evolution over revolution.
• Maintain core elements of the branding.
• Updating the product while keeping the customer experience the same.
• Associating newness with the product and familiarity with the brand.
• Maintaining elements of the visual branding.
These are just some of the many strategies for making the familiar new and the new familiar. The point is that it is critical to find that sweet spot between new and familiar. Failure to do so can hinder sales.
There is nothing more irrational than human’ feelings.’ Few things impact consumer behaviour more than feelings – or the emotional response to a brand or marketing message. Indeed, one study found that:
• Advertising that relied on rational product messaging led to significant revenue gains in 16% of campaigns researched, while
Incorporating an emotional ‘component improved the chances of achieving large gains significantly, to 26%.Recognition of the importance of feelings (which may or may not be supported by evidence and which may or may not be rational) has given rise to what is now known as ’emotional marketing.’ Emotional marketing is:
‘…. marketing and advertising efforts that primarily use emotion to make your audience notice, remember, share, and buy. Emotional marketing typically taps into a singular emotion, like happiness, sadness, anger, or fear, to elicit a consumer response.’
Consumers have six basic emotions:
• Happy.
• Sad.
• Afraid.
• Surprised.
• Angry.
• Disgusted.
Emotional marketing:
• Drives first impressions.
• Makes a brand memorable.
• Drives decisions not supported by evidence.
• Inspires consumers to act.
• Drives brand loyalty.
Regarding the last of these points:
• Happiness tends to drive the sharing of information.
• Sadness tends to drive empathy and connection.
• Fear and surprise tend to encourage consumers to cling to the comfortable.
• Anger and passion tend to make consumers stubborn.
Creating an emotional connection with consumers begins with:
• Understanding the audience at the deepest possible level.
• Telling stories the audience relates to and engages with.
• Creative design that engages and inspires the audience.
• Communicating absolute authenticity.
Cues or factors that can then be leveraged to create the required emotional response within the target market include:
• Product differentiation.
• Confidence in the future.
• A sense of well-being.
• A sense of freedom.
• The sense of a thrill.
• A sense of belonging.
• Protection of the environment.
• Personal aspirations.
• A sense of security.
• A sense of succeeding in life.
The point here is that information is important, but feelings are often more important and more long-lasting. Feelings are certainly a key to engagement.
• Great marketers in 2022 understand the power of cognitive fluency.
• Great marketers in 2022 strike a balance between novelty and familiarity.
• Great marketers in 2022 engage with and dive into the feelings of consumers.
• Embrace the power of symmetry to create attraction.
• Embrace the power of cognitive fluency to create attraction.
• Understand the need to make the novel appear familiar.
• Create an environment in which the familiar can appear new.
• Place as high a priority on feelings as they do on facts.
• Research highlights the potential for cognitive fluency to drive revenue. What priority do you place on maximising cognitive fluency?
• How easy is your promotional material to read and engage with? Short copy is easier to read than long copy. San serif fonts are easier to read than serif fonts.
• Maximising sales requires the balancing of familiarity and novelty. What is your strategy for resolving this dichotomy?
• Research highlights the importance of making the new – familiar and the familiar – new. What is your strategy for achieving this?
• Feelings are often more important than facts. How do you use emotional marketing to create the connection required to maximise sales?
• Content that elicits anger has a 38% chance of going viral
• Customers with an emotional connection to a brand are 71% more likely to recommend it.
• Advertisements with an above-average emotional response deliver a 23% spike in sales
• Headlines with negative superlatives have a 30% higher click-through rate.
• Emotionally connected customers are 52% more valuable than the highly satisfied customers
The fact is – feelings matter.
When identifying the target markets for a product or brand, it is important to know what factors influence the behaviour of potential markets. It would be folly to target any market without first understanding potential influencers of people’s behaviour within that market. For example, there is little point in trying to market premium cuts of pork in the middle east.
When developing a strategy to fully leverage the potential of the primary and secondary target markets, it is essential to understand the range of influencers that impact consumer decision making. These factors include those which can and those which the brand can’t influence.
