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Tapping into the Human Element: How to win trust in the Relationship and Social Media Era

There’s a saying “there’s no such thing as bad publicity”. But we have seen time and time again, how bad marketing decisions (eg.: Pepsi) or mishandle of customer problems or backlash from them (e.g.: United) damage brands and can completely destroy trust (if there ever was in the first place). 

The rise of social media has only put more pressure on companies: word of mouth not only reaches independent communities, but a customer’s experience is shared and seen by thousands or even millions of people instantly through Youtube, Twitter, Facebook. At the same time, a bad marketing strategy can live in the memory of people forever, so it is imperative to be very intentional and precise when developing social media marketing content (McDstories for example or Pepsi or Shea, just to name a few).

This is why, more than ever, it is important for companies to reflect on what their corporate purpose is and live by those values to create trusting and sustainable relationships with their customers - because if you try to trick your audience to believe something that is not aligned with the company’s true values, you will 100% get caught and your brand will suffer.

A good example of a company who has been able to build trust and a sustainable relationship with their customers through an authentic approach is Patagonia.  

Patagonia is an active-wear manufacturing company with a focus in sustainability and the environment, which is why they offer clothing and equipment that is long lasting and high quality. In many occasions, they have used their marketing platform to alert consumers on the impact manufacturing has on the environment and asking them to reconsider purchasing products if they don’t need them. This could appear to be a marketing “poser” strategy, but the fact that the company’s entire strategy and vision is aligned with this message has shown that they walk the talk and built trust with the consumer (e.g.: fair trade certification, organic materials, solar energy, etc.). 

One example of their posture is the risky Black Friday campaign they launched that said “Don’t buy this jacket”. This was executed in an effort to make the consumers more aware of their purchasing decisions and not just buy unnecessary products because they were on sale on this date. This ad could have been perceived as an attempt of the company to “seem” honorable when really they were only looking for an increase on sales on Black Friday, but the fact that the company has maintained this posture consistently throughout years, did not angry their customer base but instead it resonated with them and was just another expression of the company’s values and what they stand for, which is something their consumer base shares strongly. 

Appealing to the human element, just as Patagonia does, is an essential today to build sustainable brand loyalty and to have customers become ambassadors of the brand. Brands do not need to be saving the world to reach this level, but it is a basic that they are consistent in what they say they stand for and their actual practices. In today’s social media world, if you don’t walk the talk, it is a matter of minutes for you to get caught.

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What is the US to do? The crazy healthcare cost problem

I have always been passionate about healthcare. Coming from a family of doctors, ever since I was a little girl I spent my afternoons playing at hospitals and accompanying my dad quietly from a corner while he performed surgeries. I became fascinated with this world, and as an adult, I’ve been very fortunate to work with healthcare companies in improving patient experience and their processes. However, being in this space has also showed me the vast room for improvement that exists, and how difficult it is to bring significant change to the table, since many leaders don’t really want them due to their short term vision.

The chart that is displayed has always disturbed me deeply: The US, one of the leaders in technology and innovation, not only has the highest healthcare costs in the world, but also those costs don’t translate in better outcomes! Being this a deep problem today, it will only get worse in the future as the population ages and chronic diseases have a higher incidence in the population. This is why it is important for us as future leaders or entrepreneurs to take this issue seriously and find innovative ways to improve either the outcome or cost side, or hopefully both! 

American Well found a way to use resources more effectively by using tele-medicine and online platforms allowing doctors and patients to communicate. This idea is brilliant and reduces costs significantly, since most doctor visits can be resolved without a physical examination (and could end up not being “visits” at all), and could use in several scenarios that today have not been deployed as much as it should (e.g.: could there be an MIT medical were I can talk to a doctor over Skype?). Hopefully this example and many others that are out there help us revolutionize this industry to improve people’s well being and also to lower the healthcare debt that will only continue to grow.

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Check out those checks!  

