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Welcome To The Human Era - Lippincott
Welcome To The Human Era - Lippincott
Human Era
The new model for building trusted connections,
and what brands need to do about it
Sense Perspective
Welcome to the Human Era
Today,
marketing
challenges
run
deeper.
It is a tough world for marketers. We have moved away from
the time when leadership commanded respect, stature
mattered and big business were always the economic leaders.
Instead, trust in institutions has plummeted. Company life
cycles have been compressed. Connected consumers quickly
expose institutions for what they really are.
Introduction
3
Welcome to the Human Era
Contents
Contents
4
Welcome to the Human Era
01
THE END OF THE
INSTITUTIONAL ERA
6
02
WHAT MAKES A
HUMAN ERA COMPANY?
10
03
THE HUMAN ERA INDEX:
WHICH BRANDS STAND OUT?
21
Contents
5
Welcome to the Human Era
01
T
he end of the Institutional Era
Derived in some part by the dominant in the new model comes horizontally. Reflecting
military-industrial complex of the day, this shift, successful companies have begun to
command and control hierarchies were resemble organic systems or networks more
the hallmark of the Industrial Era companies. closely than machines. The most admired brands
Complex and rigid institutions, they were and organizations have become flatter and less
designed to function with machine-like efficiency. centralized. They listen to the world around them
and are open to social influence. They use data to
Over time, they became so densely layered and organize their capabilities around an individual’s
complex as to be impenetrable to outside opinion needs, rather than the other way around.
or influence, creating a rift between their actions
and consumers’ expectations. The end result was In short, the most successful companies have
a loss of trust that had significantly impacted the recognized that “fortress” behavior is no longer
long-term sustainable growth of many previously an effective approach to interacting with
successful companies. customers or communities. Why?
80%
Source: Gallup
“Confidence in Institutions 72% The military
Study” top 2 box results
65%
58%
42% Organized religion
51% 37% Medical system
42%
31% Public schools
31%
24% Newspapers
8% Congress
1970s 2015
Y N Y N Y N Y N
Do you send emails Do you make it Do you make Do you have policies
that have “do not difficult for your money in ways that that make it hard for
reply” addresses? customers to reach your customers frontline employees
a real person? don’t know about? to “make it right”?
Y N Y N Y N Y N
Do you measure Do you send out Do you prevent Do you resist letting
your call center reps communications unedited ratings your leaders speak
on how fast they get with a paragraph and comments unscripted and show
off the phone? in six-point type at from customers their true personality?
the bottom? on your website?
Y N Y N Y N Y N
Do you proactively Are you Do you follow your Is your customer
steer customers away uncomfortable process to the letter, research done behind
from the product saying sorry? or will you allow an “closed doors,” or do
best for them and exception to create you ask questions
toward the one more a happy customer and get feedback in
profitable for you? and advocate? open forums?
If you answered yes to most of these questions, At the core of the Human Era is the realization
you have a ways to go to enter the Human Era. that the expectation of meaningful connection —
But moving the needle on just a few can make the search for trust — extends to organizations
a big difference. and brands as well as to people. And as we’ll see,
those who hope to be successful must be willing
Meaningful human connections can’t be to hold up their side of the bargain.
formed in one direction — they require the
other party to reciprocate, to level with us. The Human Era
When they do, the connections then become The rise of the Human Era has precipitated
a foundation for something that we intuitively a fundamental shift in the value equation,
understand and value highly: trust. In all aspects which has profound implications for brands
of our lives, we strive to create more of these and organizations. Value creation has become
connections — to gain more friends and business not only more intimate and personalized, but
partners, and to gain knowledge and comfort. more cooperative and inclusive.
Technology has exponentially expanded our
ability to make connections on a vast scale.
The result is that individuals can, and expect to,
have powerful networks of connections that are
direct and dynamic.
02
What makes a
Human Era company?
I
nstitutions have always used their Characteristics of Human Era stories
communications to declare. To preach. • They demonstrate listening.
To sell. Yet humans communicate to • They convey a sense of always helping.
connect with one another. To learn and to • They focus on collaboration.
teach. To ask a question. To apologize. To share • They are localized and personal.
joy. They communicate by writing. By talking. • They appeal to citizens as well as users.
