Winning in the Relationship Era™A New Model for Marketing Success By Doug Levy pptx

Winning in the Relationship Era
™
A New Model for Marketing Success
By Doug Levy
Published by Doug Levy at Smashwords
Copyright 2010 Doug Levy
Table of Contents
Introduction
Chapter 1: A New Era in Marketing
Chapter 2: The Brand Sustainability Map™
Chapter 3: Breakthrough Success in the Relationship Era
Chapter 4: Getting Involved
Introduction
I can still remember the day I realized marketing had changed forever. It was summer of 2004. I was
reading an article about Kryptonite, a manufacturer of bicycle locks. Kryptonite had found itself in
uncharted territory after a series of forum posts and an online video revealed how the brand’s tubular
bike locks could be opened with a simple BIC pen.
At first, the company denied the claim’s validity. But as word (and ire) spread like wildfire across the
Internet’s budding social sphere, Kryptonite soon realized it had to change its way of thinking. In a
bold move, its leaders adopted a position of transparency and open communication. Not only did
Kryptonite replace 400,000 locks, but it also took steps to create a true, open dialogue with
customers.
It didn’t take long for people to appreciate the brand’s efforts and recognize their shared values. Nor
did it take long for Kryptonite to earn back the respect of the community and its position of market
leadership.
I love the Kryptonite story. It’s one of the first examples of a company shifting conventional thinking to
meet this radically changing marketing environment.
Some of my friends and colleagues have gone through a similar shift in thinking. Over the years,
we’ve helped some of the biggest brands in the world enter and flourish in the digital space. But we
have come to realize that digital is only part of the equation. We have the opportunity to do something
bigger and more meaningful.

We asked ourselves an ambitious question: “Can we partner with our clients to transform the world of
marketing?”
The question soon became a quest, and this new approach to marketing was born—a fundamentally
different way to practice marketing that’s both extraordinarily effective and intensely meaningful.
What this book champions is a bold new direction, yes, but it’s also practical—giving marketers the
means to spend less and get more. More sales. More profit. More engaged, loyal customers and
employees. Even more benefits for society.
Winning in the Relationship Era outlines this new approach, giving business leaders a guide for
leapfrogging competitors in a dramatically different marketing environment.
Is the approach controversial? Yes. Is it a model that the next generation of successful marketers will
adopt? I think so.
After reading, I invite you to participate in the dialogue at www.relationshipera.com, and if you’re so
compelled, to join us in this movement to make marketing more profitable for everyone.
This is a time of extraordinary opportunity. Together, we can lead a momentous transformation in one
of the biggest and most powerful industries on the planet.
Winning in the Relationship Era includes four sections:
A New Era in Marketing, our perspective on the evolution of marketing
The Brand Sustainability Map™, an introduction to a better tool for assessing relationships
Breakthrough Success in the Relationship Era, five keys to victory in the emerging model
Getting Involved, an invitation to join us
Chapter 1: A New Era in Marketing
THE SHIFTS IN CONSUMER MEDIA CONSUMPTION HABITS ARE RESHAPING
THE WAYS MARKETERS CAN—AND MUST—BUILD RELATIONSHIPS WITH
CONSUMERS. MOREOVER, THE EXPANSION OF DIGITAL INTO EVERY ASPECT
OF OUR LIVES HAS CAUSED FUNDAMENTAL CHANGES IN HOW PEOPLE
INTERACT WITH BRANDS, WHAT THEY EXPECT OF BRANDS, AND THE ROLE OF
MARKETING IN THEIR LIVES.
Even as brand leaders use new tactics to accomplish their goals, most think of the practice of
marketing much as it’s been defined for decades—a way to persuade people to buy something. In
short, most marketers are applying new tactics within an old model.

Today, a new era in marketing is here, and succeeding in it requires an entirely different marketing
model.
The Product and Consumer Eras
Before introducing this new model, we first provide some context on the evolution of marketing. Until
recently, there were two eras of marketing—the Product Era and Consumer Era—and each featured
a winning marketing model that distinguished the period.
This Product Era ad details Dr. Rhodes’ Dandruff Cure and its benefits.
In the Product Era, from the early 1900s through the 1960s, the focus in business was on producing
products. During this era, marketing was about simply informing people about these products. Ads
were copy heavy, and the strongest performers did the best job of explaining why their product was
superior.
In the 1960s, marketers realized that product descriptions reached people at a logical level but failed
to connect on an emotional level. As a result, the Consumer Era was born. Whereas in the Product
Era, the thinking started with the marketer and its products, in the Consumer Era, marketers learned
that an understanding of the consumer was paramount. Marketers worked to deeply understand
consumers’ wants and needs, to reach them at a moment of utmost receptivity with a message most
likely to influence them.
Although there has been a lot of change in marketing since the Consumer Era began in the 1960s,
the change has largely been within the same model. Yes, there are now better approaches for
gathering consumer insights, more techniques and channels for getting messages out to consumers,
and a richer set of analytics tools for assessing what is working, but they’re just more sophisticated
methods for doing the same thing—persuading people to buy.
With such an intense focus on creating messages that elicit a specific action, it’s no surprise that
people feel persuaded and manipulated by marketers. In fact, the practice of marketing has become
synonymous with spin and deception.
In the Consumer Era, marketers appeared as if they were putting consumers first. There was a lot of
talk about trust and relationships, but trust in the Consumer Era was one way. Marketers persuaded
consumers to trust them only as a way to sell more products. They were using these words differently
than people typically use them in their personal lives, where trust is two-way. Successful marketers
will discard this shallow approach to trust as they employ a new model of marketing.

