Oikonomics: a social life of money

8 Habits of Successful, Authentic Brands

Being authentic in a super premium or local niche is becoming just “the ticket to the game” for marketing savvy consumers.

As niche brands, they benefit from the value of being ‘discovered’ and ‘secret’ and can afford to invest in developing complex and deep reciprocal relationships with individual customers.  These brands (such as Rapha or my own "baby" Monkey Shoulder) also benefit from the investment customers are themselves prepared to make on behalf of a brand over which they feel a sense of ownership.

Encouraging such reciprocal ‘investment’ is vital to brands who want to build and maintain their authenticity as they become ‘mainstream’.  Mainstream brands that rely on authenticity need to develop new habits to avoid becoming standardised and commoditised in their approach.

Habit 1: Turning discovery into currency
First Direct was made service part of its ‘authenticity’ – and succeeded by delivering key moments of truth which had their own social currency for their customers.  In the years following the launch the constant refrain of the First Direct customer centred on the fact that they could call them whenever they wanted.  This investment in 24/7 service was reciprocated many times over in word of mouth marketing and brand building by their customers.

Habit 2: Having a good memory (and mining the data)
Starbucks relies on customisation (and its customers) to deliver the illusion of personalisation.  An authentic barista will remember your drink by the third time you walk in.  Customer data enables brands to tailor the experience and choice to their local customers but it is made all the more powerful when those customers feel that they have left their mark on a place – the retail equivalent of a favourite chair in the pub.

Habit 3: being generous – gifting with interest
Anthropologists know that there is no such thing as a ‘free gift’.  Gifts always carry an implicit obligation of future relationship (and payback with interest to acknowledge that relationship).  Brands which give away stuff that is valuable create customers who want to give something back.  Financial incentives and discounts do not carry the obligation of a gift unless they are connected to the recognition of a relationship (and hence undermine value in the long term) but there are plenty of things of value which a brand can give for free which do create value in the long term.

Habit 4: Giving employees a sense of ownership and responsibility
Retail brands live in the hearts and minds of their people – but only if those people see the brand as something they have a part in creating and not just a constant constraint on what they can and can’t do.
Brands like Innocent and Leon benefit from making their employees part of the story and (mythical) history of the brand and by maintaining that connection even after they have left (and left their mark) on the brand.

Habit 5: A conversation from the ‘front of the stage’
According to the science of semiotics, it is useful to understand the brand’s relation to its audience as if it were the actor in a play.  Conventional mainstream brands stand at the back of the stage where like the gods and kings of theatre, they speak over the heads of their audience.  The front of the stage is where the likes of Falstaff josh and banter with the pit. Authentic brands maintain that front of stage approach even when they are crowned king of their market.

Habit 6: Shared experiences – a sense of community
Consumption is fundamentally social.  Shared experiences between customers are as valuable as experiences between the customer and the brand.  Brands which facilitate the creation of connections and community between their customers give customers a greater sense of ownership over what the brand means to them and greater salience by playing a role in the creation and maintenance of their social network.

Habit 7: Creating a language (but don’t forget a lexicon)
Authenticity for the mainstream consumer needs to be accessible. Any customer should feel that the language of the brand, its people and its customers should be both a rite of passage – you learn the lingo to feel part of the brand experience – but also easy and intuitive for new members to pick up and use.

Habit 8: Making fans rather than managing failures
It is a well established myth that customers who have a problem resolved are more loyal than those who have never had a problem.  However, measuring the loyalty of the lucky against the apathetic majority does not create customer advocacy.  Successful authentic brands don’t try to please all of the people all of the time but rather focus on making fans of their customers – as their recommendations will count far more in the long run.

Nose to the Blogstone

It has been an intense summer of work which has rather denuded my blog posts.  I have just returned from speaking at the launch of the Bauman Institute on the subject of consumerism and sustainability which was a great event and a rare opportunity to get away from the internet and phone and do some thinking.  Although I must admit the main attraction was the man himself and true to form he was inspirational in his closing speech.  My own paper is winging its way through the ether to the Institute as a draft so hopefully it will appear sometime soon with all the typos and misquotations removed.