By exchanging a grin or a furtive glance. With a • They simplify to convey transparency.
gesture or a sound. • They are expressed in acts, not ads.
In the Human Era, brands must communicate in Breaking through and making an authentic
the same way. They must invite people to connect connection is a tall order, and few brands actually
with them. Institutions have historically kept get beyond the messaging. Why? Because real
ironfisted control over what they communicate, connection needs to be firmly anchored in the
and it shows. They communicate to further their culture of the business.
agenda, on their timeline, in ways that are often
glossy, airbrushed and convenient. Pivoting a big institution to create more open
and trusted connections in the daily customer
Human communications aren’t as tidy. They experience requires hard work — establishing
involve a willingness to talk about the hard stuff, organizational values and commitments that
the ugly stuff. Acknowledge a mistake you are truly customer driven, but also driving them
made and what you’re doing to make it better. toward daily leadership decision-making and
They imply being available to talk — at 2 a.m. if employee behaviors.
someone desperately needs you right then.
Examining our data, several traits appear
These new demands may appear at first as just among the leaders. (See page 24 for the list of
another burden to be borne by already stretched leaders across industries.) Not every company
marketing professionals and budgets. In fact, exhibits every characteristic equally, but when
there is great value to be unlocked by identifying taken together a picture of a truly Human Era
and activating valuable connections, inside and company emerges.
outside the company. Done right, Human Era
communications can result in mutual benefit for Attributes of Human Era brands
the individual, the community and the brand. • They have deep customer empathy.
• They talk and act like people.
Individual consumers find value through loyalty • They are open, real and even flawed.
from their connection to brands they believe in. • They aren’t boring.
The community derives value through diverse • They care intensely about the little things.
people sharing mutual knowledge and the • They empower individuals to be the brand.
power of connection to amplify accomplishments
and achieve large-scale goals. Brands generate
value where decisions need to happen — at the
point of direct contact with their customers —
even when that interaction includes no products
or services at all.
From management to the front line, each of British retailer Tesco makes each leader work
these companies goes beyond paying lip service in the stores — stacking shelves and checking
to being “customer driven.” They have cultures out shoppers — for several days per year. For
in which employees deeply immerse themselves these companies, customer understanding goes
in customers’ lives. beyond learning based on sample sizes and
crosstabs; it is true immersion in the lives of real
people and how they think and feel.
What
Whatmakes
makesaaHuman
HumanEra
EraExperience?
company?
13
Welcome to the Human Era
Connecting with a Human Era company should Somehow in most institutions, the shorthand
feel more like an eye-to-eye conversation than a jargon that employees adopt to get work done
one-way corporate communication. efficiently has leaked out to customers. Most
airlines still talk about “equipment” change
Human Era companies shed the jargon, lose the (it’s a plane, right?), “EFC time” (expect further
corporate pronouncement and have a dialogue clearance), “all-call” and “cross-check.” Banks
like real people do. If you follow the Starbucks lose their customers in talk of effective APR, APY
Twitter feed, you’ll see an authentic and and DDAs, and cell carriers speak of 4G, 5G and
interactive style that feels very personal. When LTE. No industry is worse than the PPO and FSA
Katy Perry tweeted “Today I quit my beloved of the health-care business. It’s no wonder these
coffee & make the switch to vitamin B complex institutions are untrusted.
:( Don’t worry @starbucks it’s not forever,”
Starbucks playfully hit right back with “It’s ok. The opportunity to talk like a person holds true as
Today I made the switch from California Gurls to much internally as externally. Target, for example,
Hold It Against Me. Don’t worry, it isn’t forever. ;-)” calls its customers “guests” and employees “team
members,” choosing the simple, direct terms over
HR jargon.
I messed up.
I owe everyone
an explanation. Reed Hastings, Netflix
cofounder and CEO, on his
lack of communication
about Qwikster. Qwikster
would be shelved soon after
its launch in response to
customer backlash.
