Digital technology enables today’s consumers to narrowly define what value means to them. They seek out sources and are influenced in a myriad of ways. And the source they most trust is each other (and their reliance on other consumers is increasing). According to Nielsen’s 2015 Global Trust in Advertising Report, people don’t trust advertising—at least not as much as they trust recommendations from friends and consumer opinions expressed online. The report, which surveyed more than 30,000 Internet respondents in 60 countries, shows that 84 percent of consumers say they trust “recommendations from people I know” above all other forms of advertising—and that by 20 percentage points. “Consumer opinions posted online” rank as the third most trusted source, at 66 percent.5 We’ve all become very particular about what we consume and who we trust to inform us. The power of social media has created a strong influence network, where we’ll trust a friend before we’ll trust an advertisement or brand that’s talking to us directly. That’s another significant change if you’re in the business of communicating a brand’s value or essence.
Here’s the thing that’s becoming evident: In today’s hyper-connected world, a traditional marketing approach is no longer relevant. Does anyone really believe that consumers these days are passively watching television commercials and then driven to try or prefer a brand? Today, companies need to both spread their message across numerous channels and platforms and be prepared to have their brand build a community of engagement.
How a brand interfaces, influences, and stays relevant nowadays requires an altogether new approach and a different makeup. We’ve uncovered a winning formula that presents an enormous opportunity for brands and those who market them. And it all begins with a new paradigm that builds, sustains, and measures ultimate brand relationships built on emotion.
Why does emotion matter for brands? According to a recent Gallup poll, a majority of consumers can’t identify with leading brands.6 The good news is that the opportunity for brands is immense—if they can find a way to bridge the gap. On a lifetime value basis, emotionally connected customers are more than twice as valuable as highly satisfied customers. Emotionally connected customers buy more of the brand’s products and services, exhibit less price sensitivity, pay more attention to brand communications, and recommend the brand more frequently.7
Gallup also found that customers who are fully engaged represent an average 23 percent premium in terms of share of wallet, profitability, revenue, and relationship growth over the average customer. The same study showed that companies that engage both their employees and their customers gain a 240 percent boost in performance-related business outcomes.8 Further, it has been found that an emotional response to an advertisement has far greater influence on a consumer’s reported intent to buy a product than does the ad’s content—by a factor of 3-to-1 for television ads and 2-to-1 for print ads.9
Navigating today’s marketplace is made more difficult by brands proliferating (recall our earlier comment about misappropriation of the term “brand”), making it harder than ever to create distinctness and differentiation. Competitors copy faster than ever—everything from product features to messaging—resulting in a commodification of categories and the brands in them. Success today is predicated on building brands in omni-channel environments that draw consumers in and foster a community of influence and reciprocity. Brands must now remain two-way, agile and sensitive to market shifts, consumer behaviors and technological advancements.
TECHNOLOGY TOMORROW
In our interconnected and increasingly globalized lives, brand expectations have become elevated, demanding and immediate. One prime example is the supercomputers we carry inside our pockets and purses that have access to an entire ecosystem of enhancement. This one device, the ubiquitous smartphone, creates a profoundly personalized interface to a world of information, entertainment, work, family, and friends. The technology interface we enjoy changes what, how and when we consume brands. It alters how we share, how we learn and how we influence each other, too. The very meaning of what we know and what we believe is largely cast through the interface of technology. It can’t be overstated how much technology has transformed our lives.
By 2020, the projected 9 billion connected mobile devices will exceed the global population by 16 percent.10 Sensors and actuators in physical objects linked through wired and wireless networks (the Internet of Things) grew 300 percent in the last five years, and are expected to make a $2.7 to $6.2 trillion impact on the economy by 2025.11
In just a decade, digital, mobile, and social advancements have dramatically altered how we behave and react—and that includes how we interact with the brands in our lives. Through the proliferation of digital devices, mobility, cloud computing, social media and the Internet, technology, as we mentioned, is providing people with unprecedented access to information, the means to distribute it and the ability to connect with, learn from, and influence each other. Ultimately, technology is transforming the way people relate to each other and to the companies whose products and services they research, purchase, and discuss.
Technology is also creating new and more multifaceted ways to track and measure brands. Big data promises to answer tactical questions, including, “Who buys what? When? At what price?” “How can we link what consumers view, read, and hear to what they buy?” “What’s most effective at attracting them?” These answers can result in short-term gains, in terms of increasing the next transaction, but big data can also try to contribute to more long-term concerns—strategic questions about customer retention, stickiness, and relationships. Answering not just what will trigger the next purchase, but what will be the customer’s life-time value and what can prevent them from leaving when offered a better competitive price, will be invaluable as brands and marketing research try to maintain a foothold in this new world. That said, big data can be overwhelming and it can be a challenge to read the signal from all the noise. For many, the continuously mounting data is as paralyzing as it is motivating, especially when faced with the challenge to sift, aggregate, prioritize or act based on these insights.
