“We are employee-owned.”
It is a powerful statement. It signals commitment. It suggests accountability. It tells customers, partners, and prospective employees that the people inside the business have something personal at stake.
But here is the hard truth: employee ownership is not a culture strategy.
It is a structure.
A powerful structure, yes. A meaningful structure, absolutely. But still a structure. And, like any structure, it creates value only when people know how to use it.
Think of employee ownership as giving everyone a key to the building. Brand culture teaches people what kind of business they are building inside it.
That distinction matters now because many mid-market B2B companies are facing a market that does not reward vague pride. It rewards speed, trust, consistency, expertise, and customer confidence. It rewards companies whose people know how to make the brand stronger in the moments that matter.
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The Ownership Gap
Employee ownership answers one important question:
Who has a stake?
Brand culture answers a different question:
What must we do every day to make the brand promise real?
The gap between those two questions is where many companies lose value.
An employee-owner may understand that better company performance can improve personal financial outcomes. But that does not mean they understand what improves brand value.
They may know the company wants growth. But that does not mean they know which behaviors create customer trust.
They may care deeply about the business. But care without clarity can become scattered energy.
This is why employee ownership should not be treated as the culture. It should be treated as an asset that culture can activate.
The National Center for Employee Ownership reports that employee ownership tends to improve corporate performance and employee financial well-being. That is a strong foundation. But it is still a foundation. It does not automatically define how people should sell, serve, solve, or lead.
The Four P’s Of Ownership Culture
To make employee ownership useful, leaders need to translate it into a working brand culture. A simple way to do that is through four P’s:
1. Purpose: What are we here to make possible for customers, employees, and partners?
2. Promise: What can customers count on us to deliver, no matter where or how they experience us?
3. Practices: What behaviors make that promise real every day?
4. Proof: Where can customers, employees, and leaders see that ownership is creating value?
Without these four P’s, ownership remains abstract. It becomes something people are proud of, but not something they know how to use.
With them, ownership becomes practical. It becomes a set of decisions, habits, and standards that customers can feel.
Pride Is Not Enough
Pride matters. In employee-owned companies, it can be one of the most powerful emotional forces in the business.
But pride alone does not create a differentiated customer experience.
Border States, one of the largest 100% employee-owned electrical distributors in the United States, makes that point. The company serves construction, industrial, and utility customers through a large branch network, where culture has to travel through thousands of daily decisions. When Jason Seger became President and CEO, he spoke about serving the company’s employee-owners and connected leadership directly to listening to customers and delivering consistently high levels of service.
That connection is important.
The strongest employee-owned companies do not stop at “our people care.” They ask a more demanding question: How does that care show up for the customer?
Does it show up in a faster response?
Better problem-solving?
Smarter recommendations?
More reliable follow-through?
Greater accountability when something goes wrong?
A stronger sense that the customer is dealing with people who own the outcome, not just the transaction?
That is where brand culture earns its keep. It transforms pride into behavior.
Culture Is What Customers Experience
Leaders often talk about culture as if it lives inside the company.
It does not.
Culture leaves the building every day.
It rides with the delivery. It speaks through the salesperson. It appears in how a problem gets handled. It becomes visible when a customer is frustrated, a shipment is late, or a team has to decide whether to do what is easy or what is right.
Van Meter, a 100% employee-owned electrical and automation distributor, has expressed this idea well. CEO Lura McBride has described culture as the outcome of what employee-owners feel, think, say, and do, tying ownership to alignment, education, empowerment, and the creation of lasting value. That is the right frame. Culture proves its value when a company has to turn a promise into shared behavior across a larger, more complex system.
At The Blake Project, we saw this clearly in our work with UCX, the unified company created from Belknap White, JJ Haines, and Swiff-Train. The business did not need a name change alone. It needed a culture capable of delivering the promise behind the name. “Ultimate Customer Experience” could not live as a corporate claim. It had to become a shared standard for how people served customers, made decisions, handled handoffs, and worked across legacy company lines.