Gone are the days when you had to be On a bigger scale, Netflix openly admitted
perfect. “Human Era” companies admit error, the error of its ways in rebranding its mailer
show customers where they truly stand, and DVD service to Qwikster with a very public
The short-lived Qwikster logo let you see behind the curtain. They are taking apology, and it saw its brand reputation recover
transparency to a new level. with surprising speed just a year later. After
Southwest’s accident in 2011 when a fuselage
For example, USAA displays customer ratings broke open in the air, the company grounded a
and comments about real estate and mortgage large portion of its fleet for inspections before
products on its website, whether they are a 2 or being required to do so and offered regular
a 5 out of 5. And the comments section on their public updates. Human Era companies are willing
website shows everything customers have to to be honest about where they stand and about
say, raw and unvarnished. Apple does the same, their mistakes.
publishing customer ratings on its products.
Any human relationship is anchored in candor
There isn’t a company at the top of the list that and honesty, and relationships with companies
makes money from hidden fees or locked-in should be no different.
contracts. Not surprisingly, prepaid leader Metro
PCS is perceived as the most human company in
the cell carrier business, almost certainly because
nothing says “untrustworthy institution” like a
20-page, small-print-packed, two-year contract.
It is tempting to ascribe leadership solely to “the Many of these things are extra, surprising and
big innovation” or “the structural competitive unanticipated. Many don’t have immediate
advantage.” But the leaders on our list show that returns other than helping, but they also don’t
little things can matter a great deal as well. cost much. Some are innovations; some are
the courage to do what matters; and some are
Amazon occasionally allows you to keep just good, plain human thoughtfulness, such as
low-priced products that you want to return. Umpqua branches having dog bowls in them to
Disney’s magic in the park is not just from the make pet owners welcome. These efforts and
most exciting ride, but that it pays just as much gestures don’t just come out of a research project
attention to understanding that garbage cans or focus group, but an ingrained daily habit of
should be not farther than 25 paces apart. And listening and responding. There is also a virtuous,
Disney park gates open five minutes earlier than cyclical aspect to these little gestures. They form
expected, each morning, to create a little added daily reminders that what matters is serving
delight for waiting customers. Southwest adds people well, and they define a standard of care
a smile and friendly welcome to its low-cost in actions and not just words. Employees notice
model. Target doesn’t just win with its breadth them and learn from them, and they serve as
of low-priced designer items, but it also places inspiration to spawn more of such behaviors.
a simple label on private-label brand Up & Up’s
packaging, helping you to easily identify the
competitor product to which it compares.
The final key characteristic of human brands is To enable this, many of these companies are also
their willingness to truly trust, empower and investing more in training and often benefits.
celebrate their people. They throw out the script Many of our leaders — Starbucks, In-N-Out
and entrust employees to deliver. Burger, Disney and Umpqua Bank, to name a
few — boast unique employee-training facilities.
And many of the companies on the leader list also
give the front line better rewards. For example,
Wegmans’ compensation cost of 15–17 percent
Each member of the floor staff or genius bar of revenues is significantly higher than the
at Apple is uniquely themselves. Trader Joe’s supermarket average, an expense more than
made up for in the customer loyalty and basket
employees make each store their own by size these employees can deliver. The same holds
making their own signs. true for In-N-Out Burger and Starbucks.
03
B
eyond the rise of the “human brand The Lippincott Brand Study
campaign,” the real question is which Comprising 30,000 customers across four
company truly delivers a more human continents and over 1,000 brands, the Lippincott
experience — one that is honest, Brand Study quantifies customers’ experiences
caring and real; and one where customers and the general market’s perceptions of brands.
11%
are more likely to trust the brand, forgive it
when something goes wrong and create real We determined the Human Era Index from an
relationships? Or one that does none of that? equal weighting of three character traits that
indicate whether a brand connects on a more
average distance ahead To learn more about which companies really human level than its counterparts. Each brand is
of the Dow of public stand out as Human Era leaders, we analyzed the rated by its customers on three dimensions:
companies on the Human
Era leadership list per year Lippincott Brand Study database across multiple • Do you truly care for and about
over the last four years industries. Exhibit 1 shows us the leaders in a your customers?
new metric we created — the Human Era Index — • Are you trustworthy, real and authentic?
50%
an assessment of the extent to which brands • Is your personality vital and unique?
exhibit three human characteristics: authenticity,
empathy and vitality. The composite score is calculated on a range
of 1–10, with a high of 9.4 and a low of 1.0.
increase in value creation Perhaps not surprisingly, the highest-scoring The average brand in the U.S. has a score of 6.
by Human Era leadership companies do indeed outperform financially.
companies over that period
The public companies on the leadership list
outdistanced the Dow by an average of 11
percent per year over the last four years, implying
50 percent more value creation over that period.
the highest-scoring
companies do
indeed outperform
financially.
