Consumers are constantly forming deep, personal connections with brands—they love their iPhones, hate their banks, and are in a codependent relationship with their favorite coffee shops. Psychologists agree that in social interactions, we make two types of judgments about others: what the person's intentions are and how capable he or she is of carrying them out. Simply put, people judge other people on the basis of warmth and competence. And according to The Human Brand: How We Relate to People, Products, and Companies, by Chris Malone and Susan T. Fiske, they judge brands in much the same way. Associate Editor Maria Minsker caught up with Malone to discuss how brand perception and judgment can influence customer behavior.
CRM: How did you notice a connection between social perception and brand perception?
Chris Malone: Back in 2010, some interesting things started happening. Some trusted and respected brands were going through tremendous turmoil. BP was hurting as a result of the Gulf [of Mexico] oil spill, Toyota was going through a series of recalls, and even Tylenol was in major trouble with recalls and an FDA investigation. I was just starting to think about how angry customers were getting at these brands when I read a paper by Susan Fiske called "Warmth and Competence: Universal Dimensions of Social Cognition." It was then that I had an "aha!" moment. I thought, I bet that companies and brands are evaluated by customers using the same parameters—warmth, which has to do with how honest and trustworthy someone is, and competence, or someone's general abilities.
CRM: Warmth and competence make sense in the context of people, but how can a brand exhibit these characteristics?
Malone: It turns out that we are wired to interact with everything around us as if it were human, and whether we are aware of it or not, a lot of our perceptions happen subconsciously. This means that even though we don't necessarily have direct contact with the people at Coca-Cola, we know that inanimate bottle is made by a company, and at that company are people. It also turns out that the more we know about the intentions and abilities of the people at that company, the more likely we are to become loyal to it.
CRM: In your book, you highlight companies like Honest Tea and Zappos as brands that are getting it right. What are these companies doing that others aren't?
Malone: Honest Tea is a very purpose-driven organization. They decided the world needed beverages that were more honest, transparent, and without artificial ingredients. Even [when] they ran into an issue with Coca-Cola, which didn't want them to print anything about high-fructose corn syrup on their bottle, they stood up for their cause, and customers loved that dedication. As for Zappos, they have a very interesting balance between technology and people. Their platform is totally based on e-commerce—you don't get to walk into a store and try the shoes on. But, unlike most online retailers, they've got their 800 number on every page, and they encourage customers to call. Those people on the other end are their customer loyalty team, not their customer service team, and they're there to balance out the deficit of warmth you might feel through the Web site alone.
CRM: Many of the companies you praise are quite small. Can large companies be competent while maintaining warmth, or does their size inherently doom them?
Malone: Size doesn't inherently doom them, but it makes things more difficult, certainly. Our research has shown the way big banks, oil companies, and telecom firms have all developed policies and practices that are fundamentally at odds with the spontaneous triggers of human trust and loyalty. Large companies have to make sure that they're not isolating themselves from their customers, because bigger corporations tend to feel distant and out of touch [with] their customers. If they can somehow get past this, there's no reason they can't be perceived as warm as well.
CRM: What can the companies that are making these mistakes do to win back customers' trust? Is there a common thread for success that companies can follow?
Malone: The Internet, especially social media, is really rattling the way companies do business. Customers now have near-instantaneous power to hold companies and brands accountable for their words and actions. That power will only continue to grow in the years ahead. The companies that will succeed are the ones that have the customer's best interest[s] in mind. These are the companies that stand for something other than their own profit, be that a commitment to healthier, transparent produce or a commitment to delivering excellent customer service.