 "Chris Malone")
Instead, they should be using social networks as customer service platforms that allow employees to interact directly with patrons by name, re-establishing relationships and putting a human face on their brands, Chris Malone tells Masoom Gupte
How can companies, without waiting for a crisis to shake them out of their reverie, proactively build the perception of being "warm"? How can this perception be tracked continually?
The simplest and the most direct way to build a reputation for warmth is to practice what we call 'The Principle of Worthy Intentions.' This means putting the best interests of customers and employees ahead of company profits in the short-term. Doing so doesn't require that the company recklessly disregard its own interests. Rather it means that keeping the best interests of others in balance with our own is the only way to achieve loyalty and consistent growth. When our policies, practices and processes toward employees and customers reflect our worthy intentions, the loyalty they give us in return delivers profits.
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Your new book, The Human Brand: How We Relate to People, Products & Companies, uses the example of BP and Tylenol to elucidate the management of a crisis. Do you feel there was a way BP could have minimised the backlash post the Gulf spill? What could it have done differently?
There are many things that BP could have done early on that could have dramatically altered the public's perception of the company. First, it could have started by immediately halting all oil drilling in the Gulf of Mexico until the causes of the Deepwater Horizon explosion were better understood, as a precautionary measure to protect the environment. Next, the company could have pledged to accept full responsibility for whatever role its actions played in causing the disaster. Perhaps most importantly, the CEO could have rolled up his sleeves and spent some time helping others clean up the mess and visiting victims. This crisis provided the opportunity for BP to become an admired energy company in the world - it simply had to demonstrate its worthy intentions in responding to it.
You have used the example of Lululemon Athletica, a Yoga apparel brand company, in the book. You have said it is a company that has focused its brand growth story not on big budget spends but on engaging with the community it operates in. Does this strategy hold up in the light of the PR disaster it faced last year?
Lululemon is a fascinating case study in progress. Its repeated missteps in 2013 are examples of how not to handle a crisis and what a company founder should not say about its customers on national television. As would be expected, its reputation has taken a beating in the process and customer traffic in the stores slowed by the end of 2013. However, what I find surprising is that Lululemon's revenue continued to grow through the year. Other companies with less loyal customers would have been decimated by missteps like these. The fact that many customers are sticking with Lululemon is a testament to the strength of the relationships its retail staff has built with them.
Companies typically face the issue of the last mile staff not being able to communicate the brand's philosophy appropriately to the customer. How can this be fixed by companies?
The last-mile customer experience must always be led by front-line employees. The way to accomplish this is by selecting, managing and serving employees with the same warmth that we seek them to display toward customers. It's no accident that the companies with the most loyal customers are also the ones with the most loyal employees.
In Lululemon's case, its founder's comments seemed like a u-turn from its adherence to the good intentions philosophy. Isn't that always a challenge since these two attributes are largely subjective?
The most significant problem with the way capitalism is taught and practiced today is the misguided, over-emphasis on competence. It is necessary to meet all basic expectations on competence but warmth related factors have a far greater impact on human trust. The problem with Lululemon founder Chip Wilson's disparaging comments about plus-sized customers was that it showed his true intentions toward them.
The solution is not to avoid relying on the potentially subjective warmth perceptions of customers. The solution is to have more selfless and worthy intentions toward them in the first place.
Isn't it difficult for retailers or services to impart themselves such human attributes as warmth or competence? How can products in categories like personal care or FMCG, without a direct interaction with the consumer, humanise themselves?
Businesses that continue to have direct human-to-human contact with customers have an advantage over those that do not. Unfortunately, very few retailers have recognised this fact. Instead of striving to squeeze efficiency and productivity from their employees, retailers should support and enable front line employees to build lasting relationships with customers.
In product categories like personal care and FMCG, there is a much greater need to humanise these brands and make the intentions and abilities of the people behind them more clear. Many of the fastest growing FMCG brands and companies today are purpose-based enterprises that were created to engage in social capitalism that benefits communities more than shareholders.
Theoretically, businesses seem to be fairly updated in their understanding of social media and how it can be used to engage with the consumer in a conversation. Few seem to be using this knowledge effectively. Why this disconnect?
The root of the problem is that social networks are thought of as "social media". Finally, after 150 years of the Industrial Revolution that made it impossible for large scale providers of products and services to have direct relationships with customers, a technology has been created that allows us to do this again in a scalable, trackable and efficient way.
So what are companies and brands doing with it? They're trying to use it as a faceless, transactional advertising medium, of all things. It is like inventing the automobile and then choosing to pull it around with a horse. Instead, companies should be using social networks as customer service platforms that allow employees to interact directly with patrons by name, re-establishing relationships and putting a human face on their brands.
THE HUMAN MARKETER
* Chris Malone has over 20 years of experience in sales, marketing, consulting and organisational leadership. He has held senior marketing positions in companies in the hospitality and fast moving consumer goods sectors such as Choice Hotels, ARAMARK, Coca- Cola, Procter & Gamble
* In 2010, Malone founded Fidelum Partners, a research-based consulting and professional services firm, of which he is the managing partner
* Malone holds a bachelors degree from the University of Maryland at College Park and an MBA from The Wharton School of the University of Pennsylvania
