“Loss aversion” – Understand what it means in order to rebrand successfully

I play soccer at least once a week in a 30+ league. While mentally I feel like an 18 year-old out on the pitch, my body reminds me that the “studs on my cleats” have been permanently worn down. I don’t run or turn as fast as I used to.

old soccer cleats

But one thing that hasn’t changed over the years is that feeling I get when being down by a goal (or more).

It’s like someone has taken something very personal away from me, and I’ll fight until the bitter end to get it back. I’ll sprint (it looks like I’m running in slow motion) after the ball, defend, and take shots up until the last second; doing everything in my power to help get our team to tie the game.

It turns out I’m not alone. From what we understand about our brain, we’re driven to fight harder to recoup what we’ve lost than to try to gain something in the first place. This is loss aversion.

“Loss aversion” and rebranding

An interview with NPR’s Shankar Vedantam about the theory loss aversion got me thinking about what this might mean for marketing professionals, specifically those trying to push forward change in an organization’s image.

Rebranding, specifically a visual and verbal brand identity changes (i.e. logo, icon, tagline), impacts an entire organization: departments, products, services, people. You name it, they are affected.

Groups that have to change their existing visual and verbal sub-brand identities to fit that of the new corporate one, will likely have immediate push-back. Why? Because it’s like someone has scored a goal on them – now they will fight to get back what they’ve lost; to at least even the score.

It doesn’t matter if the change will actually support their business objectives. Data and strategic insights be damned! Losing your identity is an emotional thing, just like losing a soccer game.

It’s the theory of loss aversion at work.

Turning “loss aversion” into a tool to build rebranding support

What if we use the theory of loss aversion to our advantage?

If you are leading a rebranding effort (assuming you are doing a rebrand for strategic reasons and not just for a “refresh.”) do your homework. Have a clear sense of how the business objectives and challenges the company is facing relates to the individual groups whose sub-brand identities are being altered. Then, look for a common “enemy” or “challenge” that the individual groups can jointly get behind – identify the losses and use it as a rallying cry so that all of the individual groups work as a team.

A common enemy could be:

  • a competitor that’s eaten up your market share;
  • economic shifts that have caused sales to drop; or
  • a new product or service another company is launching aimed at your target audience.

Sure, it’s easier said than done. However, you have to look for opportunities to bring people together rather than have them hunker down in their silos. Even a team of soccer all-stars can’t win a game if each of the 11 players works independently.

Do you have any examples of organizations finding a “common enemy” to focus on during a major re-brand? Please share.

3 things cities can teach businesses

By 2030, an unprecedented 60 percent of the world’s population, or 5 billion people, will be living in cities.

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McKinsey & Company’s new report, “How to make a great city,” notes that urban areas around the world are at a crossroads, with their leaders needing to make strategic decisions that will impact their city’s and people’s long-term well being.

City leaders who 1) achieve smart growth, 2) do more with less and 3) win support for change put their cities in a position to improve and become great. So what can the heads of the more than 27.9 million small businesses in the US learn from city leaders in order to build great businesses?

Achieve smart growth: Smart growth identifies and nurtures the very best opportunities for growth.”

Part of a business’ SWOT analysis looks at opportunities that a firm can capitalize on. While the opportunities include variables beyond a firm’s control, creating the right environment within an organization to take advantage of a break when it’s at hand can be the difference between jumping ahead of the game (even creating the game), or playing catch up. Google’s 20% time encourages staff to follow up on ideas that don’t fall under a person’s typical scope of work. Leaders that create an environment that values people looking into maverick ideas as part of their day-to-day workload, position the company to better see new chances for growth and adding value to customers.

Several years ago Roni and Ken Di Lullo noticed their dog squint during a visit to a park which led them to wonder whether they could do something about it. The result: “Doggles” – the first of its kind company that makes goggles for dogs. From starting out by modifying sports goggles for her dog, to reaching out to eyeware manufactures to build prototypes for dogs, to quitting her job to focus 100% on the business, the Di Lullo’s have made the most out of their idea. By creating and delivering a product that pet-owners appreciate, they’ve carved out a niche for themselves, reaching $3 million in revenue in 2012.

Do more with less: “Great cities secure all revenues due.”

Cities that don’t effective collect taxes leave revenue on the table and run the risk of not being able to meet the needs of their citizens. Similarly, businesses that don’t manage customer/client relationships effectively run the risk of over-delivering and not getting paid for it.

Since all clients have limited resources, they want to make their dollars stretch and that often means that they will ask their service providers (advertising agencies, PR firms, consultants, etc.) to go above and beyond the original scope of the agreed upon plan. In many cases, this is fine if both parties are on the same page. However, business leaders must identify projects and customers that will be a good fit for the company, ensuring on the B2B side that there’s limited project scope creep with clients. Otherwise, the service provider can suffer from people being stretched to thin, other clients feeling neglected and team morale sinking.

Win support for change: Successful city leaders build a high-performing team of civil servants, create a working environment where all employees are accountable for their actions.”

Like all great cities, a company’s strength stems from its people. Business leaders need to identify and put the right people in the right places so that they can thrive, and in turn, build and sustain a healthy company.

Start with culture. Shawn Parr, the Guvner & CEO of innovation and design consultancy Bulldog Drummond, explains in the Fast Company article Culture eats strategy for lunch, that culture is the “balanced blend of human psychology, attitudes, actions, and beliefs that combined create either pleasure or pain, serious momentum or miserable stagnation.” Look first for the people who will fit the culture of the organization and avoiding the “expert” just because s/he is the expert. By finding people who fit the culture of the company, there’s likely a better chance to build a high performing collaborative team focused on the same objectives.

