by Chris Malone and Susan T. Fiske
A summary of the original text.
The Human Brand, summarized by arrangement with John Wiley &
Sons, Inc., from The Human Brand: How We Relate to People, Products, and
Companies by Chris Malone and Susan T. Fiske. © 2013
by Chris Malone and Susan T. Fiske.
In this
summary:
- Understand what is actually
going on in our brains when we describe our relationships with brands in
deeply personal ways.
- Discover why we relate to
companies, brands, and products in the same way that we naturally
perceive, judge, and behave toward one another.
- Realize why two
categories of perception—warmth and competence—drive
most of our emotions and behavior toward people and businesses.
- Profit from the
implications of this natural devotion people feel toward certain
companies, brands, and products
- Achieve success and
sustain it by putting your customers' interests ahead of your own, in
accord with the principle of worthy intentions.
The Human
Brand
People everywhere describe
their relationships with brands of all kinds in deeply personal ways—we hate
our banks, love our smartphones, and think the cable company is out to get us.
What's actually going on in our brains when we make these judgments?
In The Human Brand, customer
loyalty expert Chris Malone and social psychologist Susan Fiske show that we
relate to companies, brands, and even inanimate products in the same way that
we naturally perceive, judge, and behave toward one another.
Early humans developed a kind
of genius for making two specific kinds of quick judgments: What are the
intentions of other people toward me? How capable are they of carrying out
those intentions?
Social psychologists call these
two categories of perception warmth and competence, and
they drive most of our emotions and behavior toward other people—and in today's
modern world, toward businesses too. As a result, we become devoted to certain
companies, brands, and products, but we also have high expectations for loyalty
from them in return.
Based on evaluations of 45
companies across 10 separate studies, this summary shows how your organization
can achieve success and sustain it by forging genuine relationships with
customers.
The Middle
Ages of Marketing
We live in a time of rapid
change and uncertainty. Large companies and brands that once seemed invincible
are struggling and steadily losing market share, calling into question much of
what they believed about running a successful business. American Airlines is
besieged by smaller, friendlier Southwest just as Lululemon has besieged the
Gap.
Americans have decided that
bigger is no longer better, and in the case of some of America's best-known
brands, bigger may be much worse. At the same time, lots of
smaller companies and brands are growing rapidly and filling the void with far
fewer resources and a very different approach to doing business. Many of these
upstarts are guided by purpose-driven missions that say as much about who they
are as people as it does about the products and services they provide. They
speak to us more intimately then the big corporations do.
The growing divide between big
national brands and their customers has been decades in the making. In the eyes
of customers, old-line companies don't listen; they advertise. They don't
adjust themselves to our needs; they try to sell us what they've got. They
aren't flexible, because they have strict policies to ensure consistency and
efficiency—and deadening, impersonal aloofness.
In short, big companies and the
people who work in them are in the habit of shaping our expectations in the
exact opposite direction of the way our brains are wired.
Social psychologists have
deduced that primitive humans were forced to develop a primal, unconscious
ability to make two specific kinds of judgments quickly and accurately:
1.
What are the intentions of other people toward me?
2.
How capable are they of carrying out those intentions?
Today, we judge others almost
instantly along these same two categories of social perception, which are known
as warmth and competence.
A person who demonstrates both
warmth and competence inspires feelings of trust and admiration, motivating us
to seek a continuing relationship with that person. One who displays competence
in the absence of warmth, however, tends to leave us feeling envious and
suspicious, while someone we perceive as warm but not competent stimulates
feelings of pity and sympathy. A person who exhibits low levels of both
warmth and competence often provokes feelings of contempt and
disgust.
Survival for our distant
ancestors depended upon their ability to quickly judge others according to
these criteria.
We are merely the latest in a
line of thousands of generations to inherit this time-tested ability, and we
apply it in all our relationships, including those involving
commercial transactions. We engage with brands on the same basis of warmth and
competence because they have the capacity to stir up these same hard-wired
primal passions. We experience feelings of affection and admiration for brands
and companies that do well by us, and we feel insult or even rage when we
believe that those companies have treated us badly.
To understand where we are
today, we need to go back about 130 years. During the 1880s, the Industrial
Revolution was in full bloom. The rapid expansion of railway networks and
telegraph lines prompted the evolution of mass production, retailing, and
advertising. The first national product brands arrived on the scene, including
Levi Strauss, Tabasco, and Heinz.
The people who produced those
goods faced a number of obstacles. It may be hard to believe today, but humans
were never mentally wired to trust and enjoy goods made by "unknown
hands." Before the advent of mass production, people knew their butchers,
bakers, and candlestick makers by name. Before 1880, there were hardly any
packaged goods or ready-to-wear clothing. There were no fixed prices for goods,
and often barter was substituted for money. For all these reasons, commercial
exchange entailed little distinction between the seller and the product or
service offered. Customers were, in effect, buying the person who stood behind
the product. Human transactions of all kinds had been that way for so long that
we have within us an embedded preference for trusting, face-to-face exchanges
in all our affairs.
