Once upon a few years ago, companies could reach new customers by having a large budget and a half-decent advertising agency. Whilst that approach still appears to be working for a select few, others have realised there’s a smarter way to get noticed, loved and bought.
It’s hard to believe, but the choices and spending habits of consumers today are markedly different from just eight years ago. In those pre-recession times, we hadn’t lost quite so much faith in the truth and motivations of companies – and the Internet wasn’t quite so good at highlighting how inept and greedy they could be.
So what changed – and how can brands and organisations learn to attract and retain their best customers in this new, more open-to-scrutiny world?
The gradual disappearance of trust
The 2007–2009 recession changed the Western psyche in a big way. Tales of huge executive pay packets, wasteful spending and terrible working conditions left many of us feeling dismayed at the companies taking part – and appalled with our semi-conscious complicitness for the sake of cheap goods. Pair that with ever-increasing online chatter about bad-quality products and inferior customer service, and people who could afford to change their buying habits started to do so.
It wasn’t just the reviews and news reports: some consumers (spurred on by revealing blog posts and articles) began to think more critically about the vague, cliché-ridden mission statements and “values” spouted by such companies. When we’re told that the world’s largest coffeehouse chain aims to “inspire and nurture the human spirit”, it makes us wonder what on earth is going on. Do these companies really believe this sort of stuff, or are they simply saying things they think we want to hear? Did they get bored halfway through brainstorming their own mission statement, and chose to outsource the matter to an online generator instead? Because that’s often what it seems like.
Trust went through the floor – and 30-second television spots, website popups and squirm-inducing magazine advertorials weren’t doing much to change that. In 2014, a report by the Reputation Institute found that just 15.4% of UK consumers believe what companies say in their advertising – with the rest neutral, disbelieving or unsure.
Bringing back the customers
So if people aren’t trusting traditional advertising and they’re almost intrinsically weary of what the big brands have to say, what will they believe in? What will make them choose one product over another? And how can the relationship between consumer and company be improved upon – so that we don’t feel quite so icky every time we buy something?
Increasingly, the answer for companies is this: (1) a strong sense of its values and moral obligations, and (2) a genuine commitment to creating an internal culture that staff believe in and customers appreciate. These two parts are interrelated, and they come with two essential caveats: “consistency” and “honesty”. If companies chop and change their values and obligations – or if they say one thing but do another – it all means nothing.
So what does “a strong sense of values and moral obligations” actually mean? It doesn’t mean anything that ought to be a given, like “We won’t pollute the town in which our factory is based.” It also doesn’t mean anything vague or hard to assess, like “We’ll endeavour to be as energy efficient as possible when manufacturing our products.” Instead, it’s about providing a concrete explanation of what you’ll actually do to make the world a better place (or improve the lives of your customers)… and sticking to it.
Take outdoor clothing company Patagonia: they’ve been devoting time and money to the environment ever since they were founded, more than 40 years ago. Not only do they donate 10% of profits (or 1% of sales – whichever is greater) to small groups working to protect the natural habitat, but they also get involved in countless national environmental campaigns. What’s more, they’ve continued to reduce their own role as corporate polluters – using recycled and environmentally friendly fabrics wherever possible. Unlike the vast majority of their competitors, they also encourage their customers to care for their existing clothing rather than buy new. In fact, during the 2011 Thanksgiving season, Patagonia ran an advertising campaign named “Don’t Buy This Jacket”. It read:
“The environmental cost of everything we make is astonishing. Consider the R2 Jacket shown, one of our best sellers. To make it required 135 litres of water, enough to meet the daily needs (three glasses a day) of 45 people. Its journey from its origin as 60% recycled polyester to our Reno warehouse generated nearly 20 pounds of carbon dioxide, 24 times the weight of the finished product. This jacket left behind, on its way to Reno, two-thirds its weight in waste… Don’t buy what you don’t need. Think twice before you buy anything. Go to patagonia.com/CommonThreads, take the Common Threads Initiative pledge and join us… to reimagine a world where we take only what nature can replace.”
Revenues skyrocketed. It was a highly savvy advertising campaign, to be sure, but it was also a genuine one: the company’s commitment to the environment is beyond doubt.
Electric motor company Tesla is another great example. Founder and CEO Elon Musk is so committed to reducing our reliance on fossil fuels that he opened up his company’s patents to the public. Competitors can now use that information to develop their own electric cars – which would take revenue away from Tesla. When Musk first announced this initiative back in 2014, it garnered the sort of attention, news coverage, intrigue and awareness that a traditional advertising campaign could only dream of. Not only that, but it continues to be mentioned by blogs, books, news articles and word of mouth.
This sense of values and obligations demonstrated by Patagonia and Tesla helps attract customers: through buying from reputable companies with values they believe in, they too are able to help contribute to improving the world around them. (The cynical among us might say that it also helps them offload some of their own guilt through the simple act of buying stuff, but even if that’s the case, it’s not exactly doing any harm.)
Internal culture exposed
Customers don’t stop there, though. They also want to know that companies have the aforementioned “genuine commitment to creating an internal culture that staff believe in and customers appreciate”.
Working conditions and benefits form a large part of this: companies that go above and beyond for their staff win plaudits, adulation, new customers, and a never-ending supply of candidates desperate to get a job there too.
This is a fairly recent occurrence: as trending experts TrendWatching explain, “Consumers have long been concerned about purchasing goods produced by vulnerable workers in developing countries. Now, rising inequality and growing job insecurity in affluent countries means their empathy is expanding to white-collar workers, too. Who knew people cared so much about Amazon’s highly paid developers, marketers and middle managers featured in the NYT’s controversial exposé?”