Changing Within a Model versus Creating a New Model
Although businesses constantly evolve, most change happens within a fundamental paradigm for an
industry. Truly transformative change, though, results from powerful thinking that brings about an
entirely new model.
“You cannot solve a problem from the same level of thinking that created the problem.”
—Albert Einstein
As explored in the previous section, there have been many changes in marketing over the past 100+
years. But how exactly do you know if it’s a new model or simply changes within an old one? To
illustrate the difference, we step away from marketing to consider two examples of companies that
embraced a different level of thinking to create a new model within their industries.
Apple
In 2001, there was a robust marketplace of MP3 players, with dozens of reputable and experienced
manufacturers actively competing to lead the industry. When Apple declared its intent to enter the
market, most scoffed, dismissing Apple’s lack of skill in building high-feature, low-cost devices.
Creating a new model in digital music players
Old model: Create devices with more functionality and lower prices
New model: Offer a simple system for enjoying digital music
But Steve Jobs decided to play a different game. He determined that the real need was not cheap,
complex devices but rather easy-to-access, legal digital music. So Apple invented a device that had
few bells and whistles—and a hefty price tag. Apple also built a music store, where people could
easily buy songs for 99 cents and transfer them to their music devices. The iPod and iTunes results
are legendary. Within a year after iTunes’ launch in April of 2003, Apple owned 92.1 percent market
share for hard-disk digital music players and 70 percent market share of all MP3 downloads. The
company had a value 4.5 times greater than in 2001.
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Apple succeeded unlike any of its rivals by
making digital music accessible and enjoyable.
Southwest Airlines
Southwest Airlines also changed its industry. When co-founders Rollin King and Herb Kelleher came
up with their business idea in the late 1960s (as legend has it, drawn on the back of a cocktail

napkin), only 15 percent of the U.S. population had flown in an airplane.
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At that time, the focus was
on constant innovation around providing the most luxurious experience to attract the flying elite.
Creating a new model in the airline industry
Old model: Cater to the flying elite
New model: Give people the freedom to fly
Kelleher and King envisioned something new—offering more people the freedom to fly. Southwest
created a lower-cost structure and made air travel less stuffy and more fun. Its advertising focused on
providing freedom, still apparent in its ads today that feature the tagline: “DING! You are now free to
move about the country.” Now, 85 percent of the U.S. population has flown on an airplane,
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and
Southwest Airlines stands out as the industry’s clear leader in customer satisfaction and profitability.
Apple and Southwest Airlines achieved breakthrough success—both financially and otherwise. While
others were evolving within their industry’s predominant model, these leaders created a new model.
Introducing the Relationship Era
While the Product Era focused on informing people about products and the Consumer Era focused on
persuading consumers to buy more, we’re witnessing the emergence of a new era—the Relationship
Era. The role of marketing in this new era is to foster sustainable relationships between brands and
people.
The following graphic shows the progression to the Relationship Era and the predominant marketing
models in each era:
Just as new ideas from Apple and Southwest Airlines disrupted the digital music player and airline
industries, we see a different way of thinking shaking up the marketing industry.
The new model of marketing—fostering sustainable relationships—represents a meaningful change
in the role of marketing. In the Consumer Era, the starting point was typically the consumer.
Marketers worked to understand the buyer and become what consumers wanted them to be. Problem
is, what consumers want the brand to be may not be what the brand authentically is. This causes a
gap between the brand’s true intentions and how the brand presents itself—a gap that can cause