Five types of drivers of consumer behaviour have been identified in research. They are:
• Psychological.
• Social.
• Cultural.
• Economic.
• Personal.
A range of psychological factors significantly impacts consumer decision making.
Motivation is a critical factor. Consumers are motivated by different outcomes at different times and at different stages of their lives. Maslow talked about five levels of human needs. Herzberg talked about two categories of consumer needs.
What motivates your consumers to make a purchase?
Perception -is a second critical psychological factor driving behaviour. Consumers purchase based on perception, not reality. Perceptions are, in turn, impacted by the information available and how they interpret that information. It is essential to understand how marketing messaging is perceived.
How do your consumers perceive your brand and customer experience?
Learning is a critical outcome of the marketing process and input from a range of secondary sources, including referrals, reviews and recommendations. All that has been learned by a potential customer in their interaction with a business impacts purchase behaviour.
What has your primary target market learned from interactions with your brand?
Attitudes and beliefs are also significant determinates of consumer behaviour. These things are formed by external influences beyond the control of consumers. The curious thing about beliefs and attitudes is that no one chooses what they believe or their attitude.
What do your consumers believe about your brand, and how does this impact purchasing.
Human beings are social beings. Consumer behaviour is impacted by group thinking and other social factors.
Family is an important influencer of consumer behaviour. Consumers care what family members think. Families create behaviour patterns.
Reference groups are an important influencer of consumer behaviour. Consumers are also influenced by groups they identify with, including religions, sporting, and workgroups.
Roles and status also impact consumer behaviour. All people are informed by their role and place in the community. People of higher status can impact the behaviour of others significantly.
• 28% of millennials say they won’t try a product if their friends don’t approve of it.
• Word of mouth is the primary factor behind 20-50% of purchasing decisions.
• 92% of consumers believe referrals from somebody they know.
• Social media posts posted by friends influence the buying decisions of 83% of online shoppers.
How are social influencers impacting your consumer’s behaviour?
The cultural background of consumers can have a significant impact on consumer behaviour.
Culture determines many basic requirements, values, needs, wants and preferences. Further, the cultural drivers of behaviour are perhaps the hardest to change. They are what they are.
Sub-cultural factors also influence consumer behaviour. Each cultural group has within it sub-cultures that also influence behaviour. These include nationality, religion, caste and geography.
While less talked about in Australia, social class also impacts significantly on consumer behaviour. An individual’s perception of their social class impacts purchase behaviour every day.
How are cultural factors determining the purchase behaviour of your target market?
There are, of course, a range of personal factors that impact consumer behaviour, especially consumer purchase behaviour. The relevant personal factors include:
• Age – some products and brands are attractive to specific age groups.
• Occupation – what a person does with their time can impact behaviour.
• Lifestyle – tree changers often have very different needs than city dwellers.
Increasingly, brands focus on lifestyle – drawing a link between the brand and a particular lifestyle. There can be significant merit in linking a brand with a lifestyle.
How would you define your target market in terms of personal factors?
The economic factors impacting consumer behaviour include:
• Personal income.
• Family income.
• Credit availability.
• Asset liquidity.
• Savings
All five of these factors relate to the capacity to pay.
Have you established the capacity of your target market to pay?
Traditionally market segmentation has focused on demographic factors, including the following:
• Personal.
• Economic.
Both of these influencer categories are important – especially in terms of the capacity to pay. In many cases, the capacity to pay must be the first influencer considered in determining the primary and secondary target markets. There is no point in targeting a market segment that is in a position to pay the price.
If you survey 100 white-collar workers about the brand of mobile phone they own – about 60% will say an Apple I-phone. However, if you survey 100 blue-collar workers, only 30 – 40% will report owning an Apple iPhone. The high price i=of the I-phone is a critical factor here.
That said, smart marketers (and there are few smarter) like Apple, while paying attention to the capacity to pay, are increasingly segmenting the market based on factors:
• Psychological.