If you are interested I have published a short article on ‘Making modern research’ which perhaps  is the first use of Monty Python to introduce the concept of ethnographic research in service design and innovation.  It is a preview of one of the themes in a speech I am giving at the International Institue of Business Analysts conference which is happening here.

And like London buses my third conference of the Autumn season is at SIBOS in Amsterdam – talking about the future of money from an anthropological standpoint.

All this while still trying to make the next financial revolution a reality and getting a report funded, written and published on the future of alternative finance.

Beyond the fringe

I spent a fair amount of time working with a leading Israeli food and coffee company in the 1990’s.  At the time, everyone talked about living in the bubble – Tel Aviv – which was renowned for having the fastest adoption curve of any new technology in the world.  Working and living in the bubble was a heady and addictive cocktail of constantly changing bars and restaurants serving fantastic culinary experiences.  Change was truly was the norm.  As were the girls with guns on the street corners, the Scuds and Hezbollah missile strikes.

I then spent time working on some interesting brands in the UK drinks market, such as Sailor Jerry and Hendricks Gin and my own co-creation Monkey Shoulder Whisky. What was interesting (or perhaps ‘authentic’) about these brands was that they were positioned as an antidote to life in the bubble. The world of the London cocktail bar and mixologist bore little relevance to what people were drinking in the ‘real world’.  In fact, new ideas in the bubble were instantly devalued as soon as their ‘newness’ wore off, and as I began to ‘deep hang out’ in the bars of various towns and cities in the UK, the views of the bubble were largely irrelevant to the so-called regions.

Starting a brand outside of the bubble required new ways of working – lead by an innovations manager at Grants who has since gone on togreater things but who was ruthless in looking for ways to stay one step ahead – and new ways of branding.

We now face the same problem with our money.  The world outside of the City has been largely excluded from the debate about how money should be produced and used as a result we have created a ‘bubble’ from which we must now venture forth into the unknown of the ‘real economy’.   Bankers are the mixologists of money – creating ever more expensive cocktails of heady liquors and flavours which only the rich and well connected can access but which leave even them as distinct hangover.  By the time such products make it to the supermarkets of our retail banks they have not only lost their freshness and value – they are almost completely alien to the world which the retail customer lives within.

So now the essay question which is being asked in various circles – sociological, political and economic – how will the world of money outside of the bubble lead the recovery and how can we balance the relative importance of what happens inside the bubble of the City with what happens in the real economy?

Answers on a postcard gratefully received. : )

A Mad Men moment on the Hammersmith and City Line

Nothing beats seeing a tangible outcome of a piece of research. It also gives me something to explain to my children just what and why I do all day chatting to people about their life, what they buy, their mobile phone, their money, whatever really... It doesn't seem to be work as they know it from school and perhaps they are right but at least now I can point to a piece of advertising and show how it derives directly from those conversations onto a poster in Hammersmith tube station.

 

Check out www.mflow.com for the best way to discover and buy music.   

 

Welcome to the new politics - comparethemeerkat.com

Is the Lib-Dem surge really down to Nice Nick’s TV manner or is there a brand dynamic playing out behind the choice?

The format of the ITV broadcast, with its simplistic game show/supermarket colour scheme, shouting MC was certainly more supermarket sweep than parliamentary debate. But there was a deeper brand effect in the very equal yet empty presentation of the brand choice ‘on the shelf’. I felt like I was being asked to ‘compare the politi-kat’ rather than engage in issues and as such began to make decisions based not on my allegiance to any particular brand but on a calculation of risk and reward similar to that observed when people shop for insurance on the real internet comparison sites.