mistrust with customers.
In the Relationship Era, the starting point is the brand. The brand must know its authentic self
before it can engage in sustainable relationships with people. (This is similar to other relationships in
our lives. Many would say that in a healthy adult relationship, it’s essential to know yourself and
what’s important to you before finding a good match.)
Marketers who thrive in the Relationship Era are clear on their purpose, the reason for the brand’s
existence. A clear, inspiring purpose defines what the brand or company stands for—in addition to
financials—and inspires people to not just buy its product, but to join its movement. Brands that are
clear on their purpose attract passionate supporters and create loyal customers. They accommodate
customers’ true needs rather than try to convince them that the brand is right for them. This clarity of
purpose also provides company leaders with a guiding light to make bold decisions with greater
conviction.
The winners in the Relationship Era will be those who build trust and transactions, creating
sustainable relationships with people.
A Model of Trust and Transactions
Because trust and transactions can have different meanings, we start by defining each term. The
word “transactions” refers to the amount of money a consumer spends on a particular brand relative
to what might make sense for a person to spend in that category.
Specifically, we can define “trust” as having three progressively complex components. The level of
trust in a consumer-brand relationship stems from the consumer’s perspective on the following topics:
Credibility: Does the brand deliver on its promises?
Care: Does the brand understand my needs?
Congruency: Does the brand resonate with my values?
To further explore the concept of trust and transactions, we connect back to the three eras of
marketing:
Product Era: The focus is solely on transactions.
Consumer Era: The focus is still on transactions, but the idea of trust enters the dialogue as a
way to persuade people to transact more.
Relationship Era: Trust between a brand and consumer is mutual. Trust and transactions are
seen as distinct, and both are important.

The distinction between the role of trust in the Consumer and Relationship Eras is important. In the
Consumer Era, trust was seen as a means to achieve an end, namely a consumer buying more. It’s a
manipulation.
One could certainly question whether “trust” is an appropriate word to use in the context of convincing
people to do something. The word “trust” has simply been misused in marketing, and we now use the
word to describe a concept more in keeping with the depth and importance of its true meaning.
Similarly, “relationship marketing” is a term often used to describe a technique for learning as much
as you can about people to more successfully sell them things. (Can you imagine a friend always
asking you lots of questions so he can do a better job of selling you things?!) As with the word “trust,”
we talk about “relationship” in a way that mirrors its use in common language rather than its use in
current marketing vernacular.
Whatever words are used, the shift from the Consumer Era to the Relationship Era is a fundamental
one—beyond a shift in communication, advertising CPM models, or measurement tools. It’s an
entirely new way to think about and practice marketing.
Although trust is certainly a topic of conversation in marketing today, we believe no one has brought a
precise, brand-level focus to relationships. This approach covers both the intangible dimension of
trust (including credibility, care, and congruency) and the tangible transactions that marketers need
for both short- and long-term sustainability.
Having reviewed surveys, studies, and literature such as the Edelman Trust Barometer,
ENGAGEMENTdb, Interbrand’s Best Global Brands series, and Saatchi’s Lovemarks, the trust and
transactions model described here illuminates the brand-person relationship in a new way. More
importantly, the model is matched by an actionable approach to building enduring relationships that
benefits both the brand AND the consumer.
Why Now
The old model is failing.
The traditional tools of mass marketing are clearly no longer working. Nor is using a variety of
channels with the same campaign-driven persuasion techniques. With CMO tenures now averaging
about two years, marketing leaders are under pressure to deliver results quickly. Many are spending
an exorbitant amount of money attempting to influence consumers to buy more, with less to show for
it.

It’s clear that digital has a profound impact on relationships between brands and people. It’s more
than another channel that marketers must consider when optimizing their spend. In fact, digital
channels have caused significant changes to the fundamental ways that consumers interact with
brands, their expectations of brands, and ultimately the role of marketing in today’s world.
In the past, marketers pushed messages to consumers, disrupting their TV shows and inserting
themselves into newspapers and magazines with one-way advertising. With the advent of digital
marketing in the ’90s, many marketers simply saw a new way to interrupt consumers and began
searching for the best mechanisms to barge into their online experience.
For many innovative marketers, though, digital marketing offered more than a way to interrupt an
experience. Some companies began rudimentary, but evolving, dialogues between their brands and
consumers. As a result, consumers began expecting more information, choice, and transparency
from the brands with which they interacted. What was previously not possible in the pre-digital world
was now expected by consumers—a relationship built on an active dialogue with the brand.
Most marketers, however, continued creating advertising campaigns designed to reach, persuade,
and elicit transactions through a mix of product and emotional appeal. They were trying to use the old
model of marketing from the Consumer Era within a new era—an era that calls for a fundamentally
different marketing mind-set.
In recent years, with the rapid emergence of social media and almost ubiquitous U.S. broadband
Internet adoption, relationships between consumers and brands are expanding beyond dialogue to an
“always-on” marketing ecosystem. People now interact with other potential customers, friends, and
brands within the ecosystem. And, with cell phones now serving as in-pocket mobile computers,
people have more frequent access to the ecosystem. They no longer interact with brands passively,
but instead contribute proactively and help shape a brand’s ecosystem.
It’s no longer the marketer’s role to run campaign after campaign to persuade and drive transactions.
Effective marketers now participate in and nurture an ecosystem of touch points with people, building
trust with customers that aligns with the brand values.
Following are three specific reasons why trust is more important in this new always-on marketing
ecosystem:
•
People have more choices. In earlier times, consumers were typically limited to a handful of