• Social.
• Cultural.
One study defined the I-phone market as – a ‘high-end, tech-savvy consumer, who is often a business user’ There is, here, no mention of demographic factors like the personal and economic influencers listed above. Indeed, in 2022, most branding by highly successful brands, like Apple, focuses on psychographic characteristics – including psychological, social, and cultural.
Increasingly, brands identify markets psycho-graphically, intending to shape the brand to address psychological, social, and cultural influencers. Focusing on such factors is much more effective in identifying the primary and secondary target markets – and in developing strategies that can ensure the brand is consistent with parameters determined attractive by consumers.
• Great marketers in 2022 understand the factors influencing purchase behaviour.
• Great marketers in 2022 identify their target markets based on psychographic characteristics.
• Great marketers in 2022 will develop brands that address psychographic influencers.
• To maximise sales – they must understand the psychological influencers of buying.
• To maximise margins – they must understand the impact of social factors on buying.
• To maximise sales and margins – they must target culturally appropriate markets.
• To maximise the lifetime value of a customer – they must understand the personal drivers.
• To maximise profitability – they must understand the economic influences on behaviour.
• Research highlights the impact is psychological influencers on purchase behaviour. How are psychological influencers impacting the behaviour of your target consumer?
• Research highlights the importance of social influencers on purchase behaviour. What social factors influence your consumer – and what are the implications?
• Research highlights the importance of culture on purchase behaviour. What are the cultural considerations in your market, and how are you addressing them?
• Research highlights the impact on purchase behaviour of a range of personal factors. What are the personal factors impacting the purchase behaviour of your target market?
• Research highlights the impact on purchase behaviour of key economic factors. How well do you understand the range of economic factors impacting your market’s purchase behaviour?
• 61% of consumers trust influencer recommendations
• Google searches for “Influencer marketing” grew by 400% in the UK from 2016 to 2021.
• Micro-Influencers are on the rise, increasing from 89% to 91% in 2021.
• 51% of businesses suggest influencer marketing helps them acquire better customers.
• 80% of consumers have purchased after seeing a recommendation from an influencer.
The fact is – influencers are becoming an increasingly important consideration in marketing.
Have you ever walked past a Bakers Delight store and felt the immediate impact of the smell of baking? Most of us have had this experience along with the resulting pull to go into the store and make a purchase – no matter how unhealthy. Even though we know that the cake we are about to purchase will stack on the kilos, the smell’s appeal is too strong. This example highlights the potential to influence consumers by creating a sensory connection and memory.
Rational thinking is overridden by an emotional response caused by a highly appealing smell. In this case – arguably, the smell of baking will have a more significant impact on consumer behaviour than the investment in-store signage and other forms of promotion.
While marketing campaigns overwhelmingly focus on sight and hearing, these are just two of the five emotions that can be addressed or leveraged to influence consumer behaviour. Moreover, it is often the case that senses other than sight and hearing can have a greater impact on consumer behaviour. Indeed, this is the case with the Baker’s Delight example. Indeed, addressing multiple senses at once can significantly impact consumer behaviour – overriding rational thinking.
Over recent years there has been a growing appreciation of the power of ‘sensory marketing’, the science of leveraging all five senses to influence:
• Perceptions.
• Memories.
• Learning processes
• Behaviour.
Sensory marketing is all about creating sensory experiences (singular and integrated) that strengthen a consumer’s connection with a product with a view to:
• Driving sales.
• Building a brand.
Smell is most certainly a big part of the customer experience when eating in a restaurant. In Bakers Delight’s case, the baking bread’s smell activates the consumer’s taste buds, creating the desire to eat – this is the decision to purchase. In the case of your local Indian restaurant, the aroma’s wafting out the door and causing you to salivate as you review the menu – smell helps build the brand – associating the restaurant will the ‘authentic’ (or what we believe to be the authentic) aroma of the country.
How often do you sit in a food environment with the intention of consuming as little as possible, perhaps because you are trying to lose weight – but end up eating far more than you should because the aromas and the food are irresistible.