In past elections we have had the challenger brand (New Labour 1997) who becomes the confident brand leader (Labour next two terms) versus the weak ‘challenger’ who made the mistake of believing the loss of trust was fixed by going back to its roots and core vote. All very Virgin/Branson vs. BA.

Now consumers of politics – or shopper/voters – are faced with two brands whose trust is shot to hell and who are both experiencing something of a crisis of authenticity and identity which is familiar to many conventionally structured brands in the first decade of the 21st century. Conventional messaging – be it stage managed stomps or familiar attack posters – is dead in the water. We switched off to that type of persuasion long ago. In fact, you might argue that such tactics only have the effect of reinforcing the "compare the polikat" effect which is benefiting the Lib-dems – when faced with a choice of three things which seem to function in broadly the same way (or which you aren’t prepared to risk betting the farm on) you will go for the middle choice – not the most expensive (socialist promises/increased spending) and not the cheapest/offering to save you money (conservative austerity/cuts) but somewhere in between.

Perhaps it is a function of the politics of fear (Brown selling fear of Conservatives, who are in turn selling fear of Gordon) that we are looking for a safe choice insurance policy – one which the Lib dems have found themselves serendipitously able to capitalize upon. Perhaps, this election and potential hung parliament will therefore not be a function of dirty politics, negative campaiging or an outdated electoral system, but simply the outcome of making politics a function of consumer choice?

Share your music taste and your guilty pleasures on mflow

Well, it seems 10000 people can't be wrong.  With hardly a marketing big gun needing to be fired mflow is really taking off - all down to succinct creative, clever PR and media packaging. Shows what you can do when you listen out for what culture is telling you.

I have 50 invites to give away - just go to www.mflow.com and enter the code FREELUNCH.

I am hoping that they will soon start a flow called 'guilty pleasures' where everyone can recommend anonymously the tracks that they listen to but don't always admit to - whether you are an indie fanatic with a penchant for girls aloud or punk lover with an ABBA collection, the research says you are not alone. We all have guilty pleasures in our playlists and now you can earn free music for owning up to them!

Maximize or optimize?

Paul Mason at Newsnight has been asking what will bring about the recovery in the UK, saving the current system or building a new ‘post-industrial’ system. Zopa was used as an example of what Philip Blond calls ‘de-centralized capital’ or the ‘re-localised economy’. More interesting for me (aside from the cheerleading for my one and only shareholding….) is the challenge to the idea that philosophy of maximizing, be it efficiency, profit or growth is the only strategy for business success. What Paul called ‘a bunch of Hippies in West Wales’ would assert that optimizing for your environment and your values is the more sustainable strategy and they cited strategies for survival in nature which utilize this approach.

But this is more than financial engineering, it is also about decentralizing the political economy too. Not through the creation of more quangos and institutions, or perhaps even a new bubble forming in the so-called "third sector", but through the creation of new and more sustainable networks of individuals who can do much more than just create a new way of borrowing and investing money (although of course that is a good start). The problem is that just as in banks there is a significant and powerful vested interest in the pyramid-like structures of power which organize both our financial and political capital – propped up by their own forms of bail out for whether it be unions or non-doms.

Perhaps something which Paul missed in his commentary was the implicit challenge to the idea of competition and self interest as the maxims for success which in turn will generate the wider social goods which our society arguably needs to survive. It doesn’t take a genius to recognize that this model has its limitations but as yet there is relatively little being created as a cogent alternative. Giles at Zopa used the word ‘collaborative’ to describe the zopa market – but the important thing to note is that this is not some form of Soviet collective setting prices for the greater good, but a collaboration in which everyone is equal in their ability to influence the market and set prices because price is not a function of some competitively driven index but a function of individual decision on how much is ‘enough’. It something that needs more study, but my theory would be that as a zopa lender I have an ‘interest’ in being competitive versus banks (which in the current climate is relatively easy) and also an interest in creating a sustainable and affordable (by borrowers) return on my money.

