Introduction

In August 2011 there was widespread rioting and looting in some English cities. Many of us sat glued to the television as the police struggled to control the chaos. Shopkeepers saw their businesses go up in flames. Millions of pounds worth of public and private property was destroyed. The looters were targeting plasma screen television sets, sportswear and mobile phones. It seems that if you can walk down the high street and take anything, you take what you want not what you need.

Understanding consumption

The starting point for creating a great customer experience is not looking at what people ‘need’, because most people’s needs are met. We actually need very little. We operate in a world of wants, not needs. The question is, why do people want one thing over another? To build an appealing customer experience we need to start by understanding the mechanics of consumption.

The object value system

The French philosopher Jean Baudrillard explored the concepts of consumerism and value in detail, concluding that there are four sources of value for an object:

• Use value is the function or utility of an object – a pencil draws, a refrigerator cools
• Exchange value is the economic or market value – a pig is worth two sheep, a pen is worth two pounds
• Symbolic value is the value conferred on an object as a symbol of a relationship between two people – a gift, a wedding ring, or a graduation present
• Sign value is the value of the object in relation to other similar objects, and what it says about the owner in a social context – a Mont Blanc pen signifies different values, status and taste to a Bic

Baudrillard argued that consumption is driven by the sign value of the object – what it says about the consumer – and this determines the exchange value – what it’s worth.¹ Consumption is driven not by any kind of objective need, but as a means to convey our beliefs, values and self-image. An official report into the London riots identified ‘the desire for high-profile brands’² as a significant factor. They were looting for sign value.

Connoisseurship

If this sign value is what drives consumption, then it should follow that the more visible or obvious the signs are the better, but we see almost exactly the opposite in practice. Some people take great delight in owning ‘Q cars’ which are enormously powerful but look ordinary. Anyone with money can buy a diamond encrusted Rolex to display their wealth, but it takes a true connoisseur to recognise a vintage ‘Double-Red’ Sea Dweller ($50,000+). As William Whyte puts it in The Organisation Man, ‘the more exquisite distinctions are, the more important they become’.³

This doesn’t just apply to luxury brands. Every social group however small has such cues, and any purchase that has a sign value is a form of consumption. My father, who has a deep appreciation for engineering, has a house stuffed full of vintage clocks. He certainly isn’t trying to impress anyone with them, in fact, unless you go to his house, you’ll never know he has them. This is perhaps the most important point about sign value. The brands we buy and the products we own tell a story, and the audience for that story is most often ourselves. It is our personal beliefs and values that drive our consumption, but where do these come from and why do they matter so much?

The gyroscope and the radar

One explanation for the source of our beliefs and values is offered by David Reisman, whose hugely influential book The Lonely Crowd was published in 1961. The author explores the relationship between social character and society, proposing three distinct types.

In a tradition-directed society, conformity reflects an individual’s ‘age grade, clan or caste’⁴ and important relationships are ‘controlled by careful and rigid etiquette’⁵ and rituals that have existed for centuries.

In an inner-directed society, individuals are not simply controlled by behavioural conformity, but by an inner ‘gyroscope’⁶ set early in their lives by parents and authorities that keeps them on track. An inner-directed individual can choose to pursue far more courses than the tradition-directed one – wealth, knowledge, power or fame among others – since they are directed by their character rather than restricted by the traditions of the day.

The other-directed individual is guided by their contemporaries, through ‘exceptional sensitivity to the actions and wishes of others’.⁷ Their chief aim is to be liked by their social group. Their ‘control equipment, instead of being like a gyroscope, is like a radar’.⁸

To an extent, every individual is a blend of these three character types – tradition-directed, inner-directed and other-directed – and each has a role to play in establishing our values and beliefs. Resolving the tension between inner and other direction remains a huge source of value to the anxious modern consumer. We want at once to be individuals but also to belong to a group. Few things would ruin a party for one of my female friends like wearing the same dress as another guest, even though they would want to be seen as similarly fashionable.

To me, Reisman’s most interesting observation is that as society has become increasingly governed by consumption there has been a shift towards other-directedness.⁹ As consumer culture has developed we have become more adept at reading and using this sign value to communicate our identities. The tutor is now no longer the parents, but the peer group and the media, who direct us.

Reisman’s observations were eerily prescient. He explains how the other-directed man suffers an ‘inability to know what he wants, whilst being pre-occupied with what he likes’¹⁰ and that his heroes are the captains of the consumer industries ‘actors, artists, entertainers’ whose consumption habits take centre stage: ‘the heroes dress, food, women and recreation are emphasised’.¹¹ This is exactly the state of consumer culture today, as one glance down the shelves at the newsagent will confirm.

The other-directed business

It is not only consumers who have shifted towards other-directedness and ended up struggling: businesses have too. The dominant obsession with market intelligence, competitor analysis and customer research is all about developing a more powerful radar, and the endless hand-wringing and strategising over social media betrays the kind of anxieties that are most often found in those eager for the approval of others.

By contrast, we most admire those businesses with a strong inner direction – a clear set of values, integrity and sense of purpose – and tend to lionise celebrity CEOs who bring that ethos to life. Telecoms companies, banks, insurance providers, airlines and energy suppliers find themselves tyrannised by price comparison websites because there is simply no other way of choosing between them. Customers churn between suppliers to find the best deal, not because we are all extremely price sensitive, but because there is nothing to be loyal to.

I hold Ryanair in far higher esteem than many other carriers because at least I don’t need to check their mission statement to know what they are about: safety, the lowest possible prices, and arriving on time. It may not be the most luxurious experience flying with them, but we know what we are getting ourselves into. I’ve flown extensively for work and leisure and the lack of differentiation between most carriers is criminal. Rather than building a more powerful radar, what these businesses should be doing is getting their gyroscope spinning. Our beliefs and values play a decisive role in our behaviour as customers, and those experiences that reinforce our self-image appeal to us on a deeper level. The rest of this chapter explores how this insight can be put into practice.