While the recovery of the Burberry brand through Bravo’s leadership is truly remarkable, the brand still has a lots of challenges to face in order to sustain itself in the luxury segment, and the brand’s popularity poses both an opportunity and a big threat to achieve this goal.

Threat:

The brand has definitely suffered from the check overkill, and from many celebrities that do not represent their core customer wearing the brand in an excessive manner (and they are not alone in this, since many luxury brands are suffering from this lack of appropriate profiling and association). Even though some changes have been made, and you no longer see these monstrous check infested garments, the brand still has issues in terms of having the right distribution and sending the right signal to its customers. Just last weekend, I was at an outlet mall and the Burberry store sold their famous 1.500-2.000 dollar trench coat at 500 dollars. Even though still a high price, it is MUCH more accessible than their original price, which could lead the brand to losing its value, by attracting such a broad customer base that their loyal customers don’t really want to be associated with the brand anymore. 

Opportunity:

Burberry has a high brand recognition a lot of positive associations with the brand: it is classic, it is elegant, it is the ultimate trench coat, and taking advantage of today’s connectivity is key for the company’s future success. Even though Burberry has gone digital and you can now buy your coat online, it can take further advantage of the online platform and get creative, creating some sort of club where Burberry sends you recommendations regarding outfits and care, or suggesting new looks to revamp your beige trench coat, that sort of stuff and more. There are definitely great opportunities for this brand and many other luxury brands in the online space, and Burberry has the opportunity to capture that while reinforcing its brand positioning. 

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Service as a Core Capability: The Case of Singapur Airlines

Singapore Airlines does not sell a plane seat to their premium customers  but rather an experience, where instead of being trapped on a plane for a long haul flight, they are transported to the mysterious and majestic Asia, receive luxurious treatment, and are not just passenger n°12896, but are an important person to them and want to assist your personal needs. 

This core competitive advantage is what allows SIA to succeed in the airline industry and deal with an industry crisis, because customer loyalty in the premium segment is crucial for their profitability. Premium customers value special treatment and feeling “royal”, and their price elasticity is much lower than the economy segment, so SIA can charge that premium price and passengers who value it will pay it. If they were to lower their level of service in the premium segment, these customers would not doubt to walk away, especially because of the high expectations SIA already put into people’s minds. 

An important aspect is that, in order for this model to survive, SIA has to be better than the rest and lead the market in terms of service level, which is a very demanding position for the company to be in, especially in today’s competitive landscape. Innovating and being state of the art in terms of the service they provide must remain strategic for the company, so that they continuously strengthen their core capability and keep finding ways to surprise their customers to remain the number 1. 

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The Legend of The Devil’s Cellar

Don Melchor de Concha y Toro saw that his best wines began to disappear. He then spread the rumour that in his wine cellar inhabited the devil, thus creating a legend that still lives to this day, and is a great part of Casillero del Diablo’s mystique.

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Perception is reality: Why Concha y Toro and the Chilean Wine Industry must pursue the premium global market

Living in Chile you are constantly preferring and are exposed to international brands. Everyone drinks Coca Cola (Coca Cola Light to be precise), drives a Toyota or BMW if you can afford it, and wears international clothing brands with pride (it’s even better if you bought that dress in Europe or the US). However, there’s a couple of things that every Chilean will defend with all they have, and that is our national soccer team and our wines (the best in the world according to us).

Wine consumption is much more about perception than actual reality, and the Paris and Belgium blind tasting experiences prove it even further. This is why it is crucial that not only Concha y Toro, but also the other Chilean wine players in the global market work together to position their brands, and more importantly the “Made in Chile” brand as a high status image: one that is associated with quality, with refinement and aspirations. If the Chilean brand as a whole is perceived as a glamorous high status brand, then every Chilean player benefits, being able to position their own brands in a premium segment and being able to obtain higher margins from their cases of wine (this is also why the existence of “Wines of Chile” is important). Even though Chilean players will still have to compete with each other in the market, if the country is perceived as high quality then they compete in a different tier.  

