By Fard Johnmar As the Trump Administration begins to take shape, many are asking what the new U.S. government will mean for digital innovation in health—an area that has flourished over the past eight years of the Obama presidency. If the Affordable Care Act (ACA) is repealed (as appears likely), consumers, patients, insurers and others […]
Nissan recently gave the wildly popular YouTube star UnBox Therapy the opportunity to check out the 2017 Nissan Rogue One Star Wars Limited Edition, this model just happens to be 1/5400. The video appeared on his channel just a couple days ago and in typical UnBox Therapy fashion it was done in an unboxing fashion just on a much grander scale.
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MBAs are taught that a business is worth the sum of its future profits. This benchmark is how investors calculate the fair price of a company’s shares.
CEOs and their management teams are evaluated by their ability to increase the value of their stocks—and therefore care deeply about the ability of their companies to generate free cash flow. Management’s job, in the eyes of shareholders, is to implement strategies to grow future profits by increasing revenues or decreasing expenses.
Fostering consumer habits is an effective way to increase the value of a company by driving higher customer lifetime value (CLTV): the amount of money made from a customer before that person switches to a competitor, stops using the product, or dies. User habits increase how long and how frequently customers use a product, resulting in higher CLTV.
Some products have a very high CLTV. For example, credit card customers tend to stay loyal for a very long time and are worth a bundle. Hence, credit card companies are willing to spend a considerable amount of money acquiring new customers. This explains why consumers receive so many promotional offers, ranging from free gifts to airline bonus miles, to entice them to add another card or upgrade the current one. Potential CLTV justifies a credit card company’s marketing investment.
Habits Supercharge Growth
Users who continuously find value in a product are more likely to tell their friends about it. Frequent usage creates more opportunities to encourage people to invite their friends, broadcast content, and share through word of mouth. Hooked users become brand evangelists—megaphones for your company, bringing in new users at little or no cost.
Products with higher user engagement also have the potential to grow faster than their rivals. Case in point: Facebook leapfrogged its competitors, including MySpace and Friendster, even though it was relatively late to the social networking party. Although its competitors both had healthy growth rates and millions of users by the time Mark Zuckerberg’s fledgling site launched beyond the closed doors of academia, his company came to dominate the industry.
Facebook’s success was, in part, a result of what I call the more is more principle—more frequent usage drives more viral growth. As David Skok, tech entrepreneur turned venture capitalist, points out, “The most important factor to increasing growth is . . . Viral Cycle Time.” Viral Cycle Time is the amount of time it takes a user to invite another user, and it can have a massive impact. “For example, after 20 days with a cycle time of two days, you will have 20,470 users,” Skok writes. “But if you halved that cycle time to one day, you would have over 20 million users! It is logical that it would be better to have more cycles occur, but it is less obvious just how much better.”
Having a greater proportion of users daily returning to a service dramatically decreases Viral Cycle Time for two reasons: First, daily users initiate loops more often (think tagging a friend in a Facebook photo); second, more daily active users means more people to respond and react to each invitation. The cycle not only perpetuates the process—with higher and higher user engagement, it accelerates it.
User habits are a competitive advantage. Products that change customer routines are less susceptible to attacks from other companies.
Habits: A Friend Or A Foe
Many entrepreneurs fall into the trap of building products that are only marginally better than existing solutions, hoping their innovation will be good enough to woo customers away from existing products. But when it comes to shaking consumers’ old habits, these naive entrepreneurs often find that better products don’t always win—especially if a large number of users have already adopted a competing product.
A classic paper by John Gourville, a professor of marketing at Harvard Business School, stipulates that “many innovations fail because consumers irrationally overvalue the old while companies irrationally overvalue the new.”
Gourville claims that for new entrants to stand a chance, they can’t just be better, they must be nine times better. Why such a high bar? Because old habits die hard and new products or services need to offer dramatic improvements to shake users out of old routines. Gourville writes that products that require a high degree of behavior change are doomed to fail even if the benefits of using the new product are clear and substantial.
For example, the technology I am using to write this piece is inferior to existing alternatives in many ways. I’m referring to the QWERTY keyboard which was first developed in the 1870s for the now-ancient typewriter. QWERTY was designed with commonly used characters spaced far apart. This layout prevented typists from jamming the metal type bars of early machines. This physical limitation is an anachronism in the digital age, yet QWERTY keyboards remain the standard despite the invention of far better layouts. Professor August Dvorak’s keyboard design, for example, placed vowels in the center row, increasing typing speed and accuracy. Though patented in 1932, the Dvorak Simplified Keyboard was written off.
