Super-connected: Shared Values as a Key Business Strategy
Move over, 4Ps — there’s a new strategy in town:
Business leaders have traditionally considered classic marketing strategies (with a relatively recently added new media edge) the main way to generate a sustainable competitive advantage in their respective industries. While these methods have their own degrees of merit, there’s a new member in the strategy club: values alignment.
At the most basic level, values alignment is not a new approach, but it’s increasingly considered a strategic imperative — an authentic way to reach and connect with consumers, get them to spend more on your brand and even possibly insulate your company if something with your brand goes sideways.
The Volkswagen emissions cheating scandal has consumers marveling at the depth and breadth of the company’s lies, and pundits the world over arguing about whether the iconic brand will survive. But behind the buzz about what some are calling the biggest corporate breach of trust since Enron is the story of shared values waiting to be told.
The VW scandal comes at a time when consumers are aligning themselves with companies who share their values, and these consumers are more empowered than ever to make intentional, mindful choices about whom they trust with their money and who they believe will be a reliable provider of quality products and services.
Fans of the Volkswagen brand had aligned themselves with the company’s unique mix of heritage, style, performance and relative eco-friendliness. VW’s “clean diesel” messaging left buyers feeling satisfied that their car was not only affordable and fun to drive, but better for the planet. Consumers believed that they were supporting a brand that shared their eco-friendly values.
But in order to comply with regulations and, almost as importantly, to be able play in the green sandbox with its competitors, VW cut corners. VW had not fully integrated their values throughout the company, and they’re paying dearly in dollars and consumer trust.
What’s the lesson for brands here, besides the obvious “don’t cheat” and “don’t lie”? It’s about shared values, and alignment with the needs and desires of your customers that go beyond the big-P, price value-proposition.
Why Checking Your Alignment is Key
Not sure if your company should prioritize talking about values? Consider a recent Harvard Business Review piece by marketing and business leaders Scott Magids, Alan Zorfas, and Daniel Leemon, who have been looking at this topic and talking to hundreds of companies and thousands of consumers. What I have called “shared values” they call “emotional motivators” — and they have produced some thought-provoking findings proving that it’s possible to rigorously measure and strategically target the feelings that drive customers’ behavior.
Their team looked at the customer journey and the varying emotions and motivators people feel in association with different brands and industries. In measuring these emotional motivators, Magids and his colleagues prove out the concept I have posited with many clients and in my past publications: Customers become more valuable as they become more connected to a brand.
Creating the Fully Connected Consumer
How are these fully connected consumers created? In stages, according to an in-depth study conducted by Magids and his colleagues: People move from not feeling connected, to being satisfied, to sensing brand differentiation, to being fully connected. And with each step, they begin to spend more money — and to invest more in the shared values embodied by the brand. According to their research, across a sample of nine categories, customers moved from not emotionally connected (18% less valuable), to baseline highly satisfied but not fully connected, to perceiving brand differentiation and satisfied but not fully connected (13% more valuable), to fully connected customers who are 52% more valuable, on average, than those who are just highly satisfied. These remarkable numbers are worth digging into and taking time to think about.
On a tangential note, what I wonder is: If a company has expressed its values and a customer shares those values, is that enough? After all, VW expressed its values but it stopped there. If a company talks about its values and acts on them, is it less likely to find itself in a crisis? And if they do have a crisis, might their customers be more likely to stick with them, knowing that their values are aligned? What I would argue is that companies that have integrated and aligned their values not only have more profitable consumers; they have more loyal ones — people who will stick with the brand through thick and thin. If, despite best intentions, a company with “fully connected” consumers has a crisis, I believe they’ll find themselves shielded from some of the worst fallout. For an example, see Jeni’s ice cream.
A Values Roadmap:
What must you do to take a customer from “satisfied” (stage #2) with table stakes of doing business — great product, great price, great customer service — to a higher level of connectedness? And what should you do if your company didn’t start with the emotional DNA of Tom’s Shoes or Patagonia? What does an authentic shared-values courtship look like? How does a smart brand move forward on the shared-values road?
1. Identify your brand’s core values. Not sure what your company values are? Start by considering Good to Great author and business guru Jim Collins’s definition of core values: “the deeply ingrained principles that guide all of a company’s actions; … its cultural cornerstones.” The exercise of identifying values aligns internal compasses and guidelines for product, marketing, operations, employee relations.
2. Identify your consumer’s core values. You can compel your customers to stick with you and spend more with you by talking to them about the things that matter to them most. When you identify what matters to your consumers, you gain traction the endures and supersedes typical buying behaviors. When your company and customer values align, you can service customer emotional needs above and beyond product attributes.
3. Lead with your values. Instead of reserving the conversation about your company values for off-site meetings, a section in your annual report, or even the “about us” section of your website, lead with your values. Talk about them all the way from your senior management team to your customer-facing employees and the very people who buy your products. Dare to change your messaging hierarchy and go out with values first. Post-recession consumers want to invest their money with companies they can trust, companies that speak about their values as a part of their value proposition. Take Unilever, for example. Unilever, an 85-year-old company, has used all the traditional strategies and now has pivoted toward leading with a values message. Their values mix involves talking about consumers (“What matters to you”) and talking about Unilever values and related goals. Just look at their website: “We will become Carbon Positive in our operations by 2030.” Their values message is front and center. Perhaps Unilever will see that a values alignment strategy can deliver (what Magids and Co posit) a 52% higher customer value for their current customers.
4. Don’t just talk. Plan and act.
For a recent example of a company that is walking its talk company-wide, take a good look at REI. In a move that’s consistent with its mission, ownership, and exemplary past of making its values clear to their employees, the company closed on Black Friday, historically one of its top sales days of the year. By wholeheartedly embodying its values, paying its employees to “#optoutside,” and exposing its company culture for all (consumers, competitors, the media) to see, REI created several Velcro points for customers to feel fully connected to their company.
5. Contact me. Want to know more about how values alignment and integration can help your brand create more valuable, fully connected consumers and reduce liability? Need help identifying, integrating, or communicating your brand’s values? Let’s talk.