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Build Your Brand as a Relationship

The way we think about brands need to change. In the past, they were objects or concepts. You had a relationship with a brand. But in this social age, brands are the relationships. By defining a brand’s particular kind of relationship, companies can create greater engagement, differentiation, and loyalty.

To understand this new mental model for brands, it is helpful to see how the concept has evolved. A brand started out as an identifying mark. Cattle owners would “brand” their cattle to indicate ownership. We can still see the “brand as object” model in the American Marketing Association’s definition: “Name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.” In this view, a brand is something applied to what you make.

In the next wave, a brand shifted from a feature to a perception, from an object to an idea. Al Ries and Jack Trout capture the essence of this model in their classic book Positioning: The Battle for Your Mind. They define a brand as “a singular idea or concept that you own inside the mind of a prospect.” In this view, a brand is not something you make, it’s something you manage.

The most recent wave focuses on brand as experience. Sergio Zyman, in The End of Marketing as We Know It, says: “A brand is essentially a container for a customer’s complete experience with the product or company.” A brand is not something you manage over time. It’s something you deliver in the moment.

Our experience working with innovative companies indicates they are redefining not only how their brands are observed, perceived, and experienced. They are also redefining the very nature of the relationship they have with their customer.

If the first three waves were brand as objectidea, and experience, the next wave will be brand as relationship.

The way to put “brand as relationship” into action is by defining the respective roles and responsibilities of the company and customer. The default brand relationship is provider/consumer. It’s a simple relationship that is one-directional and asymmetrical. The company provides the product or service, and the customer consumes it.

Brand innovators tend to create different kinds of relationships. Instead of transactional and one-directional relationships, the roles are more collaborative and reciprocal.

For example, in the hospitality industry most brands operate with the roles of host/guest.It’s one-directional, asymmetrical, and transactional. Airbnb has disrupted that model. With a mission of “belonging,” Airbnb has cultivated a neighbor-to-neighbor and citizen-to-citizen relationship on a global scale. It is reciprocal, symmetrical, and collaborative.

In the taxi and livery industry, cabs and limo services have operated with the roles of driver/passenger. Again, it’s one-directional, asymmetrical and transactional. Uber and Lyft established differentiation by introducing new roles along two dimensions. The first is a shift from driver/passenger to friend/friend. For example, Lyft passengers are encouraged to “sit up front” as if they were getting a ride from a friend. According to Kira Wampler, CMO of Lyft, “Our original tagline was ‘Your Friend with a Car’ which served not only to describe the human, peer-to-peer experience we delivered with Lyft but also to differentiate us from other private driver approaches.”

Another new brand role is entrepreneur/supporter. Uber encourages potential drivers to “build their business” on Uber. In both these cases, the brand relationship is more reciprocal and personal. As Amy Friedlander, Head of Experiential Marketing at Uber describes it, “Working with Uber is about our drivers’ needs, whether those needs are to have a fully flexible schedule or earn extra money. Uber is a platform that fits their lifestyle, not the other way around.”

In the airline industry, innovators have also redefined the brand roles. The established players like United and Delta have operated with a brand relationship of flyer/passenger. But Southwest broke the mold with singing flight attendants and a relationship that might be described as “fun friends.”  JetBlue, with its free snacks and mission of “Inspiring Humanity,” has a “human-to-human” relationship.

Virgin America went in a different direction, creating a brand relationship that is a cross between the hip friend and host of the party. The relationship is perhaps one reason Virgin customers are so upset by the sale of the airline. As one Virgin fan said, “I think of Alaska [Airlines] as more of a friendly aunt.” The sale is like someone busting up the party and telling everyone to go home.

The concept of brand-as-relationship also helps explain the rise of well-established market leaders. American Express redefined the relational roles of its industry from card issuer/card holder to club/member. Disney redefined the relational roles of amusement parks from operator/rider to cast member/guest. And Starbucks redefined not only the role of the server from waiter to barista, but the role of the coffee shop from restaurant to community hub.

Those familiar with brand archetypes may see some similarities to this approach. The difference is that in brand archetypes, the focus is on the attributes of the brand. But in the model proposed here, the focus is on the relationship that people have with Nike. As an archetype, Nike is a “Hero” brand because of its focus on victory. But Nike’s brand roles are best described as coach/athlete.

Marketers have an opportunity to redefine brand roles in every industry. Media has been defined by broadcaster/viewer for decades. Health care has been defined by doctor/patient. Education has been defined by teacher/student. In each of these industries, there is an opportunity to create a new relationship based on co-creation and collaboration.

To get started, think about the relationship people have with your brand today. Frame your answer as social roles. For example, if you are a health care provider, you probably have a brand relationship based on doctor/patient. Now think about other kinds of relationships outside your industry. For example, in health care there are aspects of teacher/student (to educate), coach/athlete (to motivate), or guide/traveler (to navigate). Be sure to consider roles that are symmetrical, like friend/friend, neighbor/neighbor or co-creator/co-creator.

Another strategy is to work backwards from the kind of relationship you want to have. Think about the value and benefits of your product. Then imagine the human relationships that would provide the same type of benefits. Nest thermostats, for example, automatically adjust the temperature to your liking, and their smoke detectors calmly direct you to safety in the case of a fire. Instead of the usual role for a device maker of manufacturer/buyer, Nest has created a brand role of being part of the family, looking out for you in an attentive and protective way. “Instead of thinking about George Jetson’s ‘smart home’ we imagine a home that is humanized and takes care of the people inside it and the world around it,” says Doug Sweeny, CMO of Nest.

Finally, look for ways to shift your brand roles from one-directional, asymmetrical, and transactional to reciprocal, symmetrical, and personal. These roles will bring to life your strategic narrative around a shared purpose. If today’s brand innovators are a guide, the result will be greater engagement, differentiation, and loyalty.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Cara France is CEO of The Sage Group, a firm providing marketing and consulting talent to San Francisco Bay area companies, and founder of Marketers that Matter. Follow her on Twitter @SageCEO.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How to Build a Strategic Narrative

It’s a common refrain in executive suites these days: “We need a new narrative.”

It’s not enough any more to say “we make widgets.” With changes happening so quickly from so many directions – competition, regulation, technology, talent, customer behavior – it’s easy for one’s story to become generic or outdated.

You want a story that inspires employees, excites partners, attracts customers, and engages influencers. A story that is concise but comprehensive. Specific but with room to grow. One that defines the company’s vision, communicates the strategy, and embodies the culture.

The natural step is to give the assignment to an agency. Most branding firms will come back with a tagline and positioning statement. Most advertising agencies with creative treatments and marketing campaigns. Most PR firms with messaging and communication plans. These are useful tactics but aren’t the kind of strategic narrative you are looking for.

A strategic narrative is a special kind of story. It says who you are as a company. Where you’ve been, where you are, and where you are going. How you believe value is created and what you value in relationships. It explains why you exist and what makes you unique.

This doesn’t come out of the usual competitive landscape, customer interviews, and whiteboard sessions. It takes a different approach and a shift in thinking led by the leadership team.