options at their local store. Now, the prevalence of retailers, both online and offline, and the
explosion of product choices mean that people can be more selective. Zappos, for example,
offers more than 3 million options for shoes, including at least 1,100 eco-friendly women’s
shoe options.
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•
People are more vocal about their level of trust in companies and brands, and they now
have the ability to be heard broadly. When Dave Carroll’s expensive guitar was damaged
on a United Airlines flight, he tried to get reimbursed but failed. So, he produced a video
called “United Breaks Guitars,” and posted it on YouTube, where it has been viewed more
than 6 million times. People are talking about (or, in Dave’s case, singing about) brand
preference, and others are listening. Personal recommendations are the most trusted form of
advertising.
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A customer with an opinion, positive or negative, can wield tremendous
influence.
•
People are choosing to buy from companies they trust. A recent study revealed that 91
percent of survey respondents purchased from a trusted company while 77 percent refused
to purchase from a distrusted company.
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Now more than ever, people are more focused on
trust in their buying decisions.
In this marketing environment—the Relationship Era—persuasion is less effective. Trust cannot be
used as a tool. Instead, successful marketers are fostering trust as a fundamental, essential, and
independent pillar of sustainable brand-customer relationships.
The Death of Marketing as We Know It
Business is abuzz with talk about marketing’s evolution. Yet for all the hyperbole, few are offering
more than minor adjustments to the old marketing model, many of which amount to little more than

better ways to manipulate.
Of course, marketing is changing. The change, though, is not one of tools and tactics. It’s a
fundamental shift in thinking and practice.
I often ask people what marketing is all about. At best I hear responses like “persuading people” or
“convincing people to buy things they don’t need.” At worst, I get “manipulating” or “lying.” This is the
reputation that Consumer Era marketing has given our industry.
In the epic Cold War battle of capitalism versus communism, capitalism won. But it was not a
complete victory. The institution of business has failed to win over hearts and minds. Marketing—and
business as a whole—is roundly mistrusted, and the Consumer Era has contributed to the problem.
Advertising is now a $444 billion global business built to persuade and manipulate.
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The good news? Marketing as we know it is coming to a close, and its demise is giving way to
something better.
The Birth of Something Better
Actually, “better” might be too general of a word. It’s the birth of something deeper, more profound,
and more profitable. The Consumer Era model of marketing—persuading people to buy—was built on
the idea that people must be convinced to purchase, and that failing to do so is a detriment to one
stakeholder, the investor.
The new model—fostering sustainable relationships—comes as a refreshing and rewarding change
because it benefits several stakeholders simultaneously: employees, customers, suppliers,
investors, and society.
In fact, many leading business thinkers now point to data showing companies that focus on multiple
stakeholders deliver superior results to each one.
8
Here’s how:
Employees
People are clearly at their best when working toward something bigger than themselves. When I look
at companies with a clear, inspiring purpose, I’m not surprised to see more dedicated, motivated
employees. After all, they’re not just working for a paycheck; they’re working for something they

believe in.
I’m proud to use my own company, imc², as an example. We are an amazing, eclectic bunch of
creatives, strategists, technologists, and account managers. But no matter how varied our roles,
we’re united by our purpose: to advance relationships. Many of us see our purpose as something
bigger than just marketing. We get to create, foster, and deepen relationships every day. Not just
between clients and customers, but with our vendors, partners, each other, and society as a whole.
Having the clarity of “why we do it” makes “what we do” all the more rewarding.
Customers
During the Consumer Era, marketers focused on convincing people to buy. Obviously, this tact
intones an air of superiority (e.g., brand = smart, consumer = not smart) that will inevitably turn
consumers off.
In the new model, marketers are inviting people to join in, participate with, and become part of the
brand. Customers become active partners rather than targets to be sold to. With this always-on
ecosystem between customer, brand, and peer group in constant motion, the buying comes naturally,
and typically with less advertising spend.
Suppliers
Making decisions that mutually benefit brand and supplier, in good times and bad, can have positive
effects on a brand or company’s long-term health.
One example comes to mind. I recently spoke with the CEO of a major outdoor retailer that made a
sustainable decision with its key suppliers. As sales slowed in the recent downturn, the retailer
needed fewer products from these suppliers and would have typically just cut back on purchasing. In
this case, cutting orders would have likely put the key suppliers out of business. Instead of allowing
trusted allies to go away—and risk breaking the trust of customers who rely on those products—the
retailer kept buying, warehousing the extra inventory. By protecting its suppliers, the retailer
advanced its relationship with the suppliers and ensured that it would be able to continue to offer
these products, further cementing its competitive advantage.
Investors
Business schools teach management as a zero-sum game of controlled trade-offs between
stakeholders. Managers learn to focus on employees, customers, suppliers, and society only to the
degree that it profits investors.

