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How the Post-Crisis Values Revolution Is Changing the Way We Buy, Sell, and Live

New spending patterns reveal how massive cultural values shifts can be recognized in today’s consumer behavior and are remaking capitalism for the better.

In Spend Shift, John Gerzema, a world-renowned expert on consumer values, and Pulitzer Prize winning writer Michael D’Antonio travel across America to document a renewal of hope and enterprise in the post-recession economy. Guided by exclusive data from Young & Rubicam’s vast surveys of public attitudes, the authors find that hipsters in Brooklyn, entrepreneurs in Tampa, and veterans in Southern California are all returning to age old values such as self-reliance, faith and thrift to redefine the “good life.” While these consumers and others guard their dollars, they also use them to influence companies of all sorts in the hope of making the world a little better with each purchase.

Packed with insights from global leaders in market psychology and communication, Spend Shift also features interviews with business leaders who understand the changes now underway. At companies like Zappos, Ford, Sunrun, and Hulu, (to name just a few) the authors find executives who are using new technologies and old fashioned customer-first practices to make their companies more relevant, more resilient, and more profitable. These examples, and many others, show that while the consumer psyche is changing even faster than the economy, companies can adapt and thrive. In the process, they may also feel a lot better about their impact on the communities they serve and on the planet they share with their customers.

Compelling and insightful, Spend Shift is essential reading for anyone interested in how values are changing and how businesses can connect with customers who vote with their dollars, every day, even after the recession.

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The 19th century U.S department store merchant John Wanamaker once famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”. And such is the case with measuring the value of brands. While many forms exist, I took the opportunity to write about our model, which relies on measuring the momentum, creativity and vision of a brand. Through BrandAsset Valuator, we are able to quantify the impact of creativity on contribution to building brand and shareholder value. The more creativity, the more momentum and energy and thus the more sales and profitability to the firm.

Here is a paper we wrote for The Journal of Applied Corporate Finance, a Morgan Stanley publication that contains our argument for the ‘three c’s’ — consumers, creativity and commerce. When brands are customer-centric and prolific, they are more likely to be profitable to their firms and their shareholders. We modeled a fund to prove it. In these times, the economic value of creativity matters more than ever.

I hope you can take away something useful.

Measuring the Contributions of Brand to Shareholder Value

There were a number of books I personally enjoyed this year for your end of year reference…

As I thought about my TED speech on post-crisis consumerism, many books provided valuable grounding on the origins of the final crisis, such as David Wessel’s fine book In Fed We Trust and A Colossal Failure by Lawrence McDonald.  Fool’s Gold by Gillian Tett of the Financial Times and House of Cards by William Cohan are lively, vivid reads that capture the hubris and mistrust of a system gone awry with greed and indulgence.  It seems we never learn from our mistakes is the premise of This Time is Different by Kenneth Rogoff and Carmen Reinhart. As a data analyst in my own right, I loved the rigor they brought to this argument and I kept thinking of the Who song ‘We won’t get fooled again’ only realizing that’s likely not the case.

There are the beginnings of books on how to pick up the pieces, such as managing in a post-crisis environment in The Upside of the Downturn by Geoff Colvin and my friend Philip Kotler’s book Chaotics. Each look at opportunistic strategies for managing through what is likely to be a period of indefinite turbulence. (As my colleague told me on a recent trip to Quito, ‘you need to embrace volatility, it’s a way of life of here in Latin America’). And I really enjoyed Chris Anderson’s book Free as well as Bridge CSO Bob Gilbreath’s book The Next Evolution of Marketing.

I went over to London last month to receive the strategy award from our holding company WPP through it’s Atticus Awards Program. And I received from Jeremy Bullmore (a strategic god in his own right) A Master Class in Brand Planning: The Timeless Works of Stephen King. This book is a remarkable collection of observations on articles written by one of the fathers of account planning, Stephen King — by many of WPP’s top marketing practitioners. I was left thinking that while so much has changed, the sound fundamentals of insights, ideas and passion for craft are never more relevant or more important.

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Valeria’s solution is to empower the voices of the organization beyond the c-suite. Her belief, and one supported by the success of organizations like Zappos, is that by opening up your workforce to the world, you will expose a latent culture of storytelling that can energize your organization and your customer relationships, ultimately resulting in higher sales.

I agree with all these points to this point in the article. However, I start to diverge at the point where Valeria suggests a methodology for exposing these voices. Valeria asks B2B to relinquish their dependence on fact dumps and instead tell the stories of product use that connect. I’m not sure if focusing on the story at this point is correct as I think employees get concerned about their ability to tell stories. I think the key is simply to get them talking. My interest is in thinking less about the story’s constitution and more about starting the conversation from an individual point of view.