That is where brand culture becomes real. It takes the idea of customer experience out of marketing language and puts it into the operating behavior of the business. For UCX, the opportunity was to help people see the new brand not as something imposed on them, but as a clearer expression of what the combined company had to become. The work was about alignment, belief, and behavior. Without that, a new brand is just a sign on the building.
Culture is not a poster. It is a pattern.
And customers read patterns quickly.
They know when a company is aligned.
They know when people care.
They know when employees have authority.
They know when a promise is real.
They also know when ownership is only a line in the “About Us” section.
The Blake Project turns brand clarity into culture, trust, and growth.
Growth Makes Culture Harder
When a company is small, culture moves through proximity. People internalize expectations by observing how decisions are made, how customers are treated, how problems are solved, and how leaders respond when the business is under pressure. The founder’s judgment, the company’s origin story, and the unwritten rules of “how we do things here” are close enough for people to feel them.
Growth changes that. As a company expands across markets, locations, systems, and acquired businesses, culture has to travel farther than relationships can carry it. What once felt natural becomes uneven. What once moved through daily contact begins to depend on interpretation. A larger company can still have a strong culture, but only if leaders stop relying on osmosis and start giving people a clearer language for what the brand requires.
This is where brand culture becomes strategic. It gives growth a standard. It helps leaders decide what should remain local and what must become shared. It protects the trust built close to the customer while giving the larger enterprise a more coherent identity. The goal is not to erase the pride, history, or customer intimacy that made each local business valuable. The goal is to connect those strengths to a larger promise that employees can understand, and customers can recognize.
McNaughton-McKay is a useful example of this kind of opportunity. As a 100% employee-owned company operating across multiple businesses, it faces a growth challenge that is not just operational. It is cultural and commercial. The company has to protect the local trust that each business has earned while creating a clearer enterprise identity to support growth. That work is not cosmetic. It determines whether employee ownership becomes a shared brand advantage or remains a collection of proud local cultures operating under a broader corporate name.
The Brand Culture Flywheel
Here is the practical model.
Employee-owned companies grow stronger when they create a Brand Culture Flywheel:
Then the flywheel turns again.
This is the simple but often-missed point: employee-owners do not build value because they own shares. They build value because their decisions make the brand more trusted, more distinctive, and more useful to customers.
What Leaders Must Teach
If leaders want employee ownership to drive brand growth, they have to teach more than financial participation. They have to teach the business in a way that people can use. Employees need to understand what makes the company valuable beyond its products and services. They need to understand why customers choose the company when the decision is not obvious, when competitors look similar, and when price becomes the easiest point of comparison.
They also need a practical understanding of the brand promise. Not as language on a website, but as a standard for judgment. A promise becomes real only when people know how to apply it under pressure. That requires examples, repetition, and permission to act in ways that protect the customer relationship and strengthen the brand.
This is where leadership often falls short. Leaders announce values, celebrate ownership, and assume people will connect the dots. But most employees need the dots connected. They need to see how their daily work affects customer confidence, how customer confidence affects preference, and how preference affects enterprise value. Without that education, ownership remains an idea people support but may not know how to practice. With it, ownership becomes a clear standard for how people think, decide, and act.
Brand is not the marketing department’s job. It is the accumulated effect of decisions made across the business. Marketing may express the promise, but employees prove it or disprove it every day.
Ownership says, “This Is Ours.” Brand Culture Says “This Is How We Make It Worth More.”
This is the point leaders cannot afford to miss. Employee ownership gives people a stake in the company, but it does not automatically give them a standard for building its value. It can create pride, loyalty, and commitment, but pride without direction does not guarantee customer trust or growth.
Brand culture closes that gap. It turns ownership into a way of working that customers can feel. It helps people understand how the brand promise becomes real in moments of pressure, ambiguity, and inconvenience, especially when protecting trust costs more than taking the easier path.
The next advantage for employee-owned and growth-oriented companies may come from teaching people how to build brand value through the decisions they already make every day.
For many companies, that answer will define the next chapter of growth.
Dr. Derrick Daye is the Managing Partner of The Blake Project and Publisher of Branding Strategy Insider.
