Creating Advocates

A Values-Oriented Approach to Developing Brand Loyalty

A maniacal dedication to authentic purpose is what separates the strong from the weak in the competitive brand landscape.

By Michael Crooke, MBA, PHD and Craig Wilson

Introduction
Customers become advocates of brands because they develop an emotional connection with their core purpose. Brands that elicit advocacy provide a value beyond just product quality and experience. This connection is something that deserves analysis, as it is the foundation of true loyalty. Customers see this association as something that makes their world a little bit better and, in so doing, creates satisfaction and motivates them to take action. It turns out that customers want to be part of something bigger than themselves, to help achieve something that they cant necessarily achieve on their own. When this relationship is found, consumers move beyond being casual customers and become advocates. Advocates show a high propensity to repurchase, a reluctance to switch brands, and they demonstrate a high likelihood to recommend. In the end, advocates contribute to protability at rates up to 10 times greater than casual customers. And, from a brand management perspective, they are the source of long-term nancial success. So, how does an aspiring entrepreneur or brand manager ignite the passion in their customer base that leads to this emotional connection? The key is a congruence of values. When a customer nds a brand that shares or aligns with their own values, the connection begins. In its mature state, it can be described as a deep and lasting bond between what the company stands for and what the customer believes in. Constructing such a brand environment is a matter of establishing a clear set of values and making them actionable at every touch point in the brand/customer experience. This article explores the way in which two models, SEER and the Buyers Life Cycle, conspire to provide brand managers the tools to assure brand advocacy among their target audience.

Graziadio Business Review -- A Peer-Reviewed Journal of Relevant Information and Analysis

2011 Volume 14 Issue 3

Forming a Values-Based Approach: Dening Authentic Purpose

The rst of these models is called Social, Ethical & Environmental Responsibility, otherwise known as the SEER model.[1][2] The authors posit that SEER captures many of the contemporary values of the 21st century: Environmental stewardship, Corporate Citizenship, Product and Service Quality, and Financial Strength. These four macro-values encompass the most pressing issues facing organizations today. We refer to them as macro-values, because they are essentially broad categories that encircle numerous related values:

Environmental Stewardship refers to the need for organizations to recognize and mitigate their impact on the natural environment; the ultimate goal is to integrate environmental concerns into product (and service) design in order to develop closed-loop manufacturing processes that eliminate waste. Corporate Citizenship represents the social realm and the organizations relationships with stakeholders, ranging from employees to suppliers, neighbors in the local community to government entities. Product and Service Quality is specic to making the best product or providing the best service within the competitive set. Financial Strength refers to the need for organizations to be nancially sound, without which, the other values become irrelevant.

The key to the SEER model is that none of the four principles can be ignored without degradation of the organizations output.[3] The values do not operate in isolation; rather, they function as a system and feature many areas of overlap and interaction. Decision making is rarely, if ever, guided by one of the four individually. For example, product or service quality can be dened as striving to achieve the best possible product with the least possible social and environmental harm; and, nancial strength is integrally related to the other three values, which cannot function without an economically viable organization. Furthermore, these macro values are mutually reinforcing; each of the elements is important individually, but when leveraged as a collective group the relationships are synchronous. The power of environmental stewardship is amplied when nancial strength is realized. Financial strength is improved when buying behavior is increased because of positive consumer opinion due to the actions of corporate citizenship. It should also be pointed out that every strategic decision forces the organization to acknowledge the inherent conict between the values. The process is what is important. In some cases nancial requirements may come at the expense of Corporate Social Responsibility (CSR) or environmental needs. In other cases, Financial Strength will suffer from an environmental need, or CSR may become the deciding factor. Often the rm will nd the values in harmony, but that will not always be the case. Great organizations accept the challenge and use the SEER lens to lter strategic decisions.