It is interesting to note that smell is almost certainly the sense that has the greatest impact on memory. We tend to remember and associate smells much more than sights and sounds. Research suggests that memories associated with smells tend to be older, and their recollection tends to be more vivid when compared to other senses. Research indicates that smell and memory are closely linked with the brain’s anatomy, allowing olfactory signals to get to the limbic system very quickly. Few connections are better remembered than those associated with smell.
Consider these statistics:
• 75% of all emotions we experience are directly related to smell.
• Consumers recall 35% of what we smell and only 5% of what they see.
Clearly, not all products lend themselves to sensory marketing; not every sense is relevant to every product. Research confirms, however, that where senses can be associated with a product – ‘A memorable experience can forge a stronger connection to the product or service, increase satisfaction, and influence the consumer’s behaviour and attitude. …. the consumer becomes more predisposed to make a purchase, spends more time in the store, has more exposure to the various categories, and in turn, becomes more predisposed to make future purchases. By setting this process in motion, the brand also improves its image.’
Further, sensory marketing can be used to create and leverage connections – thus influencing consumer behaviour – throughout the customer journey and with some products at each touchpoint in that customer journey. At the same time, the strategic use of sensory marketing is less common than it should be. Too few marketers appear to appreciate the potential to leverage human senses to influence consumer behaviour. Anecdotal evidence suggests a low recognition of the degree to which consumer behaviour can be influenced through the strategic association of sensory input with a product. Certainly, there appears to be a low recognition of the potential to reinforce a product’s attributes, benefits, values, and personality – convey its relevance to the consumer – and communicate the product’s differential value for a specific customers in a competitive market.
Sensory marketing involves:
• Developing a strategy what senses to associate with a product.
• Defining the messaging to be conveyed through the senses.
• Establishing a brand signature – the sensory input associated with a brand.
• Appreciating how the individual senses create an overall sensory experience.
A sensory experience, used effectively, can communicate product:
• Attributes.
• Functional benefits.
• Emotional benefits.
• Values.
• Brand personality.
A strength of sensory marketing is that it can impact consumers at various levels – this establishes a powerful connection.
Following are some examples of the practical application of sensory marketing.
Sound has long been used to influence consumer behaviour. In 2022 such marketing can involve everything from background music to podcasts and the use of virtual assistants. Hearing is a powerful sense. It is the sense that brings joy or alerts of danger (car horns, for example).
Visa has started incorporating a sensory branding experience at the end of transactions. Recognizing that sound plays a part in how consumers make purchases when cardholders use their card and the transaction is complete, they hear a unique (well researched) sound. When customers hear this sound, they know their purchase is successfully and securely completed – providing comfort and consistency.
Smell is unique because the sensory organ that detects it is directly connected to the brain. This makes your sense of smell extremely powerful. Interestingly, smell is also the sense that causes most people to have no sexual interest in close family members.
The Dunkin Donuts campaign is one of the most successful campaigns in the history of olfactory marketing. To improve the sales of their coffee, in several buses in Korea, Dunkin Donuts programmed several nebulizers with a coffee aroma. At the same time, their jingle played on the bus radio in the morning while people went to work or school. And when the user got off the bus, he or she came across an advertising poster with the Dunkin Donuts brand, causing the brain to work with different stimuli. Coffee sales improved to 29%, and visits increased to almost 20%.
Scent plays a big part in the marketing of Hyatt Places. The hotel’s signature scent, ‘Seamless,’ ‘delivers the sensation of welcoming elegance and calm’ through a blend of blueberries, light florals, warm vanilla and musk. Having ‘Seamless’ wafting through Hyatt Place’s 300 locations has enhanced the visitor experience and increased brand memorability for thousands of guests.
Research suggests that vision is the strongest of the senses. Humans tend to rely more on sight than hearing or smell for information about their environment. Colours, images, fonts, graphics, and light can impact a consumer’s perception of a product.