At The Blake Project, we help leaders turn brand into a disciplined driver of financial performance — strengthening pricing power, competitive position, and enterprise value. Email us to start a conversation about enduring profitable growth. For The EBITDA.
Branding Strategy Insider is a service of The Blake Project, a strategic brand consultancy focused on turning brand into pricing power, growth, and enterprise value.
]]>In a market crowded with claims, strong visual assets make value tangible. They reduce uncertainty. They show how a product works, how a service performs, how a brand behaves, and whether the promise feels believable.
Today, the central question for brands is whether their visual assets are helping buyers move closer to a decision.
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Visual Strategy Must Begin With The Buyer Decision
Too much visual content is created from the company’s perspective. A business decides what it wants to say, commissions a video or photo shoot, and distributes the assets across channels. The result may look polished, but it often fails to move the buyer.
Effective visual strategy begins with the decision the buyer is trying to make.
What do they need to understand?
What doubts must be reduced?
What proof would make the choice feel safer?
What emotion should the brand create before the buyer speaks with sales?
Video and photography become more powerful when they are built around these questions. A product video can clarify value. A customer story can reduce perceived risk. Behind-the-scenes imagery can make expertise more credible. A visual comparison can make differentiation easier to grasp.
The point is not to produce more video or photography. The point is to have stronger visual assets.
Better Visuals Reduce Buyer Uncertainty
Sales slow when buyers are unsure.
Strong visual assets reduce that uncertainty.
Photography can make quality visible. Video can demonstrate use. Motion can explain complexity. Real environments can ground abstract claims. Customer proof can show what success looks like in context.
The strategic implication is clear: brands should build visual assets around the moments where hesitation appears. Those moments are often where conversion is won or lost.
Platform Execution Should Serve The Strategy
Each channel has a different job. A website must create clarity and confidence. Paid media must establish immediate relevance. Social media must earn attention quickly. Sales enablement must provide proof. E-commerce must help buyers evaluate details, context, and fit.
The mistake is assuming one asset can do all of this work.
A strong visual system adapts the idea without weakening the brand. The same campaign may require a short-form video for discovery, a product demonstration for evaluation, photography for e-commerce, a customer story for sales enablement, and executive-facing visuals for credibility.
Consistency does not mean sameness. It means every asset feels unmistakably connected to the same brand, even when each asset performs a different role.
Product Visualization Is Now A Sales Tool
Product visuals have become a critical form of sales support. They help buyers understand what they are buying before they commit. This is especially important in categories where details matter, quality is difficult to judge, or the buyer needs confidence before taking the next step. Video is especially useful when buyers need confidence before making a decision.
High-resolution photography, video demonstrations, application shots, comparison visuals, and use-case storytelling make the offer easier to evaluate.
This is not about making a product look attractive. It is about making the decision feel easier.
When buyers can see the product in use, understand its features, imagine owning it, and compare it with alternatives, the brand removes friction from the path to purchase. Visual clarity becomes commercial advantage.
Global Brands Need Visual Governance
For brands operating across markets, visual execution can quickly become fragmented. Different regions, agencies, teams, and production partners may interpret the brand differently. Over time, coherence weakens.
That is why global visual production requires coordination and governance.
Creative direction, usage standards, campaign toolkits, asset libraries, approval processes, and localization guidance help protect the brand while giving regional teams room to adapt. For brands managing distributed campaigns, access to sales and marketing video production resources can support execution, but governance is what keeps the work strategically consistent. The goal is to make every market feel connected to the same brand.
Strong visual governance allows brands to move faster without becoming inconsistent. It also protects the investment made in positioning, identity, and customer experience.
Brand should strengthen competitive position, pricing power, and enterprise value. The Blake Project helps make that happen.
Measurement Must Go Beyond Views
Views are easy to count. They are not always meaningful.
A video can be watched and forgotten. A photograph can attract attention without changing perception. A campaign can generate engagement without improving conversion. Measurement has to move closer to business value.