Human context

The first step is to understand the context of the narrative. Research shows that our brains think of companies not as objects but as people. Every time someone engages with your brand, they are asking you: “So tell me about your yourself.”

Consider the scenario of a job interview. You have the candidate’s resume, but what really matters can’t be put on paper. You want to know what inspires them, what they are like to work with, and whether they can be counted on. You want to get a sense for them as a person.

It may sound a bit strange at first, but the same is true for your company. The context of the narrative must be a human, not an institutional, relationship. People want to get a sense for your company as if it were a person. Human relationships require reciprocity and authenticity. The narrative should say who you are, not just what you do.

Shared purpose

The cornerstone of a strategic narrative is a shared purpose. This shared purpose is the outcome that you and your customer are working toward together. It’s more than a value proposition of what you deliver to them. Or a mission of what you do for the world. It’s the journey that you are on with them. By having a shared purpose, the relationship shifts from consumer to co-creator.

One function of the strategic narrative is to explain how the purpose will be fulfilled. As an example, between 2008 and 2015, IBM organized its marketing under the shared purpose of “Building a Smarter Planet.” In a series of papers and talks, then CEO Sam Palmisano laid out a detailed explanation of how things were becoming more “instrumented, interconnected, and intelligent.” By infusing intelligence into systems and processes, the world would become smarter.

The second function of the narrative is to explain the roles necessary to fulfill the shared purpose. By analogy, consider a potluck meal in which everyone is responsible for bringing a different dish. I bring the entrée, you bring the salad, and someone else the dessert. Similarly, the shared purpose is the potluck and the narrative explains who brings what to the party.

As an example, Nike has a mission “to bring inspiration and innovation to every athlete in the world.” What makes this a shared purpose is that Nike actively encourages people to inspire each other. Nike’s “Just Do It” slogan is a key part of its narrative. In addition to being part of the inspiration in the mission, it also helps define the respective roles. In effect, Nike is saying “We’ll bring the shoes, the equipment and the clothing; you bring your drive, your discipline and your competitive spirit.” It’s a narrative that goes far beyond the products Nike sells.

Brand DNA

People don’t fundamentally change, and neither do companies. When they are founded, a kind of DNA is created that persists for the life of the company. A strategic narrative must align with this brand DNA or it will be perceived as inauthentic.

It’s not a coincidence that the mantra of IBM’s founder, Tom Watson, was THINK; IBM’s last marketing strategy was based on the idea of a Smarter Planet; and its current strategy is based on the idea of Cognitive Business. Thinking is the DNA of IBM’s brand.

To find your brand DNA, go back to the original vision and ethos of your founder(s). Walmart’s value proposition is everyday low prices. It’s by no means unique among retailers. But Walmart’s shared purpose is not about lowering prices, but raising the quality of life. When he founded the company, Sam Walton said, “If we work together, we’ll lower the cost of living for everyone.” Other retailers can match Walmart’s strategy, but not its narrative.

Losing the narrative

Most companies don’t have a powerful narrative. They are missing the human connection, lack a shared purpose, or are out of alignment with their brand DNA. But the opposite can also be true. Some companies have a powerful narrative and then lose it. Starbucks is one such cautionary tale.

At the core of Starbucks narrative is the idea of a “third place.” Before becoming the CEO, Howard Schultz traveled through Europe and realized that in every country there was a third place between home and work where people gathered for conversation and community over a beverage. He envisioned Starbucks as a third place for America. The concept of third place powered years of exponential growth for Starbucks until Schultz stepped away from direct management of the business in 2000. Financial performance suffered until his return in 2008.

In his book Onward, Schultz reveals that Starbucks lost its narrative while he was away. Schultz writes: “Starbucks’ coffee is exceptional, yes, but emotional connection is our true value proposition. Starbucks is not a coffee company that serves people. It is a people company that serves coffee.”

It is no coincidence that market leading companies like IBM, Nike, Walmart, and Starbucks have powerful narratives. By creating a context of human connection, collaborating around a shared purpose, and connecting with the company’s DNA, you too can create a narrative that energizes your executives, inspires employees, excites partners, and attracts customers.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How to Discover Your Company’s DNA

The term “company DNA” is sometimes used as a shorthand for an organization’s culture and strategy — a metaphor for what makes it unique.  But there may be more to the metaphor. Understanding your company’s DNA can help you know what you can and can’t do, and how to achieve agility and authenticity in a changing world.

We know from biology that DNA contains the instructions an organism needs to develop, function, and reproduce. It is formed at conception and does not change. However, the same DNA can express itself in different ways based on one’s environment. It’s the reason identical twins have different fingerprints. In this process, called “expression,” the instructions in the DNA are turned into proteins and other cellular products.

Does biology inform business? It’s happened before. The language of ecosystems redefined our understanding of competition by viewing markets has habitats. Our understanding of organisms might lead to similar insights about organizations.

  • For example, DNA is formed at conception. Is that the case for companies too? Is a company’s uniqueness set by the founders’ vision and values?
  • Second, DNA does not change over the life of an organism. Is that true for a company? If so, does it limit the degree to which it can adapt and evolve?
  • Third, DNA expresses itself differently based on its environment. Might a company have the same DNA for its lifetime, but be able to innovate by expressing that DNA into new business models, organizational designs, and offerings?

These questions will clearly take a lot more research than this article. But the following stories suggest further exploration is warranted.

Consider Pokemon Go, the viral sensation of Summer 2016 and the most popular smartphone game in history. You probably know about the millions of people who gathered in public spaces trying to “catch” Pokemon characters with their phones. What you may not know is the origin of Pokemon.

The founder of Pokemon, Satoshi Tajiri, grew up outside Tokyo. His childhood hobby was collecting insects. The other children even called him “Dr. Bug.” As urban expansion paved over fields and forests, Satoshi’s insects disappeared. When Satoshi later developed an interest in video games, he saw a way to recreate his childhood experience of catching and collecting elusive creatures. For many years, this vision was played out on desktop computers. With Pokemon Go, Satoshi’s original vision remarkably came to life in the outdoor environments where it was first conceived. One might say that the company DNA of Pokemon is “collecting creatures.”

Interestingly, Pokemon Go was produced by a company called Niantic, whose founder, John Hanke, created the company that became Google Earth. The DNA of Niantic might be described as “mapping places.” Put “collecting creatures” and “mapping places” together, and you have Pokemon Go. Conversely, it would be hard to imagine Mojang (creators of Minecraft) or LEGO, both of whom have a DNA of “building worlds,” having created Pokemon Go.

If we continue with the idea that DNA is set at the conception of the company, does it actually create a limit on the ability to adapt and evolve?  The examples below seem to suggest that a company must stay true to its DNA, but has a lot of room to express that DNA in new ways whether in external strategy or internal management.

To illustrate this, consider the paths of two competitors: IBM and HP. Both struggled in the 1990s, but one re-embraced its founder’s vision and values while the other rejected them.