Customer profiling #1 – brand, function and price

To create an offering that appeals to the customer, we need to know as much about that customer as possible, and so most businesses try to capture this information in customer profiles of one sort or another. There is another reason for this – there is often more than one distinctive customer group, so we need to know not just how customers are similar but also how they are different. Baudrillard’s object value system provides a good place to start. Get a piece of paper and a pen and answer these questions:

• Use value – Do all our customers want a product that performs the same function? What are these functions?
• Exchange value – Do all our customers have the same budget or willingness to pay? What are these price points?
• Sign value – Do all our customers want to say the same things about themselves? What exactly is the message?

Being able to accurately answer these questions alone will stand you head and shoulders above most, and will give you a solid starting point for understanding how your customers differ at the highest level.

Consider what the brand should say about the customer

If sign value is what drives consumption, then we need to think carefully about what the brand, product or service says about the consumer. Write down answers to the following questions:

1. Does your customer see themselves as more inner- or other-directed?
2. Does the brand reflect membership of a social group or community?
3. To what extent does your intended customer want to emphasise their individuality?
4. Think of the product as an avatar for the customer – what does it say about them?
5. Who do the signs tell the story to – themselves, other people or both?
6. Who should be able to read these signs?
7. Think about connoisseurship – how subtle do the signs need to be?
8. Does the brand confer a particular status on the customer?
9. Does the customer have a unique set of values that they are expressing through the brand, or are other rationales more important?
10. Finally, if your brand is the answer, what is the question? (This will help capture what you think is most important.)

Think carefully before adding features

A key take out from this chapter is that not much of our consumer behaviour relates to basic functionality or ‘use value’. This is exactly the opposite of how many businesses think, and so they try to increase a product or service’s appeal by adding features. This is the kiss of death, especially to technology products: the more features there are the more expensive it gets to add new ones, the more it costs to maintain and, usually, the slower the performance. At the same time it becomes more difficult to use.

There is no better example than the remote control for my television. When people pick it up they just stare at it in horror. The functions you actually want, like turning it on, choosing a channel, changing the volume or controlling the DVD player, are hidden in plain sight among the abundance of useless buttons that nobody ever asked for in the first place. I am not saying that the features and the price point are not important (there are plenty of other books that cover this, so I won’t) and, of course, most products find they need a functional minimum to be competitive, but they are just two of the rationales we use; they are not the only ones.

Resolve the tension between individuality and conformity

There is a community dimension to any great brand, and there is an individual one. Since the sign value of a product is often about belonging to a particular group, cultivating a brand community can be especially powerful in reinforcing the sign value. Social media makes this easier than ever. An obvious alternative is to align yourself with an existing community, which is the driving force behind most sponsorship and traditional advertising.

The other side of the coin is allowing the consumer to express their individuality. This has never been easier with modern technology. Do your customers value conformity and individuality in equal measure? Are they buying in, or expressing their individuality?

Consider your belief structures

Does your brand relate to a particular set of customer beliefs? Think about how these relate to your products and services.

Develop a personality

The inner-directed business has two appealing traits that are often sorely lacking in these modern times: sincerity and personality. We seem to live in a world where both have been sacrificed on the altar of professionalism. Whenever there is a problem with the trains around where I live, the driver is forced to read the same banal message every time: ‘We apologise for any inconvenience this may cause.’ When waiting on hold I am often greeted by a monotonous ‘your call is very important to us’ while I wait endlessly for them to answer. These sterile messages are totally void of any humanity. In a world dominated by shades of grey, adding a bit of colour can go a long way. A bit of personality might just be the difference that keeps your customers coming back.

Support rationale thinking

The most important conclusion from this chapter is that there is no such thing as rational thinking when it comes to consumer behaviour, only what Rob Walker, author of Buying In, cleverly calls rationale thinking.¹⁸ Walking down the aisle of the supermarket your inner monologue might go something like this: ‘I don’t need three of these but they are on special offer (puts in trolley) … Oh yum cookies! I’m on a diet but these ones are gluten free and I’ve had a hard day (puts in trolley) … I need some washing-up liquid … Oh look this one is more environmentally friendly (puts in trolley).’

We continuously swap between different rationales when we buy and combine them at will, so to come out on top you’ve got to consider carefully which rationales will apply to your brand and communicate them unambiguously. This is of absolute importance, because it sets the tone for the whole customer experience that follows.

Build a brand reality, not a brand image

Once you have identified what rationales apply to your business, capture them in a form that can be easily communicated both internally to staff and externally to customers, and then make absolutely sure that they are delivered upon. In my career to date I have sat through countless brand presentations where teams have set out to create a centrally controlled brand image. Most of these miss the point: you need to build a brand reality, not a brand image. Create a great customer experience, and the brand value will look after itself.

Once you have decided on your rationales, you need to commit to them and they need to permeate every single element of the experience. These rationales are the foundation of the customer experience because they set our expectations. We usually become aware of a brand before we do business with them, either through advertising, looking at a website or a referral from a friend. The best way to set yourself up to succeed is to make sure that the initial expectations that are set through marketing or branding can be delivered upon.

Summary

• Wants are a more powerful motivator than needs.
• Social groups define themselves through their consumption.
• Everything we buy reflects our values, beliefs and self-image.
• Great customer experiences help us resolve the tension between expressing our individuality and belonging to a group.
• Think about what your brand says about your customers.
• Focus on creating a brand reality rather than a brand image – this is the foundation of a great customer experience.