The more important questions are whether the visual asset improved understanding, increased consideration, reduced hesitation, supported sales conversations, improved conversion, strengthened preference, or helped the buyer believe something important about the brand.
The best visual strategies are measured across the buyer journey, not only at the point of exposure. Watch time, completion rates, click-through rates, conversion data, sales feedback, customer questions, and brand perception all help reveal whether the asset is doing its job.
The Strategic Role Of Video And Photography
Video and photography hold greater importance today because buyers are moving faster, comparing more options, and trusting fewer claims. Visual assets will be expected to do more than attract attention. They will need to clarify value, build confidence, support sales, and reinforce differentiation.
Brands that treat visual content as decoration will keep producing assets that look good but underperform.
Brands that treat visual content as strategy will create stronger connections between attention and action.
The opportunity is to create with greater purpose. Visual communication should help the buyer understand faster, trust sooner, and choose with more confidence. That is where video and photography become instruments of brand performance.
At The Blake Project, we help leaders turn brand into a disciplined driver of financial performance — strengthening pricing power, competitive position, and enterprise value. Email us to start a conversation about enduring profitable growth. For The EBITDA.
Branding Strategy Insider is a service of The Blake Project, a strategic brand consultancy focused on turning brand into pricing power, growth, and enterprise value.
]]>The irritation arrives quickly. You count to three, sigh, and hit the back button. You do not think about server latency, database queries, image compression, or code bloat. You simply feel that your time is being wasted.
That is why website performance is not only a technical issue. It is a brand experience issue.
A website is often the first real interaction a customer has with a business. It is where interest becomes evaluation, evaluation becomes trust, and trust becomes action. When that experience is slow, fragile, or frustrating, the brand pays the price.
A slow website does more than delay a page. It changes how people feel about the company behind it.
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The Brand Meaning Of Speed
Speed communicates competence.
When a site loads quickly, moves smoothly, and helps people complete the task they came to complete, the brand feels organized, responsive, and respectful. When it does not, the opposite impression forms. The company may appear careless, under-resourced, indifferent, or difficult to do business with.
Most customers will never diagnose the technical cause. They will only remember the feeling.
That feeling matters because brand is built through accumulated experience. Every interaction either reinforces the promise or weakens it. A slow page, a stalled checkout, a broken form, or a sluggish product search all send the same message: this may not be worth my time.
In that moment, performance becomes perception.
Trust Is Built In Milliseconds
Reliability is one of the foundations of trust. People trust brands that work as expected.
When a website hesitates, doubt enters the experience. Visitors begin to wonder what else may not work. Will the checkout fail? Will the confirmation email arrive? Is the business as dependable as it claims to be? Is the customer experience better after the sale, or worse?
These questions may not be conscious, but they influence behavior.
A fast, stable website creates confidence. It signals that the company has invested in the customer experience. It tells people the brand is capable of handling demand, protecting the transaction, and supporting the relationship.
A slow site creates friction before the brand has earned the right to ask for patience.
The Cost Of The Bounce
Website performance is directly related to business performance.
When pages load slowly, people leave. When people leave, marketing efficiency declines. Paid media becomes more expensive. SEO value is wasted. Conversion rates fall. Acquisition costs rise. The brand has done the hard work of creating awareness and intent, only to lose the customer at the point of interaction.
This is why speed should be viewed as part of the revenue system.
Driving traffic to a slow website is like trying to fill a bucket with holes in it. More traffic may temporarily increase activity, but it does not solve the underlying problem. The better answer is to improve the destination.
Before investing more in campaigns, content, or lead generation, leaders should ask a simpler question: Does the experience we are sending people to deserve the demand we are trying to create?
Infrastructure Is Part Of The Brand Experience
A beautiful website is not enough if the foundation is weak.
Design, messaging, photography, and content all matter. But they depend on infrastructure capable of supporting the experience. If the site slows down during peak traffic, product pages lag, search is clumsy, or checkout becomes unreliable, the brand experience breaks down at the exact moment it needs to perform.
For e-commerce brands, this is especially important. The hosting environment, platform architecture, database performance, caching strategy, image optimization, and checkout flow all contribute to the brand experience.