That thinking is now changing, and the numbers prove it out. The book Firms of Endearment studied
companies (which it calls “Firms of Endearment”) that have a clear purpose and that focus on multiple
stakeholders. During the 10-year period from 1996 to 2006, the stock of these companies
outperformed the S&P 500 by an average of 8 to 1 (see chart).
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During the latest recession, the S&P
500 fell 25 percent, while the “Firms of Endearment” only declined by an average of 12 percent.
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(Stock returns for “Firms of Endearment” vs. S&P 500 from 1996 to 2006. 10 Year Period (’96-’06))
One reason these companies fare better may be that they can spend less on advertising. When a
brand has engaged, loyal customers who believe in its purpose, it no longer has to spend precious
dollars on campaign after campaign to convince people to buy. The brand has entered into a
sustainable relationship.
Society
One of the greatest ideological shifts in our new model of marketing is that business no longer must
choose between building profits and bettering society. In the Relationship Era, focusing on both is not
just possible, but necessary. People are aligning with brands that follow their same ideals or give
them new movements to join. Brands that don’t follow a clear purpose that benefits society will
eventually lose out to those that do.
One example is Interface, makers of industrial carpet tiles. In 1994, founder and CEO Ray Anderson
committed his company to manufacturing their carpets sustainably by 2020, taking from the earth only
what can be renewed by the earth. The initiative was called Operation Zero. Since 1995, Interface
has reduced greenhouse gas emissions 82 percent in absolute tonnage. Meanwhile, sales increased
by two-thirds and profits doubled.
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Interface discovered that by focusing on bettering society, it had created a superior business model.
Profits are up, costs have actually gone down, product innovation and quality is at an all-time high,
and Interface employees are galvanized behind the goal of absolute sustainability.

By its very name, the Relationship Era suggests that marketing is no longer about simply persuading.
It’s about fostering sustainable relationships—not just with customers and investors, but with
employees, suppliers, and society as well.
The new model is more than a roadmap for winning in the Relationship Era. It truly is the birth of
something better.
Chapter 2: The Brand Sustainability Map
WE’VE INTRODUCED THE RELATIONSHIP ERA AND A DIFFERENT MODEL OF MARKETING THAT
CONSIDERS BOTH TRUST AND TRANSACTIONS TO BE CRITICAL IN BUILDING SUSTAINABLE
RELATIONSHIPS BETWEEN BRANDS AND PEOPLE. TO ASSESS AND MEASURE HOW BRANDS
FARE IN THIS NEW MODEL, WE CREATED THE BRAND SUSTAINABILITY MAP, WHICH EXPLORES
THE TERRITORY OF RELATIONSHIPS BETWEEN BRANDS AND PEOPLE.
On the map, the x-axis reflects the level of spending (or transactions) in a relationship—specifically,
the amount of money that a person spends with a given brand relative to what might make sense for
them to spend in that category. “Share of requirements” is another term used to describe this
measure.
The y-axis reflects the level of trust in a relationship, as measured by the three distinct components of
trust—credibility, care, and congruency.
A description of the Map’s four quadrants and the implications for brands follows:
•
Sustainable Relationships: People in sustainable brand relationships tend to spend money
with the brand and think so highly of it that they serve as effusive brand advocates. Several
studies demonstrate that regardless of the economic climate, brands in this quadrant typically
outperform their competitors financially.
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Because of the trust in the relationships, consumers
are more likely to forgive mistakes and stick with a brand even in tough times. Brands
committed to sustainable relationships tend to nurture these connections and focus on
continually strengthening them.
•
Emotional Relationships: Brands with emotional customer relationships have loyal