The leader who defined IBM as we know it was Thomas J. Watson. It was his vision to move beyond “office appliances” and create the International Business Machines Corporation. His mantra was THINK. It was more than a slogan. It was a way of doing business and a credo for the company. Watson’s vision was to use thinking to create machines, and to use machines to enable thinking.

IBM had a near death experience in the early 1990s due a series of bad business decisions. But in the wake of that crisis, IBM returned to its DNA of “think.” IBM’s game-changing laptop was the ThinkPad. One of its most successful marketing campaigns was “Let’s Build a Smarter Planet.” And its current focus is on Cognitive Business, led by the machine learning technology called Watson.

IBM’s competitor, HP, was founded in 1939 by Bill Hewlett and Dave Packard in a one-car garage in Palo Alto. The “HP Garage” is recognized by many as the birthplace of Silicon Valley. (The garage is such a symbol of the entrepreneurial spirit that other tech companies have invented stories about how they too were started in a garage.)

As they outgrew the garage, Hewlett and Packard sought to maintain that entrepreneurial spirit on a larger scale. This became the “HP Way,” one of the first examples of empowering employees, decentralizing the organization, and tying pay to performance. Jim Collins has written of Hewlett and Packard that “their greatest product was the Hewlett-Packard Company and their greatest idea was The HP Way.”

Starting in the late 1990s, a series of CEOs saw the HP Way as a liability rather than an asset. They abandoned the HP Way and replaced decentralized entrepreneurship with centralized control. The mindset of the garage was not only abandoned, it was destroyed. When HP merged with Compaq in 2002, Bill Hewlett’s son Walter protested that “the fundamental mistake … was the perceived need to do something with scale instead of succeeding the way HP has in the past.” Only recently with CEO Meg Whitman, has HP begun to re-embrace the HP way.  In 2012 she announced to all the employees a re-expression as “The HP Way Now.”

This story suggests that there may be a limit on corporate malleability. Strategy must be aligned to the company’s own DNA as well as the marketplace.  Transplanted organs are rejected if there isn’t a genetic compatibility between donor and recipient. Similarly, one can’t simply transplant a best practice from another company. It needs to be consistent with the DNA of the company.

At first glance, this seems to pose a problem. In today’s markets, it’s more important than ever to adapt and evolve.  If companies are limited by their DNA, is it possible to change in a way that keeps them competitive?

In biology, there is a difference between genotype and phenotype.  The genotype is the underlying DNA or instruction set for a physical trait, also called a phenotype.  Sometimes the genotype determines the phenotype regardless of the environment, as in the case of hair color. But sometimes there is a range of how the DNA can be expressed, what’s called “phenotypic plasticity.” For example, when baby newts sense the presence of predators as they are growing, they develop bigger heads and tails, which increase their chance of survival.

In business, some companies display this same type of plasticity, finding ways of responding to new environments by expressing their DNA in new ways. Pokemon Go is an example of expressing the underlying DNA of “collecting” in a new environment on the smartphone. Similarly, IBM has gone through multiple iterations of taking the underlying DNA of “thinking machines” and expressing it across mainframes, PCs, cloud, and now artificial intelligence.

Today, GE is looking to make a similar transformation, re-expressing Edison’s DNA of “invention” into the new market for the Industrial Internet, less focused on manufacturing and finance and more on software and analytics.

How do you discover your own company’s DNA? Start digging around in the company archives, talking to early employees and reading the corporate history. Look to the original vision and values of the founders. How did they see the world? What problem were they out to solve? What was their core insight about human behavior and the creation of value?

Once you’ve found the DNA, map it to the company’s past and current business.  Where is there stronger or weaker alignment? Finally, as you consider future strategies, how can you increase your “competitive plasticity” — the ability to express your DNA in new ways that create unique value and sustainable advantage.

It’s not a coincidence that the origin of the word company is “companion”, corporation is “body”, and organization is “organ.” Just as we talk about human development as a combination of nature and nature, perhaps the growth of organizations follows a similar path.  As leaders we spend most of our time thinking about how to nurture and shape our companies.  It’s time we also paid attention to their intrinsic nature and how we can cultivate their full expression.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How to Thrive in Social Media’s Gift Economy

So you’ve got your brand on social media. You have a Facebook page and Twitter account. Maybe a Pinterest board. But now what? There has to be more to social media than posting coupons and running sweepstakes. How do you drive real customer engagement?

The answer may come not from Silicon Valley or Madison Avenue, but from places like the Trobriand Islands and the Pacific Northwest.

Indigenous cultures developed what anthropologists call gift economies. As observed by Marcel MaussLewis Hyde, and others, gift economies are quite different from the market economies to which we are accustomed.

The concept of gift economies has been used to explain open source software and the Burning Man festival. But it also provides insight into what works — and doesn’t work — with social media, and what brands can do to be more successful in the online arena.

To understand a gift economy, consider the example of moving into a new apartment. When friends help you move, you express your appreciation by providing pizza and beer — really good pizza and beer. When you hire professional movers, you pay with money. Offer your friends money instead of pizza and beer, and they are likely to be offended. Offer to pay the movers in pizza and beer, and they won’t unload the truck. Your friends are operating in a gift economy; the movers in a market economy.
While both market and gift economies are systems of exchange, they differ in three fundamental ways.

1) Context: Transaction or Relationship
In a market economy, the focus is on transactions. In a gift economy, the focus is on relationships. Trobriand Islanders passed along necklaces and armbands as part of a ritual called the Kula Ring. An item’s value was not determined by supply and demand, or measured by a market price. Instead, its value came from the relationship between the giver and receiver and its meaning in the community.

2) Currency: Financial or Social
In a market economy, people use money as a medium of exchange — a financial currency. In a gift economy, people use social currencies. The purpose of a social currency is not to execute a transaction, but to express a relationship. Social currencies don’t have a price set in the market. In the moving example, pizza and beer are a social currency.

Note that social currencies are not the same as virtual currencies. Facebook “Likes” are social currencies, while Facebook Credits are virtual currencies. There is no price on a Facebook Like, while Facebook Credits have a clear market value.

But just because something has a monetary value doesn’t mean it can’t be a social currency. In the moving example, imagine if one of your friends drove a long way to help you out. It would be entirely appropriate to give your friend some gas money to cover the extra cost. The key point here is that the context is relational, not transactional.

3) Status: Earned or Bought
A tell-tale sign of a gift economy is that status is earned, rather than bought. In the Pacific Northwest, native tribes developed the ritual of the potlatch. Status was given not to those who accumulated the most wealth, but instead to those who gave the most to the community.

On a Google search page, you can see these two worlds of earned and purchased status side-by-side. In the middle of the page, so-called “organic” search results are earned based on a site’s popularity. In contrast, the ads in the top rows and right-hand column are based on how much advertisers have paid for the spot.

Social media are fundamentally gift economies. People are there to cultivate relationships, not conduct transactions. They exchange social currencies, not financial currencies. And status is earned not bought.

This illuminates why many brands are struggling with social media. They have confused market and gift economies. They focus entirely on transactions, buying status, and pushing products and promotions.