Concha y Toro is clearly a success story in the wine industry, and especially in the Chilean market, and their trajectory, the quality of wine they can produce, and their global market penetration, make developing a bottom-up strategy their best move. Additionally, building a strong relationship with distributors is key and differentiating in the market, and must also be a strategic aspect the company must consider (this is why in key markets they have a structure with export managers by country and also by wine category). 

Casillero del Diablo and their other premium brands have world recognition and not only give them the opportunity to differentiate themselves from the rest of the Chilean market, but give them a chance to compete with the higher margin top wine competitors. Disregarding this opportunity to continue to grow their premium brands, and instead focusing on volume, would be losing a tremendous opportunity to position their brands in high willingness to pay regions such as Asia (where the Manchester United sponsorship was important to attract that market). In Asia luxury is at another level and you can obtain crazy margins if you can provide status. Long live the legend of Don Melchor and the Devil’s cellar.

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Heineken commercial UEFA Champions League 2015

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Corona commercial 2010

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What are Heineken and Corona’s brand meaning for consumers, and how do their campaigns contribute to these meanings?

Heineken’s brand was initially associated with product quality and international beer, which was what they advertised about. However, through the years they have evolved their brand and changed the way they want to be perceived by the consumers. They have transitioned in their marketing strategy into one that targets men, and displays a brand that is cool, glamorous and adventurous. An example of this is the number of commercials they have done associated with the Champions League, a highly famous European soccer tournament watched all over the world, predominantly by men. In these ads, you can see men usually in adventurous or man associated settings (e.g.: a big container ship) doing everything in their power and using teamwork and ingenuity to be able to catch the soccer game. These ads are fun and engaging, and appeal to the emotion of their target consumer.

Corona on the other hand has maintained a consistent brand over the years, associating itself with Mexico and a relaxed lifestyle, where beaches, friends and sunny days are usually part of their commercials. In many of their commercials you can see people in a beach setting, relaxing and enjoying the company of friends with a Corona (always with the lime).

Even though both brands have some similarities in their branding, such as the social aspect they portray in their commercials, there are important differences in what these brands mean to consumers: Corona means relaxing, summer, sun and fun, while Heineken means intensity, glamour and adventure.

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What are Heineken’s vulnerabilities and how could they be protected?

At the moment of Corona’s entrance to the US market, one of Heineken’s largest vulnerabilities was the management team’s over confidence, were they did not take the new competitor seriously, labeling it as a “Mexican soda pop”. This attitude made them react to Corona’s success late in the game, and gave Corona space to catch up and gain a large consumer base in the US market.

Also, the way they focused their marketing strategy in the late 1980’s, where they portrayed competing beers as passing fads was not very effective (e.g.: “When you’re done kidding around” campaign), since it did not appeal to any of the consumers’ emotions or aspirations, and also is a provocation to your competition, which means they can get back at you (e.g.: Samuel Adams).

An important vulnerability was the tension and lack of trust between the Heineken corporate team and the US team. The fact that the team in the Netherlands had changed, and the relationship and appreciation of Leo van Munchings’ trajectory was lost in these organizational transitions, and these teams were not cooperating in an effective way. Foley, Leo’s replacement attempted to improve Heineken’s situation and created a Marketing function, and decided to drop the arrogant attitude the company had. However, while they were beginning to define their marketing strategy, Corona had already gained a huge advantage in that field, with a consistent image that was appealing to beer consumers.

A good way for Heineken to protect themselves from competition would be to focus on creating a consistent brand and message that could resonate with consumers and awaken positive emotions towards their brand. In order to do that, the organization as a whole (Corporate and Regionals) must be aligned in their marketing strategy and work together to gain insights from how local markets and consumers behave, in order to deploy effective strategies. Also, improving relationships with distributors and build strong ties with local communities could also have a positive effect, especially in the context where microbreweries are becoming strong in those markets and you have to compete with them.  

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