By artificially separating the
producers of products and services from their end customers, the Industrial
Revolution introduced middle players such as distributors and retailers to
mediate relationships between producer and customer. Producers came to believe
that the mass communication of features, benefits, and positioning would be
enough to yield lasting customer loyalty, without actually having to deal
directly with those individual customers.
These and other myths, from the
Middle Ages of Marketing, are now being shattered every day. Customers are now
abandoning many of the largest and most established consumer brands in favor of
smaller companies with fewer resources and very different ways of doing
business. We are increasingly calling it quits on the relationships we've had
with many of the world's largest and most established companies and brands—all
because newer, more transparent and trustworthy ones have come along that treat
us better.
The rest of this summary will
explore the many dimensions of warmth and competence in order to shed new light
on why some companies have surged in popularity while other brands have been
flagging.
A new Relationship Renaissance
between customer and company is emerging out of the Middle Ages of Marketing.
Customers already have near-instantaneous power to pass judgment on how
companies and brands conduct themselves in public. That power will continue to
grow for decades to come.
Our look at this phenomenon
will unfold in six parts:
- First, we'll
explore the extent to which our warmth and competence judgments drive our
interactions with all kinds of social groups, including companies and
brands.
- Second, we'll
discuss why the short-term-profit focus of most companies almost
guarantees that they will seek exploitive relationships with even their
most loyal customers.
- Third, we'll look
at the other side of the story: the companies who have earned our
fanatical loyalty because they succeed in connecting with
our need for warmth and competence. Companies that put the customers'
interests ahead of their own, in accordance with the principle of worthy
intentions, are able to prosper financially by activating our
automatic perceptions of their warmth and competence.
- Fourth, we'll
examine the idea that while mobile and Internet technologies have
energized the Relationship Renaissance, they can also serve to eliminate
warmth and humanity from our economic exchanges.
- Fifth, we'll show
why setbacks and problems can provide companies with opportunities to
build stronger relationships with customers—as long as these troubles are
handled with worthy intentions.
- Sixth, we'll
offer some specific guidance for navigating the Relationship Renaissance
that lies ahead.
With the waning of the Middle
Ages of Marketing (the age of mass everything) the Relationship Renaissance
constitutes a rebirth of pre-industrial values, of an age in which customers
can again insist on personal relationships with their product and service
providers. For all businesses, large or small, a consistent focus on building
personal relationships with customers will be an essential ingredient for
lasting success in the decades to come.
1. Warmth
and Competence
We have a spontaneous and immediate
attraction to signs of warmth and competence in others. Warmth and competence
judgments prompt us to feel friendly toward some, and alienated by others.
Warmth and competence judgments explain why some inspire our loyalty, while
others provoke only feelings of suspicion.
Decades of social science
research have shown that within the two broad categories of warmth and
competence perception, detailed dimensions of how we perceive others can be
measured and interpreted to reveal the predictable patterns of emotions and
behaviors that result from them.
- Warmth is judged
by assessing whether people are kind, friendly, and good-natured. Do they
seem sincere, honest, moral, and trustworthy? Do they appear to be
helpful, tolerant, fair, generous, and understanding?
- We assess
people's overall level of competence to understand how
successful they would be in carrying out their intentions towards us. Do
they appear efficient, capable, skillful, clever, and knowledgeable? Do
they seem to possess the confidence and ability to carry out their plans?
These judgments are a
remarkably simple but powerful mode of social perception that, by some
measures, influences more than 80 percent of all human social behavior. We use
warmth and competence to assess not just people, buteverything in
our lives that acts or seems to act of its own free will. So we make warmth and
competence judgments about people, groups of people, pets, animal species,
teams, companies, brands, and nations. Likewise, when the car sometimes
"acts up" or when the computer seems to have a mind of its own, we
even make warmth and competence judgments about inanimate objects.
Studies show that of the two
dimensions, warmth comes earliest and carries more weight in our perceptions.
Studies show, for example, that you are judged for your trustworthiness within
a split second of someone's seeing your face. Moments later, you'll be judged
for your competence.
Warm implies trustworthy. We
judge other people's trustworthiness after seeing their faces for a fraction of
a second, in the blink of an eye. People with slightly surprised, happy faces
and baby-faced people tend to gain our trust almost immediately. Conversely, we
immediately distrust people with furrowed brows or frowning, angry faces,
judging them cautiously and with suspicion.
Our judgments of competence
arrive a fraction of a second more slowly, in maybe two eye-blinks. People with
strong, dominant faces tend to win our immediate respect as competent, and we
assume that people who look weak and submissive are actually incompetent, no
matter the objective truth. Snap competence judgments of this kind can even
predict election outcomes. Research participants shown photos of unfamiliar
out-of-state political candidates were able to pick out the winners on the
basis of assumed competence two-thirds of the time.