Brands that succeed in social media follow the principles of a gift economy. They build relationships, earn status, and create social currencies.

How is your brand doing? Rate yourself with the following simple guide:

1) Build relationships. 
• Push out information to drive transactions: Base
• Create relationships with individuals: Better
• Help people create relationships with each other: Best

A brand that that I give a Best rating to in this category is Vail Resorts’ EpicMix, which turns a ski slope into a social game. The experience keeps people connected anywhere on the mountain.

2) Earn status. 
• Celebrate your own accomplishments: Base
• Celebrate the accomplishments of others: Better
• Enable people to celebrate each other’s accomplishments: Best

A brand that I give a Best rating to in this category is Nike’s running community, Nike+. If you post to a friend’s Facebook wall during their run, they hear virtual applause through their music player.

3) Create social currencies. 
• Focus on discounts and promotions: Base
• Think of your product as a social currency: Better
• Create new social currencies related to your brand: Best

A brand that that I give a Best rating to in this category is Kraft Foods for recognizing recipes as a social currency and engaging customers on the Web, Facebook, Pinterest, and Twitter.

To put these principles into practice, put yourself in the position of your customer and ask yourself the following questions:
• What rituals, traditions, or social conventions involve your product?
• What do people talk about, share or exchange in these activities?
• How might the experience be enhanced with something better or different?

Keep looking until you get an “aha” moment — a social insight you can build on. For Kraft, it was helping people exchange recipes. For Vail Resorts, it was bringing the social experience of the lodge onto the slopes. For Nike, it was enabling runners to bring their friends with them.

Put these insights into practice, and soon your social strategy will start taking off. Begin by contributing to the community and earning trust. Over time, you can mint your own social currencies and cultivate a gift economy. As your customers start connecting with each other, you will generate social gravity that pulls customers into orbit around your brand. The result will be a deep connection with your customers that goes beyond our transactional notions of loyalty.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

How Top Brands Pull Customers into Orbit

The most successful companies in business today have something in common. This trait doesn’t just make them better than the competition; it makes them fundamentally different.

Where traditional companies push out messages and products, these companies pull customers in. Instead of treating customers as passive targets, they treat them as active participants. Like the sun in a solar system, they create a gravitational field that pulls customers into their orbit. They go beyond customer loyalty to building customer gravity.

Consider three top companies with orbit strategies: Apple, Google, and Nike. Each has a different approach, but the result is the same: customer-initiated touchpoints between transactions, and the creation of value beyond just product. At the core of each orbit strategy is a platform or service, what might be called a Customer Gravity Generator. Apple has iTunes and the App Store. Google has its search engine and Gmail. Nike has Nike+ and NikeID.

These orbit brands are actively building new Customer Gravity Generators. Apple has launched its iCloud. Google created Google+. Nike just launched NikeFuel.

Orbit brands are organized differently than traditional companies. Traditional brands are like artillery. Their mantra is aim and fire. They spend their time sighting targets (through customer segmentation), calibrating trajectories (by optimizing marketing mix), loading ammunition (with messages and offers), firing their weapons (with marketing campaigns), and celebrating successful strikes (from sales).

Orbit brands are more like scientists building a supercollider. Their mantra is test and learn. They focus on understanding the physics of their market space (through customer behavior), create and improve their technology (on products and platforms), run experiments (for new benefits and services) and analyze the results (for customer engagement).

To get started with an orbit strategy, start by measuring the strength of your gravitational field. Customer satisfaction isn’t enough. You aren’t measuring how well you target and transact. You want to measure the attractiveness of your brand — how well you pull customers in, and how well they pull other customers in with them.

A good test of where you are on the push/pull continuum is your social media strategy. Are you using social media as a channel for delivering messages to an audience? If so, you may be stuck in the push mindset. Or are you using social media as a way to listen and learn, to create an authentic relationship, and to deliver value beyond the products you sell? If so, you are well on your way to being an orbiter.

Next, imagine how you might build your own Customer Gravity Generators. First, revisit the core mission or purpose of your company. Think about what would help fulfill that mission and complement the products and services you sell. There are any number of sources of value: data, content, stories, relationships, experiences, identity.

If you think that only technology companies can create orbit strategies, think again. Nike has created a series of gravity generators, including Nike+, NikeID, and NikeFuel. With each generator, Nike creates a different orbit. One for runners, one for shoe aficionados, and one for athletes. Nike+ is particularly good at building social gravity, as existing users pull in new users like moons around their planets.

You don’t need to be a product company. Vail Resorts, a ski resort operator, created an orbit strategy with its Epic Mix. Starbucks’ “third place” strategy turned its own stores into gravity generators for local neighborhoods. Retailer Sears Holdings — where I work — is creating concentric orbits: ShopYourWay.com, a social network for social shopping; FitStudio, a community for fitness enthusiasts, and Craftsman Experience, a media channel for do-it-yourselfers.

You can also start small. Have you seen the Samsung power towers at busy airports? Road warriors are always huddled around them, tethered via their power cords. Samsung used electricity to generate customer gravity, and this one literally pulls in potential customers.

There are lots of options for creating customer orbits. So next time you hear someone talk about targeting customers, ask yourself, “What could we do instead to create some gravity and pull them in?”


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Marketing Can No Longer Rely on the Funnel

One of the central concepts of marketing and sales is the funnel — through which companies are supposed to systematically move prospects from awareness through consideration to purchase.

But consumers are now more informed, connected, and empowered than ever. Does the funnel still work in a digital, social, mobile age?

We asked some of the leading marketers in the world — from companies like Google, Intuit, Sephora, SAP, Twitter, and Visa — to assess the relevance of the marketing funnel.  What we found says as much about the future of business as it does about the future of marketing.

According to these marketers, the primary problem with the funnel is that the buying process is no longer linear. Prospects don’t just enter at the top of the funnel; instead, they come in at any stage. Furthermore, they often jump stages, stay in a stage indefinitely, or move back and forth between them.

For example, consider items that come recommended on an e-commerce site. With a click you can add them to your cart, moving straight from awareness through consideration to purchase in only a few seconds. The same holds true on items discovered in a Tweet, Facebook post, or Pinterest board.

In both B2B and B2C businesses, customers are doing their own research both online and with their colleagues and friends. Prospects are walking themselves through the funnel, then walking in the door ready to buy.

As an example, Julie Bornstein, CMO at Sephora, has seen social media change how people buy beauty products. Recommendations from friends have always been important, but now these recommendations spread “quicker, faster, and further” at every stage in the funnel. The decision on what to buy increasingly comes from advocates who share their experience in a way that pulls in new customers and informs their purchase decision. Sephora’s response has been to bring all the stages of the funnel together into a single place, creating its own online community where people can ask questions of experts and each other about brands, products, and techniques.

One popular alternative to the funnel is the Customer Decision Journey popularized by McKinsey. A key advantage of this model is that it’s circular, rather than linear. Prospects don’t come in the top and out the bottom, but move through an ongoing set of touchpoints before, during, and after a purchase.

