A Blog by Jonathan Low


Feb 25, 2015

Marketing Is Dead - and Loyalty Killed It

Marketing may be dead but it still has budget. Must be one of those legacy things. The question is what to do with it.

The challenge is that all that big data you've been squirreling away in order to divine some extraordinary truth from the numbers is pointing rather insistently towards customer loyalty as the play.

Loyal customers cost less (bye-bye budget), they are easier to upsell and they keep coming back for more. As long as you keep your end of the bargain, that is, which means turning out stuff they like, can brag about to their friends, tattoo on their arms and otherwise celebrate as evidence of their not your brilliance.

Your job is not to screw up a beautiful relationship based on trust, quality and image. So it's not about ad buys or content or being on message. It's about aligning everything the company or agency or organization does with the end product. In other words, it's not really about marketing, its rather more existential than that: it's about who you are, what you deliver and whether there is any daylight between the two. JL

Alexander Jutkowitz comments in Harvard Business Review:

The Chief Loyalty Officer’s job isn’t about asking, “What should this company say?” It’s nothing less than answering the question, “What should this company be?”
So, you’ve worked your way up the corporate ladder to become Chief Marketing Officer. Pat yourself on the back – you deserve it! All done? Good. Now, please accept my condolences. Your job is obsolete, and unless you turn yourself into a Chief Loyalty Officer, you’re sure to eventually be replaced by one.
Want proof? Look no further than Apple’s record-smashing earnings release last month. We all know the colossus of Cupertino has amazing products and is constantly working on new ways to dazzle and disrupt, from the Apple Watch to Apple Pay. But the earnings report makes clear that intense loyalty to the iPhone– 87% loyalty, to be precise – is what really drives its success. Instinctively, we all know that, because we can all think of someone who pre-orders every new iteration of the iPhone before the shine has faded from the previous one. That kind of extreme loyalty inspires confidence in others, which in turn drives new sales – 74.5 million new phones last quarter – without Apple having to lift a finger. Indeed, aside from a few television spots and billboards here and there, Apple pretty much ignores marketing and advertising.
Of course, not every company is Apple. Letting the products do all the talking won’t work for everyone. But here is the takeaway that can work for every brand: try de-emphasizing traditional marketing and focusing on loyalty instead.
For most people, the word “marketing” summons up a single-minded focus on selling products – a one-sided endeavor. But one-sided doesn’t work in a world where social media has given consumers a megaphone just as powerful as that of traditional marketers.
Instead, there is loyalty, which requires communicating brand values that people want to be affiliated with. Consumers today have many options, and more than ever they choose particular brands to communicate something personal about their own beliefs and priorities. The best way to establish and reinforce common values is to create content that’s so highly specific it defines not only the brand, but the customer.
Take Chipotle, the good guys of fast food. Their produce is local, the meat is free of hormones and antibiotics, and their cheese comes from pasture-raised cows. But the company’s reputation for being the socially conscious, thinking person’s lunch is about more than just the food. Last year, the company started its “Cultivating Thought” initiative, in which writers such as Toni Morrison and Malcolm Gladwell write short texts that appear on the company’s cups and a dedicated microsite. The idea didn’t come out of the CMO’s office, or from a hotshot agency – it came about because Jonathan Safran Foer had nothing to read in Chipotle one day. This is loyalty talking, not marketing. Chipotle is devoting significant resources to something that won’t make the company any money directly, but that is an act of good faith, perfectly targeted to its customers.
J. Crew is another company that successfully uses content to define itself and its customer. The company’s blog is a master class in cozy chic, effortlessly affluent and gently outdoorsy. (If this blog were a person, its favorite activity would be sitting around an outdoor fire on a crisp fall evening, roasting homemade marshmallows on fragrant cedar sticks.) Recently, the blog featured a story about the history of the fisherman’s sweater, a nature photographer’s photo essay about working all over the world in one of the brand’s puffy vests, a how-to guide on caring for cashmere sweaters, and studio tours with designers. The content is beautiful, creative, and most importantly, it has a distinct personality that has nothing to do with shilling.
Customers keep coming back to J. Crew, Chipotle, and Apple because being a loyal fan of the brand reassures them that they are succeeding in being a certain kind of person. People expect convenience from a transaction, but what they crave is meaning. A marketer’s thundering from the top of a mountain like the voice of God will be quickly spotted for what it is – a disconnected jumble of hollow words bouncing along the canyon walls. Building loyalty is much harder work, and it requires not only valuing customers, but liking them enough to have a conversation every day. Bringing passion and excitement to that conversation requires genuine enthusiasm for your own products and mission. The Chief Loyalty Officer’s job isn’t about asking, “What should this company say?” It’s nothing less than answering the question, “What should this company be?”


Currency Derivatives said...

I agree with the term that Letting the products do all the talking won’t work for everyone. But here is the takeaway that can work for every brand.

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