advocates but have not typically maximized the economic value of the relationship. Brands in
this quadrant may have challenges with pricing or distribution, or their product portfolio may be
too narrow. Some brands in this quadrant have expanded from a specialty subsegment of their
industry, but have not yet succeeded in reaching a broader market that would increase their
transaction levels. These brands have built a foundation of trust that could more easily propel
them to the Sustainable Relationship quadrant.
•
Reluctant Relationships: In the lower-right quadrant are brands that have relationships with
high transactions but low trust. People keep buying either because they lack choice or simply
out of habit or inertia rather than deeply held affinity for the brand. These types of relationships
have two major downsides for marketers:
Risk: These brands are particularly susceptible to competition as people may quickly
abandon a buying relationship if they find a better alternative and have enough motivation
to make a change.
Expense: Brands with reluctant relationships often spend precious funds to keep untrusting
customers buying their products. They may advertise heavily, discount, or continually
invent new products that add little customer value but enable them to maintain mindshare.
•
Limited Relationships: Brands with relationships in the lower-left quadrant may be entering a
market or may be struggling to gain traction. Clearly, limited relationships between brands and
people are not sustainable.
Placing Brands on the Brand Sustainability Map
In our work on understanding brand sustainability, my agency has conducted more than 250,000
brand relationship surveys and, from the data we gathered, placed actual brand relationships onto the
Brand Sustainability Map.
To date, the research has focused on the two to three market share leaders in a variety of industries
and also a handful of companies that seemed likely to plot in particularly extreme points on the map,
all with the intent of fine-tuning the approach and demonstrating the model’s value. Results from the
initial research are included on the following pages to provide context and examples of how brands
are currently faring in the Relationship Era. Some brands are already clearly winning, while others

have significant work to do to succeed in this new era.
The next step is to conduct research on a broader set of market share leaders in each industry.
Additional results are available at www.relationshipera.com, and details of the Brand Sustainability
Map research methodology are available at www.relationshipera.com/brand-sustainability/bsm-info/.
Sample of brands in the quick-service restaurant (QSR) and mass merchandising industries
Following are two industries that demonstrate the BSM methodology. For quick-service restaurants
(QSR), we have included the dominant market share leader, McDonald’s. We also include SUBWAY,
a distant third in revenue (after McDonald’s and Burger King) because its strategic approach is so
different from the other market share leaders. In mass merchandising, we evaluate the three largest
players—Walmart, Target, and Costco.
The map above displays McDonald’s superior position in market share, but SUBWAY demonstrates a
higher level of trust among consumers. Perhaps because of its focus on health, which shows up in its
menu choices and advertising, consumers think of SUBWAY as caring more about people and
holding more congruent values than McDonald’s.
For mass merchandisers, Walmart has the highest transactions. Perhaps given its notoriously
antagonistic relationships with suppliers and employees and negative impact on local business, the
level of trust among consumers is low. Costco and Target have lower levels of transactions, but they
have higher trust compared to Walmart and thus map into the Sustainable Relationship quadrant.
Costco provides higher pay and better benefits to employees than other mass merchandisers and
offers its customers a more educated and more consistent workforce, and Target has distinguished
itself by providing customers with affordable, well-designed products.
Sample of brands in the wireless carrier and banking industries—plus a grocer
The following companies help show a greater breadth of detail for the BSM research:
Three largest wireless carriers—Verizon Wireless, AT&T, and Sprint
Three largest commercial banks—Bank of America, Citigroup, and JPMorgan Chase
Whole Foods Market, a grocery chain that is far from the largest in its category
The wireless carriers are all low on trust and in the Reluctant Relationship quadrant. Customer
service typically involves an automated labyrinth of punching in numbers and waiting, and service
contracts—laden with fine print, hidden fees, and penalties for termination—leave consumers feeling
more imprisoned by their carriers than trusted by them.

Commercial banks currently have the lowest level of trust among all of the categories reviewed. The
Wall Street bailout and the exorbitant compensation of executives at bailed-out companies leave U.S.
consumers with a clear sense that these firms are looking out for their own profit rather than mutually
beneficial customer relationships.
We also include Whole Foods Market to counterbalance the six brands with reluctant relationships
with one that maps to the Emotional Relationship quadrant. The company’s values-centric approach
is felt by people who rate the company highly on trust. Whole Foods Market, previously a specialty
grocer that now competes in the general grocery category, is smaller than competitors such as
Walmart, Kroger, and Safeway™ and now faces the challenge of growing its transactions among the
general population in order to move into the Sustainable Relationship quadrant.
To join the dialogue about these brands and to see where other leading brands appear on the
Brand Sustainability Map, visit www.relationshipera.com.
Chapter 3: Breakthrough Success in the Relationship Era
We’ve introduced the Relationship Era, a new era in marketing where the most successful marketers
build sustainable relationships—ones that have high levels of both trust and transactions. We
examined the Brand Sustainability Map as a way to understand the level of trust and transactions in
customer relationships—and explored the implications for brands. Finally, we reviewed research that
places brand relationships onto the Brand Sustainability Map.
ONE QUESTION (OF MANY!) LEFT TO EXPLORE, “HOW DO BRANDS WIN IN THE
RELATIONSHIP ERA?” BECAUSE THIS IS A TIME OF CHANGE, I BELIEVE IT WILL
LEAD TO A DRAMATIC REORIENTATION OF THE COMPETITIVE ENVIRONMENT
IN MANY INDUSTRIES, AND SOME BRANDS WILL WIN BIG. WHAT SPECIFICALLY
WILL BE BEHIND THE BREAKTHROUGH SUCCESS OF THE TRIUMPHANT
BRANDS IN THE RELATIONSHIP ERA?
Principled action.
Following are five principles for breakthrough success in the Relationship Era, based on ideas that
are already being applied in market. With each principle, you will find examples of companies and
brands that embody each principle and map to the Sustainable Relationship quadrant on the Brand
Sustainability Map.
Principle #1: Clarify Purpose