The Customer Decision Journey is an improvement over the traditional funnel, but some marketers see it as incomplete. The problem is in the name itself. Brands may put the decision at the center of the journey, but customers don’t. Jonathan Becher, CMO at SAP, believes that for customers, “the pivot is the experience, not the purchase.” The Customer Decision Journey might be circular, but if the focus is still on the transaction, it is just a funnel eating its own tail.

One of the most critical weaknesses of the Customer Decision Journey is the connection between purchase and advocacy. Almost every marketer we spoke to described how social media has disconnected advocacy from purchase. “You no longer have to be a customer to be an advocate. The new social currency is sharing what’s cool in the moment,” says Joel Lunenfeld, VP of Global Brand Marketing at Twitter.

In today’s marketing landscape, people can experience a brand in many ways other than purchase and usage of a product. These include live events, content marketing, social media, and word-of-mouth. Consider all the members of the Nike+ running community who don’t own Nike products or the half million fans of Tesla’s Facebook page who don’t own a Tesla. Or consider companies where employees use their own devices or download their own software until IT purchases the enterprise version for the entire company. In today’s digital age, advocates aren’t necessarily customers. Marketers who think that advocacy comes after purchase are missing the new world of social influence.

Antonio Lucio, Chief Brand Officer at Visa, believes the solution is to shift the focus from the transaction to the relationship.  After exploring the Customer Decision Journey, his team developed what they call a Customer Engagement Journey.  In this model, transactions occur in the context of the relationship rather relationships in the context of the transaction.

As an example, consider a real world journey of a family’s trip from the U.S. to Mexico. Visa has mapped out the entire experience, from where the family gets ideas on where to go (TripAdvisor), to how they gather input from friends (Facebook), to how they pay for their cab (cash from an ATM) or hotel (credit card), to how they share photos of their trip with friends back home (Instagram). Only a few of these situations are opportunities for transactions, but they are all opportunities for relationship. “When you change from decision to engagement,” Antonio says, “you change the entire model.”

Market trends suggest the mismatch will only widen between customers’ actual experiences and the models of the funnel or Customer Decision Journey.  One key trend is the integration of marketing into the product itself.  The funnel presumes that marketing is separate from the product.  But for digital products like games, entertainment, and software-as-a-service, the marketing is built right into the product.  Examples include the iTunes store and Salesforce’s App Exchange.

Caroline Donahue, CMO at Intuit, oversees numerous web-based products for which “the product and the marketing become one thing.”  The funnel changes because “with cross-sell and up-sell, you move from awareness to action instantaneously.” Instead of a Customer Decision Journey, her approach might best be described as a User Experience Journey into which opportunities for transactions are thoughtfully embedded.

Google shares a similar view, taking the fusion of product and marketing one step further. Arjan Dijk, the company’s Vice President for Global Small Business Marketing, believes products should be designed to market themselves. For Google, the question is not “how can we market this product?” but “which products deserve marketing?” Marketing isn’t about “pushing people’s thoughts and actions. It’s about amplification, helping what’s already happening grow faster.”

So where do we go from here?  The funnel and Customer Decision Journey aren’t going away.  They are useful models, and will continue to be helpful in certain contexts.  But marketing today requires a new mental map to navigate a changing landscape. We need a model that informs marketers how to enable and empower, not just persuade and promote.  There are a variety of alternatives including journey, orbit, relationship, and experience.

Whatever model you choose, what’s most important is that it addresses: first, the multi-dimensional nature of social influence; second, non-linear paths to purchase; third, the role of advocates who aren’t customers; and fourth, the shift to ongoing relationships beyond individual transactions.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Cara France is CEO of The Sage Group, a firm providing marketing and consulting talent to San Francisco Bay area companies, and founder of Marketers that Matter. Follow her on Twitter @SageCEO.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

People Are the New Channel

In the past, channels delivered messages to audiences. You either owned the pipe or paid to use someone else’s. You controlled the message all the way through that pipe.

In a digital and social age, pipes are less important. People are the channel. You don’t own or rent them. You can’t control them. You can only serve and support them.

This new world is disorienting because pipes and people work very differently as channels. Pipes flow out; people flow in. Content is pushed out through pipes, but pulled in through people.

This reversal is shifting the balance of power. Individuals have access to information, tools, and resources once reserved for institutions. Externally, this means a shift in the relationship between customers and brands. Internally, this means breaking down the silos that once divided functions and departments. What used to be a hierarchy with the company at the top is now a network with the customer at the center.

For marketers, this of course changes everything. As part of an awards program that one of us (Cara) created and the other (Mark) helped judge, we had the opportunity to see how hundreds of top marketers in Silicon Valley are engaging customers and growing revenue in this new era. The two most important principles that emerged are that customers make the best brand advocates, and entire organizations make for the best marketing teams.

• Externally, empower your customers to be brand advocates. Laura Messerschmidt, Vice President of Marketing at Outright (a GoDaddy company), discovered through extensive customer research a new tax law that would significantly affect millions of customers and prospects. Instead of creating a campaign, Laura created a movement. She developed compelling content to educate customers, prospects, advocates, and influencers on the new law. She organized a roadshow meeting with local small business groups in ten cities. She reached out to 5,000 top customer advocates and invited them to share the content on social networks. The results? Monthly sign up rates went up over 225% in just two months and the cost to acquire customers decreased by over 40%.

• Internally, treat your entire organization as your marketing team. Chris Borr, former Vice President of Marketing at McKesson, was responsible for launching a major new campaign for one of McKesson’s divisions. On the belief that everyone in the division would need to support the campaign to make it successful, he spent as much energy cultivating internal ownership as external engagement. Focusing on the division’s 7,500 employees, from the night shift workers to the executives, he looked at every customer touchpoint and ensured everyone understood their new role as it pertained to the brand. The results? $600 million in new business the first year the program launched.

Some key skills and strategies accelerate the shift from pipes to people:

1) Don’t talk, listen. Brent Remai, CMO at FireEye, was hired into a small, venture- funded company with several years of moderate results. His first task was to spend significant time with dozens of customers to understand their problems and the language they use to talk about the issues. He used this information to formulate a marketing strategy that spoke to the customers in a language they understood. He then tested his strategy repeatedly with customers until it truly resonated. The result? In 2012, they were ranked as the 4th fastest-growing tech company by Technology Fast 500.

2) Don’t push products, solve problems. Laura Fay, Vice President Integrated Campaigns and Strategy at Cisco, has helped the global marketing organization rethink the way it approaches marketing. For years, the company had been focused on product launches to create splash, buzz, and engagement. Instead, she implemented an integrated planning process that started with the top customer issue and then created an integrated solution that crossed business divisions. The results? The integrated campaign resulted in Cisco’s share of voice for Cloud computing going from No. 5 to No. 1.

