Trust Me

In 2010, I did a TED Talk, titled “Is it Better to be Loyal or Honest?” My talk was based on the idea that humans subscribe to two different systems of ethics, one which supports the smooth functioning of the marketplace, and one which enables the effective authority of a king—or, today, a government. 

The important thing to consider from a brand-building point of view is that many large brands must try to adhere to both systems, even though the ethical principles of the two systems are frequently in conflict. This is particularly important when it comes to building trust, because it turns out that the meaning of “trustworthy” changes as a brand becomes more successful, more ubiquitous, and more powerful. 

When a new brand enters the marketplace, trust is mostly about honesty: Can the brand actually deliver what it promises? Is the product worth what it costs? If the brand grows big and powerful, different questions arise: Does the company have my best interests at heart, or is it just focused on enriching itself? Is the brand going to use its power to push products (on me, my kids, my neighbors) that it knows are bad for us? At the end of the day, who is the brand actually loyal to?

Trust is a fat word. I trust you to deliver a product or service that is worth what you charge for it means something different from, I trust you to be a force for good. The do-what-you-say kind of trust is easier for consumers to wrap their minds around and easier for brands to measure. The do-what-you-say kind of trust is essential to building a brand of any value in the first place, but it is not enough to sustain that value in the long term. I may be pleased with a brand that delivers what it promises, but my relationship with that brand is conditional. If the brand fails to deliver, even once, or if someone else is able to deliver marginally better value or better service, then my loyalty to the brand is likely to fray.

If a company grows big enough and powerful enough, the threat to the brand goes beyond frayed loyalty. The more I come to depend on a brand, the more uncomfortable I get with a relationship that is defined in mostly commercial, transactional terms. To the extent that I depend on a brand, I would like to think that the power that I’ve given it is being used in my interest. That’s where the force-for-good kind of trust becomes particularly relevant. If I begin to suspect that my interaction with a brand represents the pursuit of my own short-term comfort and convenience at the expense of a lot that I cherish in the long term, then I may start to feel a little uncomfortable about patronizing that brand. 

Consider Walmart. When it started out, selling “national brands for less” to working families in small, underserved markets, it could earn trust simply by delivering what it promised. By the mid 2000’s, however, Walmart was the 1000-pound gorilla of retail, and many people had serious doubts that the brand had their best interest at heart. Walmart’s smiley-faced icon, originally a kind of Robin Hood character enthusiastically rolling back prices, was widely coopted by the company’s critics as an emblem of corporate greed, representing the sacrifice of real value on the alter of low price, and signaling the exploitation of working families and the disruption of small-town culture. 

It is difficult for any massive company to convince its customers that it is ultimately acting as a force for good. A brand can build this kind of trust only if its customers are convinced that it believes in something beyond making money. In a story, we don’t begin to trust a character until we understand that character’s objective and see what it costs them to pursue it. 

The first kind of trust is an expression of honesty: I trust you to do what you say. Honesty serves efficiency; it does not inherently require warmth or compassion. But unless I believe that you are driven by some objective beyond just making money, I will fear—quite reasonably—that your increasing efficiency and effectiveness might end up transforming my world for the worse. The second kind of trust is an expression of loyalty: I trust you to have my best interests at heart—not just what I might want in the moment, but what I will need in the long term to insure my own well being and that of my family, my community, and my world.

Just like the tension between honesty and loyalty in any personal relationship, you can’t build a brand by committing to one side of the conflict at the expense of the other. Simply doubling down on convenience, price leadership and reliability can lead a big brand to justify anything that is efficient and profitable, which can end up alienating big groups of stakeholders. That is what happened to Walmart, and it took a massive effort on their part to rebuild trust by signaling—through their actions—that there is something bigger than profit that the brand believes in when it is at its best.

As with a personal relationship, the only healthy way forward is to relentlessly pursue both honesty and loyalty at the same time—without pretending that there is no conflict between the two. A brand needs to deliver what it promises. At the same time a brand needs to stand up for the long-term well being of its customers, its stakeholders, and the communities in which it lives. At important moments in the life of any brand, those two objectives will collide in some dramatic way.