The apex of trust-building involves a connection at the core. To support brands in creating the
deepest possible relationships, brands should find partners that facilitate the process of uncovering
purpose. Purpose answers the question, “Why are we here?” Brands that have clarity and alignment
on their purpose have more engaged team members. They’re more energized by their work and
make decisions more efficiently and with greater conviction. These brands also have happier
customers, consistently beat their competitors, are more apt to positively impact society, and have
more prosperous shareholders.
Pampers is one example of a brand achieving greater results as an outcome of purpose discovery.
According to Procter & Gamble’s long-time Global CMO, Jim Stengel, the Pampers team thought of
the brand in terms of the functional benefits that it provides—keeping babies dry. After a deeper
evaluation of its purpose, the team broadened its role and defined its purpose as helping mothers
around the world with their babies’ physical, social, and emotional development. This clarity led the
brand team to fund clinical trials regarding the connection between sleep and the development of
babies, which in turn helped Pampers expand and improve its product portfolio. Given its commitment
to helping mothers around the world, Pampers started a program to support the immunization of
children in developing countries. Orienting the business around a meaningful purpose, Pampers
inspired deeper engagement with its employees. Within a few years, brand sales doubled, and
Pampers became P&G’s first $8 billion brand.
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Mr. Stengel points to the clarity of purpose as the key
to attaining these remarkable results.
Pampers discovered a way to benefit society and its customers, inspire employees, and build a
stronger bottom line for investors. This “multiple stakeholder” orientation is typical of brands and
companies that build sustainable relationships. Former Johnson & Johnson chairman Robert Wood
created the company’s credo in 1943, emphasizing a commitment to the needs and well-being of
consumers (doctors, nurses, patients, and parents), employees, stockholders, and society. This credo
is much more than a poster that hangs on the walls of the headquarters building; Johnson & Johnson
believes it is the secret to its success. Company leaders credit the credo for helping them make smart
decisions in the wake of Tylenol’s cyanide tampering and quickly restoring confidence and sales in
the leading over-the-counter analgesic.

Johnson & Johnson is one of only a few 100-year-old American companies, and it has been able to
stand strong during difficult times and achieve long-term financial success. It thrives today in large
part because it has proven to be a brand that can be trusted, and it has built that trust by remaining
true to its core ideology.
In good times and bad, a clear purpose helps leaders make difficult decisions that can ultimately lead
to breakthrough business results.
Principle #2: Commit to Sustainable Relationships
In the Consumer Era, building trust was seen as a mechanism to sell more. That type of trust is fairly
easy for company leaders to support. However, building trust as a goal separate from influencing
transactions—a key philosophy associated with the Relationship Era—truly requires organizational
commitment.
Business leaders typically have significant obstacles to overcome:
•
Corporate culture (fueled by capital structure) that solely prizes short-term financial
performance and views dialogue about nonfinancial objectives as “fluffy” or extraneous
•
Organization structure and career paths where mid-level managers quickly rotate, leading to a
focus on big, immediate results rather than thoughtful action with both short-term and long-
range benefits
•
Marketing partners who talk about new approaches but have a vested interest in protecting the
legacy talent and infrastructure they have built
•
Confusion, as the words associated with innovation within the Consumer Era (i.e., trust,
relationships, measurement, targeting, insights) can be the same as those used to talk about
the move to the Relationship Era
The brands that excel in the Relationship Era are those that skillfully align leaders and organizational
systems to support sustainable relationships. Their commitment to sustainable relationships leads
them to take principle-driven, unique actions that often produce superior results.
When Google went public in 2004, it released an IPO letter titled An Owner’s Manual for Google’s

