Culture of openness gets the thumbs up

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It’s important to be popular. But in an era where marketers are aiming to turn their Facebook ’likes’ into hard cash, being seen as genuine and believable is more important than ever. This new ’affinity economy’ must be leveraged by brands, according to a new theory called Likeonomics.

Rohit Bhargava, senior vice president in the strategy and planning group at Ogilvy and inventor of Likeonomics and professor of global marketing at Georgetown University, explains: “We all want to do business with people we like and choose products that we have personal affinity with.”

Bhargava, who will release a book on the concept next year, says that while companies are competent at analysing spreadsheets, they are also “very good at removing any trace” of how much a brand’s likeability can contribute to engagement with consumers and employees.

Bhargava is working on exactly how brands can measure the contribution of being ’liked’ to the economics of a brand. He says “brutal honesty, simplicity and being human” are three key areas that can affect how brands are liked and assist their success or failure.

Honesty is important in a world where consumers doubt the integrity of politicians and business. Brands that can cut through this will win, Bhargava argues. He cites Domino’s, which has just tripled its marketing budget in the UK, as a good example of a brand improving its customer affinity by being brutally honest.

In the US, Domino’s has been running a campaign called Pizza Turnaround, where it admitted its crusts tasted like cardboard and published consumer comments that the product was “mass-produced, boring and bland”. It has changed its recipe and used the campaign to talk about its service levels as well as the product.

In doing so, a brand that was losing sales was able to regain them by being honest about the limitations of its old product (see How Domino’s Became Brutally Honest, below). Domino’s chief marketing officer Russell Weiner explains: “We realised there was a brand tension we were a 50-year-old pizza company with a product that could be better.

“At the same time, societal tension meant people were disillusioned and wanted someone to be honest with them. We could address both of these at the same time by telling the truth.”

Phil Guest, executive vice-president of global ad sales at teen social network Habbo, agrees that a culture of openness is crucial for brands. “For years, we have been learning the lessons of openness and transparency from the children we interact with. When brands come into our environment and don’t follow the guidelines of Likeonomics to be relevant, transparent and open kids simply won’t engage with them.”

Good customer service is another way brands can be honest, says Bhargava. “Customer satisfaction is not enough. We need delight, so people will write positive reviews online.”

US online retailer Zappos aims to achieve this by offering free delivery and returns, along with exchanges and refunds for unworn items up to a year after purchase. Senior brand marketing manager Michelle Thomas says making Zappos likeable through interactions with customers is at the heart of the brand. “Delivering ’wow’ with service is the filter for everything we do.”

Zappos reported turnover of $1bn in 2009, which suggests this claim is not simply PR spin. It encourages feedback and is not afraid to publish poor product reviews on its site.

For Thomas, this is simply the way a brand should do business. “We show the good stuff but also any issues. We want that kind of feedback so customers can make decisions in relation to how they get information from their peers.”

As Zappos is an online-only business, it relies partly on its call centre for customer service. Staff use their own words, rather than reading from a script. Thomas says this is important to help the company be ’human’. They talk to customers wherever they are needed, including on social networks such as Twitter.

However, Bhargava cites call centres as an area where many businesses make themselves unlikeable. Some brands measure productivity by the brevity of call times, believing that the more calls staff get through, the more sales they will make.

But one telecoms company in a McKinsey study found that it was losing money by setting a time limit on phone calls. When the firm let staff stay on the phone for longer, it found that sales increased by 10%. “Incentive models in business are not based around likeable business practice,” says Bhargava.

However, giving call centre staff autonomy results in better customer service, he suggests. ING Direct in the UK enables staff to pay a small amount of compensation to customers when something goes wrong. This has resulted in more loyal customers who deposit more savings.

Changes in call centre practice entail costly staff retraining. So how can marketers measure the financial return of being likeable?

“Forget about return on investment and talk about business impact,” says Bhargava.

“The impact of being a likeable brand is that you hold on to employees longer and have more loyal customers who create positive word of mouth for your company. Is there a return on keeping employees? Yes. Is there an ROI to having more loyal customers? Yes.”

He says brands should try to recruit people who are already fans. He cites the example of an employee who was headhunted by Dyson from his role at a general retailer because he was evangelising about the brand’s products.

“If you can find someone who already thinks your product is the world’s greatest thing, then that is good for your brand,” says Bhargava.

Another Likeonomics principle is being simple in communications. Bhargava cites the example of Ally Bank in the US for the simplicity of its advertising. The bank uses the single word ’straightforward’ as its strapline.