QWERTY survives due to the high costs of changing user behavior. When first introduced to the keyboard, we use the hunt-and-peck method. After months of practice, we instinctively learn to activate all our fingers in response to our thoughts with little-to-no conscious effort, and the words begin to grow effortlessly from mind to screen. But switching to an unfamiliar keyboard—even if more efficient—would force us to relearn how to type.
Users also increase their dependency on habit-forming products by storing value in them—further reducing the likelihood of switching to an alternative. For example, every e-mail sent and received using Google’s Gmail is stored indefinitely, providing users with a lasting repository of past conversations. New followers on Twitter increase users’ clout and amplify their ability to transmit messages to their communities. Memories and experiences captured on Instagram are added to one’s digital scrapbook. Switching to a new e-mail service, social network, or photo-sharing app becomes more difficult the more people use them. The nontransferable value created and stored inside these services discourages users from leaving.
Ultimately, user habits increase a business’s return on investment. Higher customer lifetime value, greater pricing flexibility, supercharged growth, and a sharpened competitive edge together equal a more powerful bang for the company’s buck.
More on habits…
Contributed to Branding Strategy Insider by Nir Eyal. Excerpted from his book Hooked: How to Build Habit-Forming Products
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This blog was written by Ilaria Maselli, Brian Schaitkin, and Klaas de Vries. Asked whether they agree or not with a set of changes to the Constitution, 65 percent of Italians (almost 33 million voters) showed up to answer on Sunday December 4. The response was a loud no: 59.1 percent of the votes. How […]
This year, SS+K is breaking free of the traditional flat holiday card stack by offering 360° virtual reality bobsled rides. A few folds will turn the 2D card into 3D VR glasses for the recipient to take take their seat in the bobsled. After sliding through banked turns, jumps, an upside-down loop and more jumps, the bobsledder will bash through a bank of snow at the finish line where they are greeted by cheering polar creatures that they’ve encountered along the way.
The virtual world consists of beautifully simple 3D polygonal assets that make up a colorful winter wonderland. With the cardboard glasses, users will be able to engage a slow-motion effect at any point throughout the experience to get a better look at the playful world around them. At any point throughout the run, snow will fall if the user shakes their head.
You can start the experience with any VR headset by going to https://www.ssk.com/holiday/ on your phone. No VR glasses? There’s also a 360-degree YouTube video of the experience, video above. (Hint: If you watch the video on an Android phone, you can explore the world as you would with a VR headset.)
CREATIVE CREDITS:
Agency: SS+K
Partner, Chief Creative Officer – Bobby Hershfield
Creative Director – Armando Flores
Copywriter – Ryan Hrbek
Design Director – Jesse Raker
Designers – Chris Peck, Don Vincent Ortega
SVP, Director of Client Services – Elisa Silva
SVP, Director of Production + Innovation – John Swartz
Producer – Andrew Veith
SVP, Digital Strategy & Innovation – Kevin Skobac
Production companies
VR development: TANTRUM Lab
Website development: Firefall Pro
CTO: Scott Park
Project Manager: Stephen Lutchman
Developer – Aric Ng
Developer – Tyrone Shine
Developer – Gena Hayward
Developer – Stephen Tetreault
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When I started to connect with top influencers in online marketing, millionaire entrepreneurs, New York Times bestselling authors and renowned media personalities, my life and my business were transformed. First… I changed my own beliefs about what was possible for me. I realized that if I followed the same steps…
If you’re looking for a “job,” Apple doesn’t want you. Apple prefers to hire people who hear a “calling” to apply.
Apple hires people who want to play a role in creating the best-loved technology on the planet. Apple hires people who take joy in helping others discover tools they can use to change the way they live, work, and play. Apple hires enthusiastic people who want to help others achieve their dreams. It’s a philosophy Steve Jobs instilled in the culture. Andy Hertzfeld, an original member of the Apple team and now an engineer at Google, once said that what Jobs taught him was to “follow your heart” and only great work comes out of doing what you adore. Hertzfeld was walking with Jobs near his home in Palo Alto, California. It was around the time the Internet bubble was minting millionaires all around them and those who weren’t rich yet were talking about “exit strategies” – selling quickly for a profit. “It’s such a small ambition and sad, really,” Jobs said. “They should want to build something, something that lasts.”
Apple creates a customer service culture that lasts because it hires for personality. The company cannot train for personality. No company can. The filtering process begins at the Apple website, which specifically states the company is only looking for people who want to change the world and who want to positively impact the lives of others: “Like when someone creates their first video with iMovie. Surfs the Internet-the real Internet-on an iPhone. Or uses the built-in iSight camera to video chat with their grandchildren. Making it all happen can be hard work. And you could probably find an easier job someplace else. But that’s not the point, is it?”