Apple is acutely attuned to the impact of sigh on consumer purchase behaviour. Design, driven by one of the worlds leading industrial designers – Jony Ive – has always been a critical component of Apple’s marketing strategy. Steve Jobs talked at length about the importance of excellent design in the success of Apple. This is also reflected in the excellent design of Apple stores. They are perhaps the best-designed and most memorable retail stores in the world.
Behr places a very high priority on sight. It’s common knowledge that certain shades evoke specific emotions. Behr Paint created a sensory experience for social media fans through an ASMR (Autonomous Sensory Meridian Response) video of the painting process featuring soothing sounds and satisfying visuals like paint pours.
The average consumer has over 10,000 taste buds. Taste is an important sense, although it is rarely a stand-alone sense. Research has consistently demonstrated that smell and sight significantly impact taste. The importance of taste is demonstrated by the fact that taste testing is often considered the most effective way of selling a new food product.
The Krispy Kreme product has a distinctive flavour that is hard for anyone with a sweet tooth to refuse. Few businesses on the planet use taste more effectively than Krispy Kreme. Even people who are not inclined to eat cake – find resisting a second Krispy Kreme doughnut had to refuse after eating one. In this light, it is interesting to reflect on the success of Krispy Kreme, even though it has no advertising budget.
The Museum of Ice Cream creates interactive spaces dedicated to the sweet treat, encouraging consumers to indulge all of their senses. To help bring the playful brand to life, the museum partnered with Target to release 7 premium flavours and open “The Pint Shop,” an interactive space in NYC where guests can indulge in a one-of-a-kind tasting experience.
Touch involves not only the touch & feel of a specific product and the whole in-store physical experience. Some 75% of consumers say that they’d prefer to “feel” a product before they buy it: on a subconscious level, every purchase is influenced by texture, shape, weight and even temperature. An interesting feature of using touch in marketing is that holding a product can effectively create a sense of ownership.
Because Casper does not have showrooms where consumers could test out their beds, they offer a comfortable space where busy people can pop in for a quick rest and recharge. For $25, patrons can slip into silk pyjamas and sleep in a “Nap Nook” with a Casper bed and pillow, allowing them to feel the product while drifting off to sleep.
Relevant to professional services marketing in general, research reported in the Harvard Business Review shows that actual interpersonal touch, such as a handshake or a light pat on the shoulder, leads people to feel safer and spend more money. Studies have shown that waitresses who touch the diners they are serving earn more in tips.
Great marketing campaigns often target more than one sense.
In 2022, the most successful sensory marketing campaigns appeal to multiple senses. The more senses appealed to; the more effective the branding and advertising will be.
Singapore Airlines addresses multiple senses and especially scent and sight. The airline has a one-of-a-kind, refreshing, and subtle scent (rose, lavender, and citrus) worn by all flight attendants that are sprayed onto their towels and other elements throughout services. This specific smell can only be enjoyed on Singapore Airlines.
Singapore Airlines also requires all flight attendants to wear ‘The Singapore Girl’ uniform, in the colour and pattern that matches their earned designation. These sensory inputs are uniquely Singapore Airlines and offer a high-end and consistent experience for the flyers.
Starbucks’ philosophy is to satisfy its customers’ taste, sight, touch, and hearing senses. The Starbucks brand serves this comprehensive package of sensual gratification with consistent flavours, aromas, music, and printing that is known to appeal to its customers. All music played in Starbucks stores worldwide is selected from about 100 to 9,000 songs on CDs sent to the stores monthly by the company’s main office.
The potential for sensory marketing to drive sales or build a brand has rarely been realized in Australia. Great marketers, however, pay a great deal of attention to sensory marketing, given its potential influence and especially it’s potential to sidestep rational thinking.
• Great marketers in 2022 understand the potential of sensory marketing.
• Great marketers in 2022 develop and implement integrated sensory strategies.
• Great marketers in 2022 prioritize sensory marketing over cognitive marketing.