The fundamental dimensions of
warmth and competence make the most sense when they are combined to reflect
distinctive sets of emotions and behavioral responses. Each combined pattern of
warmth and competence perceptions leads to a predictable set of human emotions,
and those emotions stimulate a predictable pattern of behavior:
- Warm and
competent people make us feel admiration and pride, which leads to the
behavioral response of attraction, affiliation, and alliance.
- Cold and
competent people make us feel envy and jealousy, which leads to obligatory
association and potential sabotage.
- Warm and
incompetent people evoke sympathy and pity, leading to patronizing help
and social neglect.
- Cold and incompetent
people stir feelings of contempt and disgust, leading to rejecting and
avoidance.
Similarly, the warmth and
competence model offers a simpler and more direct way to measure our
perceptions as customers.
Consider first that every
corporation is literally a body; the word comes from the Latin word for
body, corpus. As customers, we perceive corporations as acting
with intention and volition, just as we perceive other people. Human psychology
has encoded in us the imperative to be wary of others, but also the sense that
they have warm intentions toward us and might offer us something of value. Out
of our need to secure access to resources, we perceive, judge, and trade with
brands and companies just as our most distant ancestors did with people and social
groups.
To quantify the extent to which
warmth and competence influenced the behavior of customers, in 2010 the authors
asked 1,000 U.S. adults to evaluate BP, Tylenol, Shell, Advil, McDonald's,
Burger King, Tropicana, and Minute Maid.
The findings showed that
companies and brands were judged so strongly along the lines of warmth and
competence dimensions that these judgments explained nearly 50 percent of all
purchase intent, loyalty, and likelihood to recommend a brand or company. To
put that 50 percent figure in perspective, consumer research is normally
considered to be significant if it reveals a new variable explaining as little
as 15 percent of customer behavior.
In the wake of the Deepwater
Horizon oil rig explosion in April 2010, the customers in the study showed
widespread distrust for BP and reported a low rate of purchase intent and brand
loyalty for BP locations, about 40 percent lower than for Shell stations.
The results for Tylenol,
however, showed that the brand was largely unharmed by the bad publicity
surrounding its product recalls due to poor sanitary conditions and violations
of safety standards in 2009-2010. Tylenol scored twice as high as BP on such
warmth characteristics as "honest and trustworthy" and "acts in
the customer's best interests." In fact, customers reported substantially
higher purchase intent and brand loyalty for Tylenol than for its competitor,
Advil, even though the Advil brand had enjoyed a blemish-free record.
Customers appeared to have
interpreted Tylenol's production problems to be a short-term, forgivable lapse
in competence that did not impair its reputation for warm intentions. Tylenol's
maker, Johnson & Johnson, has long acted on a company-wide credo that
directs employees to put customers first. The company's behavior in the face of
Tylenol product-tampering deaths in 1982 became a textbook case of effective
crisis management. Through the parent company's willingness to take a large
financial hit and go far beyond what the situation required, Tylenol retained
the trust of consumers.
In contrast, when the Deepwater
Horizon blew up and sank in the Gulf of Mexico, BP spokespeople laid blame with
the rig's owner and sought to minimize the extent of the oil spill. CEO Tony
Hayward insisted that the environmental impact would be "very, very
modest." Underwater cameras recorded in real time the company's failures
to staunch the gusher of oil polluting the gulf, cementing the image of BP as
fundamentally incompetent. Along with a record of recent safety failures that
included a deadly refinery explosion in 2005 and an Alaskan oil spill in 2006,
BP had no store of goodwill on which to draw.
A peer-reviewed, academic study
subsequently showed how warmth and competence dimensions drive people's
purchase and loyalty behavior.
The study, involving well-known
companies, showed recognizable clusters of brands spread out across the
intentions-and-ability matrix. The most popular brands—Hershey's, Johnson &
Johnson, Campbell's, and Coca-Cola—all landed in the well-intentioned, capable
quadrant of high warmth and high competence. People admired them, said they
would purchase from them, and expressed loyalty to them.
Troubled brands—which included
BP, AIG, Goldman Sachs, and Marlboro—all rated as low on ability and low on
intentions. People expressed neither planned purchase nor expected loyalty.
These brands landed in the "contempt and disgust" quadrant, ranking
low on both warmth and competence.
Luxury brands—Mercedes,
Porsche, Rolls Royce, and Rolex—rated high on ability but tended to score low
on good intentions. People reported feeling envy toward these as a result of
their ability to enact their intentions. Both dimensions strongly predicted
purchase and loyalty behavior.
Finally, government-subsidized
corporations fell into the region of sympathetic and pitied brands. The U.S.
Postal Service, Amtrak, and public transportation agencies were all regarded as
well intended but incompetent. Again, both dimensions predicted purchase and
loyalty—their intentions ranked positively but perceptions of competence were
low.