Businesses that can learn from great cities will be on their way to smart and sustainable growth, and potentially, greatness too.

Your brand needs a “belief framework”

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Author and marketer Seth Godin defines brand as the “set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision of one product or service over another.”

These expectations result from direct and indirect experiences that current and prospective customers, members or fans have with a company, organization, individual or idea.

So how do you put a connected framework around a brand to begin to create and deliver positive experiences that deliver a sense of value to people, and have them wanting more?

Patrick Hanlon, author of “Primal Branding,” proposes that organizations must clearly identify 7 assets that are the essence of a brand belief system:

  1. Creation storyAnswers the question where you came from.  This lays the foundation for why people should care about you. Every organization has one. It can and should be crafted and shared with employees, customers and prospects so that they get a sense of the organization’s roots. Examples of brands with compelling creation stories include Coca-Cola, Facebook, and FC Barcelona.
  2. CreedAnswers what you want the person to believe in. It’s a mission statement or tagline that your audience can easily understand and embrace. Examples include, “Just do it” or “Soup is good food” or “Think different”.
  3. IconsAnswers the question how a person can recognize you in such a busy world. Icon’s are not only logos, but also can include uniforms (think of your favorite sports team) and designs like the shape of a VW bug.
  4. RitualsAnswer the question how people can interact with you and the community in a unique way. Consider what the NFL has done to Monday and Thursday nights. The NFL brand has created must-watch events during the fall and winter, where two nights a week (not to mention Sundays) people sit in front of the TV, or pull out their tablet/smartphone and watch a live football game.
  5. Pagans/non-believersAnswers the question of who doesn’t like you. Just like a superhero needs a supervillain, brands also have their “enemies” – and this is good as it helps you draw a line in the sand. Examples include Coke vs. Pepsi, Eagles vs. Cowboys, the Republicans vs. the Democrats. By identifying non-believers, you are likely better able to define/understand what you stand for.
  6. Sacred wordsLike rituals, these are special words and phrases that only those who “belong” know. Starbucks has it’s own language for ordering (check out the Huffington Post article, “The Most Obnoxious Starbucks Drink Orders” for a laugh). Universities too have a long history of “sacred words” – Seattle Sounders soccer fans all know the songs and chants that are becoming a part of the team’s tradition.
  7. LeaderAnswers the question of who people should follow. These can be the founder or CEO, or a strong person within the organization that is able to bring people together and create a sense of purpose and unity. Consider Richard Branson, Bill Gates, or the late, Steve Jobs.

Once identified, you need to actively manage and communicate the 7 brand belief assets through the channels that make the most sense for your organization and audiences.

Examples for communicating your brand belief framework include:

  • Using your website to tell the story of where you came from (video, text, old images, etc.);
  • Building a tagline and/or key brand words into all of the digital and print materials you develop and ensuring spokespeople incorporate this creed into their presentations;
  • Incorporating colors and key images throughout digital marketing efforts in order for people to immediately recognize the brand, without even having to read text;
  • Capitalizing on the Christmas holidays and delivering messages that tie your product/service directly into the holiday, like Stella Artois did in its 2012 holiday commercials;
  • Creating videos that demonstrate exactly who you are and who you are not so that it’s clear who the pagans are (remember the Mac v PC commercials);
  • Creating a webpage like the University of Georgia has where fans can listen to and learn your “battle hymn” and “fight song” and participate in the game-day experience; and
  • Having your leader use Twitter or a blog to share her/his vision and personal perspective like Bill Marriott’s “Marriott on the move” blog.

So, does your brand have a belief system? Are you actively managing the seven assets?

Take the time to understand the belief framework you have to work with. Build it out so you can better market your brand and build long lasting relationships with customers and members, and transform them into believers.

What comes first: the content or the design?

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Unlike the circular debate about which comes first, the chicken or the egg, the “which comes first, content or design” question has a clear answer:

NEITHER!

If you’re in marketing, communication or advertising, you’ve likely been on the receiving end of one or more of the following statements/questions:

  • “I need a brochure by the end of the week.”
  • “We need to create a new webpage for tomorrow.”
  • “Can you make an ad?”

If the statement is followed by something like, “Just start designing something and then we’ll give you the content later,” or “We can’t give you the content until we know what it’s going to look like,” just STOP!

That’s unless you’re ready to spend hours of your life going back and forth to deliver something that will likely disappoint you and your colleagues, and miss the mark with your target audience.

So where do you start if it’s not with crafting text or finding great imagery?

You begin by answering these four foundation-level questions before discussing any design or even messaging:

  1. Why you are designing something?
  2. Who needs to engage with message?
  3. What people should do or feel once they engage with the message?
  4. When and where (location, not platform or channel) people will experience what you are crafting?

With these answers, you can craft the basic message that you want to convey – I’m not talking great copywriting at this point; just defining in simplest terms what you want people to understand.

With the basic message identified, begin the conversation about the medium(s)/channel(s) that it will be delivered on.

You can now determine if you need something short and punchy for an ad on a search engine that people might see while researching. Or, maybe you realize that you need to provide more utility through a series of blog posts so you can begin to pull in new prospects. Whatever the medium or channel, the discussion on what you need to say and what it will look like is much easier when starting from a solid foundation, a foundation that is shared by the people you are working with.

Put a strong copywriter and creative director or designer together who both understand the answers to the four questions above, and you have the ingredients in place to deliver solid, and even amazing results.

The reality is, this process often has to take place in a matter of hours because of deadlines. But, it’s a process that can definitely make the final deliverable more effective, and at the same time, help you keep a little more sane.

What do you think? Share your perspective.