• Sensory marketing can cost-effectively connect consumers and establish brand loyalty.
• Sight, while the most pervasive sense, is not always the most effective for marketing.
• Olfactory marketing finds its power in the direct link between smell and memory.
• Multi-sense sensory marketing strategies are highly effective in building a brand.
• An integrated sensory marketing strategy can be used to sidestep barriers to purchase.
• A key component of Apple’s marketing strategy is sensory marketing. How are you using the senses to connect your product with your customer?
• Research demonstrates that the consumer’s sense of smell is directly linked to memory. In what ways do you use the senses to enhance brand loyalty?
• Starbucks uses a multi-sense sensory strategy to create the optimum customer experience. How are you using the five senses to enhance the customer experience?
• Research shows that while sight is the human sense most leveraged by marketers, it is not always the most important. What sense is most important for your brand?
• Sensory marketing can cause a purchase even when the rational brain says don’t buy. How are you using sensory marketing to overcome cognitive barriers?
• 75% of all emotions we experience are directly related to smell.
• Olfactory recollection accuracy is about 65% after 12 months.
• A visual recollection of images is just 50% accurate after about three months.
• Consumers recall 35% of what we smell and only 5% of what they see.
• A consumer’s mood can improve by 40% when exposed to a pleasing smell.
• The fact is – smell is probably the most powerful sense in marketing

A lot has changed due to the COVID 19 pandemic. When the pandemic was at its worst and shutdowns were common, business confidence (and consumer confidence) were at an all-time low. Post pandemic, business and consumer confidence rose sharply. Confidence is already beginning to moderate. Some of these changes will be short-term, while others will endure, impacting the market and marketing for the medium to long term. These are, however, relatively short-term effects.
Short-term impacts of the COVID 19 pandemic include:
• An initial rise in confidence.
• Inflation and interest rate increases, damaging confidence.
• An initial defensive marketing stance evolving into an offensive stance.
• A rush on services (e.g. travel) that have not been accessible for two years.
• A propensity to work from home and use more digital communication.
These short-term effects are, however, unlikely to endure. At the very least many of these short-term effects will at best fluctuate and potentially go away altogether. This article focuses on the medium to long-term impacts on markets and marketing of the COVID 19 pandemic. Indeed, there is a growing body of evidence that the COVID 19 pandemic has:
• Highlighted the importance of marketing – in all environments.
• Increased the focus on being agile enough to address market changes quickly.
• Increased the focus on developing high-quality back-end infrastructure.
• Highlighted more of the potential of the internet – socially and economically.
• Lead to an increase in expenditure on marketing (which might be long-term)
Changes in marketing addressed in this article are:
• E-commerce.
• Social commerce.
• Customer experience.
• Experiences in general.
No reader here would be surprised to know that the use of e-commerce has increased markedly due to the pandemic. Consider:
• Worldwide – e-commerce sales increased by $244.2 billion or 43% in 2020, the first year of the pandemic, rising from $571.2 billion in 2019 to $815.4 billion in 2020.
• In 2021 Australian e-commerce sales increased by 17%, with 5 million households involved.
• Between February 2021 and February 2022, e-commerce growth was an impressive 16.6%.Between February 2021 and February 2022, ACT, WA, and TAS e-commerce was up 26.3%, 21.3% and 18.7%, respectively.
While there is no doubt that online sales have increased over the last two years, there might be questions – as to whether the rate of growth will continue and whether the growth over the previous two years will be maintained.
The consensus seems to be that the growth rate will moderate a little – but that gains over the last two years will be maintained and built on. One researcher noted:
• “Retail sales in Australia are showing signs of improvement after the end of lockdowns and restrictions. However, consumer confidence remains cautious, as new daily cases of COVID-19 in Australia remain high, especially with the rise in cases in March 2022, after a downward trajectory for the first two months of 2022. Online retail sales remain high despite the fall in COVID 19.”