When companies prioritise the needs and motivations of staff (“How can we ensure they’re happy and fulfilled? How can we help them do a great job? How do we give them perks and benefits that align with our company values?”), they also end up with top-notch service from dedicated and knowledgeable workers who feel appreciated and invested in the company’s success. A great example of this in action is with Chip Conley and his Joie de Vivre hotels. As entrepreneurship blog Cause Capitalism explains:
“Instead of spending big money to sell customers the comforts and unique delights of Joie de Vivre, the company decided to invest a much smaller sum into staff training. Chip anticipated that importing service-level employees with ‘a sense of calling’ for what they’re doing would translate into great service experiences and lead to long-term profitability rather than an advertisement-induced uptick. He was right.”
The CEO of Evernote, Phil Libin, provides another excellent case study. A few years ago he decided to give staff unlimited annual leave: everyone can take off as much time as they want, as long as they get the job done. As Libin explains: “… we’re still measuring you on the same thing, which is, did you accomplish something great? Frankly, we want to treat employees like adults, and we don’t want being in the office to seem like a punishment.”
“Advertising in the future is like sex. Only the losers will have to pay for it.” – Jon Bond, Co-Founder, KBS+P
As with Conley, though, it’s not like Libin will hire anyone and offer them perks like this: he needs to hire the right people in the first place. “We try to have the kind of a culture that doesn’t value excuses in the sense that when you’re supposed to accomplish something, and you’re at a high level, then your job is to accomplish it, in spite of difficulty. And you’re rewarded for dealing with that.”
If you run a company that hasn’t traditionally put much thought or effort into “culture” or “values”, how do you integrate it in a real, meaningful way? After all, customers (not to mention the media) will see right through it if you suddenly jump on the one-for-one bandwagon and donate a cake to a hungry person every time someone buys from your bakery. And they’ll smell something fishy the moment you give your staff random away days that has nothing to do with their regular job. So where do you start?
Here are some tips:
1: Identify what Jim Collins (the author of Good to Great) refers to as your company’s core values: “What is [your] fundamental reason for existence? What do [you] aspire to achieve and become?” If you’re not sure, think back to why the company was started in the first place. Your core values don’t necessarily have to be anything hugely charitable or do-goody. Many companies are founded in order to address an unmet need or pain point from prospective customers – and that’s absolutely fine.
Of course, it’s also fine to believe in profit – and it’s completely acceptable to want profit and go after profit. But there’s usually something else there, too – and often it’s just a case of saying “Yes, we believe in profit, but that’s not the only thing we believe in.”
2: Think about what your audience values – what do they believe in and find important? Ideally, your own values should align with your customers’. If you’re an accountant with hard-nosed and ruthless clients, they might not care (and may indeed actively dislike) your mission to spend 10% of your time providing free advice to small struggling businesses.
3: Consider how much your customers are likely to care about your values and culture. Sonia Simone at Copyblogger argues that there are certain kinds of companies (like dog food and airlines) where, actually, the customer doesn’t care beyond things like price and quality – so there’s no point navel-gazing about “culture” for too long.
We see where she’s coming from, but we think it’s better to think about this a bit differently. A strong culture can still provide a superior experience for customers; even if it’s never shouted from the rooftops, Buffer style. If your employees feel like they’re fighting for a common good, if they feel appreciated and they find their work highly rewarding, that can only have a positive impact on the customers who deal with them.
“Our philosophy has been to take most of the money we would have spent on paid advertising and invest it into customer service and the customer experience instead, letting our customers do the marketing for us through word of mouth.” ― Tony Hsieh, CEO, Zappos
Also, it’s worth mentioning that some industries possibly haven’t yet been disrupted by this new type of marketing. Ten years ago, who’d have thought that a shoe company could focus on something beyond cost, comfort and looks, and make a huge success out of it?
4: Lead with values. As brand strategist Mandy Levenberg states: “Instead of reserving the conversation about your company values for off-site meetings, a section in your annual report, or even the ‘about us’ section of your website, lead with your values. Talk about them all the way from your senior team to your customer-facing employees and the very people who buy your products. Dare to change your messaging hierarchy and go out with values first. Post-recession consumers want to invest their money with companies they can trust, companies that speak about their values as a part of their value proposition.”
5: Be consistent (and don’t lie!). In a hyper-connected and transparent world, what you say has to match up with what you do – or else you’ll get discovered in no time.
Define your company from the inside out
A company’s ultimate aim – to become known, bought and loved – has a newer, alternative route. Advertising is and will probably always be one path, but its effectiveness is increasingly undermined by false promises, bad reviews and cringey (not to mention cynical) attempts to appeal to our emotions.
At a time when the public is more sceptical than ever of advertising – and when too many similar products and services compete for our attention – your company’s values and culture can be a way to both differentiate and align yourself with loyal customers.
As James Watt, co-founder of multinational brewery BrewDog, says in his book Business for Punks: “Working on your company culture is actually a much more effective form of marketing than pretty much all traditional marketing mediums combined. Culture now resonates much more with consumers than advertising does.”
It shouldn’t be forgotten, of course, that an emphasis on values and culture isn’t just good for customers: it also makes employees feel happier, more motivated, and more fulfilled.
How you behave as a company is increasingly more important than what you say. Surely that can only be seen as a good thing for everyone.