AIRLINE
Industry Leader (tie):
GROCERY
Industry Leader:
RETAIL
Industry Leader:
RETAIL
Learnings from other leaders
With the second-highest score among 50 nice to customers, and then gives them the
retailers, Nordstrom remains strong as it training, tools, resources and support to help
continues to deliver its exceptional customer them achieve this for customers. Importantly, it
service. While Nordstrom’s famous return policy empowers them to act to best help the customer,
can be imitated by online retailers, recreating starting with their now-famous Employee
its level of outstanding customer service is more Handbook: “Rule #1: Use best judgment in all
challenging. Nordstrom hires employees to be situations. There will be no additional rules.”
CONSUMER ELECTRONICS
Industry Leader:
“You can design and create, and build the most wonderful place
in the world. But it takes people to make the dream a reality.”
Walt Disney
Perhaps surprisingly, Netflix was near the top of people really need. Perhaps most important is its
the media list. The company shows us that being legendary internal culture, including nine shared
a more human brand can be about changing values that empower employees and guide
course and making and admitting mistakes. behaviors — including honesty in being quick to
Netflix now has more subscribers than HBO, an admit mistakes. Its user-generated, quirky movie
amazing comeback after the Qwikster launch and tags (e.g., “Sentimental dysfunctional-family
pricing misstep of 2011 where the company lost dramas”) also infuse a personality that members
800,000 subscribers. Netflix has always been appreciate. Netflix shows that being human is
very real, never lacking the courage to invent a indeed not about being perfect.
new way, humbly admit mistakes or pioneer what
RESTAURANTS
Industry Leader:
RESTAURANTS
Learnings from other leaders
Starbucks does extremely well, third out of more Chick-Fil-A ranked second in the restaurant
than 50 restaurants, showing that scale does not category. A family-run business that still remains
necessarily prevent you from making a human closed on Sundays, it scores the highest on our
connection. Starbucks is a standard deviation “caring” dimension among restaurants. Like
above other restaurants on the human index, In-N-Out Burger, Chick-Fil-A puts an emphasis on
staying connected in a personal way while serving quality and integrity, from hand-battered chicken
over a billion cups of coffee a year. to fresh-squeezed lemonade. While customers
crave the taste, and likely find personality in its
advertising of cows proclaiming “Eat Mor Chikin,”
they are also delighted by the friendliness and
service they encounter. Customers submit their
stories on the company website, mentioning
kindnesses such as employees providing table
service, giving them their meals “on the house”
when a customer is having a bad day, and
generally treating customers with respect and
good cheer.
FINANCIAL SERVICES
Industry Leader:
FINANCIAL SERVICES
Learnings from other leaders
Portland-based Umpqua Bank is rated the customer experience, it always strives to feel
top commercial bank, with a score of 7.4. The like a community bank by making sure its
company has surely parted with expectations customers never feel like a number, and also
as to how a bank connects with its customers. to create interest in a “boring” category.
Umpqua fashions itself as a retailer rather than Their “stores” are beautifully designed to reflect
a financial services company, with its store-like the local environment and create a welcoming,
design and “training missions” for employees no-pressure setting. Umpqua is not old-fashioned
similar to other retail and hospitality leaders like though; it pushes ahead with integrating
Ritz-Carlton. Like many other “human” brands, technology and even has special Innovation Lab
Umpqua creates a culture that encourages its branches. Each store also has a direct telephone
employees to take charge of their actions, but to the CEO, keeping management connected
also to admit mistakes and learn from them. In its and accountable.
Conclusion
30
Welcome to the Human Era
MEET THE AUTHOR
Contributors Design
Liz Greene, Partner, Strategy Jenifer Lehker
Daniel Johnston, Partner, Design Partner, Design
Amit Sabharwal, Partner, Strategy
David Stein, Senior Partner, Strategy Bethany Lesko
Heather Stern, Chief Marketing and Talent Officer Partner, Design
Rui Maekawa
Design Director
lippincott.com