The research confirmed that
customers reward perceptions of warmth and competence with feelings of
admiration, purchases, and customer loyalty. Just as we all assess other human
beings, we also assess the intentions and abilities of companies and brands.
Perceptions of a company's intentions and abilities trigger specific customer
emotions, which in turn drive customer behavior. Companies and brands win our
affiliation and loyalty just as real people do, by worthy intentions and
capability, through warmth and competence.
All this research suggests that
if companies are going to succeed with customers in the Relationship
Renaissance, a new language of loyalty is needed, one built around warmth and
competence.
Our loyalty as customers
doesn't commit us to abstract companies or brands. Rather, we become loyal to
what we experience, learn, or infer about the intentions of people behind those
companies and brands.
2. The
Loyalty Test
Warmth is a word that can be
used to describe a wide array of admirable qualities, but they all add up to a
reliable, trustworthy concern for others. Social psychologists note that warmth
benefits others, while competence benefits the self.
A person who is honest,
reliable, and agreeable demonstrates warmth by demonstrating concern for other
people's interests and needs, even if the person might gain more in the short
term from doing otherwise.
The same goes for companies.
Companies that exercise genuine warmth exhibit a willingness to respond
sincerely to their customers' needs, even at their own short-term expense. The
most-admired ones tend to be those that establish trusting, long-term
relationships with their customers by making it a point to put customers first
and themselves second.
For instance, the Nordstrom
department store chain offers such legendary customer service that it has been
known to take back a dress that no longer fits because the owner has gained
weight. That's an extreme example of a commitment to the needs of others. That's
authentic warmth—and loyalty to the customer.
If that seems like an
unprofitable way to run a business, consider how costly it is to operate with a
more transactional orientation, with a sharp focus on short-term sales and
profits. Companies and brands that seek quick and impersonal transactions with
us tempt us to leave them every day. They may be highly competent, but by
acting in defiance of our need for warmth, they trigger our natural feelings of
distrust.
If they lack warmth and offer
little sense of their loyalty to us, these companies leave us cold. Having
failed to earn our loyalty, they are forced to go on expensive hunts for new
customers to replace the ones they keep frustrating and losing.
In essence, we unconsciously
conduct a loyalty test as we assess the warmth and competence of a person, a
company, or a brand. We make a series of fast calculations in relation to the
categories of warmth and competence that heavily influence our willingness to
extend our loyalty.
When a company treats us competently
but coldly, we don't feel particularly grateful, even if the service or product
provides us with excellent value for the dollar. Instead, as the research
shows, we see a cold and competent company acting in a transactional exchange
for its own benefit first, with little thought given to our needs or desires.
We feel used.
Competence without warmth is
likely to leave us feeling suspicious. It makes us worry that our competent
partner might cast aside our needs the minute that it's in that partner's
interest to do so.
An example of a company that
knows how to build loyalty through warmth is Mercedes Benz. Mercedes is a
luxury brand, but that's not what sets it apart from other carmakers in terms
of customer loyalty. At 55 percent, Mercedes has the highest rate of customer
loyalty among all luxury carmakers, so the company attempts to go one better
and make customer referrals a business objective.
For instance, Mercedes
practices what it calls "random acts of kindness" with its customers,
offering them invitations to exclusive events related to the Masters golf
tournament, Fashion Week in New York, or the U.S. Tennis Open.
Mercedes's alliance with 14
exclusive hotels around the country means that when Mercedes drivers check in,
they're rewarded with a bottle of wine and a $100 spa and resort credit,
presented as tokens of gratitude for Mercedes ownership. Each new buyer of a
high-performance AMG Mercedes vehicle gets to schedule a day on a racetrack
with a professional driver to learn how to drive the car under extreme, intense
conditions. Mercedes succeeds by passing the loyalty tests of their
customers—loyalty tests that their competitors often fail.
For loyal customers to trust,
commit, and support them, businesses first have to demonstrate genuine warmth,
concern, and commitment to those customers' needs and interests. As you'll see,
customers handsomely reward companies and brands that exercise this simple but
powerful application of warmth and competence insights, through something
called the principle of worthy intentions. When a company or
brand goes beyond normal expectations to express worthy intentions, it turns
loyal customers into passionate advocates who actively recommend others to
them.
3. The
Principle of Worthy Intentions
Lululemon has taken the women's
activewear industry by storm. Started in 2000 as a single yoga gear store, it
has expanded rapidly to more than 200 stores in North America and Australia.
Despite high prices, the retailer has developed an almost cult-like following among
its loyal fans.
Despite a brief period of yoga
pants recalls in early 2013, fans of Lululemon are clearly sold on the
company's competence, on the quality and fit of its unique
products. They love the way Lululemon fabrics and designs flatter their figures
and swear by its reputation for holding up under repeated washings.
Yoga pants, which can sell for
under $50 at competing retailers, start at $78 at Lululemon, and they are
almost never available at a discount. Lulu fans think the products are worth
the cost, because almost 95 percent of all Lululemon purchases are made at full
price.