Another researcher noted:
• “Growth predictions expect the Australian eCommerce market to balloon from around AUD 13.9 billion in 2017 to AUD 21.7 billion by the end of 2022. The eCommerce industry continues to evolve as Australians increasingly adopt online shopping as a part of their daily lives.”
The reality seems that people who have not used e-commerce for the first time were forced to use it during the pandemic and, having embraced its advantages, will not retreat.
The greatest areas of growth will almost certainly be:
• Marketplaces – growing at 74% per annum.
• Omni-channel retailing – covering all bases seamlessly.
My prediction is that having passed through a threshold point, e-commerce will continue to grow with more and more people using it more and more often. My other prediction is that retail centres will continue to decline until they can embrace the science of customer experience.
Few are not aware of the growth of social commerce over the last two years. Few of us have not used Zoom, Skype, or TEAMS of one or more of the plethora of video conferencing products on the market today. This has coincided with the use of similar technologies by medical practitioners, pharmacists, and other health professionals.
Social commerce includes:
• Video conferencing.
• Social media.
Consider these statistics on the growth in both:
• More than half of the world uses social media (58.4%).
• 424 million new users have come online within the last 12 months
The average daily time spent using social media is 2h 27mRegarding video conferencing, note as follows:
• 82% of users started or increased video conferencing
• 65% of users started or increased working online from home.
• 29% of Australians over 55 started video conferencing.
Again, while there has been growth in the use of social media and video conferencing during the pandemic, the question is whether the rate of change and gains to date will be maintained. This will be impacted by several factors, including rates of working from home. The consensus seems to be that while growth rates will temper, gains will be maintained, and growth will continue.
One researcher noted:
• Even before the pandemic, video calls were part of our daily routine. According to Fortune Business Insights, the global video conferencing market was worth $5.32 billion in 2019 and is estimated to grow to $10.92 billion by 2027.
Another commentator noted:
• As the ongoing pandemic continues to push more people online, social media remains integral to our daily lives and brands. The nature of social media engagement continues to shift as apps grow and platforms evolve.
I predict the growth rate may slow, but the overall trend will continue. While there will be innovations in video conferencing, and some will reduce their frequency of use – growth will continue nonetheless – driven by the new features on video conferencing products. The social media channels will continue to evolve, and preferences will change – the growth rate in the use of social media will be maintained. It may even accelerate.
I do not doubt that the real growth area will be online communities.
Customer experience is more important than ever, partly spurred on by the pandemic and the need retailers have to get customers back in store. Of course, the fact is – customer experience is important to every business and not just retailers.
Customer experience is also much more than customer service. Prioritising customer experience requires a detailed understanding of the customer journey, identifying each touch point in that journey and ensuring the customer’s experience exceeds expectations at each touchpoint. This is as important for a professional service firm as it is for a retailer.
On the importance of Customer experience, note these statistics:
• In 2022, global spending on customer experience is estimated to reach $640 billion.
• 74% of customers can switch brands if the purchasing process is too difficult for them.
• 32% of customers “break up” with a favourite brand after one poor customer experience.
Customer experience is continually growing, and the evidence suggests that the growth rate will continue and potentially grow. Trends in customer experience in 2022 and beyond include:
• Developing immersive, hybrid experience – addressing all channels.
• Well-integrated experiences embracing smarter products and services.
• Increased automation of customer service experiences.
• Personalisation and customisation. Brands find their positioning in the experience more than the product.
All four of these trends are important and pervasive. That said, none is more important than personalisation and customisation. Research suggests that consumers have a growing expectation that service and the experience will generally be personalised around their individual needs.
My prediction is that over the next two years, businesses will increasingly fall into two categories – those focused on customer experience and those that are not. Regardless of the industry, increasingly demanding consumers will ensure that the latter group suffer. The consumer will see to this.
My prediction regarding the growth of online communities will also be critical here.
Some trends started before the pandemic. Indeed, all four trends discussed here started with COVID 19, with the pandemic increasing the growth rate. The growing demand for services or experiences ahead of goods is but one example of this. There are four factors generally blamed for the degree to which bricks and mortar businesses have suffered over recent years:
• E-commerce.