The customer does not separate the front end from the back end. To the customer, it is all the brand.
This makes decisions such as WooCommerce hosting, site architecture, and performance optimization more than operational choices. They are brand decisions because they affect trust, conversion, and repeat behavior.
Speed Is An Invisible Brand Asset
Some elements of brand identity are visible. A name, logo, color palette, voice, and visual system can all be seen and evaluated.
Speed is different. It is felt.
A fast site creates ease. It removes unnecessary thinking. It lets customers move naturally from curiosity to action. They browse more comfortably, evaluate more confidently, and purchase with less resistance.
Brand should strengthen competitive position, pricing power, and enterprise value. The Blake Project helps make that happen.
That ease becomes part of the brand’s identity, even if customers never describe it that way.
The best digital experiences often feel almost invisible. They do not call attention to themselves. They simply work. That is the point. When the experience is smooth, the customer stays focused on the product, service, idea, or decision in front of them.
When the experience is slow, the website becomes the story.
Designing For Attention
Attention is one of the scarcest resources in the marketplace.
Customers scan, compare, abandon, return, and reconsider at speed. They are moving between tabs, devices, messages, and competing offers. A brand cannot assume it has unlimited time to make its case.
This should change how websites are designed and managed.
Every image, script, plug-in, pop-up, animation, and tracking tool should earn its place. The question is not only whether an element looks good or serves an internal stakeholder. The question is whether it improves the customer experience enough to justify the added weight.
Performance discipline forces strategic discipline.
It asks leaders to separate what is useful from what is decorative, what helps conversion from what adds clutter, and what serves the customer from what slows them down.
Friction Is A Brand Liability
In competitive markets, friction is dangerous.
If two brands offer similar value, the easier brand often wins. The faster site, clearer path, simpler checkout, and more responsive experience reduce the perceived risk of buying. They make action feel natural.
This is not just a UX principle. It is a brand principle.
Brands grow when they make it easier for people to choose them. Every unnecessary delay, distraction, or point of confusion creates space for hesitation. And hesitation is where competitors enter.
A frictionless website does not merely improve usability. It improves brand preference by making customers feel understood.
Performance Should Be Managed As Brand Stewardship
Website performance should not be treated as a one-time technical fix. It should be part of ongoing brand stewardship.
Markets change. Content grows. Plug-ins accumulate. Campaigns add tags. Teams add features. Over time, even strong sites can become slow, heavy, and difficult to manage.
That is why performance needs ownership. It should be measured, monitored, and discussed alongside the other factors that shape customer experience and business performance.
Brand leaders do not need to become developers. But they do need to understand that speed, stability, and usability influence perception, trust, conversion, and loyalty.
The website is not a static asset. It is a living expression of the brand.
Fix The Experience Before You Ask For More Attention
Performance is not a technical afterthought. It is one of the ways a brand shows respect.
A fast website tells customers their time matters. A stable website tells them the business is dependable. A smooth website tells them the company understands what they came to do.
Every millisecond saved is not just a technical improvement. It is a small act of brand building.
Before asking the market for more attention, make sure the experience is worthy of it. Optimize the infrastructure. Sharpen the code. Remove the friction. Make the path easier.
Because in digital experience, speed is not just about how fast the website loads.
It is how quickly the brand earns trust.
Contributed to Branding Strategy Insider by Tufail Ahmed, Digital Web Solutions
At The Blake Project, we help leaders turn brand into a disciplined driver of financial performance — strengthening pricing power, competitive position, and enterprise value. Email us to start a conversation about enduring profitable growth. For The EBITDA.
Branding Strategy Insider is a service of The Blake Project, a strategic brand consultancy focused on turning brand into pricing power, growth, and enterprise value.
]]>Take, for example, Gap’s “faded” jeans, launched in the early 2000s to tap into the trend toward casual, relaxed denim. Despite some initial interest, the product struggled and ultimately failed to gain lasting traction.
