I offer up an instructive allegory for our times. It also explains the underpinning of my philosophy and practice about loyalty, engagement, and market research, and will be the basis from which my commentary and opinions flow. You have been forewarned.
By Robert Passikoff, Founder & CEO of Brand Keys
A market researcher was on a hiking vacation and came across a beautiful mountain valley covered with grazing sheep. Taken with the bucolic tranquility of the scene, he realized that he would like to own a sheep.
Approaching the shepherd, the researcher offered up a proposition. “If I can tell you exactly how many sheep you have in your flock, will you give me one to take home?”
The shepherd broke off playing his wooden flute and agreed. The researcher scanned the valley and instantly reported, “There are 1,274 sheep in your flock.”
The shepherd was astonished. “In fact, there are exactly 1,274 sheep. You have guessed correctly, stranger; now you may claim your reward.”
The researcher bent down, swooped up his choice, slung it across his back, and began to stride away. The shepherd called after him.
“Stranger, if I can guess your occupation, will you give my animal back to me?”
“Fair enough,” replied the researcher.
“You’re a market researcher,” announced the shepherd.
“Why, that’s simply amazing!” the researcher said. “How did you know that?”
“Put down the dog and we’ll talk.”
Are you laughing? If you are, is it hearty or nervous laughter? If my story made you chuckle, it’s probably because you see the truth behind the joke. There are a lot of “put down the dog” moments in research today. Just look at how often research gets bogged down in counting stuff. You know, tweets, shares, recommendations, clicks, views, and likes, and it all adds up to the wrong answer. There’s a lot of stuff folks do that hoodwinks marketers, or at least underserves them, because it turns out counting stuff is not the same thing as researching real insights.
Marketers and researchers got away with murder for a long time. Some still do, or try to. But then the digital world and mega-connected consumers showed up. So, it’s monumentally more important today not just to count stuff. Why? Because the consumer is monumentally more complex than ever before. They’re smarter and more connected than any consumer confederation in the history of commerce. So, their loyalty is critical for brand success; creating it, measuring it, maintaining it. And if you want something that’s predictive of consumer behavior and a leading-indicator of profitability you need to go with loyalty. But we’re talking real loyalty here.
If you’re tired of relying on the definition of “loyalty” as being something that you’ll recognize when it visits itself upon your brand or some sort of point scheme, take heart. I can offer up something more concrete, tied less to accumulation of points and more to actual, behavioral loyalty creation. Loyalty isn’t as nebulous as you might think. But it’s also not a lot of things.
Awareness is not loyalty or engagement. Everybody knows the Gap, but their same-store sales have been in a death spiral for years now. Everybody knows J.C. Penney and J. Crew, even as they declare bankruptcy. “Awareness” is easy to measure and count, is the absolute longest route to profitability, and has nothing to do with loyalty.
Satisfaction is not loyalty or engagement. The Customer Satisfaction and Total Quality Movements, and ISO 9000 programs pretty much guaranteed companies that survived to compete in the 21st century marketplace are turning out products and services mostly “right” and pretty much the same. The age of brand ubiquity arrived and nearly every brand “satisfies.” Satisfaction may be the “table stakes” of business survival, but it isn’t loyalty.
Then there’s the recommendation route. That isn’t loyalty either. It’s an indicator of satisfaction (see previous paragraph), even if practitioners insist otherwise. You either recommend (“I’m satisfied.”), are neutral (“Yeah, yeah, it’s OK, but who cares?”), or wouldn’t (“It didn’t satisfy, and BTW it only took a nanosecond to find another brand.”). NPS owns that arena, delimited via a 0 to 10 scale. It – like awareness – is easy to grasp and requires virtually no thought or analysis. It allows management to bask in averageness. And, yes, it’s not very specific, but has the added-advantage of no diagnostics, which in a complex world can be problematic. But hell, it’s easy. And if you’re what they call “passive” or a “detractor,” it’s not likely you are going to be loyal. QED.
No, loyalty is more complex. It’s the consumer-to-brand bond, the emotional engagement that ensures loyalty and future purchases. From a measurement perspective it’s defined as the degree to which a brand meets expectations consumers hold for the Ideal product or service in its category. It’s the answer to the question, “How well does the brand deliver on what consumers really desire?” Those expectations are mostly emotional, the rational ones being generally ubiquitous. The better a brand measures up to those mostly-emotional value expectations, the better consumers will behave toward the brand. It has the advantage of identifying value-shifts 18 months before they get articulated in focus groups or make an appearance in brand tracking studies and before marketers see such them in real-time consumer behavior, sales, or profitability.
The tweets and shares, clicks and views, likes and recommendations, are all rooted in counting “stuff,” which may be interesting, but “interesting” generally doesn’t, as the saying goes, “feed the bulldog.” Effective market research and brand and loyalty commentary is rooted in business, or ought to be. Real insights shouldn’t just be entertaining, and they sure as hell shouldn’t be a hobby!
Anyway, that’s my belief system and where future columns looking at winners and losers, brand blunders and successes, and marketing mishaps and triumphs will be coming from.
So, put down the dog and we’ll talk.
Robert Passikoff is founder and CEO of Brand Keys. He has received several awards for market research innovation including the prestigious Gold Ogilvy Award and is the author of 3 marketing and branding books including the best-seller, Predicting Market Success. Robert is also a frequent contributor to, and guest of TheCustomer.