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  Howard Schultz's brilliant, inspiring memo is all about matching Aspirational Inside with Aspirational Outside. If Starbucks does something that helps the bottom line in the short term but over the long term undermines the way customers feel about the experience of buying coffee in a Starbucks store, drinking it or being seen with a Starbucks coffee cup, the extraordinary success of the Starbucks brand will come undone. This includes not only the smell of the coffee and the look of the stores, but also the coffee having been harvested, packaged and distributed in an environmentally sound, socially responsible way.

  Starbucks's ability to offer customers fast, good, cheap at the premium price, plus an X-factor of feeling good for, in and about themselves, has recently been extended to sales of specially chosen books and music CDs. Starbucks has achieved great success with exclusive retailing windows for CDs by artists such as Bob Dylan and Alanis Morissette, including outselling all other retail outlets on the late Ray Charles's final CD, Genius Loves Company. In 2007 Starbucks formed its own music label,Hear Music, in collaboration with the Concord Music Group, and signed Paul McCartney as the label's first artist. The same year it gave a huge boost to number one on The New York Times hardcover bestseller list to Ishmael Beah's memoir of being conscripted as a child soldier in Africa, A Long Way Gone: Memoirs of a Boy Soldier. 4

  Note that the crucial thing is not the retailing power of Starbucks. It is how the company uses its hard-earned power to achieve true synergy, choosing musicians and books that fit key customer demographics and resonate with socially responsible themes such as economic justice for coffee growers in the developing world.

  I've already referred to what I call Aspirational Outside, the conspicuous consumption of something flash and expensive – such as a ridiculously high-priced cup of Starbucks coffee – so other people know you have money, good taste or good values. Buying something to show off to yourself is Aspirational Inside. I almost spent a serious amount of money on such a purchase in San Francisco. I passed a really funky jewellery store with bracelets in the window that looked like black stone. I went inside for a closer look and found out they were rubber. When I asked how much, I nearly died when the sales assistant told me several thousand US dollars.

  'For bloody rubber ?' I said without realising how rude I sounded.

  The assistant was taken aback because I swore, but was also concerned that I didn't know the 'story' behind these bracelets.

  'They are solid gold,' she said.

  'What?' I asked, now very confused.

  'They are solid gold bracelets, covered in rubber. You buy them not to show off to others, but to make yourself feel content. You can enjoy something unique without having to tell the world about it.'

  All I could think was, wow! It was such a cool idea, I was tempted to buy one. I could have easily bought a steel bracelet covered in rubber and no one would know the difference. No one except me. This is Aspirational Inside.

  As a little thought experiment I am wondering how I would react if someone offered to sell me an imitation Ferrari (a brand I am deeply passionate about) at a fraction of the price. Suppose that this were legal and that it was truly a great imitation, duplicating the materials and even the performance, at least insofar as a driver of my abilities could tell. Or suppose a Ferrari Formula One driver said it actually drove like a Ferrari. And it cost one-fifth of the price.

  I would never want a 'Ferrari' that wasn't truly a product of the Ferrari tradition. It just would not be the same.And you would be right in guessing I could come up with half a dozen justifications for the decision to spend half a million dollars on a motor vehicle, which many would say defies logic. It does not though, at least not in the mind of a Ferrari owner. I want a Ferrari and I want a real one.Why? Because that is the kind of person I am!

  Now I know some people think that it is insane to spend the amount of money on a car that it would cost to buy a Ferrari. And a Ferrari owner may criticise someone for spending $4 on a bottle of Fiji Water. So while I would spend half a million dollars on a car, I was critical of my wife for spending $1500 on a handbag, and have been critical of my sister for spending $60 on hand cream from L'Occitane.

  You may have said the following things yourself at times:

  'A car is just a car. As long as it gets you from A to B.'

  'You can't tell the difference between a real Gucci bag and a fake one. You are getting conned.'

  'You would have to be stupid to spend $4 on a bottle of water when you can get the same stuff for free from the tap.'

  However, as we gain a deeper understanding of the human mind and how we make decisions, it actually becomes inaccurate to say that such decisions are illogical or irrational. They are not. They are in fact very 'normal' ways to behave. The story we tell ourselves about the products we buy and other such decisions we make is so deep to the human experience of the world that 'because it feels good' is actually the only rational explanation for why we do anything. If it is Aspirational Inside, the story only has to appeal to me, and who cares what anyone else thinks. If it is Aspirational Outside, then what is important is the story being presented to other people.

  The point is that what we think is rarely what drives our behaviours. It is what we feel that matters. I started this conversation by introducing you to the four fundamentals of the total ownership experience, before explaining in some detail why I deliberately used the word 'feel' when describing what they were. Let's go deeper into each of these elements now. Please note that even though I have separated them here for ease of understanding, the four fundamentals are inextricably linked – especially the story. The story of a product and why someone would buy it is intertwined through each of the other three fundamentals, as well as being the basis for all PR and marketing conducted by a company (remembering of course that this includes you).