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2011 Volume 14 Issue 3

Fig. 1: The SEER Model

Financial Strength

Corporate Social Responsibility

SEER

Environmental Stewardship

Quality Product/Service

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2011 Volume 14 Issue 3

Forming a Values-Based Approach: Continued

So how do we develop an organization with these integrated values? How do we create the infrastructure that respects and operates on these values, yet is robust enough to face disruptive change? We contend the values captured by the SEER model must be designed and built into every aspect of the brand business model because these are the beliefs that dene the purpose of the organization. These values are, in essence, where the founding vision resides; what we refer to as authentic purpose, and, it is this value set that drives everything the customer ultimately experiences. But, the dening moments of every customer experience occur under a microscope because customers interact with brands in remarkably minute ways: interfacing with a single customer service agent over the phone, receiving a package in the mail, a Facebook like, a Twitter tweet, or walking by a storefront. Therefore, if the SEER values are not sincerely embedded into every level of the organization, there is no authenticity of purpose and customers will eventually discover the brands superciality. To instill authentic purpose into the brand DNA, the most important step is to understand each of the SEER principles, then design every nuance of the brand experience with them in mind, assuring that customers connect emotionally with those values

Graziadio Business Review -- A Peer-Reviewed Journal of Relevant Information and Analysis

2011 Volume 14 Issue 3

Brand Value Exists in the Consumers Mind

A maniacal dedication to authentic purpose is what separates the strong from the weak in the competitive brand landscape. A great brand has depth. If one digs into the details of an exceptional organization, it is evident that the espoused values drive the sustainable competitive advantage. The outdoor brand Patagonia is an example of an organization with a purpose that is tied directly to the minutia. Their mission statement, Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis, is simple and extends to every single activity in their value chain.[4] The following is taken directly from their website, in a statement they call their Reason for Being: Our values reect those of a business started by a band of climbers and surfers, and the minimalist style they promoted. The approach we take towards product design demonstrates a bias for simplicity and utility. For us at Patagonia, a love of wild and beautiful places demands participation in the ght to save them, and to help reverse the steep decline in the overall environmental health of our planet. We donate our time, services and at least 1 percent of our sales to hundreds of grassroots environmental groups all over the world who work to help reverse the tide. We know that our business activityfrom lighting stores to dyeing shirtscreates pollution as a by-product. So we work steadily to reduce those harms. We use recycled polyester in many of our clothes and only organic, rather than pesticide-intensive, cotton.[5] However, simply having a strong mission statement doesnt mean that its meaning is manifest in the consumers experience. As Godin notes in his book, All Marketers Are Liars, Spending an inordinate amount of time and money on your sign or your jingle or your website is beside the point. Its every point of contact that matters. If youre not consistent and authentic, the timing of that rst impression is too hard to predict to make it worth the journey. On the other hand, if you can cover all the possible impressions and allow the consumer to make them into a coherent story, you win.[6]

Graziadio Business Review -- A Peer-Reviewed Journal of Relevant Information and Analysis

2011 Volume 14 Issue 3

Brand Value Exists in the Consumers Mind: Continued

It is this tenet, that whatever one does should be done thoroughly, that is the crux of connecting the values of the brand with the values of the consumer. The idea is that customer expectations arise in the minds of the individual as part of a woven story that is created over time via a process. A consumers experiences interacting with a brand at various times at various touch points lead to dening what it is the brand truly stands for in total. In the case of Patagonia, their company seeks to communicate the values of the brand to customers both through their own experiences with the products and by observing the unique choices the company makes over time. For instance, when Patagonias founder Yvon Chouinard learned of the environmental damage caused by growing conventional cotton, he chose to switch to organic cotton in 100 percent of the sportswear line of products in 1994. Fortune magazine writer Susan Casey writes, Given that organic cotton, rare at the time, cost between 50 percent to 100 percent more, and that a fth of Patagonias business came from cotton products, this was no small risk.[7] The decision could have bankrupted the company, yet its environmental consciousness resonated powerfully with their consumers. Patagonias cotton sales rose 25 percent, Casey writes, and, more important, established an organic-cotton industry so that other companies could cross over. The consumer experience of the quality of Patagonias products, for better or for worse, is best discovered in the outdoors under duress. One brand story that has emerged to communicate this value is one of a customer who was in near-comatose condition from severe hypothermia and would not allow helpers to remove his Patagonia Capilene underwear even though it was soaking wet and freezing cold. After recovering, the customer related to his rescuers that he knew if hed allowed them to remove his Capilene underwear he would surely perish. In order to get everyday customers to understand Patagonias commitment to product quality without having a near-death experience, the company enacted their Iron Clad guarantee, which states: If you are not satised with one of our products at the time you receive it, or if one of our products does not perform to your satisfaction, you may return it to us for a repair, replacement or refund.[8]