Embracing this kind of conflict is not a skill most brands have cultivated. A competitive mindset treats conflict as a battle to be won. An analytical approach treats conflict as a problem to be solved. These classic brand-building tools are not wrong, but when it comes to building trust they are not particularly helpful. The whole strength of story as a strategic tool is that, in the world of story, conflict is a source of energy and authenticity. Embracing the conflict—between honesty and loyalty, between short-term wants and long-term needs—is the only way to build the kind of trust that makes a brand both profitable and sustainable.

I can think of lots of brands for which trust has eroded in inverse proportion to their success. If you have some examples of brands that have maintained or even increased trust as they have grown, I would love to hear them.

The Road to Hell is Paved…

Six weeks ago I added a blog posting entitled Brands that outrun their story, in which I speculated that Starbucks is having a difficult time regaining its footing as a brand precisely because the story on which the brand was built seems to be contradicted by the very size and success of the business.

By the same token Walmart–which was arguably in an even deeper hole than Starbucks three years ago–has done a better job of climbing out of that hole because the Walmart story, at its best, is very congruent with its size and success.

So what about Google? One of our readers asked if we thought that Google was in danger of outrunning its story, which provoked the following thoughts:

On the one hand, the Google brand was built around people’s experience of a free service, presenting a clean, non-commercial home page and a funny, playful name. As a business, it had a kids-in-a-dorm-room kind of feel to it: friendly and a little self-deprecating.

On the other hand, the model for the business Google was building is a poster child for the network effect: connect uncountable hordes of people and mine unfathomable streams of information until the resulting flow of cash could sink even the Evil Empire of Microsoft itself.

The conflict, as so often happens, was right in the name. On the surface, Google sounds warm, fuzzy and almost cartoony. At the same time, for engineers with their hands on the controls of the digital economy, the word googol stands for numbers so big the rest of us don’t know how to deal with them. The conflict is also acknowledged in the company’s informal motto, “Don’t be evil.” The phrase sounds anti-corporate in a glib, rebellious way, while at the same time clearly referencing the corruption that can accompany great wealth and power.

From a story point of view, the future of Google as a brand depends entirely on what objective is communicated by its actions in the world. In other words, what does the brand want? A brand is like a character in the drama of its category. As a member of the audience watching that drama, I am suspicious of any character whose motive is not clear. If a brand fails to convey a clear and convincing sense of what it wants, then my default assumption must be that the brand is only interested in my money. 

In that sense, Google’s strategic marketing problem is very much like Walmart’s. As vast commercial enterprises, both Google and Walmart must communicate a sense of purpose above and beyond making money. Otherwise, they will have an increasingly tough time making money.

From the beginning, Google has done a good job of articulating a larger purpose: to organize the world’s information and make it universally accessible and useful. The question is, do you believe them? It was easy to buy this as altruism when it seemed like kids in a dorm room playing with geeky algorithms. Now that they are becoming more and more deeply enmeshed with our vital personal information, and the opportunities to exploit that information are so clear, do you still believe they are capable of managing their wealth and power in a way that honors their stated purpose?

I’d love to hear your answers to those questions.

Something to Buy Into

I’ve been thinking a lot recently about handy tools marketers can use to test their brands for latent story energy. One idea–of which I was reminded by the new Starbucks print advertising–is to ask yourself this:

Does my brand offer its customers something to buy into, or just something to buy?

What I like about this question is that it immediately separates a brand with real equity from a commodity. At the end of the day, if all you are offering your customer is a specific thing to buy for a certain amount of money, it is very difficult to develop any pricing leverage and you have no way to engage any loyalty on the part of your customers. (If you have a patent on the thing you are selling you can charge a premium as long as the patent lasts, but that’s not brand equity, that is just a temporary government-licensed monopoly.)

Of course, some stories are deeper and more compelling than others. When Walmart was a scrappy little challenger from Arkansas its story was lifeline for working families trying to get by on a budget. That story, given credibility by Walmart’s ability to bring brand name merchandise to small towns at surprisingly low prices, built a successful business and–for a while–a brand that customers across small town America felt connected to. In the years after Sam Walton died the business grew but the story got shallower until, by the middle of this decade, the only thing Walmart was asking its customers to buy into was its ability to deliver the absolute lowest price–no matter what the cost to the towns, the employees, the suppliers or the community as a whole.