There are a good number of
unique ways, however, in which Lululemon draws in its fans with warmth as well
as competence. Lululemon stores tend to be small and are left a little messy on
purpose, to project a relaxed, lived-in look. Pants are hemmed for free.
Customers are called "guests." Sales clerks are called
"eds," for educators, and they are better trained and better paid
than most other retail clerks, and they're expected to educate customers about
the clothing and help them find the perfect fit.
But the real difference in
Lululemon is the way that each individual store builds a community around
itself. Before each new store is set to open, Lululemon scouts the area to
identify influential local yoga and fitness instructors who would be willing to
become "community ambassadors." The ambassadors get discounts on
Lululemon clothing, and in exchange their classes are promoted by Lululemon
online and inside the stores. Lululemon ambassadors also lead free yoga
classes.
Lululemon's culture encourages
its guests to set goals for themselves, and not just fitness goals, either. The
Web site offers a free downloadable goal-setting worksheet to help you
"create your ideal life."
In so many ways, the company
expends time and resources putting the customer's interests ahead of its own,
and the response has been overwhelming. On a revenue-per-square-foot basis,
Lululemon in 2012 ranked third behind only Apple and Tiffany & Co. Buoyed
by the fanatical loyalty of its guests, Lululemon has emerged from nowhere to
become one of the most profitable clothing stores on earth.
Lululemon's winning formula
reflects the principle of worthy intentions. This principle is
a relationship-building strategy that involves attracting and keeping customers
by consistently putting their best interests ahead of those of the company or
brand.
Businesses face a difficult challenge if they try to gain
our loyalty with competence alone. Most of us, most of the time, are perfectly
satisfied with the competent goods and services we're already in the habit of
buying. We're unlikely to change these habits on rational grounds, especially
because differences in comparative quality have become harder and harder to discern.
Only the emotional connections of worthy intentions have the power to change
minds. When we are offered someone's worthy intentions, in the form of a
relationship set openly in our favor, only then are we likely to shift our
perspective and try something new.
In the Relationship
Renaissance, the most valuable commercial relationships take on the character
of the traditional one-to-one business relationship. Lululemon has perhaps the
most loyal customers in retail today, and it has no loyalty or "rewards"
program at all. In fact, Lululemon doesn't even keep data on its individual
customers. It spends no money at all on the customer relationship management
software that many retailers rely on to send out little birthday cards,
teasers, and discounts to their most loyal customers.
Why? Because Lululemon operates
in ways that ensure that its most loyal customers don't need automated
acknowledgments via email or the postal service. Meanwhile, all the resources
Lululemon saves by not managing a customer loyalty program can be diverted
toward product development (enhancing competence), building community with
complimentary yoga classes and local charitable giving (demonstrating warmth),
and, of course, profits. Lululemon saves millions by having no national or
local advertising budgets at all.
When any organization
consciously pursues a course of worthy intentions, warmth and competence will
tend to play off each other. By making the breakthrough of leading with worthy
intentions and increasing their perceptions of warmth, they open up new
opportunities for developing and expressing competence, too.
For example, small retailers
know that competing on price against the likes of Walmart and Target is
useless, so worthy intentions become their primary competitive edge.
One way that Connecticut bike
shop owner Chris Zane has built a sense of trust with his customers is by
giving away every bike part that costs him less than a dollar for free. He used
to charge about $1.99 for small parts that cost him nearly nothing—nuts, bolts,
and the small master links on the bicycle's drive chain. But then he realized
that the need for these parts "come during painful times for our
customers." A father who enters his shop with a crying child and a bike
with a broken chain has enough troubles without being nickel-and-dimed for a
master link. So Zane started giving away the parts for free.
In his book Reinventing
the Wheel, Zane writes, "We do this because it lets our customers
know we're not out to milk them. We're there to save them the hassle and the
expense of getting their kids back out on the street and riding their
bikes."
When he tracked the annual
expense of these giveaways, he discovered it had cost him just $86 to offer
free parts to 450 customers—which represented 450 chances to show worthy
intentions toward customers with whom he expects a lifelong relationship.
This approach builds loyalty
among his customers who could buy a bike for about 50 percent less at Walmart,
but prefer to shop at his store because he puts their interests first.
The ability to perceive and
judge the intentions and abilities of others has been imprinted on us over
thousands of generations. As a result, no new technologies or innovations—not
even the Internet—can materially change how it continues to guide us during our
lifetime.
4. The
Price of Progress
If a company's website is used
for interactive relationships and not for one-way commerce, then it can be a
powerful tool for communicating a company's warmth and competence through its
expression of worthy intentions. Large corporations cannot love us back, but if
company employees can use websites, Facebook, Twitter, or other social media to
give us the experience of individuality and responsiveness, then the prospects
for relational loyalty are there, even though the communications are transacted
online.
A number of academic studies
have shown that we interact with both computers and Web sites as what are
called "social actors." We do not "think" they are human.