Graziadio Business Review -- A Peer-Reviewed Journal of Relevant Information and Analysis

2011 Volume 14 Issue 3

Brand Value Exists in the Consumers Mind: Continued

Of course, in order for a product or service to succeed, it must win in the marketplace. Great products or services will be differentiated and have unique qualities that other similar products do not; however, it is the perceived value of the brand determined by the individual customer that propels growth and protability. Patagonias Reason for Being statement also recognizes this point noting, Staying true to our core values during 30-plus years in business has helped us create a company were proud to run and work for. And our focus on making the best products possible has brought us success in the marketplace.[9] This is why a comprehensive SEER process must be developed beginning with a strategic plan and then evolving into annual SEER-focused initiatives that will drive the activities of the organization, maintaining the awareness of a balanced scorecard between the four macro values over time. With this value set manifested in this way, the brand will stay true to its mission. More importantly, if customers get a notion of these values at every possible point of interaction, there is a higher likelihood these distinctive values will begin to take root in their minds eye. Brand strength is a function of the emotional connection your customers have to it, and it is through this process that advocacy is formed.

Graziadio Business Review -- A Peer-Reviewed Journal of Relevant Information and Analysis

2011 Volume 14 Issue 3

Tracking Perception and Reality

Its one thing to have a competitive advantage: superior product, quality, pricing, distribution, etc. Its another thing to have a connection to values, beliefs, and causes. In other words, a company needs an authentic purpose. When looking at why your customer is loyal, ask yourself that very question: Is it because youre outperforming the competition, or is it because you stand for something your customer also believes? If your customers loyalty is strictly a result of a short-term competitive advantage, then your business is at risk of a competitor swooping in with a better mousetrap. In the world of brand differentiation, clarity regarding this point is paramount. Real loyalty is a heart-felt occurrence that organically evolves over time. By utilizing the SEER lens as a process to make strategic decisions, the result will be a long-term, sustainable advantage relatively immune to competitive onslaught. However, it is mission-critical that the internal set of values be made actionable on the front line with the consumer. This means that it is important to clearly identify the tangible, relevant, and helpful ways these values work on behalf of the consumers enjoyment of the product or service in play. If the message is too complicated or convoluted, the risk is the consumer may misconstrue the actual value set. If the communication is overly simplied, the risk is the brand will appear only supercially committed to the values. To bring true depth to the consumers understanding, it is critical to understand the path that actual customers take to become advocates. This exposes the consumers points of confusion as well as the positive key milestones in their brand discovery, highlighting areas where the SEER values are connecting and/or not connecting. This path to advocacy is called The Buyers Life Cycle,[10] and delivers the critical messages and brand experiences that lead consumers to a full understanding of the value set, and thus, creates an emotional connection to the brand, which is the moment casual customers move to advocacy.

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2011 Volume 14 Issue 3

Fig. 2: The Buyers Life Cycle

Prospects
Brand Introduction

Product quality demonstrated by real life stories of performance and durability, and backed by lifetime guarantee.

Advocates
Brand Relationship Actualized

Casuals
First Product, Brand & Service Experience

Consumers learn about social responsibility such as Patagonias on-site child care, fair labor practices, and are invited to participate in environmental activism such as 1% for the Planet and Vote for the Environment.

Loyalists
Brand Ethos & Values Discovery

Quality claims validated. Customer exposed to SEER values (eg. 100% organic cotton).