3) Don’t stop at 1-to-1, think many-to-many. Antonio Lucio, Chief Brand Officer at Visa, created a customer engagement strategy for the 2012 Olympics. Instead of pushing out messages, the company used social media to connect fans with each other and with the athletes they were cheering for. In exchange, fans got exclusive behind-the-scenes stories. The results? The most successful campaign in the company’s 26 year history of Olympic sponsorship, resulting in significant brand equity lifts, 13% claimed product usage and 470 million earned impressions in 26 markets.

Ironically, the shift from pipes to people is made possible by intensive use of technology and data — not only to automate but to analyze, personalize, and socialize. Technology brings speed and scale to what previously was impractical or unaffordable. Many of the most innovative marketers cited how social media monitoring enables them to listen and respond on a global scale. In addition, customer and employee communities enable them to identify real problems in real-time. Finally, relationship and content management tools enable them to make connections and capture user-generated content achieving both reach and relevance.

Counterbalancing this use of technology and data is a shared mindset that emphasizes reciprocity in the relationship between a brand and its customers. Top marketers know that they can’t put one over on the customer, nor can they control the message or their customer’s behavior. It takes humility, appreciation, and an orientation towards openness and inclusion.

So what’s the recipe for results in marketing today? Choose people over pipes, and mix one part technology with an equal part humanity.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.

Cara France is CEO of The Sage Group, a firm providing marketing and consulting talent to San Francisco Bay area companies, and founder of Marketers that Matter. Follow her on Twitter @SageCEO.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Purpose is Good. Shared Purpose is Better

Companies are turning to “purpose” and “authenticity” as a way to engage consumers and employees. But it’s hard enough to find a purpose in life if you’re an individual, let alone an entire company. And being authentic is a bit like being cool — sometimes the harder you try, the less you are.

So what’s a leader to do?

The first step is to recognize that there are different kinds of purpose. Sometimes purpose is about values — who you are and what you stand for. Other times it is about value — what you do and how it benefits others.

The ultimate goal would seem to be having your values and value aligned: have what you do reflect who you are, have what you stand for guide what you make, and have your value to the community enhance your value to customers and shareholders.

This goal is of aligning values and value is espoused by many eminent leaders, from Jim Stengel to Bill George. It’s a core tenet in the field of corporate social responsibility.

But in a social age, this kind of purpose isn’t enough. The problem comes down to a simple preposition. Most leaders think of purpose as a purpose for. But what is needed is a purpose with.

Customers are no longer just consumers; they’re co-creators. They aren’t just passive members of an audience; they are active members of a community. They want to be a part of something; to belong; to influence; to engage. It’s not enough that they feel good about your purpose. They want it to be their purpose too. They don’t want to be at the other end of your for. They want to be right there with you. Purpose needs to be shared.

To understand the power of shared purpose, it’s useful to look at the mission statements of leading companies. To be clear, I’m not equating mission statements with company purpose. But they illustrate the point, and in fact are remarkably representative of the differences between the companies. So with that caveat, let’s look at our first mission statements from Adidas and Nike:

Adidas: The adidas Group strives to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle.

Nike: To bring inspiration and innovation to every athlete* in the world.

*”If you have a body, you are an athlete.”

Notice how you respond to each statement. Which one do you feel more a part of, regardless of whether you are a customer or shareholder? Adidas puts the emphasis on value and values. But Nike goes further, addressing not only people’s interests but their sense of who they are. Adidas is for, while Nike is with.

Let’s look at another example, this time between Starbucks and Dunkin Donuts.

Dunkin Donuts: Make and serve the freshest, most delicious coffee and donuts quickly and courteously in modern, well-merchandised stores.

Starbucks: Our mission: to inspire and nurture the human spirit — one person, one cup and one neighborhood at a time.

Dunkin Donuts’ purpose is clearly for customers, and it delivers on this purpose exceedingly well. But there is something different about Starbucks’ purpose. It is a purpose that is achieved with its customers.

Again, mission statements don’t always reflect a company’s true purpose. But in these cases, I think you would agree that they are fairly accurate representations of the company’s approach to the market, its engagement with customers, and its perception as an “authentic” brand.

The relationship of shared purpose to corporate social responsibility is worth exploring a bit further, this time by comparing Pepsi and Coca-Cola. Under the label “Performance with Purpose,” Pepsi has declared both a mission and a vision.

Mission: Our mission is to be the world’s premier consumer products company focused on convenient foods and beverages.

Vision: PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate — environment, social, economic — creating a better tomorrow than today.

This is a perfect example of a “Values and Value” approach to purpose. The vision covers values, and the mission covers value. But something is missing. There is no shared purpose here. Nothing for people to participate in, belong to, engage with, co-create, or share with others that aligns the commercial side of the business with social responsibility.

By contrast, Coca-Cola has declared as its mission:

To refresh the world…
To inspire moments of optimism and happiness…
To create value and make a difference.

While the third line is a bit generic, the first two lay a stronger foundation for a shared purpose. It is perhaps no coincidence that Nike, Starbucks, and Coca-Cola all feature the word inspiration in their mission statements. You can’t inspire someone without their participation and engagement.

How can you create your own shared purpose? It’s simple, but not easy. The essential question is:

What is the shared purpose that …

a) We and our customers can work on together?
b) Is a natural expression of who we are and what we stand for?
c) Connects how we make money with how we contribute to the world?

When you apply this lens to the brand we have covered here, you can see how Nike, Starbucks, and Coca-Cola pass the test. Nike to inspire the athlete in all of us. Starbucks to nurture the human spirit. And Coca-Cola to refresh the world with moments of optimism and happiness
.
As you formulate your shared purpose, don’t go for what you think it should be. Look for who you already are. How you already connect with your customers. What your fans already say about you.

Remember, this is not something you are going to do to them, or for them, but withthem. It’s a journey you will be on together, hopefully for a very long time.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

What If You Could Learn Design from Apple?

Over 4,000 companies have corporate universities. Some of the most famous are run by GE, Disney, and McDonalds. Their purpose is to instill the company’s vision and values and cultivate critical skills and competencies.  The best ones are permeable membranes that transfer knowledge from the outside in: Steve Jobs recruited the Dean of Yale’s Business School to run Apple University, while  Jeff Weiner recruited business coach and thought leader Fred Kofman to lead leadership development for LinkedIn. Some of the best programs are said to rival traditional business schools.

The assumption in leadership development is that corporate universities are for internal audiences. But what if corporate universities were for customers as well as employees?  There are competencies inside of companies that would be of value to those on the outside. What would happen if we turned the corporate university inside out?

Companies everywhere are looking for new ways of engaging customers.  Content marketing is a start, but articles and posts on social media don’t go deep enough. It’s time to flip the corporate university inside out, blending marketing with learning to create relationships beyond the transaction.

There’s some precedent for “flipping the corporate university.” The Disney Institute is a professional development organization that works with companies to showcase “the business behind the magic” and instill the competencies of leadership, employee engagement, and service that have made Disney so successful.  The company uses events, courses, and consulting to share principles of what the Institute calls “#DThink” like “Setting the Stage” with a growing community of individuals and organizations. The Disney Institute is separate from and complements Disney University, which trains Disney cast members who work in their parks.