In contrast, Abercrombie & Fitch released its “A&F jeans” during the same period. Thanks to strong marketing and their association with a trendy lifestyle, A&F jeans quickly became highly popular among young consumers and turned into a wardrobe staple throughout the early 2000s.
The empirical evidence shows that great product engineering, the emphasis of most new companies and product designers, is merely table stakes. Instead, the empirical evidence shows that it’s almost always great Market Engineering that determines winners. Unfortunately, I have discovered that few teams possess the internal skills, experience, or even the knowledge that they must engineer a market for their product or service.
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Market Engineering is the intentional design and orchestration of a company’s place in the world—not just through great product development, but through building the frameworks of belief, awareness, and demand. That is what determines whether you win the market or become just another footnote. It’s not a slogan.
Market Engineering is the discipline of architecting how a problem is understood, how your solution is interpreted, and how your company is positioned for durable success.
Within this discipline live five foundational tenets—each one essential, and together forming the “architecture of inevitability” for industry leaders:
The Five Tenets of Market Engineering
Brand should strengthen competitive position, pricing power, and enterprise value. The Blake Project helps make that happen.
Integrating the Five Tenets of Market Engineering
Here’s an easy way to think about the role that each tenet of Market Engineering plays, as well as how they integrate:
Why these tenets matter: As noted, product engineering is table stakes—it’s what it takes just to join the game. Market Engineering is what really determines winners. Each of these tenets reinforces the others, creating a system that shapes, and reshapes, the world’s perception and the company’s destiny. The companies that master these disciplines are not simply built to last; they are built to lead.
Contributed to Branding Strategy Insider by Bruce Cleveland, Excerpted from Market Engineering. Reprinted by permission of Silicon Valley Press. Copyright 2026 Bruce Cleveland. All rights reserved.
At The Blake Project, we help leaders turn brand into a disciplined driver of financial performance — strengthening pricing power, competitive position, and enterprise value. Email us to start a conversation about enduring profitable growth. For The EBITDA.
Branding Strategy Insider is a service of The Blake Project, a strategic brand consultancy focused on turning brand into pricing power, growth, and enterprise value.
]]>Sadly, we learned from recent Wall Street Journal reporting that 1-800-Flowers discovered that its funnel-based marketing approach was both inefficient and ineffective.
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The funnel approach – AIDA – has been around for a long time. AIDA stands for Attention, Interest, Desire, Action. According to AIDA, your intent with advertising is to generate brand Attention, which should grow into brand Interest, leading to brand Desire, which will spur Action – the purchase of the brand.
The funnel approach is wrong because it does not focus on maintaining customers, strengthening brand bonds, and building brand loyalty. The funnel is all about doing whatever you can to gain customers. The funnel is all about acquisition. Of course, brands need new customers. But new customers should become ongoing customers.
What worries me is that the concept of a sales funnel is still entrenched in brand thinking, especially in discussions of multi-touch attribution models. No brand model will succeed if a sales funnel is used as the base for the customer journey, because real customer choice is contextual, not linear.
As 1-800-Flowers has just recognized, a brand can aggressively gain customers. But those customers may be buying because of price or some amazing promotion. These customers are expensive to acquire. These customers are not with your brand for the long haul. These are not valuable customers; these customers are sunk costs that do not pay back.
For decades, the automotive brands used the Allison-Fisher funnel to generate car purchases. The Allison-Fisher purchase funnel had two segments: the upper and lower funnel. (1-800-Flowers uses a version of this concept as well.) The upper funnel consists of awareness, familiarity, opinion, and consideration, while the lower funnel consists of make-model intention and shopping leading to purchase. The automotive focus was always on “conquesting” new customers, moving them through the funnel to buy a car. Loyalty was not in the funnel. It was as if each purchase was a new purchase by a new customer. “Conquesting” is such an ugly, distasteful concept.
In 2020, Ford Motor Company woke up to the fact that this funnel model was seriously undermining Ford’s brands. Ford Motor Company’s Jim Farley, CEO of Ford at the time, told Automotive News:
“When we did all the analytics, it became really clear: a loyal owner is so much easier for us to do business with than trying to get a customer from someone else. It was a big ‘aha’ moment for us.”
