Why truth is the leading driver of customer attraction and retention in the new transparent world.

In the 1950’s and 60’s, people drooled over flashy magazine spreads for the new Chrysler Superfin 5000, rushed to their neighbourhood dealership, bought one and then got decapitated by the razor-edged steel dashboard.

They’d watch TV ads featuring Fred Flintstone recommending Winston cigarettes and keep smoking until their doctor diagnosed lung cancer.

Other deceits were less harmful but still taught the emerging post-war middle classes to beware of brands bearing gifts: Brut-33 didn’t make you more manly, Meadow Lea didn’t guarantee loving children and Miracle Whip was just pressurised cream in a can.

Even in the 80’s and 90’s exaggeration, manipulation and downright lying was just part of good old fashioned western-style capitalism. Sellers convinced themselves all was fair in love, war and business and Buyers understood you had to take everything a brand told you with a pinch of salt (“Delicious, high-sodium, good-for-the-heart Snibbo salt!”).

Sure, you could moan to your friends about your latest brand betrayal, but advertisers knew that word of mouth was way slower than TV and radio. And hey, if customer churn increased, no problem – just whack another ad campaign on air and greet the new customers.

Two major shifts in society have conspired to turn that business convention into a very dangerous practice in 2018. One, consumers are now wise to the ways of marketing and branding. In mature free market economies like the USA, Europe and Australia, we have now lived through the full gamut of advertising sophistication: from distressed mothers holding up stained shirts, to catchy jingles, wacky comedy, animated brand icons, PR stunts, celebrity endorsement and branded events.

Show me any ad technique today and I’ll show you an ordinary household shopper who can see right through it. And consumers aren’t just exposing the advertiser’s methods, we’re openly ridiculing them; for now we see them not as entertaining distractions, but as feeble attempts to win our favour. A kind of mass suck up. It now comes across as childish and somewhat insulting.

Even emerging capitalist economies are racing through these stages quickly. India, Thailand, Indonesia, Philippines are all displaying mature marketing strategies only a decade or two after getting mainstream commercial television.

But by far the biggest factor in the breakdown of the age-old co-dependency between manipulative brands and gullible consumers, is the internet. Today you can share your real-world experience of a brand instantly and globally. Not just to other shoppers like you, but to media outlets who can magnify your digital presence a million-fold. And we’re all enjoying doing it. Outing companies who exaggerate claims, manipulate emotions or just outright lie to us has become a game that millions of consumers love playing. It’s a kind commercial revenge (just Google “burger vs advertising” if you need further proof).

2017 gave us a classic example of this power shift. United Airlines spends tens of millions of dollars annually running ad campaigns showing sexy flight attendants, cool pilots and ever-smiling passengers. They tell us that our satisfaction is their primary goal. Then they prove that’s all 1960’s hogwash by dragging a bloodied doctor off an overbooked flight. The video of that disgraceful event was seen by more people than all of United’s TV ads that year.

The anger was heightened by the fact that United had for years openly promised Americans one thing and delivered another. What they said was their motive in order to win our custom was clearly not really their motive.

A point made even clearer when their CEO initially tried to explain why such events were necessary, given the state of the US airline industry and how hard it is to make a profit these days. Nobody was interested in his explanation and he duly returned to the media a few days later apologising unconditionally.

Conversely, Southwest Airlines is a terrific example of a company that happily shares with their customers the truth about what they can offer and what they can’t. Their business model is based on extreme cost efficiency. But they don’t hide that from their customer. They admit it. They say: “You only get peanuts on our flights, not meals.” and “We don’t transfer your bags from one flight to another. You have to check them in again.”

While other airlines are scrabbling to get every passenger they can with promises of smiling happy staff and trouble-free travel – benefits they know they can’t always guarantee – Southwest will happily tell you what kind of passenger they don’t want: anyone who wants a glass of wine, the latest entertainment screens, and so on.

What helps is their wonderfully nutty company style. They don’t take themselves too seriously and invite their passengers to do the same. They recruit staff with lively personalities and then let them use it in their jobs, allowing flight attendants to make funny comments when doing cabin announcements. They were one of the first airlines to have fun with the pre-flight safety routine. They enjoy their truth.

Note that I didn’t say “nutty brand image”. In today’s transparent business world, there is no longer any separation of company behaviour and brand image. There is only your company, full fat stop.

The result is that Southwest Airlines has long been, and continues to be, one of the most profitable airlines in the USA. Repeat custom is high. Retention of quality staff is high. Cost-per-acquisition is low. Brand value is up.

Yeah okay but Mike, surely in an era when Trump is elected President and fake news abounds, you’re not telling me that people now buy from companies cos they tell the truth?

No, that’s not my take-out. The message is this: companies that know their true motive for being in business and share that openly with the world, are driven to not only deliver to that truth, but to innovate to it. They are obligated by their candor to prove their authentic promise, and so improve existing products, invent new ones, improve service delivery, create new markets, advance entire industries.

  • Southwest Airlines proved you can be a budget airline and still make great profits and be loved by your customer. By telling the truth.
  • Zappos Shoes have proved that you can be a lean online-only company and still lead the industry in customer service. By telling the truth.
  • Whole Foods Markets have proved that you can be motivated by helping humans live longer, healthier lives first and profit second, and still beat the big supermarket chains in profit and share growth. By telling the truth.

The authentic motive a company’s founders have for being in business attracts smart, likeminded staff to their cause and motivates them to create innovative products and service design that prove they are sincere.

Large companies are finding it hard to rediscover their true purpose and align their business behaviour to it. This is fantastic news for startups and small businesses. You can take your original motive for being in business, use it to stimulate product and service innovation, and not only attract customers over from those bigger companies, but make it awfully difficult for those companies to win them back; thus creating a business that can grow from charming underdog to serious threat in a matter of years.

Mike Edmonds is Founder and Chairman of Meerkats The Creative Business Solutions Company in Perth. Meerkats has been named Agency Of The Year three times and won awards globally for its creativity and strategic thinking. For more ways our new transparent world has affected business growth and what owners can do about it, particularly owners of small businesses and startups, read Mike’s book Truth.Growth.Repeat. a jargon-free guide to achieving long-term growth by putting your personal why is at the core of everything you do. Available at leading bookstores, airports and online.