To Be Liked By Many Or Loved By Some
A brand identity crisis
I was no Regina George. Didn’t set any fashion trends or throw any parties. I had my own group and I was happy. Yes, I could have changed who I was. I could have tried to be like them. But even then, I knew they wouldn’t stick around. I knew they would never be loyal.
Society pushes us to conform to norms. It’s a very large pillar in the structure of consumerism. And quite honestly, I’m fine with it. We are all humans; a creature with the natural desire to be accepted by the crowd.
Everyone just wants to be loved.
Including brands. Have we ever thought that maybe they suffer from the same problem?
There is an economic theory called the Hotelling Law, also known as the Principle of Minimum Differentiation, in which it’s believed producers have a natural tendency to make their products as similar as possible. The common example is that if there is a beach with two hotels, it makes sense for those hotels to be next to each other in order to capture more customers.
But as the saying goes, if you try to please everyone, you end up pleasing nobody. Whether you’re a human, a brand, or Cady in Mean Girls, by running a mission for greater acceptance (i.e. more top line) you’ll risk leaving your values and loyal followers behind.
Toms, a shoe brand built around the foundation of social responsibility, lost a lot of its credibility after expanding at a mass rate, into multiple product lines, and with little care for product quality. It focused too much on the “what” and lost sight of the “why”; as the product line expanded, the brand has been criticized for taking away business from local shoe sellers and for the actual impact the shoe donations have on those communities.
By diluting values, it went from having a small set of strong, highly valuable customers, to having a large set of less dedicated and lower-value customers. The impact of that turnover is then higher costs for the brand in the long run.
The consequence is temporary popularity. It’s a high, it’s addictive, but it doesn’t last. Those friends, those consumers, only stay as long as your true identity is veiled.
The alternative is simple — be yourself.
It’s obvious, but it’s hard. Why? Because not as many people love it. Not as many people will flock in an instance. But the people that do, will be there because they can truly relate and share your values.
It’s the difference between brand loyalty, where customers choose to be loyal given the shared brand values, and product loyalty, which is about the short-term lower prices or discounts that might sway a shopper to one brand over another.
The argument of long-term profitability depends on the strength of relatability; Bain & Company and HBS found that for every 5% increase in customer retention, there is a more than 25% increase in profits, driven by economies of scale, increased word-of-mouth marketing, and higher average order values at lower costs. In other words, customers loyal to your brand will cost you less.
Furthermore, Research by two marketing professors at the University of South Carolina (Shimmp & Madden) shows that people that love a brand are not only willing to purchase more, but are willing to pay more, and tell more people about it.
Being loved for your individuality has a greater return.
That brand affection is built through the characteristics that we as humans have identified as relatable. Price is no longer the main factor to demand; there almost always a cheaper version of a product, especially with sites like Amazon and Google Shopping. Price isn’t irrelevant, but we now love brands for more than just their $ amount; we love them for their level of relatability. In other words, Brand Affection = (Relatability / Price).
A clear illustration of this change in the significance of price to demand is Netflix. In 2016, original subscribers were forced to pay $9.99 vs. the original $7.99. Research showed that despite 41% claiming they would cancel their plans, only 4% actually would. At the time, there were plenty of other streaming services available (e.g. Hulu, Amazon Video, HBO Go), yet despite this price change users stayed. The level of relatability gained through its position as a convenient streaming service was greater than the $2 price change incurred.
In simple terms, the more relatable we are to our customers or friends, the more loyal they are to us, and the greater return we gain from that relationship down the road.
To take it a step further, it’s important to note that when the elasticity of brand affection is greater, the level of loyalty is greater. Meaning, a large increase in price results in a very small decrease in relatability, brand affection, and profit. These customers are less dedicated to specific products, and more dedicated to the brand itself.
Consider the brand Supreme. Its customers shop with them because they are in love with the unprecedented, rebellious values of the brand; values they also share. Most products come in limited editions, creating a sense of exclusivity. Many sell out and find themselves on eBay the next day at an increased price. The products range from a $5.50 branded MTA card to a $9,000 Hermes Birkin bag, or odd end items such as nunchucks, driving hats, an axe, a brick… all labeled with “Supreme”. The label, and what it stands for is what attracts these customers. They are not defined by income, but rather their desire to be a member of the brand’s exclusive club.
These shoppers may not be fans of every product created, but are evidently fans of the creator.
Message in a Bottle
Brands: Retail is no longer just about the best deals, the most convenience, or even the best products. It’s about being the most-loved brand. And that affection is just as much about the ‘why’ as it is the ‘what’. If a customer can relate to a brand through shared values, the sustainability, loyalty and quality of those customers will lead to greater profitability over time.
Humans: Think about those friends you’ve had for years; the ones that may drive you crazy every now and then, but ultimately aren’t going anywhere. They’re loyal to you. If our return as humans is measured on happiness, those are the people that will help us achieve that.