  STORY

  No one, least of all my wife, wants to admit that we all shop for things that help tell a good story about us. Through the things we buy and the experience of owning and using them, we tell that story to ourselves and others. This is the foundation of the ownership experience and the most powerful driver of value and premium pricing.

  Nothing makes us more loyal and less price conscious than a product or service that integrates into our favoured story about ourselves. You know what I mean. The story that we are popular, hip, savvy, enlightened, successful, socially and environmentally conscious – you fill in the blank – and that's why we're wearing the labels we wear, driving the cars we drive, and so on. The products and services we buy say that we are exactly who we want to be. That we are in with the incrowd. That we are worthy of respect, admiration or envy.

  You can rail against it. But whether the purchase is a savethe- whales t-shirt from a conservation society or a Ferrari, we all make purchases for the stories they tell about us. And it's a good thing, too, as far as I'm concerned. It's creating value and progress on all fronts, including social and environmental causes.

  Your job is to find what your story is. The story of your brand, the story of your company, the story of your product, and scream it from the rooftops – or whisper it through the streets, which is usually the more powerful of the two. Notice that I did not say to find out what story the market wants and to yell that story from the rooftops. A story needs to be real, authentic and original.

  Let me give you some examples of the stories we tell.

  I have a friend who works for a company with an extremely powerful reputation in the market. She hates it. When asked to describe the workplace, she uses words like toxic, disorganised, small-minded and the least friendly place she has ever worked. Yet she stays. I asked her why. Her response was: because of how it will look on her résumé. She knows that when she moves on to another organisation there is a very good chance that her next prospective employer will think, 'Wow, you worked at ABC company. You must be good.'

  Another very close friend of mine recently purchased a BMW, despite saying he never would.
He used to say, 'Everyone has a BMW,' which is why he never would. When queried about why he bought a BMW, he told me a story that I could tell he had already relayed a few times before. Probably most of all to himself.

  'You bought a BMW.What happened? I thought "everyone" had a Beemer, and therefore you would never buy one.'

  'I know, I know. I went to buy a new car and my next-door neighbour made me promise not to buy anything until I had at least test-driven a BMW. I agreed. After test-driving a Mercedes, Audi, Lexus and Porsche, I begrudgingly headed to the BMW dealer and took the new 335i coupe for a drive. Omigosh! Dude, it left the rest seriously for dead. I now know why the BMW is such a popular car. Because it is better than all the others.'

  Now he is not a globally recognised judge of a good car, so don't take this as the hard-line truth, but this experience had made it okay for him to buy a BMW. If you probe a little deeper, as I did, you learn why he could justify spending more than $100,000 on a car as well.

  'So what makes this car so good?' I asked.

  'The first thing I noticed is that it was a new shape and no one else has one. Secondly the seats are so comfortable. It is a sports car with a luxury interior. I really liked the Porsche but found it a battle to drive. I had to really think about it. This car was just so comfortable. I know I will be less stressed driving this car.' He went on, barely taking a breath: 'It is perfectly understated. It is not as in your face as driving a Porsche, but also not as standard-looking as the different models of the Audi, which all look the same. People will know this is an expensive car without thinking the person driving it is a wanker.

  'It goes zero to a hundred kilometres per hour in 5.5 seconds and handles like it is on rails. It is BMW's first twin turbo. Instead of using one large turbo that creates what is known as "turbo lag", it uses two smaller turbos – one at low revs and one at high revs to make it more responsive.'

  He was getting visibly excited as he described this technology. It is worth noting here that if you popped the bonnet he would not know where the turbos were, and when I questioned him later he could not accurately describe how a turbo works in a motor vehicle.

  He had not finished: 'Despite being obscenely fast, it has ATC and ABS as well, making it very safe.'

  'What is ATC?' I asked, clearly not in the know.

  'Automatic traction control,' he replied. 'It is almost impossible to lose it in this baby.'

  I could go on, but I think you get the point. This was his story, and he capped it off by saying, 'This is my kind of car. And you know what? I work so hard, I deserve it.'

  Whether you realise it or not, you do exactly the same thing when you make any kind of decision. It may not be as elaborate as this example, but the story is there somewhere.

  So the question becomes, how do we construct a better story so we can build more powerful brands? What makes up the story? All good stories have three things:

  detail

  characterisation

  language.

  Using the BMW example, consider the following elements of a good story and remember that this is what you need to do for your brand, too.

  Detail: My friend knew the BMW 335i went from zero to 100 kilometres per hour in 5.5 seconds. He referred specifically to its competitors: Audi,Mercedes, Porsche, and so on. Plus ATC and ABS.

  Characterisation: Statements like 'no one else has on?' are evidence of the identity and character he associates with the car. 'My kind of car' and 'I deserve it' personalise the purchase, a process that is clinched by calling the piece of metal a 'baby'.

  Language: This bit cracks me up. If you knew this guy, you'd think it was ridiculous for him to talk about 'twin turbo?' and 'turbo lag'. Less obvious, but more powerful perhaps, was when he described the car as 'perfectly understated'. I did not dare ask my friend for fear of ruining his story and potentially creating some buyer remorse, but I'd bet the sales agent used that exact language. This is an example of how the story is not separate from, say, the service experience.