Ritz Carlton and Zappos follow a similar model. Through courses and consulting engagements, the Ritz Carlton Leadership Center enables companies to acquire the competencies of “service excellence” for which Ritz Carlton is so renowned. The Leadership Center is well respected in the industry and has been inducted into the Training Magazine’s Hall of Fame.  Zappos Insights was created to “share the Zappos Culture with the world” and help companies strengthen their own culture and core values.  The Insights team offers tours of Zappos Headquarters, Q&A sessions with Zappos leaders, content subscriptions, and a “full culture immersion” through live events.

Disney, Ritz Carlton, and Zappos are all service-intensive businesses. But the model can be applied in other areas too. For a number of years, IBM organized the Center for CIO Leadership as a “global community to advance the profession.” At the time of its founding in 2007 most leadership programs were focused on helping CIOs be better IT managers. In contrast, IBM’s program helped CIOs be better business leaders.  The program helped CIOs gain a “seat at the table” within their companies, and strengthened relationships with IBM’s key buyers.  (Note: I advised IBM on the design of this program.)

P&G Professional serves the “away from home” market for commercial cleaning. The industry suffers from high turnover and most commercial cleaners are relatively small companies without resources for extensive training.  So P&G Professional recently launched its University as a “virtual campus” with training materials on cleaning techniques and best practices.

The notion of using learning to strengthen customer relationships is not a new one. In 1920-21 farmers were hard hit by deflation.  Farmers were vital to Sears-Roebuck, which at the time was still purely a catalog company.  Radio was still a new technology but had been rapidly adopted by farmers.  Sears had advertised on radio stations, but wanted to create a deeper relationship with its customers.  In 1924 Sears launched the Sears-Roebuck Agricultural Foundation and WLS Radio (for World’s Largest Store).  The purpose was to help farmers “Farm Better. Sell Better. Live Better.” By helping farmers be more productive, Sears enabled them to generate more disposable income. By focusing on a shared purpose, Sears created reciprocal relationships that went beyond loyalty to gratitude.

The potential for turning corporate competencies into customer relationships is vast. Imagine learning product design from Apple. Salesmanship from Salesforce. Digital marketing from Adobe. Sustainability from Patagonia. Organizing from the Container Store. Industrial internet from GE. Logistics from FedEx. Branding from Nike. Networking from LinkedIn.

Why don’t more companies do this? The reason isn’t demand. Whenever I speak to a company’s best customers, they always say they want to know more about what the company knows.  The problem is that companies don’t see the opportunity.

The first reason is mindset.  No one thinks of learning as being a strategy for building deeper relationships with customers and partners.  The second is perspective.  Customer interactions that aren’t directly tied to sales are seen as unproductive.  The third is skillset.  Companies don’t think of themselves as being “in the learning business” or they don’t feel they have the competency to produce high-quality learning.  The fourth is silos. Marketing and learning rarely talk to each other.

The final reason is confidence.  Companies often don’t think they have anything to say.  A few years ago I was working with a global company that was trying to engage Chief Financial Officers.  They had developed all kinds of thought leadership and white papers about how CFOs could do their job better.  But when we talked to CFOs, what they really wanted to know was how the company managed its own finances across so many geographies.  When told of this request, the company’s response was “Really?  That seems too easy.”

As you consider flipping the corporate university, look for where your distinctive knowledge or competencies can solve a learning or business problem for your customer.  The business case has two components.  First, by solving that problem you create a deeper relationship and gratitude beyond the transaction.  Second, a properly designed program generates more business for the sponsor.  By helping farmers be more productive, Sears generated more disposable income for Sears products. By helping commercial cleaners be more profitable, P&G generates more demand for its products.  This combination of economic benefit and social reward is a powerful engagement strategy.

Keep in mind that you don’t need to create a formal “university” to put this strategy into action.  Sephora has put education and learning at the heart of its marketing, sales and customer service strategy.  Its “Beauty Workshop” gives customers expert advice and how-to makeovers online and in the store.  Similarly, Home Depot offers free DIY (Do-It-Yourself) workshops in their stores and a robust collection of how-to videos online.  For Sephora and Home Depot, the learning deepens the brand relationship while generating more demand for the products. The more creative and confident you feel about your makeup or building skills, the more likely you are to buy their products.

In this digital age, it is imperative for companies to build their brand orbits with ongoing relationships beyond individual transactions.  This relationship must be built on more than a value proposition and a net promoter score.  We all remember the teachers that had the greatest impact on our lives.  And we are loyal fans of the schools that shaped us into who we are today.  It’s time to bring marketing and learning together to create more enduring and authentic relationships.

There is a saying that if you sell someone a fish, they eat for a day, but if teach them to fish, they eat for a lifetime.  The flipped university is a simple variation.  If you have a bait, tackle, or charter business, teaching someone to fish can make them a customer for life.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Why Customer Gratitude Trumps Loyalty

Brands want loyal customers. They buy more, pay more, and refer more.  But research shows that loyalty is in decline. Consumers are considering more brands and switching providers more frequently than ever before.

So what can marketers do with their loyalty programs to earn greater trust, commitment and advocacy?  The answer isn’t more sweepstakes, coupons, points, promotions or emails.   It takes a rethinking of what loyalty really means in a digital age.

1. Loyalty needs to be reciprocal. Consumers today expect this allegiance to go in both directions. According to a study by Kitewheel, three-quarters of consumers believe loyalty programs are for brands to show their loyalty to consumers. But two-thirds of marketers think the reverse: that loyalty programs are a way for consumers to show their loyalty to brands.

You can see this disconnect in how brands talk about loyalty.  The phrases “brand loyalty” and “customer loyalty” often mean the same thing. What would the world look like if brands were loyal to their customers? Credit card companies would waive late fees for customers who were on vacation when the payment was due. Retailers would reward shoppers who don’t spend a lot, but are active on social media as brand advocates. Airlines and hotels would renew status levels for customers who took a hiatus from traveling when they had a baby or were between jobs.

2. Loyalty is about emotion first, behavior second. For most brands, the measure of brand loyalty is repeat purchase behavior. This metric puts the cart before the horse. Loyalty is powered by emotion; repeat purchases are the result.

The increasing popularity of promotions shows this flawed thinking in action. Low prices may be a way to drive more transactions, but it doesn’t necessarily earn loyalty, at least not in an emotional sense.  Ivan Wicksteed, CMO at Old Navy and architect of the brand’s recent transformation, has said, “It’s the emotional connections that a brand makes… that last the longest and go the deepest.”

Things get worse when carrots turn to sticks and brands start penalizing disloyal behavior.  Consider Amazon’s recent announcement that it would stop selling products that aren’t compatible with its video streaming service. Like other Amazon customers, I question how this serves its mission to be “Earth’s most customer-centric company.” Or consider phone companies like Verizon and AT&T that are always looking for ways to lock customers into another two-year contract.

3. Go for gratitude and loyalty will follow. How does one create a sense of loyalty that is reciprocal, authentic, and emotional?  The answer is to focus on fostering the emotional response that is most likely to drive loyal behavior—gratitude.