However, we know that computers and websites were created by people. As a
result, we process our experiences of interacting with them as a reflection of
the intentions and abilities of those that built them, using the same warmth
and competence perceptions that guide our behavior toward people, companies,
and brands. But we also respond to both computers and websites with human
emotion.
A customer loyalty study of six
of America's largest retailers confirmed the extent to which we recognize
expressions of worthy intentions and detect warmth and competence through our
on-line shopping experiences. The research involved two online retailers
(Amazon and Zappos) and four other retailers that sell through online Web sites
plus brick-and-mortar retail stores (Sears, Walmart, Best Buy, and Macy's).
Customers ranked each of the
four big, legacy brick-and-mortar retailers as more competent than warm.
However, in each case, the Web sites of these retailers were given a greater
edge of competence over warmth than the physical stores.
This response seems logical.
Online stores are impersonal, efficient, and convenient. Physical stores,
filled as they are with people, faces, and conversations, offer more
opportunities for warmth and worthy intentions to be displayed.
However, the research relating
to Zappos suggest that a warmth deficiency is not necessarily an attribute of
all online retail sites. Zappos was the only one of the six retailers that
customers actually rated slightly higher on warmth than on competence—despite
its total lack of physical stores. Zappos proves that it's possible for an
online store to demonstrate warmth through its policies, practices, and website
functionality. Even Amazon, which is noted for its absence of human presence on
its site, rated surprisingly high on warmth.
In fact, for both
brick-and-mortar and online retailers, customer warmth perceptions were more
strongly correlated with loyalty than were competence dimensions. What's more,
these same warmth dimensions explained an even greater proportion of online
customer loyalty than they did brick-and-mortar loyalty. As a result, it's
clear that warmth and worthy intentions are just as important for building
customer loyalty online as they are offline.
At even the finest call center
operations around the world, the person helping you on the phone needs to be
mindful of his or her productivity, of the need to move on to the next call as
soon as your needs are satisfied.
But not at Zappos. When you
call Zappos, perhaps with questions about a pair of shoes or gloves, you are
guaranteed to speak with someone who has only worthy intentions. You have the
full attention of that Zappos employee, who has only your interests in mind.
One team member talked for 9
hours, 37 minutes with a customer. The previous record had been eight hours and
47 minutes. There is no record that either customer bought anything on those
calls.
When customers call, they get lots of opportunities to
interact directly with Zappos employees, who are able to express worthy
intentions and allow customers to experience their warmth and competence. As a
result, Zappos generates 75 percent of its sales every day from repeat
customers—with no need for discounts, mass advertising, or rewards-based
"loyalty" programs. Customers know when they are really appreciated.
5. Show
Your True Colors
Sooner or later, even
well-managed companies and brands make mistakes and experience accidents. When
that happens, there is often a mismatch between what we as customers expect to
hear from companies in crisis and how executives at most of those companies
prefer to respond. Companies engulfed in a scandal, disaster, or product recall
often put up proud faces of competence, as if to reassure us that they have the
situation under control.
But at that moment what we
desire most are signals of warmth. If our internal warmth detectors are not
satisfied that a troubled company has worthy intentions toward us, then we
naturally suspect that its leaders' assertions of competence are aimed at
preserving the company's profits first, and our interests second.
When a company is hit with
product recalls, it's natural for company leaders to fear that we will judge
them harshly for their lack of competence. Fear of that judgment has motivated
many companies to try to keep their mistakes quiet.
The trouble with that kind of
thinking is that it ignores how forgiving we tend to be of companies who make
honest mistakes and then apologize for them. More than 90 percent of those
surveyed agreed that "Despite modern technology and honorable intentions, even
the best run companies and brands can make mistakes that lead to product
recalls." Having been embarrassed by a terrible mistake, the public
determination of your competence might rest with your perceived warmth—whether
you are judged as having made an error despite good intentions.
A July 2010 warmth and
competence study of 1,000 U.S. adults revealed that BP, then in the midst of
the Deepwater Horizon disaster, was ranked with greater contempt (scoring low
in both warmth and competence) than any other brand studied. Only the banks
associated with the 2008 financial crisis came close to BP in terms of low
regard by the public at large.
Toyota, whose vehicle recalls
were earning it almost as much negative publicity as BP, scored well above BP
and the banks in the study. However, survey respondents still rated Toyota far
below average on both warmth and competence, which marked severe erosion in
brand reputation for the company, placing it far behind rivals Honda and Ford
in both perceptions.
Farther up on the scales of
both warmth and competence was the Tylenol brand. Tylenol had been suffering
from months of negative news at the time of the survey. Tylenol manufacturer
McNeil Consumer Healthcare and its parent company, Johnson & Johnson,
voluntarily recalled children's medicines after FDA investigators found
irregularities in its manufacturing processes. Johnson & Johnson has a long
record of responding to trouble by going beyond what is necessary to ensure the
safety of its customers.