My concern is: does a company wide focus on stickiness limit the upside of micro-scale world. If the focus is on large scale stickiness do we de-personalize. It’s my belief that it is much more powerful that John, Product Manager, talks to a group of 10 interested in a small function, than Laura, CEO, connects with a group of 5,000. This is Kevin Kelly’s 1,000 true fans finding it’s way into the corporate market, we have limits to our ability to connect in a human way.

However, a critique is not enough, I want to put forth a suggestion of how to harness this new notion of marketing as R&D. The rules I’m suggesting are not my own, but rather the ones that YouTube Product Managers, Hunter Walk and Brian Glick suggest: Find, Follow, Feed. YouTube has an enviable problem, too much content. Each minute 15 hours of new content is uploaded. That’s too much stuff and YouTube needs to find a way to surface the interesting content for an individual out of this massive ocean. That’s what is going to happen when B2B unleashes its workforce on the world, lots of opinions, different ideas and each of these may have an audience. The goal is to connect the individual to the audience and this methodology, in all its messiness, seems to be a framework to do so.

There is much more to flush out to operationalize the Find, Follow, Feed for B2B but it represents the reality of turning the firehose of employee content on. I also realize that the stickiness principles are important on the micro-scale. However, Read/Write marketing is very different from read only marketing and we can learn from read/write businesses how to best bubble up important information.

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The only thing for certain is that everything changes. The rate of change increases. If you want to hang on you better speed up. That is the message of today. It could however be useful to remind everyone that our basic needs never change. The need to be seen and appreciated! It is the need to belong. The need for nearness and care, and for a little love! This is given only through slowness in human relations. In order to master changes, we have to recover slowness, reflection and togetherness. There we will find real renewal.

-Professor Guttorm Fløistad

Fred Wilson’s recent post on  slow capital in a recent post caught my attention and held it as I contemplated the analogues to marketing.  In working with clients on strategies for connecting their business goals and aspirations to the customer who shares those same goals and aspirations, some of the things that Fred is seeing by investing slow, I’m seeing in marketing slow.

Marketing is particularly at risk of falling prey to the cult of speed. Let’s  adopt this technology, let’s change this message, let’s hit the quarterly numbers with a massive ad spend. This tactical ADD is compounded by the relentless pressure our clients feel to ensure that their agencies are delivering ROI value to their businesses.  The post-recession consumer is exhibiting values and views that do not align with fast marketing, so let’s dig into some ideas of slow marketing and see if we have the start of some answers for post-recession marketers. This is a start and you’re contribution to expanding this thought are welcome and encouraged:

1. Return to the beginning - Return to your roots and remind yourself of what the original problem was that started you down the path of creating this product or service. American’s are entrepreneurs in mind if not always in action, the story of how a product is created and the problem it set out to solve matters and resonates. Tell that story.
2. Feedback is everything - Success is a matter of pattern recognition. If your business is selling to a customer, seeing their participation behavior is essential to building and supporting your relationship with that consumer.  You cannot internalize your marketing, in fact you must externalize everything. Embed feedback in your product, your marketing and your management organization so that you have the richest stream of customer data. While it may seem like we’re in a fast moving constantly changing world, if you can see the deeper, slower moving underlying trends and position against those, you’re probabilities of long term success are much greater.
3. Value and Values - In pursuit of the material at core, consumers see through pretense to the performance. Things have to work. Emotion attracts, rationality sells.  Call it ‘defending your life’, but purchases need reasons or you’re not seen as a smart consumer.
4. Declasse Consumption - The appearance of spending recklessly is passé.  Pretense is out, prudence is in: it’s stylish to exercise restraint and even to bargain in order to appear as a smart consumer.
5. Flea market capitalism- A capitalism based on personality, uniqueness, provenance and storytelling, where the product is connected to the producer/seller and the transaction forms a relationship. Increasingly this manifests in a local manner, where artisanal products are valued for being local and steeped in narrative, building value into their meaning. Moving from consumer to customer is at the heart of Flea Market Capitalism.

What would you add? Can we add slow marketing to the slow movement pantheon?

I was honored that Mike Lundgren and the VML team invited the ideas of The Great Unwind to TEDxKC.  In the ensuing months my team and I will dig much deeper into the themes discussed in this presentation. We’re living in a fascinating time of social and economic transition. It’s people like Mike, Umair Haque, Fred Wilson, Chris Anderson, the brilliant participants in TED and thousands of others agitating for the expansion of our collective knowledge that will lead a 21st century revolution in commerce. I’m happy to be participating in the discussion and the revolution.