• The economy.
• Rising costs.
• Switch to services.
Research suggests a growing preference for services over goods, especially among younger generations. Instead of buying a son a watch for his birthday, parents might give him a fortnight in Bali. Instead of buying a friend a bottle of wine, people are purchasing a movie pass or a dinner voucher. Instead of buying a new jumper, people are spending the same amount on a bungee jump or skydive.
• 76% of customers prefer to spend on experiences than on material items.
• 58% of customers want to be part of an experience to escape everyday life.
• 70% of customers want an experience where they can laugh and have fun.
• 63% of consumers want to be part of an experience where they learn something new.
The reasons for this shift in preferences for services or experiences are not confirmed but almost certainly include:
• Reality TV programmes.
• Experiences being more memorable.
• Experiences create stories and conversations.
• Experiences can be shared with friends.
• Possessions can be replaced – but experiences cannot.
• Experiences can drive a healthier lifestyle.
Overall, research suggests that experiences make people happier.
I predict that the demand for experiences will continue to grow after the pandemic is forgotten. This partly reflects a change in how our community operates and what consumers are looking for.
Online communities have a critical role to play in marketing experiences.
Other trends in the marketplace and marketing commenced before COVID 19 and continuing long after it will include:
• An increasing focus on local communities.
• Lower trust in government.
• Increase geographical inequalities.
• Increased structural inequalities.
• Increased focus on mental health.
• Renewed focus on skills and education.
All of these factors will impact our communities, markets and the marketing strategies we develop. Agility will be more critical than ever. Businesses that lack the agility to change quickly will suffer.
• Great marketers in 2022 know that e-commerce has only just begun to dominate.
• Great marketers in 2022 know that social commerce is the critical frontier.
• Great marketers in 2022 understand changing markets and the importance of agility.

• The growth of e-commerce has only just begun and cannot be ignored.
• The growth of social commerce has only just started and cannot be ignored.
• Customer experience is often as important or more so than the product.
• The growth in spending on experiences ahead of goods has only just begun
• Market intelligence and agility will determine the success of businesses post COVID.
• Research suggests that bricks-and-mortar businesses in Australia may never recover. What is your omnichannel eCommerce strategy?
• Research suggests that the growth in video conferencing will continue, even after employees return to work. What impact will this have on your culture and brand?
• Research demonstrates that preferred social media channels are constantly changing. What strategies are in place to ensure you are using the optimum channel?
• For many businesses in 2022, the customer experience is as important as the product and its price. How does your customer experience strategy address each critical touchpoint?
• Research suggests that experiences offer several advantages over goods. What strategies do you have to capitalise on the shift from goods to services?
Great marketers in 2022 know that:
• The growth of e-commerce has only just begun and cannot be ignored.
A question every effective marketer should be able to answer in 2022.
• Research suggests that bricks-and-mortar businesses in Australia may never recover. What is your omnichannel eCommerce strategy?
• 64% of marketers updated their editorial calendars.
• 70% of marketers revised their targeting and messaging strategies
• 53% of marketers changed their promotion and content distribution strategy.
• 31% of marketers have re-examined their customer’s journey.
• 20% adjusted their Key Performance Indicators (KPIs).
• The fact is – COVID has changed the world big time – and possibly permanently.

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Five Tips For Reducing
The Cost Of Branding.

Burning money on branding is more common than most marketers think. Because few businesses truly understand what a brand is and how branding works, advertising agencies, branding agencies and design studios have become expert at spending their client’s money without effective accountability.

Burning money on branding is more common than most marketers think. Because few businesses truly understand what a brand is and how branding works, advertising agencies, branding agencies and design studios have become expert at spending their client’s money without effective accountability.

1. Get out of the boardroom.

Perhaps the two most concerning issues about branding are the lack of understanding about what brand and branding are and the propensity to develop brands in the boardroom, perhaps with the help of a consultant.....