On the tenth anniversary of the Apple Store, the company created a poster that was circulated among its employees. It was meant to inspire employees and capture the spirit of the company. But if you read the poster carefully, it reveals much of the magic behind the brand and provides lessons for any company attempting to create a next-generation customer experience.
“At the very center of all we’ve accomplished are our people,” the poster states.
“People who understand how important art is to technology. People who match, and often exceed, the excitement of our customers on days we release new products. The more than 30,000 smart, dedicated employees who work so hard to create lasting relationships with the millions who walk through our doors … we now see that it’s our job to train our people and to learn from them. And we recruit employees with such different back grounds – teachers, musicians, artists, engineers – that there’s a lot they can teach us. We’ve learned how to value a magnetic personality just as much as proficiency. How to look for intelligence but give just as much weight to kindness. How to find people who want a career, not a job. And we’ve learned that when we hire the right people, we can lead rather than manage. We can give each person their own piece of the garden to transform.”
Contributed to Branding Strategy Insider by Carmine Gallo in partnership with McGraw-Hill. Excerpted from The Apple Experience: Secrets to Building Insanley Great Customer Loyalty
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“Girls rule the world” was cited as a top disruptive marketing trend by Geoffrey Colon a few months ago here on Branding Strategy Insider.
But this trend extends beyond just ruling the world. Across society, cultural norms are being challenged by ideas of what women are capable of and how they should be regarded. Just recently, a L.A.-based sitcom writer told me that a network executive asked their show to remove a scene where the female lead was eating because, ready for this? “Nobody wants to see a woman eating in prime time.” Yep, true story.
Ideas of women being single and empowered, body positivity, and increased demand for diversity everywhere is helping to propel many related trends concerning women. Here are a few brands should take note of:
1. Out Of The Box: While we hope better data will lead to more informed and nuanced market profiling, it is still too easy and common to assume that most women want to get married and have children. Of those who want to get married, many are doing so later in life, and in most of the western world, fewer women are having children. Or, they are at least having children much later in life. Some brands are reimagining the narrative for single women. Take Singles Swag, a subscription service that treats subscribers to a collection of curated products based on preferences. While the concept of subscribing to a monthly service is not new, the narrative and targeting for this one is. Brands can learn from this by getting creative with narratives and applying them in ways that allow successful concepts to be remixed.
2. From Shhhh To Chic: Back in 2015’s Future 100, JWT Intelligence cited a trend that “previously taboo aspects of femininity are being brought to the forefront of cultural discourse.” We started to see some feminine care products getting a makeover, but now this trend is going global, even in more conservative societies.
At the 2016 Summer Olympics in Rio, Chinese swimmer Fu Yuanhui told an interviewer that her failure to take home a medal was in part because, “I just got my period yesterday and I’m still a bit weak and really tired.” CNN’s account of this says she ‘smashed taboo and won the internet.’ As JWT notes in this year’s Future 100, China launched its first domestic tampon brand called Femme. It is being marketed as a premium product aiming to dispel the stigma around tampon usage. By smashing taboo, and empowered by social media, barriers are coming down where real results in health, education and quality of life can be seen.
3. Body Positive: Nearly a decade ago, Dove stunned the world with its ‘real beauty’ campaign. But last year in London, a weight-loss ad by Protein World prompted a major backlash when an athletic bikini-clad model was featured with the headline “Are You Beach Body Ready?” A vocal group of critics felt the message was intended to make individuals feel inferior and while the brand tried to fight back, so did London’s mayor. In a press release, the mayor’s office said that “from [August], Transport for London will not allow ads which could reasonably be seen as likely to cause pressure to conform to an unrealistic or unhealthy body shape, or as likely to create body confidence issues, particularly among young people.”
Today, in the U.S., 67% of women are over a size 14 yet they are reflected in only 2% of imagery. As real life photography is more readily available and user-generated content increases, brands need to be mindful of being inclusive and of the impact they can have on a society that seems to be increasingly demanding of a more accurate reflection of the world we live in. But if the world we live in is less healthy, brands need to be cautious about how much they reflect versus how much they can motivate and inspire.
Another way to look at these examples is to see them less about empowerment, and more about acknowledgement and acceptance. As we fast approach the end of the year, we can see 2016 has had a shocking and polarizing effect across many societies. Fake news, the diminishing notion of political correctness and many other effects have left many wondering “What is real?” and “Who can I relate to?”
Brands that answer those questions smartly and sensitively will better align themselves with our changing world as well as gain new customers and advocates in the year ahead.
Don’t let the future leave you behind. Join us in Hollywood, California for Brand Leadership in the Age of Disruption, our 5th annual competitive-learning event designed around brand strategy.
