What Drives Loyalty Today is Personal Performance
Chapter Three: Principle 2—To Be Compelling Requires a Strategic Point of View
Dear Friends,
In today’s installment, I want to go deeper into the argument that there is something that comes before brand strategy. It’s not just that companies who are successful have a point of view, it’s that customers have changed. Attitudes toward brands have morphed from brand identity to personal performance branding. This shift creates an external reason for a company to have a point of view.
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The outline for the chapter is at the end of the post!
What Drives Loyalty Today is Personal Performance
Of course, brand strategy is critical to keeping customers. But again, we need to step back and review what kinds of strategies work. Challenger brand strategies work because the company identifies a big hairy friction point or need and the strategists turn that need into a cause. Part of the reason why this works is because people have different requirements for brands today than they did decades ago.
Twenty years ago, I was fully bought into the ‘brand experience’ model. (Remember: the model is the brand makes a promise and the experience keeps the promise.) It was a time when branding ruled the world and companies could attract customers because people wanted to be identified with the brand. The story at every conference was about Harley Davidson, the brand that people identified so much with that they—prepare yourself for this—got tattoos of the Harley Davidson logo. I know! Shocking.
It's now commonplace for people to get tattoos of their favorite things. That doesn’t mean that identifying with the brand is the primary way that companies create loyalty today. In the past, people fully bought into becoming a part of a brand ‘tribe,’ but today, they switch tribes effortlessly. They own their own tribes (through social media). They are themselves their own brands. And they use brands to help them accomplish their functional, emotional, social, and aspirational goals.
Let me say that again: Whereas in the past, the brand owned its customers, today, people own their brands. They appropriate brands. And the brands people appropriate are the ones that improve their personal performance.
In fact, improving personal performance is the reason that people stay loyal to brands today. Back in 2017, the Stone Mantel team and the companies in our Collaboratives set out to understand how artificial intelligence would change engagement. We were doing research on exactly the issues you are facing today seven years ago. I still remember some of the interviews for the studies we conducted.
Brian described himself as a brand-loyal flier of Virgin Airlines. So, we asked him what made him loyal to the brand. He never mentioned Richard Branson, the fabulous British entrepreneur who founded Virgin Airlines and functioned for the brand like a mascot. Branson represented a daring playboy personality that was the ethos of the company. He took big personal risks. He spoke on the speaker circuit and he could be controversial. But what Brian described was the mood lighting, the music, the movies, and especially the ability to get Netflix at 30,000 feet. Remember when that was a big deal?!
For Brian, his loyalty stemmed from the fact that Virgin was innovating, not that he was part of some Virgin tribe. Innovation made his personal experience better.
For Maureen in 2017, the brand that mattered most was PayPal. She didn’t realize how much time she spent trying to figure out how to pay friends, small businesses, and online service providers. PayPal had identified a situational market and a job to be done. Billions of people needed an electronic way to transfer small amounts of money to people in their circle of trust.
No doubt Maureen now uses Venmo, which perfected the job to be done and which PayPal bought so that they could maintain that situational market.
Like almost all of us, for Maureen it was functionality that drove loyalty—not storytelling.
Jamie described herself as not brand loyal—until she got the Apple Watch. Over the last few years she had switched back and forth between Samsung and Apple phones. She described both brands as just okay. Not too different. Then she bought an Apple Watch and immediately she became a loyal Apple customer. The watch tracked things for her that she wanted to track: steps, heart rate, and other biometrics. It connected so effectively with her phone. She loved the personal data ecosphere that existed between the two devices and was designed to help her accomplish more! She could do so much more. She was not a Steve Jobs acolyte. She didn’t care about the causes that Apple cared about. What she wanted was better personal performance and as long as Apple was giving her that, she’d gladly give Apple lots of data about herself. She would remain loyal.
Since 2017, the trend has continued. People prioritize personal performance over everything else. That’s part of why ‘customer experience’ as a discipline has catapulted to the top of most company’s initiatives. It’s the only discipline that measures customer satisfaction. Customer experience, as most companies practice it, isn’t the same as improving personal performance. We will cover that in more detail in a future chapter. For now, let’s return to the key insight from our 2017 research.
Here's a slide from the report we created in 2017 for the Collaborative members. Brand churn is real. It’s faster than ever. And the number one thing that drives it is when people find something that gives them greater value. What they mean by greater value is improved personal performance. When people become comfortable with intelligent solutions, whether those solutions are just smart or full-on genius, they want the ability to improve their own personal performance. In a world where people have access to tools that are intelligent, they expect almost all brands they engage with to improve personal performance. If their goal is to relax, then the solution should improve their personal ability to relax. If their goal is to solve a problem, then the solution should improve their personal ability to solve each and every new problem that arises.
If companies want engagement with their customers, they must improve the personal performance of the customer. If companies want loyalty, the first and foremost imperative is to improve personal performance for people in common situational markets. No amount of brand identity, recognition, story, trust, or personality can compensate for the inability to improve personal performance.
To be continued…
Reilly, thanks for the comment. What we saw in the research is that people weren't identifying with the brands because the brands created an image/story that they bought into (80s innovation) but because they could identify how the brand was going to improve some aspect of their lives (functionally, emotionally, socially, aspirationally) and what they wanted was ongoing improvement, not one time improvement. They wanted to believe that the brand stood for continuous improvement to their needs. I do believe that there is a direct connection between situational markets and personal performance (and therefore loyalty).
People desire today to be able to respond to specific situations with improved personal performance. They look to technology and solution providers to do that for them.
Your comment makes me want to explore how desires have evolved.
I’m very intrigued by this.
Do you feel that “personal performance” boils down to desire?
A desire to relax, a desire to solve the issue which stems from a bigger desire that the problem has created.
Like most knowledge, their is the unknown as well which could be known and unknown desires such as most people not knowing they wanted an automobile for Ford or people not knowing that they desire to track their steps, etc. — the desire may be rooted in mimetic desire as well majority of the time.
There also may be levels of desire based on the reason that is contextually dependent on the situation.
Just some initial thoughts!