Perhaps it is timely that the Spectator was handing out free copies of Adam Smith’s Invisible Hand this week!

Music as currency: Mflow, Foucault and the nature of consumer ‘value’.

Just in case you are thinking that all my ranting on about gifts, currency and flow is just another cultural researcher with bucket load of theory, here is a plug for someone who had the courage to listen and turn a theory into something real –

www.mflow.com. It launches on 15/4/10 but is available in beta to invites and codes via Facebook and lot of other funky social media stuff.

The underlying product benefit of mflow is simple. It rewards users who pass on recommendations of music they have bought to their friends which they in turn buy for themselves – with 20% of the purchase price as a credit to buy more music.

The rational response to this would be to talk about the value this represents – 5 recommendations taken up = 1 free song, 5 recommendations of an album take up by your followers = 1 free album, you get the picture. However, this ‘equation’ has a problem which is that it fails to address the reason why we already share and recommend music in the first place, an insight which has become mflow’s strapline; "music’s better shared".

The next response might be to talk about this as a revolution in buying music. Again, this draws from the idea of consumerism as somehow progressing towards a better life, throwing out the old and in with the new. Again this is the opposite of what why we buy music legally rather than download it. We buy it because we want to keep it and value it as a thing – music is a form of memory and to some people their whole story. We want the content of our music to create new ideas but we don’t need a revolution in music to do something we are already doing. The research identified that illegal downloading of music was much more a function of feeling disconnected and fluid in society – i.e. a problem of liquid modernity not necessarily the rampant criminality of ‘youf’.  Freeloading happens because the music no longer represented something of value, rather than because of a desire to somehow get valuable music for ‘free’. Music is only as valuable in economic terms as the social and cultural capital it creates. When the airwaves and TV channels are saturated with new music – new music itself loses its currency and becomes vulnerable to being ‘used’ for free because it is perceived to be being given away without obligation to ‘buy’ it.

So like my favourite scene from Mad Men, mflow is not about the future of music, or some evolution or progression from the past, but is something which taps into the contingent reality of the way we use and value music in everyday life. Brands sometimes unconsciously play with different philosophies – presenting the world from an Hegelian, Nietzschean, Marxist, etc perspective without necessarily grasping the implications of those positions and how they inform or motivate the consumer practice which ultimately they seek to promote. This prompted an old colleague of mine from the dim and distant past to write a tongue in cheek book about how different philosophers would approach marketing (playing on the vogue for brands to have a ‘philosophy’ which more often than not generated some gnomic phrase which only the marketing director understood and made the sales guys reach for their blackberry).

Mflow’s relationship with culture is there one of trying to understand the genealogy of music, and accommodating the accidents, ambiguities and discontinuities in what music ‘is’ in everyday cultural praxis – which you might call a Foucaultian brand strategy if I didn’t know that would get me posted to Pseuds corner by one or two of my more cynical readers.... : )

As such they ‘get’ music and their chief marketer is a true example of what Grant McCraken would call a Chief Culture Officer.  Although he would hate me for saying it!

 

Local liquid money? –the new Stroud pound, demurrage and ‘gift economy’.

It has been a while between posts, in the main because I have been grappling with the very real problem of creating a completely new form of financial product which promotes investment for the mainstream without conforming to the conventions of the investment ‘market’ of the City. However, the new Stroud pound was profiled by the BBC (here) but for me the report missed out the most important point which is that for the first time in the UK the currency will be subject to ‘demurrage’. Essentially it is negative inflation (-3% per 6 months) which requires stamps to be purchased on 1st April (3p per pound) to pay for the costs of running the currency and encourage its usage. Any currency without a stamp on that date will no longer be accepted as tender.

The pounds also cannot be exchanged for sterling – they have to be ‘spent’ and circulate in the local community.