Graziadio Business Review -- A Peer-Reviewed Journal of Relevant Information and Analysis

2011 Volume 14 Issue 3

Tracking Perception and Reality: Continued

This process is what leads to an idealized state of brand/consumer relationship where the brand image arises fully in the mind of the consumer. With this understanding in hand, it is possible to pinpoint key brand messaging, channel presentation, product and service experiences, and measurement strategies, all with the intention of crafting customer experiences to dramatically increase customer loyalty by connecting the authentic purpose of the brand (the SEER values), with the values held by the consumer. In Patagonias case, the progression of messaging begins with product quality, evolves to include environmental awareness, and culminates by engaging loyal consumers in environmental and social activism.[11] As stated earlier, this level of emotional connection creates a basis for nancial success. Loyal buying behavior dovetails with deeper brand involvement, resulting in increased lifetime value by segment. In Fig. 3, Advocates are nearly nine times more protable than rst-time Casual customers. The values are aggregated from a selection of clients from Blux, a full-service creative agency focused on loyalty.[12]

Graziadio Business Review -- A Peer-Reviewed Journal of Relevant Information and Analysis

2011 Volume 14 Issue 3

Fig. 3: The Buyers Life Cycle Monetized

Prospects
Brand Introduction

WOM

Segment Count 100k Value/Customer $270 Segment Value $27M

Advocates
Brand Relationship Actualized

Casuals
First Product, Brand & Service Experience

Segment Count 500k Value/Customer $31 Segment Value $15.5M

Loyalists
Brand Ethos & Values Discovery

Segment Count Value/Customer Segment Value 200k $87 $17.4M

Graziadio Business Review -- A Peer-Reviewed Journal of Relevant Information and Analysis

2011 Volume 14 Issue 3

Tracking Perception and Reality: Continued

As stated at the outset, it is the consumers alignment with a brands authentic purpose that drives advocacy. As a management tool, it is the Buyers Life Cycle that enables brand managers to identify, monitor, and measure their efcacy while communicating through the SEER lens and moving casual customers to become the brands most valuable customers, brand advocates. By using a SEER lens to curate your brands unique value chain activities and charting progress through the Buyers Life Cycle, a brand manager can inform every aspect of the customer experience so the right message is in the right place at the right time. The more efcient brand managers get at moving customers around the cycle, the more nancial stability is created, reinforcing long-term viability. Another reinforcing aspect is the ability to invest further in the espoused values of the rm. In the end, the congruence of these values and those of the brand advocates are the foundation on which a long-term, sustainable competitive advantage is forged.

Graziadio Business Review -- A Peer-Reviewed Journal of Relevant Information and Analysis

2011 Volume 14 Issue 3

References
[1] Crooke, Michael. A Mandala for Organizations in the 21st Century. Diss., Claremont Graduate University, 2008. [2] Social, Ethical & Environmental Responsibility Certicate, Full-time MBA Program. Pepperdine University Graziadio School of Business and Management. 2011. http://bschool.pepperdine.edu/programs/full-time-mba/seer/. [3] Crooke, loc. cit. [4] Patagonia Company Information: Our Reason for Being Values, Mission Statement. Patagonia.com. 2011. Accessed June 7, 2011. http:// www.patagonia.com/us/patagonia.go?assetid=2047&ln=140. [5] Ibid. [6] Godin, Seth. Step 3: First Impressions Start the Story. In All Marketers Are Liars, 69-76. New York: Penguin Publishers, 2005. [7] Casey, Susan. GOING GREEN: The Story of How Patagonia Founder Yvon Chouinard Took His Passion for the Outdoors and Turned It into an Amazing Business. Fortune, April 2, 2007. [8] Patagonia Ironclad Guarantee. Patagonia.com. 2011. Accessed August 23, 2011. http://www.patagonia.com/us/patagonia.go?assetid=38565. [9] Patagonia Company Information, loc. cit. [10] Wilson, Craig. The Tool to Build Brand Loyalty. Blux, The Science of Loyalty. 2011. Accessed February 7, 2011. http://blux.co/approach/the-tool-tobuild-brand-loyalty. [11] Kazaks, Alex, and Ayr Muir-Harmony. Customer Life Cycle Study. Patagonia, 2004. [12] Wilson, loc. cit.

Graziadio Business Review -- A Peer-Reviewed Journal of Relevant Information and Analysis

2011 Volume 14 Issue 3