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In this session, attendees heard from two former agency executives charged with leading the transformation of Well Fargo’s 200-person creative services organization. They discussed how they laid the foundations for the shift to a true agency model. From fractionalized to unified. From servicing to leading. From vertical to horizontal. That’s only a few of the pivots that were explored in this session.
– the book: People First Leadership: How the Best Leaders Use Culture and Emotion to Drive Unprecedented Results
– the brain: Eduardo Braun. In his role as the former Director of the World Business Forum, Eduardo has interviewed world leaders such as Bill Clinton, Rudy Giuliani, and Mikhail Gorbachev and business luminaries including Jack Welch, Tom Peters, and Herb Kelleher. This front-row seat to leadership in action has given Eduardo keen insight into what great leaders do.
– the best bits: Eduardo starts with an introduction to the role of culture relative to strategy and the importance of culture in driving individual and group success.
“Culture and strategy are not wholly independent variables; they are intimately interrelated. Culture is an important variable in the strategy implementation process — it affects what people do, how they act, how they compete.”
“…You need both the right strategy and a strong culture. However, if you recognize that culture can be a unique way of competing, you will discover that culture may in fact be the essence and heart of the strategy!”
The book then introduces the concept of the CEO as the Chief Emotions Officer.
“…Culture generates emotions, so, inasmuch as your role as a leader is to create and manage your company’s culture, your role as a leader is essentially to produce certain emotions. Leaders multiply results by creating cultures because cultures generate emotions, such as a sense of purpose, pride, and trust.”
“…It is the duty of a leader to understand that she can control and use certain stimuli to create the appropriate emotions that, in turn, increase performance at work.”
The bulk of the book examines the five roles that make up the job of the Chief Emotions Officer:
Some of the best bits of the book come from the many quotes from leaders that fill the pages. A few examples:
Rudy Giuliani, former mayor of New York City: “The first and most important principle of leadership is: ‘To be a leader, you have to have strong beliefs; you have to know what you believe; you have to know what you stand for.’”
Howard Schultz, CEO of Starbucks “We are in the business of people serving coffee, and not in the business of coffee serving people.”
Bill Clinton, former President of the United States: “My work as president could best be described as Chief Decision-Making Officer.”
Colin Powell, former U.S. Secretary of State and retired four-star general in the United States Army: “You must not hang onto your ego or your past success. Be passionate about what you think, but not so in love with your original idea that you ignore when it’s time to change it. If you want to be successful, you have to be ready to throw that which is no longer relevant overboard.”
Carly Fiorina, former CEO HP: “Run to the problem. So if you have a crisis, run to it. Don’t avoid it; don’t run away from it; don’t hide it; run to it. Run to it. Identify it. Acknowledge it. Deal with it.”
– the brand story: Because People First Leadership includes quotes and insights from leaders of some of the greatest organizations in the world, it conveys the outlines of many great brands. Southwest Airlines stood out to me because of clear connection between the leadership provided by Herb Kelleher, Cofounder, Chairman Emeritus, and Former CEO of the company and the positioning and success of the brand.
Kelleher explains it saying, “Given enough time and money, your competitors can duplicate almost everything you’ve got working for you. They can hire away some of your best people. They can reverse-engineer your processes. But the only thing they cannot duplicate is your culture. They can copy what we do, but not who we are or what we believe in, and without that, it’s not enough.”
Other quotes describe the unique culture he cultivated at Southwest. For example, he says, “I really think that our humanistic approach to our people was probably more essential than anything else, because we value them as individuals, not just as workers.”
And he explains the basis of Southwest’s culture: “Employees and my team come first; then comes the customer. I don’t think you can really honor, respect, and dignify your people if you say that the customer is always right…So, we don’t tolerate abuse of our employees by our customers. And our employees love that.”
Kelleher concludes, “I always thought that our esprit de corps, the attitude of our employees, was one of our biggest competitive advantages. You know, people like to be treated nice…and our people do that from the goodness of their hearts. And that is our advantage over other carriers.”
– the bottom line: If you are a leader or simply aspiring to be one, read this book. If all leaders did, more organizations would be successful, more people would be fulfilled, and more brands would be great.
Listen to my conversation with Eduardo to learn:
Learn more about and contact Eduardo at:
related Brand Book Bites:
The Relationship Engine by Ed Wallace
Onward by Howard Schultz
Dare to Serve by Cheryl Bachelder
The post brand book bites from people first leadership appeared first on Denise Lee Yohn.
*reSET is the only Connecticut organization to receive the U.S. Small Business Administration for the Growth Accelerator Competition Award, announced by President Obama on August 4th, 2015.