While I have posted before about the benefits of such an initiative in the local community and the perception of money that is created, this example does begin to sound not so much as an alternative ‘money’, but rather the promotion of a form of gift exchange with a built in depreciation to pay for the creation of the gifts themselves. Each transaction is no longer an end in itself – the objective agreement of the value of a good in terms of a price between two individuals – but rather the beginning of a series of transactions within the community which, I would guess, establishes both social as well as economic relations and ‘capital’. A gift is not something to be hoarded and taken out of circulation but rather something to be passed on, like the well known examples of kula shells and potlatch ceremonies with Mauss’s own essay (and the excellent book "The Gift: how the creative spirit transforms the world"  by Lewis Hyde)

The store of value which is created by this currency is therefore in the social relations created by its usage. The Stroud pounds will come to represent the value of exchange between people who come to know one another rather than the anonymous exchange of the supermarket check-out. As such it aims to do more than some whiat I perceive to be slightly contradictory messages about ‘local consumption’ – there being no real guarantee that the participating businesses are truly local in their sourcing and environmental credentials.  Instead, the Stroud pound represents a form of capitalism which thrives from the creation of community rather than anonymous competition. The surplus therefore which creates this momentum and encourages the flow is therefore in the intangible social capital which these transactions represent – the hidden obligations and reciprocations upon which a local town survives and thrives.

So perhaps rather than the surplus being allocated to a local charity, which is admirable but merely replaces a function which can be carried out by sterling, the money should be used to create and promote further collaboration and collective enterprise which aims at enriching the social life of Stroud and transforming the nature of social relations between the individual and the collective identity which the town encompasses?

That Richmond or death moment

Yet again, Mad Men wades in where UK television fears to tread, lifting the lid on the fictions of consumption and the process of creation that lies behind any brand’s myth. This time Draper was the cynic, executing what the client ‘wanted’ while Peggy felt creatively challenged by the stereotype they were creating. "You are not an artist, Peggy – you solve problems" was his cutting one liner.  However this off the peg approach ultimately back fired as the copy of the original became a tokenistic parody of itself, with the additional irony that in carrying out his not so macho impression of her female performance in turn implicitly "outed" the secretive Sal to his sexually unsatisfied wife! 

In the UK, it seems we leave such meaning for the stage to pursue (probably because angst doesn’t focus group terribly well amongst those it is implicitly criticizing?) where last week I was witness to the first use of ‘semiotician’ in a West End play; the modern take on Moliere’s Misanthrope which grapples with the problem of the ‘authentic’ writer in a world where truth is what you can make out of it. Ms. Knightley was fantastic as the shallow image of herself (of course being a local girl made good I have to be supportive) while Lewis was left grasping for a dramatic anchor for his angry young man eventually lost in a world where public form and private bitchiness are the ultimate proof of superior social value. Ultimately he became some sort of Daily Mail reading conservative (with a small ‘c’) setting out an escapist bourgeois fantasy in suburbia which was cruelly dismissed by Knightley as merely swapping a life of being a commodity for one where she is bourgeois property –albeit the very place of her ‘real’ birth!

Watching the play reminded me of the cringing irony of watching "The Hours" in Richmond cinema, surrounded by fellow SW Londoners, while Virginia Wolff rebuffs her husband’s desperate entreaty to choose between ‘Richmond or death’ – "I choose death". Cue every person in the room experiencing a reflexive perception evidenced only by a ripple of nervous laughter.

Perhaps that is why the satire feels different and lands different punches in the post modern world? Our world of brands and advertising has been an ‘ironic joke’ for a long time now – for fear of analyzing too closely what lies beneath we laugh it all off. Even our politics has become a similar performance of protest and counter protest – "all sound and fury signifying nothing". I found myself having sympathy for Knightley’s character because she self consciously lives in the "real economy" of image and commodity and trades herself for the illusion of individuality, while I found myself unable to connect with the anachronistic Alceste for his nostalgic hankering after a social world long fossilized in its semi detached museums. Museums which for Knightley meant the complete loss of self – itself a sort of death. But then maybe it is all Magritte to me.