Social science tells us that
those who cling to prideful claims of competence are much harder to forgive
than those who humbly admit their faults. When companies such as Johnson &
Johnson and Toyota confess to their failings, we have a spontaneous desire to
forgive and forget. In contrast, the defensive utterances by the leadership of
BP, Goldman Sachs, and Bank of America during their times of crisis after the
Deep Horizon spill and the 2008 economic crash have left us mainly with
indelible impressions of their unworthy intentions.
As long as we detect worthy
intentions in the form of honesty and transparency, we have a tendency to
overlook even great lapses in competence, and we reward those expressions of
worthy intentions with our loyalty. A famous study of audiotape conversations
between patients and primary care physicians showed that physicians who talked
longer and laughed more with patients, "indicating warmth and
friendliness," were much less likely to be sued for malpractice than
doctors who had shorter, more businesslike visits. Other studies of this kind
show that low warmth is a highly predictable indicator of the likelihood that a
doctor will be sued, even though malpractice is supposed to involve matters of
competence.
Success, it's been said, is
determined not by whether you fall down but by how you get up. To that extent,
every company's mistake represents an opportunity to improve its standing in
terms of warmth and competence among its customers, but only if the company is
ready to respond to its moment of truth with worthy intentions.
6. The
Relationship Renaissance
The question this summary
should raise is not whether business people are warm and competent, but whether
they're perceived that way. Even if they think they've expressed worthy
intentions to others who are important to them, can they be sure they're
experienced as such? And if they learned that they weren't, what would they be
willing to do about it?
Most executives, after all,
believe they are acting reasonably and prudently when they make critical business
decisions. Like most people, they view themselves as being both warm and
competent, and they expect others to view them as such. They are largely
unaware of how their decisions and resulting actions will be perceived by their
customers and other stakeholders.
For all of us, ensuring that
our warmth and competence are getting through to others reduces to three
imperative actions:
- First, we must
overcome our natural inability to fully appreciate how we come across to
others, by soliciting honest feedback from them.
- Second, we must
embrace that feedback and significantly change our words and actions.
- Third, we must
shift our priorities. Responding to candid feedback won't accomplish much
if we remain focused only on our own best interests.
The first imperative is
to become more self-aware. In this digital, mobile, and
networked world, when it has never been easier to make millions of impressions
on others, it's never been more important to be aware of how our words and
actions are perceived by others in terms of warmth and competence. Ongoing
self-awareness of this kind may well be the most crucial competency we all must
develop in the Relationship Renaissance.
Companies and brands that
genuinely desire the trust and loyalty of their customers need to commit to
measuring and managing perceptions of their warmth and competence as diligently
as they assess and manage their finances. These two dimensions of human
perception provide the means for all of us to diagnose whether we are
succeeding in communicating our worthy intentions to others. We can use these
dimensions to help us see through our blind spots and adjust our behavior
accordingly.
The most basic dimensions of
warmth are simply whether others see us as warm and trustworthy. Similarly, the
most basic dimensions of competence assess the degree to which others see us as
competent and capable.
The nature of both human
relationships as well at those with companies and brands is such that candid
and objective feedback is not usually provided in any timely or consistent way.
For us to truly know where we stand and to become more mindful of when we act
in the future, this feedback must instead be actively sought and gathered.
The second imperative is
to embrace significant change. Companies can thrive by listening
to their customers—including their most spirited critics—and using what they
learn to revolutionize their approach to what they do.
We now expect to be able to
communicate with companies, and we expect them to listen. That two-way
communication is the basis for any relationship, whether it be with people,
brands, or even companies. We naturally want relationships only with those who
approach us with worthy intentions. Those in charge of companies and brands
must be willing to thoroughly examine their priorities, policies, and practices
from a warmth and competence perspective.
As we perceive improved
behavior from companies, we will in turn reward them with our loyalty, treat
them as if they are better people, and so on in a virtuous
circle. Psychologists call this the "Michelangelo phenomenon."
The more we behave toward
relationship partners as if they have achieved their ideal selves, the more
likely they are to attain those ideal selves. In this way, we
"sculpt" the idealized selves of our relationship partners, just as
Michelangelo's imagination caused an idealized figure to emerge from a slab of
marble. But, as researchers point out, the partner in such a relationship must
actually aspire to the ideal self we are assuming and affirming in our
interactions with that partner.
Companies that behave honestly,
transparently, and unselfishly after product recalls and mishaps demonstrate an
ideal to which they aspire, though they may have fallen short in a particular
instance. We customers forgave the company's leadership, and in forgiving them,
we affirm their ideal, encouraging them to continue to aspire to it.
Similarly, company executives
who welcome criticism and respond wholeheartedly to customer dissatisfaction
demonstrate their desire to be better. Even the harshest critics, when treated
fairly and with respect, often become a company's most loyal fans, because in
getting their complaints resolved they've been granted a sense of that
company's ideal self.