Unfortunately, there were 22 years of funnel model “conquesting” at Ford. NB: In the 1990s, Ford offered only new customers a terrific incentive package for buying its minivan, Windstar. Loyal Ford Windstar customers were ignored and not offered any incentives. Many Windstar owners were pissed off. Mishandling and not caring about Ford loyalists was such an error when the Chrysler minivans were comparable.)
The 1-800-Flowers Wall Street Journal commentary is a lesson in how advertising really works. Or actually does not work. We learn that, even with the knowledge that their funnel approach is untenable, 1-800-Flowers still talks about using the funnel to explain the brand’s next moves, focusing on valuable customers over the long term. It will be interesting to watch as there is no Loyalty Loop of reinforcement at the top of the funnel.
Since the 1990s, with the power of the Internet, digital, multi-device, multi-touchpoint, 24/7, interactive customers, the understanding of how advertising works has faded into “history.” No one learns about how advertising works. Business schools inform about the changing technologies and the ability to generate data and information. But no one teaches the behavioral and attitudinal interactions, the Loyalty Loop of reinforcement, and the power of loyal customers. Business schools must learn that there is no shareholder value without brand value. There is no brand value without valuable loyal customers.
This stuff used to be de rigeur in marketing. Now, not a whisper.
Once upon a time, you had to know how advertising worked to work in advertising.
One critical piece of marketing knowledge is that advertising’s real power lies in reinforcing the brand among those who have already purchased it. The stronger the reinforcement, the more likely the generation of enduring loyalty.
Data from the mid-1990s confirm that “Communication is often most fully attended to after experience with the product or service and acts as a reinforcement of the experience.”
The power of loyalty was a heady, headline-making topic, even at management schools such as Harvard. Customer retention was understood to be a main contributor to profit. Look for the 1993 Harvard Press volume, Keeping Customers: A Harvard Business Review Book.
Since the 1990s, research by Frederick Reichheld has shown that loyal customers are valuable customers. Loyal customers trust and perceive the brand to be a quality brand when they believe – through experience or the expectation of an experience – the brand will deliver on its promise.
Brand loyalty is valuable: truly loyal customers are more profitable, leading to higher-quality revenue growth through increased spending and reduced defections.
A brand increases loyalty by strengthening its relationship with customers.
As true brand loyalty increases, the likelihood of defection because of a competitive price promotion decreases. Research showed that reducing defections by 5% increased profits by 25% and over. Brand enthusiasts will pay more than those who will only consider a brand.
Assuming that customer satisfaction and loyalty are similar is also a current marketing mistake. Although customers may state they are satisfied with the brand, they still defect. In fact, in one study, fewer than 50% of satisfied customers are repeat buyers. Asking a customer if their recent service experience was satisfactory enough to recommend the brand to a friend is a dead end. A customer may have experienced a great service call. However, that customer may be unhappy about needing a service call.
The Reichheld work was conducted in the 1990’s. Imagine today: with speed and access as givens and information easy to obtain, it is easier and faster to switch from one brand to another. It is imperative to know whether your customers are increasing their loyalty, not just frequenting the brand.
The funnel approach does not take any of this proven thinking into account.
One of the unfortunate trends is that the forces of technology and Silicon Valley have muted the rules and principles of advertising and brand building. Right now, it is all about data collection, clicks, and the shopping cart. Yet, without the basic principles, all of this data is just data.
Data collection is not excellent at calibrating attitudes. Why is this important to you as a marketer or brand owner? Psychologists know that attitudes are much better at explaining behavior than at predicting behavior. Further, we learn from psychology that people observe their behavior and then develop attitudes and beliefs consistent with it. A trial experience can become a determinant of attitude, which should be reinforced by marketing. Marketing can help move people up the loyalty ladder by evolving trial into committed repeat purchase.