In the past couple of years Walmart has once again asked its audience to buy into the idea that its size and its capabilities can be a force for good in the world. Functionally, Walmart still has to deliver low prices in order to have a relationship with its customers at all, but the meaning of its story has gone from deeper to shallower to deeper again–with dramatic consequences for the value of its brand and the success of its business.

I’m interested in what you think of this idea as a tool for uncovering some of the key story currents running through your brand.

I look forward to hearing from you.

When Founder Brands Founder

It is interesting to see the vacuum that can be created with the loss of a charismatic leader and the way a brand can founder without its founder at the helm. You wouldn’t think that would happen so frequently–after all, most of the brands successful enough that you’ve heard of their founder are built on solid organizations of people who know perfectly well how to manage the business. Dave Thomas, for example, wasn’t really running Wendy’s at the time of his passing, and yet the problems that ultimately led to the sale of the company began to show almost immediately in brand communications once he was gone. So what’s going on? Why and how does the founder’s absence make a difference?

In our work on brands and brand characters, we’ve observed that a charismatic founder often serves as the Storyteller-in-Chief, the one who provides the emotional center of a brand. Often, a strong founder is like the author of the brand story, and as is often the case with authors, the founder embodies the story intuitively because he or she is personally torn by the same conflict that powers the story of the brand.

Wait. What’s that? Conflict?

Every great story is powered by conflict. Once the conflict is over, so is the story. The audience connects to the story through the conflict, by recognizing themselves in the struggle and by identifying with the fundamental truth about the human condition that the struggle reveals. Most great brands are powered in a similar way, by a fundamental human conflict that connects them to their audience and generates a sense of meaning much larger than the rational transaction that takes place. It is that dimension of meaning that elevates great brands above the crowd.

Charismatic founders are often deeply conflicted, which is what makes them dynamic individuals capable of powering successful brands and infusing those brands with story and purpose. Take Orville Redenbacher, the most extraordinary ordinary guy on earth. And that’s a conflict–between the ordinary and the extraordinary–a conflict deeply connected to the magic of popcorn. Popcorn starts as this boring, dried-up little kernel and then explodes into this big, savory, surprising delight. Orville’s fanatic passion for popcorn made him oddly entertaining to watch and infused his brand with its idiosyncratic purpose–to open people’s eyes to the wonder of popcorn. But like Orville, most founders don’t understand how story works. Few are consciously aware of the conflicts that drive them or have much idea how those conflicts impact their businesses. They hold the meaning of the story on an intuitive level, navigating decisions by gut instinct. Such founders make little conscious effort to pass the story along, leaving those who come after with an excellent mechanical blueprint of how the company works but little connection to the emotional juice that makes it resonate with people.

It is easy to believe that this juice is ethereal stuff, purely the province of instinct and intuition. But those who work in story understand that this is not the case. There are elements upon which every great story is founded. These elements can be articulated. In fact, with ongoing storytelling, as in episodic television, they must be articulated in order to ensure that future storytelling connects with the audience regardless of who is actively telling the story or how events specifically unfold.

Wal-Mart is an interesting example. Sam Walton was deeply torn between his desire to win and his desire to serve. He didn’t articulate that conflict for the organization, and he didn’t specifically point out the fundamental human truth that winning is only meaningful when it serves a higher purpose, but he acted within the context of that story by ruthlessly trouncing his competition in service to his customers. After he was gone, the leadership of Wal-Mart focused on imitating his tactics, while the service energy gradually eroded from the brand. The result was that the brand evolved from a servant-leader into a dangerous bully, a transition so complete that it is taking them years to correct their course now that they are turning their focus from Sam’s tactics back to his story.

It is the meaning a founder represents that is engaging. With this in mind, it is at least as important that a founder work to articulate the conflict, meaning and purpose of a brand before leaving it as that he cover the rational, mechanical bases of how the company operates. At the end of the day, the mechanics are the easy part. It’s holding true to the meaning that will continue to attract people to the brand and ultimately keep it off the rocks.