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I enjoyed speaking yesterday in Sao Paulo at MaxiMidia and wanted to share my presentation.

Please note: If you watch this using the full view presentation mode, the examples are hyperlinked to all the case studies.

Thanks again for having me.

Old CSR was structured, analytical and (frankly) self-serving. A company planned their initiative and pushed their messaging out into the marketplace with tangible intention. CSR 2.1 is more organic and intuitive and the immediate benefits are not always clear. Consider this Google conference, where some the industry’s brightest minds were brainstorming how to improve customer service, sustain employee retention and be more transparent in the marketplace. Competitive pretense was dropped as ideas began flowing. Google’s industry forums demonstrate CSR is no longer an initiative, but a core strength and tool for attracting and connecting with the consumer. You can see this transition through a recent McKinsey Quarterly article which begins with:

Over the past 30 years, most of them (companies) have responded by developing CSR and sustainability initiatives to fulfill their contract with society…

Before, businesses simply wanted to check the CSR box. But Google wants to expand it. Through their leverage, they encourage moments of convergence industry by industry, creating platforms for collaborative problem solving which has the ultimate intention of greater customer value and eventual monetary success. Reading Vineet Nayar’s article “The Collaboration Imperative” after the conference I saw how the collaborative business world in which we operate demands new thinking around CSR.

Business in our globalized world is only possible because of transparency and collaboration. If we do not embrace those concepts then we cannot efficiently access the resources necessary to grow our businesses. CSR in a globalized economy acts as the first tendrils of business relationships, establishing a platform for future conversations. In our economy a series of responsible acts can be amplified in our social media age to cast a global glow upon a brand from a local act. See the work that Tom’s of Maine is doing with its 50 States for Good program. Hyperlocal philanthropy with global resonance.

At its core, CSR 2.1 is one of the 21st century business imperatives that leaders must adopt. Vineet proposes the following:

In order to survive, business requires the cover of a collaborative ecosystem that will probably render obsolete traditional views of competition.

This new culture of collaboration means that businesses can no longer treat CSR as something to be “fulfilled”; it must be lived and integrated in a way that it becomes core to your business. As marketers we are facing a consumer who no longer cares about headlines, they want the story. CSR is a story, start writing yours and succeed mightily in the 21st century.

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Yet as a marketer I cannot help but be bummed out by green as a label and not as an energized core of a brand. I  know, through the data amassed in BAV, that to simply state green and not live it is an opening for consumers to reject not only your product, but your company. Trust and authenticity are huge brand keys in this age of atomized media, and our dawning awareness of the importance of sustainable living creates an opening for abuse. Market gains generated by subterfuge will not hold.

Which brings me  to Ford, a company near and dear to my and my agency’s heart. Henry Ford’s assembly line was a momentous step forward for the Industrial Age. The idea that precision engineering was possible at scale previous to Henry Ford was simply the work of theorists(I think). Today we live with effect of this innovation as the smog clouds of Asia and the smog clouds of LA both attest to Ford’s industrial brilliance. What’s interesting is that in 2009 his great-grandson is actively laying the groundwork that will position Ford as a leader of  our coming energy resource limited, Network Age.

It started with grand statements of green roofs, higher fuel efficiencies and a new standard for environmental consciousness. Words of a leader and an estimable vision, but alas market booms clouded that vision and the massive profitability of SUVs and trucks became synonymous with Ford, synonyms that were not in line with this vision. However, below the surface the vision percolated into tactics and operations that would place Ford at the forefront of American car manufacturers in the coming post-Great Recession age.  As we eye the end of this recession and consider what post-recession 21st Century companies must stand for we see the trails of Bill Ford’s vision in global car platforms which maximize flexibility, limiting waste and creating a platform for customization, not standardization.

But his vision is manifest most strikingly in a radical partnership that appears to be forming between Zipcar and Ford.  This recent article from Fortune begins with the platitudes to the unique Zipcar business model, but ends with Ford being lauded for its vision for future transportation.  Ford is a manufacturer who sees Zipcar for what it is, not an alternative rental service, but an alternative to individual car ownership. A direct affront to a car manufacturers goal of selling more cars. With the industry struggling to deal with a loss in overall car sales it seems shocking that Ford would be the company that Scott Griffith, Zipcar CEO, says:

Ford is the only American-branded company in the auto industry that seems to understand what we’re doing and has some affinity for what we’re up to.

This reflects an organization that is thinking about how to build an enduring brand in a rapidly changing time. There is no doubt that Ford has more work to do, but as consumers look to future purchases, they can take solace in the fact that if they buy Ford they’re buying a product that is embedded with a vision of the future that we can all support.

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