As technology has become increasingly pervasive, it has also become increasingly apparent that its impact is two-sided. In other words, there are consequences of technological advancement that people find beneficial and consequences they find detrimental. Technology creates a faster-moving, highly variable landscape, one that can both strengthen and threaten the bonds that strong brands depend on to survive. In the near future, the convergence of cloud computing, wearable mobile devices and ubiquitous interlinked sensors promises a paradigm shift as great as any that has taken place previously. In this new environment, where an individual’s very senses will be augmented, brands will have a previously unimagined ability to engage people. However, this ability will in turn be counterbalanced by an unprecedented degree of responsibility to prevent information overload and to protect privacy.
To succeed in this newly redefined space, being intimate with brands—that is, the premise of this book—will need to become a critical consideration for businesses. If brands are to be welcome participants in an individual’s perceptual net (or personal space) they will need to understand exactly how to cultivate not just a bond with their consumers, but an “intimate” relationship. The more personal or personalized the access a technology has to a person, the more heightened are the permissions and expectations on that brand.
A basic example of the new interplay between people and technology that many consumers have already experienced is haptic feedback. These are the sensors in our smartphones, smartwatches or “force feedback” joysticks in video game controllers12 which provide a physical “feel” in response to actions driven by software and hardware. These haptic moments are creating a whole new computer/human interface.
Sensors are also behind the rapidly growing Internet of Things (IoT), linking networks to everyday objects, appliances and fixtures. The business implications are transforming the supply chain, providing ju
st-in-time data around inventory. Machines send alerts for supplies or repairs and measure every aspect of their own performance. While many consumers may be unaware of the degree of impact the IoT has on their lives, their home networks today are becoming increasingly populated by devices like smart light fixtures, thermostats, smoke detectors, security systems, appliances and wearable devices that are all communicating through one network. Many would likely underestimate and be surprised by how many IPs (internet protocols or addresses which represent the different devices on their networks) there are today.
Less obvious though still burgeoning are sensor-driven technologies and applications—from self-replenishing supply chains and automated city management systems to self-driving cars—that have analysts and many companies excited about the business opportunities. More recently, academics at the MIT Media Lab have been looking at a different side of the IoT, exploring how the ways we see, hear, think, and live will change when individuals can connect to it directly. They argue that, “[T]he modern world is filled with network-connected electronic sensors, but most of the data they produce are invisible to us, ‘siloed’ for use by specific applications. If we eliminate those silos and enable sensor data to be used by any network-connected device, the era of ubiquitous computing will truly arrive.”13 Specific to this topic, the MIT Media Lab is investigating questions such as: “Where do human senses begin and end when a person is linked to a sensor network that extends virtually everywhere and grafts information onto human perception?”14 “What will ‘presence’ mean when people can funnel their perceptions freely across time, space and scale?”15 They believe the new world of ubiquitous computing will be created by “context aggregators,” tech companies that assemble sensor data into a new generation of applications.16
The forthcoming world of ubiquitous computing, context aggregation, and augmented perception presents both tremendous opportunities and challenges for marketers. At the dawn of the Internet age, psychologist Mihaly Csikszentmihalyi wrote about the potential of the Internet as a medium for staging experience. He focused on the possibility of creating Web experiences that would elicit “a state of intense emotional involvement and timelessness that comes from immersive and challenging activities”.17 And while the Internet has generally fallen short of delivering truly immersive experiences, it seems that with ubiquitous computing this promise may finally be realizable.
This appears to be what is driving numerous technology companies in their investments in virtual and augmented reality. Google Glass was an early example of a wearable technology, which offered new ways to access information, share content, and interact with the environment.18 Google also introduced Universal Analytics, which can integrate offline and online metrics, a capability that will only become more relevant in a sensor-enabled world. Compare this to the Apple Watch. The Apple Watch is more than the company’s first foray into wearable devices; it is Apple’s “most personal device yet,” enabling people to connect with each other and with information in new ways, physically touching them for alerts, notifications, and health monitoring. In effect, the device extends the wearer’s senses.19
Facebook may be the company that has most tipped its hand with its vision of how ubiquitous sensor-enabled computing can transform the consumer experience. Regarding the company’s recent acquisition of Oculus VR, Mark Zuckerberg posted: “After games, we’re going to make Oculus a platform for many other experiences. Imagine enjoying a courtside seat at a game, studying in a classroom of students and teachers all over the world, or consulting with a doctor face to face—just by putting on goggles in your home. This is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures.”20
What Zuckerberg is talking about (and what Google and Apple seem to be alluding to) is a shift in what technology is. Technology has typically been thought of as an enabler, a tool to connect us with information and other people and to provide us with computational power beyond our individual capabilities. With ubiquitous computing, technology transcends enablement to become the very environment in which we perceive the world, interact with others, entertain ourselves, and get things done.