Many of the companies and
brands that best align their efforts with our warmth and competence
expectations began doing so from their very inception, guided by a
purpose-based mission that became woven into the fabric of how they do business
each day. Companies and brands that have made a good living during the Middle
Ages of Marketing paradigm face a much more difficult challenge, because
fundamentally changing the way they do business will not be easy.
However, those hoping to grow
and thrive during the Relationship Renaissance need to embrace this new form of
"enlightened self-interest" and adapt accordingly. The alternative is
likely a future filled with cold, faceless commerce; transient customers;
unfulfilled employees; and thin profit margins
Finally, the third imperative
is to fundamentally shift priorities. Ultimately, it's not
enough to respond and change selectively in response to candid feedback from
others. Lasting change requires a sincere examination and adjustment of the
goals and priorities that led us astray in the first place.
Sustained success in the future
will require companies and brands to significantly shift their emphasis from an
excessive focus on short-term shareholder value to a much more balanced
approach that creates shared value for multiple stakeholders, with particular
emphasis on customers and the employees who serve them.
Mark Kramer and Michael Porter
have called for corporations to move from simply creating shareholder value to
creating "shared value." They advocate for companies to reconceive
their products and markets, redefine productivity in the value chain, and build
supportive industry clusters at company locations, all with the goal of
benefiting multiple stakeholders in a virtuous circle of mutual support.
They cite the efforts of such
giants as GE, Walmart, Nestlé, Johnson & Johnson, and Unilever to create
shared value of this kind. Nestlé, for example, redesigned its coffee
procurement processes, provided advice to small growers, helped them secure
resources, and began paying them directly for higher-quality beans. Higher
yields and better beans raised the farmers' incomes and provided Nestlé and its
customers with a reliable supply of good coffee.
For much of the modern era, the
relentless drive for quarterly results has encouraged companies to pursue business
in a way that turns out to be deeply flawed. When that pursuit spills over into
excess, customers inevitably jump to negative conclusions about all of the
people associated with a misbehaving company or brand, even though most of
those people actually wince at those perceptions and deeply wish it were
otherwise.
Corporate managers should be
delighted to throw out the old playbook. A number of companies already
have—some instinctively grasping the principles of warmth and competence, and a
few embracing them by design. Human nature favors the movement toward a
business culture of worthy intentions.
Research tells us that when
people are able to act in ways consistent with their ideals, they enjoy
enhanced personal well being, including greater life satisfaction and
psychological health.
The conclusion is unavoidable:
In this age when reputations can be made and broken around the world in a
single day, our capacity to express warmth and competence is among our most
precious assets. It follows that the most natural and sustainable way to
achieve any kind of meaningful success—personal, professional, or commercial—is
to earn the lasting loyalty of others by keeping their best interests at the
center of everything we do.
Doing so doesn't require that
we recklessly disregard our own interests. Rather, it recognizes that our
success as humans has always depended on the cooperation and loyalty of others.
In that regard, keeping the best interests of others in balance with our own is
simply a form of enlightened self-interest. It's a mindset that embraces the
warmth-and-competence perceptions that drive our choices and shape the human
brand in each of us.
About the
Authors
Chris Malone is a founder and managing
partner of Fidelum Partners, a research-based consulting and professional
services firm that helps clients achieve sustained business growth and
performance. As a consultant and keynote speaker, he has worked with hundreds
of senior executives in organizations ranging from Fortune 500 companies to
start-ups and non-profits.
Chris has over twenty years of
sales, marketing, consulting, and organizational leadership experience, and a
track record of driving growth and profitability. He was chief marketing
officer at Choice Hotels International and senior vice president of marketing
ant ARAMARK Corporation, and has held senior marketing and sales positions at
leading organizations including the Coca-Cola Company, the National Basketball
Association, and Procter & Gamble
For more information, please
visit: www.TheHumanBrand.com or www.Fidelum.com.
Susan T. Fiske is Eugene Higgins
Professor, Psychology and Public Affairs at Princeton University. She
investigates social condition—especially group’s images and the emotions they
create—at cultural, interpersonal, and neuroscientific levels. She is author of
over three hundred publications and winner of numerous scientific awards,
including election to the National Academy of Science. Most recently she has
edited Beyond Common Sense: Psychological Science in the Courtroom (2008),
the Handbook of Social Psychology (2010, 5/e), the Sage
Handbook of Social Cognition (2012), and Facing Social Class:
How Societal Rank Influences Interaction (2012). Currently she is an
editor of Annual Review of Psychology, Science, and Psychological
Review.
Susan has written two
upper-level texts: Social Cognition (2013, 4/e) and Social
Beings: Core Motives in Social Psychology (2014,3/e). Sponsored by a
Guggenheim, her 2011 Russell-Sage-Foundation book is Envy Up, Scorn
Down: How Status Divides Us.
For more information, please
visit www.fiskelab.org
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