The Scrooge Effect

I read The Economist, and I generally agree with their point of view, especially on matters of business and finance. A couple of months ago they did a special report on corporate social responsibility, and they began by asserting the classical position that a public corporation has no business pursuing any goal beyond increasing shareholder value. I understand the principle–that the shareholders, not managers, should decide how to spend the profits of the corporation–but in my daily practice of looking at companies and brands through the lens of story, I find almost the opposite to be true. My experience suggests this:

A company that seems to have no purpose other than making money for its shareholders will have an increasingly difficult time making money for its shareholders.

This observation raises a very interesting question for me: Are concerns about purpose or mission simply a part of the marketing and public relations function–a way to wrap a mask of public interest around a core of disinterested financial calculation–or is there a deeper and more strategic connection between brand purpose and the pursuit of shareholder value?

The way I see it, marketers are eager to develop a connection between their brands and their customers that feels authentic and emotionally compelling. Such a relationship is the only way to command loyalty, and loyalty leads directly to lower selling costs and premium pricing. For their part, most customers have no trouble understanding that a company has to have a money story–a way of acting in the world that generates profit and allows the company to survive and grow. But the money story is not the place where customers are likely to connect with a company or brand emotionally. The money story is all about the rational transaction–the cost/benefit analysis. A company that seems to have no purpose in the world other than to make money for its shareholders will consequently fail to develop a deeper relationship between its brand and its customers–and in today’s highly fractured markets filled with an abundance of high-quality choices, that kind of failure is likely to have a serious impact on the bottom line.

In the world of story, a character who pursues money for its own sake is generally the villain. Ebenezer Scrooge is archetypal. The essence of the Scrooge character is that he has no emotionally satisfying relationships with anyone because everyone understands that he loves only money. We call it “the Scrooge effect” when a brand’s audience begins to suspect the same about a company.

Wal-Mart is a really interesting case in point. Sam Walton was a driven, competitive individual who channeled his ambition into bringing the material attributes of the good life to small communities that were underserved and overcharged. He built the company around a very compelling story powered by the conflict between service and leadership. At its beginnings, and for many years after, Wal-Mart seemed a kind of scrappy underdog character. But after Sam died and the company became the largest retailer in the world, the service energy in the story slipped away, and for a while the company seemed to be driven by the idea of success for its own sake. From a story point of view, it is not surprising that Wal-Mart seemed to transform from an underdog into a bully, emerging as Scrooge in the larger category story.

In the past year and a half, Wal-Mart has made huge efforts to recapture its role in the retail category as a “servant leader.” Starting with a clear articulation of its story framework, Wal-Mart has embraced the conflict in its story, used that story to find a sense of purpose, and made strides on many fronts to bring that story to life in everything the company does. As a result, in a very difficult economy Wal-Mart’s stock price hit a 52-week high on May 1, up nearly 22 percent since the beginning of the year. And more important for the long term, Wal-Mart has positioned itself to pick up market share during the economic downturn and hold on to it as conditions improve.

I suspect that an intuitive awareness of the connection between the character of a company and its profitability is behind the surge of interest in brand purpose and the attention being paid to the nature of the relationship between a brand and its audience. Of course purpose and relationship are the province of story. Trying to find a larger purpose and establish a meaningful relationship using the current metaphors of marketing–war and science–is tackling the problem with the wrong tools. Such an effort seems likely to end up as an exercise in “taking the bird apart to see what makes it fly” unless the process is firmly grounded in a deep, strategic understanding of the metaphor of story.

If you are responsible for building a brand, one way we’ve discovered to approach purpose and relationship is to think of your category in terms of story and ask yourself, what role does my brand play in that story? What kind of character is my brand? What is its objective? And how does it act in the world in order to achieve its objective? That’s where you begin to get at an authentic purpose–the thing (over and above making money) that the brand exists in the world to do.

Most people remember Scrooge the miser–just as many people still think of Wal-Mart as the bully. But by the end of A Christmas Carol, Scrooge found enlightenment and re-engaged with the world in an authentic and compelling way. Wal-Mart, for its part, has done a lot recently to embrace its conflict and find ways to live a more authentic and compelling story. And its shareholders have a lot to be thankful for as a result.

So, are having a higher purpose and increasing shareholder value the same thing? Not exactly. But it’s clear that they are becoming more powerfully connected. It’s also clear that the conflict between them is the kind of conflict that might connect a brand to its audience and power an emotionally compelling story.