  Let's look at some more flipstars as we go into a little more depth on these three elements.

  Detail

  Detail is anything specific you can reference to say why a product is better, more suited or whatever. Companies use statistics, competitive benchmarking, surveys, information about the manufacturing process or the history of the company to distinguish their offerings from the competition.

  For a recent trip to Las Vegas, I asked a travel agent about the best place to stay. I had thought the Bellagio (based on the movie Ocean's Eleven, which is an extreme example of characterisation). However, in an attempt to convince me to stay at Wynns she said that since MGM Grand had taken over the Bellagio, staff-to-room ratios had dropped to 1.5 staff members per room. And that Wynns, which is owned by Steve Wynn, who previously developed both the Bellagio and the Mirage casino hotels on the Las Vegas Strip before selling them to MGM Grand, has a ratio of three staff per room. This detail is a powerful piece in the story that will build Wynn's competitive advantage on The Strip.

  Or what about American Airlines, whose December 2006 American Way in-flight magazine began with a letter from the editor noting the following specific details:

  120 million passengers

  1.3 billion miles

  1.5 million flights

  100 million bags

  every 22 seconds an American Airlines or American Eagle flight takes off somewhere around the world

  250 cities in 40 countries

  95 million calls received

  450 million visits to AA.com

  100 aircraft.

  I am not sure this is the kind of detail I would use to build my story. Sure American Airlines are building a story of a global, regular, experienced airline. As a very frequent flier I think, 'too many people, just a seat number and no one really caring about me'. But hey, that's just me.

  One more example of detail: Sirius satellite radio tell their story as made up from the following elements:

  over 130 channels

  69 channels of commercial-free music

  available 200 miles offshore

  60 channels of sport, news, talk and entertainment.

  Characterisation

  Characterisation is what brings a story to life. It does not actually have to be about a specific person, but it must convey human attributes. This is difficult to do, often expensive, but extremely powerful.

  In the past the most popular form of characterisation was celebrity endorsement. Although still very powerful, many would suggest that this technique is losing its effectiveness. Let me share with you some examples of characterisation that I like.

  Skins Compression Garments are highly styled athletic clothing made with 'engineered gradient compression' to improve circulation, minimise soreness from exertion and injury and speed recovery. Skins are marketed with the constant statement that, 'We don't pay sports stars to wear our products'. This small piece of information is extremely powerful because star athletes and well-known teams in Australia and elsewhere – including all the major Australian rugby league teams and players from Arsenal, Chelsea and Manchester United in British football – have been seen wearing Skins clothing while training and competing. This is a great story, but it will need to keep evolving.

  In the US, the Under Armour sports clothing line, which includes but is not limited to compression garments, has become a huge success with paid endorsements from major sports teams. If Under Armour matches Skins in technical features, style and price, and both brands are fast, good and cheap, celebrity endorsement could well make the difference in the competition between the two.

  There is much debate about whether organisations need a charismatic leader who is in the public eye. I am decided. Yes! It does not need to be the CEO. It could be the founder.

  The founder could even be dead but have an identity or an image that people can associate with.

  A good local example would be McGrath Real Estate, which has been phenomenally successful
in the Sydney market. I will talk more about McGrath later, but for now let it be said that the growth of the McGrath brand has been built on the public profile of its media-savvy founder, John McGrath.

  I would like to avoid using another fashion example here, and am feeling that you may be bored with my shopping preferences, but it is only fair that I include this example. I have criticised my wife for spending too much money on a handbag; I should at least fess up to doing so on suits.

  Many years ago I was looking at the suits in a Hugo Boss boutique. It is important to note that this was in my first year in business and I could hardly afford a suit, let alone a suit from Hugo Boss.

  After looking at a few suits in their entry-level range which were about $800 a pop, I had almost built a powerful enough story in my mind that I needed to buy one of these suits. My story was that if I wanted to be a player, I had to look like a player.

  Then the sales assistant said, 'But you really shouldn't buy any suit until you have seen this range here.' It was the over $1500 range. The sales assistant pulled a $1700 suit from the rack that, except for being a different shade of black, looked pretty much like the $800 suit I was trying on for size. Neither of them actually looked that good on me. They were a bad fit for my body shape, but I convinced myself, with a lot of assistance from the man serving me, that tailoring could fix this.

  I took a good hard look at the two jackets side by side, like a non-mechanical person looking under the bonnet of a car. I couldn't see or feel any difference, and I said so.

  'What's the difference?' I asked. 'Show me.'

  The sales assistant said, 'This suit has higher quality fabric and stitching and it will "sit" on you better. It will feel a part of you.' (Are you picking up the use of both characterisation and language?) 'What does that mean? You can't be serious. It is more than double the price.'

  The sales assistant repeated himself, more or less word for word, and I said, 'Doesn't anyone in the store have a better explanation than that?' At that point, the sales assistant went to get help from the manager. He needed reinforcements, because I had the bit between my teeth.