It is worth noting, however, that this will only work when a brand can genuinely live up to its marketing. Ally Bank used to be known as GMAC, which needed a $7.5bn bailout from the US government in 2009, so it is debatable how much consumers will be prepared to accept this repositioning.

Innocent Drinks’ simple and human positioning, summed up by its ’Little tasty drinks’ slogan, is something that Bhargava says is central to Likeonomics. He cites the brand’s Christmas campaign, where it gets the public to knit small woolly hats for Innocent bottles in aid of charity Age UK. This year, the company aims to get 650,000 hats donated.

Guest at Habbo agrees that simplicity is key to whether a brand is likeable. He says: “There is a sense that people want simplicity. Branding has become cluttered and there has been a movement to be more retro. For example, Starbucks has simplified its logo. With so much information hitting us from everywhere, keeping it simple has a coolness about it.”

Habbo allows brands to have a presence in its online world. Guest says their marketing aims are best met when they are entertaining, just as the concept of Habbo Hotel is one of fun. Most brands that work with Habbo tend to be ones that their audience likes anyway. And when they don’t do something entertaining, there is rarely a backlash, says Guest: “They tend to get ignored.”

Getting it wrong need not be the end of likeability, says Bhargava. This is where brands can emphasise their human side. While Innocent is a much-liked brand, it isn’t perfect. The size of its packaging changed in June, meaning it costs more per millilitre. Some customers have been unimpressed with this, posting comments on the brand’s website such as “Looks like I’ll be switching brands” and “Don’t treat us like idiots”. By responding to these comments, Bhargava says the brand has a human face that offsets the customer irritation.

One of Zappos’ values is to ’create fun and a little weirdness’, which it says helps it to be human, keeping customers and staff on-side.

It explains on its website: “We want people to express their personality in their work. To outsiders, that might come across as inconsistent or weird. But the consistency is in our belief that we function best when we can be ourselves.”

Humanity and likeability certainly has financial impact in 2009, Zappos was sold to Amazon for $1.2bn.

Domino's: Prepared to be frank about consumer criticism
Domino’s: Prepared to be frank about consumer criticism

Likeonomics What is it?

A concept looking at creating an ’affinity economy’, where the most ’liked’ companies are those being believed and ultimately bought by consumers.

Likeonomics: How Domino’s became brutally honest

Total honesty is one of the key criteria for a brand to be liked, according to Rohit Bhargava, author of forthcoming book Likeonomics. It is also the route taken by pizza brand Domino’s over the past year in the US to turn around its business.

When Russell Weiner, chief marketing officer and executive vice-president of Domino’s, joined the company in late 2008, he had a problem. The brand’s product had been forgotten due to a marketing focus on delivery, which talked about everything from free delivery to pizza temperature. But consumers reported that the pizza was ’like cardboard’, ’flavourless’ and ’processed’.

At the same time, banks and businesses were being bailed out as the US slid into recession. Weiner says: “Americans were disillusioned. They felt that people were just lying to them and they felt disconnected from the government. They wanted someone to be honest with them.”

Domino’s applied the principles of Likeonomics to the brand by revamping its pizza, being honest about its failings and launching its Pizza Turnaround campaign, explaining its new recipe and talking about how poor the previous product had been. Weiner explains: “It was risky but we wouldn’t have been able to do it had the new pizza not been substantially better. If it hadn’t been, it would have been an awful result.”

After the initial campaign, the brand continued to talk about what else it was doing to improve. It got rid of the food stylists that make products look better in marketing than in reality and only featured pizza straight from ovens. “We did a commercial showing what happens at these food shoots and said ’we’re never going to do that again’. We didn’t want to be one of those brands that is lying,” Weiner states.

The company then aired pictures of pizza taken by consumers, including the ones that looked poor. “The follow-up ad was not self-congratulatory. We also showed the ugly pizza and said ’we won’t stop until every pizza is great’.”

The brand has since used the new strategy to talk about its other products, such as chicken, and is now focusing on service, launching a pizza tracker so people can monitor everything from who is making their meal through to when it is out for delivery. In late July, it broadcast people’s comments in real-time on screens in New York’s Times Square, flashing up both the good and the bad.

This honest strategy meant that having lost money for the three years before Weiner joined, Domino’s made an extra 5% in sales in 2009 and 10% in 2010.

Weiner adds: “Fast food advertising is normally about product and price. But [since the launch] we haven’t introduced any new products. We have been able to tell a brand story. When a brand does these promotions, it is only as good as its last product. While other brands are talking about the pizza du jour, we are telling a story about our brand that is really working.”

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