However, as the emerging environment of Internet-worked sensors reshape the consumer experience, key issues must also be addressed. First among these are concerns about privacy and security, not to mention means of processing the unfathomable ocean of information that all these connected devices are creating. Connected individuals will need to be able to exert some control to protect their privacy and security (by limiting or preventing access from snoopers and hackers) as well as their sanity (by limiting the flow of information they experience). Brands will need to tread cautiously between enablement and overreaching.
From a marketing perspective, the environment of connected and sensor-enhanced consumers creates exciting new possibilities—which bring with them their own challenges. When technology becomes the environment itself, brands become able to personalize, be more context-relevant and predictive in an individual’s life. In this new world which is both exciting and scary, individuals will be able to exert even more control over which brands they interact with and the degree of interaction they allow. The very same is true for brands themselves—more control and higher potential for intimate interactions. What emerges has new rules, with brand relationships becoming far more bidirectional.
The new paradigm of Brand Intimacy, we believe, is an essential framework for brands that need to navigate the new complexities of technological realities.
Why? Understanding the intricacies and mechanisms of brand intimacy will help businesses better focus their resources to carve out a meaningful place in the perceptual/experiential networks individuals maintain. This framework will also help companies avoid and/or respond to relationship pitfalls that might otherwise lead to consumer indifference. In effect, our approach is the currency of the forthcoming consciousness and experience-expanding world in which consumers and brands are brokering information flow, privacy, security, and identity. Ultimately, understanding how to leverage technology will bring with it the power to build better brand bonds—bonds that can endure and are mutually beneficial.
BRAINS NOW: HOW EMOTION DRIVES CHOICES AND DECISIONS
We now know more about how the human brain processes information and triggers our behaviors than ever before. Even with all the technological advancements and resulting brand transformation, it may be the discoveries in neuroscience that have the largest impact about how we think about brands today. We now know that up to 90 percent of the decisions we make are based on emotion.21 Take a minute and read that again; almost every decision we make is based on emotion, not rational thought and measured consideration. Our decisions are the result of less deliberate, linear, and controlled processes than we would like to believe. This is true whether it is a personal decision, a professional one, or even a group decision.22
Yet for over 1,000 years in the West, philosophers, scientists, and even psychologists did not focus their attention on human emotion. The general opinion was that emotions were a base part of humanity, a vestige of our “animal” past, and that rationality was what separated Homo sapiens from other, lesser animals.
This attitude began to change somewhat in the twentieth century, with considerable focus being brought on the psychological and psychiatric treatment of neuroses and psychoses. But the subject of what emotions are and what their evolutionary or survival value is to human beings was not addressed to any great extent until the last 20 years.
A big change in the field was sparked by the discoveries of neurophysiologist Antonio Damasio, reported in his 1999 book, The Feeling of What Happens. In it, Damasio reports: “Work from my laboratory has shown that emotion is integral to the process of reasoning and decision making, for worse and for better. This may sound a bit counterintuitive, at first, but
there is evidence to support it. The finding comes from the study of several individuals who were entirely rational in the way they ran their lives up to the time when, as a result of neurological damage in specific sites of their brains, they lost a certain class of emotions and, in a momentous parallel development, lost their ability to make rational decisions . . . These findings suggest that selective reduction of emotion is at least as prejudicial for rationality as excessive emotion. It certainly does not seem true that reason stands to gain from operating without the leverage of emotion. On the contrary, emotion probably assists reasoning, especially when it comes to personal and social matters involving risk and conflict. I suggested that certain levels of emotion processing probably point us to the sector of the decision-making space where our reason can operate most efficiently. I did not suggest, however, that emotions are a substitute for reason or that emotions decide for us. It is obvious that emotional upheavals can lead to irrational decisions. The neurological evidence simply suggests that selective absence of emotion is a problem. Well–targeted and well–deployed emotion seems to be a support system without which the edifice of reason cannot operate properly.”23
If Damasio’s work was the catalyst, then the Nobel Prize-winning work by psychologist Daniel Kahneman was the revolution that changed our way of thinking about thinking. Through dozens of experiments over decades, Kahneman created a new model to explain how people think and make decisions. Kahneman created a construct, called System 1 and System 2, to replace left and right brain, respectively. System 1 handles basic tasks and calculations like walking, breathing, and determining the value of 1 + 1; System 2 takes on more complicated, abstract decision making and calculations, like 435 x 23. System 1 is more driven by intuition, snap judgments, and emotion. System 2 is driven more by reason. Kahneman explains the differences as follows: “‘System 1 does X’ is a shortcut for ‘X occurs automatically.’ And ‘System 2 is mobilized to do Y’ is a shortcut for ‘arousal increases, pupils dilate, attention is focused, and activity Y is performed.’”24
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