Hence, the problem at 1-800-Flowers. The funnel approach, even the new version spinning from 1-800-Flowers, does not capture the necessity of reinforcement: the Loyalty Loop. Advertising is not only about creating and attracting customers. Advertising is also about defending and strengthening brand behavior in line with brand expectations, which need reinforcement.
Where is the reinforcement marketing in the funnel? To all intents and purposes, non-existent. A funnel is not a loop.
A brand must communicate with its core customers frequently to reinforce its brand. The brand’s loyalists appear to be a small percentage of the population, but they represent the most valuable segment.
Since the 1990s, data have shown that 10% of the customer base can represent 50% of brand volume. At the time, one of Coca-Cola’s research firms presented Coke’s own data at a Coke conference, showing that 10.3% of Coke’s users accounted for 48.5% of its volume. The data reflected Pepsi numbers, too, showing that for Pepsi,13.% of Pepsi users were responsible for 63.8% of Pepsi volume. Diet Coke’s numbers were 7.2% of users representing 43.7% of volume. Diet Pepsi’s numbers were 6.9% of users representing 44.7% of volume.
If you averaged the percentages of users for these 4 brands and the percentages of brand volume for the 4 brands among these users, you found that, on average, 9.4% of users accounted for 50.2% of brand volume.
When Macy’s began one of its turnarounds prior to 2020, one of the first things it did was focus on its core customer base through its loyalty program. Macy’s noticed that 10% of its best customers accounted for 49% of its sales.
I know that modern marketing is wedded to the 80/20 Rule. But this is old school marketing. The new rule must be the 10/50 Rule. You can only live by this 10/50 Rule if you have a committed customer base that is incredibly enthusiastic about the brand. You cannot use the funnel model to achieve these returns on investments.
Again, this is not new. It is frustrating that marketers avoid what is clearly important information for enduring profitable growth.
Brand should strengthen competitive position, pricing power, and enterprise value. The Blake Project helps make that happen.
Use These Seven Steps As A Guide:
The first thing that marketers must do is to ditch the funnel. The funnel is transmission marketing: here is the stimulus, and here is the action I expect. Brands need to follow Information Theory, not Transmission Theory. This thinking is basic behavioral psychology thinking from 1971. Communication is not what someone does to someone else (funnel), but how to build a relationship with someone else. Add the concept of feedback. Feedback tells us how messages are being interpreted.
Second, know the value of your customers. This is what Amazon does so well. But any brand with a database can do this, too. Make sure you identify and understand your most loyal customers, as they are your most profitable. Make sure there is room for attitudinal information, not just behavioral information. Amazon advises you, “Based on your last searches.” Amazon has so much behavioral information that it can draw some conclusions about your reasoning. However, Amazon does not know why you are behaving in this manner.
Third, do not punish loyalists while rewarding newcomers. You see this all the time. The new customer at Comcast’s Xfinity gets a great deal, while the existing customer pays big time. Magazines and newspapers use incentives for new customers. Anderson Windows is using a no-payment-for-2-years incentive to convince new customers to open their windows to the Anderson brand.
Fourth, sell on quality, not on price. Too much emphasis on price creates deal loyal customers rather than real loyal customers. You see this in fast food. If the emphasis is on price, the primary message is how cheap your brand is, rather than how great it is. 1-800-Flowers spoke about how many resources were used to acquire new customers at the expense of the brand. Deal loyalty is not real loyalty.
Fifth, measure what matters. Measure sales and volume. But also, measure and monitor changes in brand loyalty. Remember that customer satisfaction is not the same as brand loyalty. Monitor performance on moving customers up the loyalty ladder to becoming valuable brand enthusiasts.
Sixth, focus on brand loyalty as an asset.
And, seventh, make branding policy your business policy and vice versa. How you manage your brand is how you manage your business.
Contributed to Branding Strategy Insider by Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
At The Blake Project, we help leaders turn brand into a disciplined driver of financial performance — strengthening pricing power, competitive position, and enterprise value. Email us to start a conversation about enduring profitable growth. For The EBITDA.
Branding Strategy Insider is a service of The Blake Project, a strategic brand consultancy focused on turning brand into pricing power, growth, and enterprise value.
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