By definition, gratitude is “a readiness to show appreciation for and to return kindness.”  Note that gratitude is inherently reciprocal. It also combines both emotion and behavior. There is a feeling of appreciation and an expression of that appreciation through some kind of action.   Gratitude therefore can serve as the basis of a relationship beyond the transaction.

It’s tempting to think that gratitude can be generated by doing nice things for your customers. It’s a good start, as Starbucks has demonstrated with the success of its own loyalty program. Giving gifts, granting rewards, and doing other nice things can work in the short term, but customers can become conditioned or easily wooed by someone else with nicer gifts.

The strategy for generating sustained gratitude is to discover and foster a shared purpose with your customers, and to help them share that purpose with others.  Shared purpose is not something you do for your customer, but rather with your customer. Satisfied customers at T-shirt company Custom Ink, for example, receive a personalized communication when they complete a survey after their purchase:  “Your t-shirt design is an extension of yourself, a statement of your creativity! I’m so glad that we were able to help bring your idea to life. We love seeing our t-shirts out in the world, so check us out on Facebook. You can share your story, post a picture of your creation, and share it with your friends.”

All of the elements of a gratitude program are in these sentences.  CustomInk is going beyond the transaction to create a shared purpose around expressing creativity.  They are expressing their own gratitude, not for the transaction (“thanks for your purchase”), but for the opportunity to contribute to that purpose (“glad to help you bring your idea to life”).  They have created a personalized interaction to show loyalty to the customer.  And they have identified a social currency in the t-shirt itself (they call it “a creation”) with opportunities to share it with others.

GE is another company pursuing a gratitude strategy with its “Surprise and Delight” program.  It launched a “Healthymagination” program with a shared purpose of “creating better health for more people.” To deliver on that shared purpose, in 2012 the company created an outreach program designed to “create an emotional connection” around health.

GE monitored social media outlets and engaged people talking about health. They didn’t try to sell, but instead to express appreciation and support. In some cases they went even further, sending personalized gifts (like a yoga mat or water bottle) as a tangible expression of appreciation aligned to the shared purpose.

The spirit of gratitude is apparent in the interactions. For example, one of GE’s tweets said “@[name] Your blog post made us smile. We’re glad you share your healthy habits with your friends :-)”  This was followed by a personalized gift. The recipient responded with:  “@generalelectric Your lovely gift made me smile. So it’s smiles all around :-)  And yes, sharing fitness with friends is the best!”

The key to success for GE and CustomInk was the authenticity of the appreciation they showed to their customers. The interactions weren’t transparent attempts to drive another transaction. They were inspired by a well-articulated shared purpose, motivated by a heartful desire to “show appreciation for and to return kindness,” and organized with a well-planned program combining social media, personalization, and customer support. And there wasn’t a coupon or loyalty program point anywhere in sight.

If you are wondering how to generate more brand loyalty, consider implementing a gratitude program. Identify the shared purpose that you can work on together with your customer. See where you can express appreciation for their accomplishments toward that shared purpose. Cultivate gratitude and loyalty will naturally follow.


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.

Three Steps to Generating Social Gravity

In a social age, people don’t like to be pushed. As described in my last post, top brands like Apple, Google, and Nike are using a new model based on pulling rather than pushing. They create a gravitational field that attracts customers into orbit around their brand.

This kind of social gravity isn’t just about how many likes you can get on Facebook. This is about enduring, meaningful, and authentic relationships with your customers and the people in their lives.

How can you shift from push to pull and create your own social gravity? With three basic steps: Purpose provides the Why; Platforms the What; and Partners the How.

1. Shared Purpose
The objective of Push marketing is to convince a customer to make a purchase. In contrast, the objective of Pull marketing is to achieve a shared purpose. At Sears Holdings, where I work, the Craftsman brand of tools and equipment has an orbit strategy for do-it-yourselfers. The Craftsman Experience studio in Chicago creates live experiences and professionally produced content to help members of the Craftsman community create and accomplish their DIY projects. The focus isn’t on the immediate purchase, but on achieving the shared purpose of creativity, craftsmanship and accomplishment. This shared purpose attracts existing Craftsman customers, and leads them to bring along their DIY friends as well.

2. Engagement Platforms
While Push marketers focus on products, Pull marketers focus on engagement platforms. These platforms are what engage customers outside the purchase process and deliver value beyond the products being sold. Some of the most well known engagement platforms are Google’s search engine, Apple’s iTunes music manager, and the Nike+ running community. Google, Apple and Nike don’t charge people for using these platforms. But they keep their customers in frequent orbit around the brand, and make it easy for customers to purchase a product, whether an ad, song, or shoe.

Engagement platforms are built from multiple layers working together. The identity layer recognizes the customer. The data layer exchanges information to personalize the experience. The relationship layer enables connection among the brand and community members. Finally, the value layer delivers benefits to the users.

One of the reasons why orbit strategies are becoming so popular is that social networks like Facebook, Twitter, and Google provide ready-made identity, data, and relationship layers. All you have to do is figure out the right engagement strategy for the value layer.

There are five types of engagement strategies that are particularly common.

a. Content, e.g. Huffington Post
b. Conversation, e.g. Facebook
c. Collaboration, e.g. Quora
d. Contribution, e.g. Kickstarter
e. Commerce, e.g. Groupon

These aren’t the only strategies. Pinterest, for example, has popularized a new category around curation. And don’t think you have to be a startup or media company. Kraft Foods has built a very effective orbit strategy around recipes, combining content, conversation, and commerce. And innovation firm PSFK uses curated content to generate gravity for its research and consulting business.

3. Collaborative Partners
Partners are a powerful way of amplifying your gravitational field. By combining forces, you can multiply the value of your service and bring in new constituencies. In addition, partners can add credibility. They reinforce that you are seeking to create value and build relationships beyond pushing products.

Apple’s platforms are integrally connected with partners, whether music companies for iTunes or developers for the App store. When IBM sought to engage mid-market companies, it partnered with GOOD to launch the GOOD Co. project. And Kraft Foods recently partnered with HSN to bring commerce to its recipe community.

Keep in mind that your own customers should be collaborative partners. Threadless sources designs for its t-shirts from its customers, and lets the community pick which ones to produce. And P&G sources new innovation ideas from outside the company through its Connect+Develop program.

There are many ways to create customer gravity. Start with a purpose both you and your customer care about, and for which you have something to bring to the table. Then create an engagement platform that creates value using one of the types of value mentioned here, or create your own. Finally, look for partners who can bring expertise, resources, credibility, and reach.

With purpose, platforms, and partners, you are ready to build social gravity. So stop pushing and start pulling!


Mark Bonchek is the Founder and CEO (Chief Epiphany Officer) of Shift Thinking. He works with leaders and organizations to update their thinking for a digital age. Sign up for the Causeit, Inc. newsletter and follow Mark on Twitter at @MarkBonchek.


Originally appeared on Harvard Business Review. Reproduced with permission from the author.