Stakeholders that made clear its intent to focus on long-term opportunities, not short-term quarterly
numbers. It stated, “We believe strongly that in the long term, we will be better served—as
shareholders and in all other ways—by a company that does good things for the world even if we
forgo some short-term gains.”
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Google made it clear that it had a bigger vision, one that—it believed
—would return better profits and have a positive impact on the world around it. Google was up front
with potential investors to ensure that their expectations aligned with the company’s philosophy.
Even with its cautious warnings about possible sacrifices in short-term results, Google has had
immense financial success—since going public in 2004 and facing a tough economic environment in
2007-2008, Google’s stock has increased in value by 475 percent compared with the S&P 500, which
increased just 5 percent during the same time.
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Additionally, its strong reputation as a responsible,
trustworthy brand allows it to shun the typical campaign-driven advertising model that calls for brands
to spend millions of dollars on simply acquiring and maintaining customers. Instead, Google spends
that money on things like developing new and better products for its users and contributing to a
stronger bottom line.
Google clearly demonstrates that companies and brands don’t just luck into sustainable relationships.
It takes an organizational commitment from the top down to achieve a truly different way of doing
business.
Principle #3: Connect with Authenticity
The brands that win in the Relationship Era are committed to connecting with authenticity. In our
lives, one could argue that we are either building or diminishing trust with every interaction we have
with another person. When we do things like follow through on a commitment, try to understand
others’ perspectives, or authentically express our values, we’re demonstrating credibility, care, and
congruency—the three factors that build trust. When we fail to deliver, think just about ourselves, or
fail to demonstrate our expected values, trust decreases.
Just as in our personal lives, every interaction between a brand and a person either increases or
decreases trust. The brands that win in the Relationship Era consistently connect with authenticity,

building trust in each interaction.
Trust was one-way in the Consumer Era, with brands working to elicit trust from consumers. In the
Relationship Era, trust becomes mutual, with brands both earning trust from people and offering to
trust its employees and customers to do the right thing.
In a time where most believe that mass merchandisers care about controlling costs rather than
building trust, Costco stands out as a notable exception. While other companies maximize returns
through stringent return policies and low employee wages, Costco has been successful by doing just
the opposite.
Costco’s CEO, Jim Sinegal, ensures Costco relentlessly focuses on caring for its employees,
primarily through considerably higher wages and above-average benefits, allowing the company to
attract a higher-caliber workforce than others. The result is much lower than average turnover,
leading to lower overall costs and higher profits for the company. Costco is equally focused on
creating authentic trust with its customers—a commitment that shows up, for example, in its
generous, no-hassle return policy and the limit it puts on markups for all of the products it sells.
While some Wall Street analysts would prefer that Costco reduce employee wages, pare back
benefits, and implement a less generous return policy to maximize shareholder return, Costco has
consistently produced astounding results for shareholders. In fact, over the last six years, Costco’s
stock has produced a return 30 times greater than Walmart’s.
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As evidenced by Costco’s stellar performance, a key to success in the Relationship Era is ensuring
that trust is two-way between people and brands. Brands build trust not by seeking it but instead by
demonstrating it.
Principle #4: Treat Customers as Partners
In the Consumer Era, there was a sense of superiority—a notion that marketers are smarter than the
rest of us. Therefore, they have the right to benevolently (or, in some cases, maybe malevolently)
convince consumers to take whatever action they want. It’s even evident in the language of
marketing. For example, marketers often talk about target audiences. A target is something that is
shot, and an audience passively listens. Neither of these concepts have a role in the Relationship
Era. My agency is working to change the language marketers use and, more importantly, to evolve

the mind-set associated with connecting brands and people.
In the Relationship Era, brands consider customers to be partners—smart people who are capable of
making good choices. They care and communicate not to manipulate, but to deepen understanding.
When Harley-Davidson™ was nearly bankrupt in the early 1980s, 13 executives bought the company
and set out to bring the iconic brand back to life. Management created H.O.G. (Harley Owners Group)
with the idea of turning owners into brand advocates. These H.O.G.s played an important role in
restoring the company’s previous level of quality by opening lines of communication between
frustrated dealers and Harley owners. Was it successful? Today, the H.O.G. boasts over a million
members with more than 1,100 chapters worldwide, making it the largest factory-sponsored
organization of its kind.
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(The tattooed arm of an avid Harley-Davidson brand advocate.)
Rallies and touring programs connect H.O.G. members, and the Fly & Ride program invites members
to fly to locations around the world and pick up a Harley to tour the countryside. Harley owners are
some of the strongest brand advocates you’ll find. In fact, tens of thousands of people have tattooed
themselves with the Harley-Davidson logo, and Harley fans have uploaded more than 55,000
YouTube videos. To Harley-Davidson, customers are not merely people who buy their product—they
are passionate brand partners.
Principle #5: Engage
Many marketers and agencies talk about an integrated approach to marketing, using a variety of tools
to reach consumers. In the Relationship Era, that idea of tapping into multiple communication
vehicles holds, but the orientation of these tools is subtlety—and meaningfully—different.
Marketers who win in the Relationship Era employ a variety of vehicles, including social, mobile,
direct, and mass marketing, all working together to create interaction that improves relationships. In
other words, they aren’t seeking opportunities to tout product benefits, they’re seeking opportunities
to engage.
In 2003, Toyota, one of the most trusted carmakers in America, was losing its appeal to younger
drivers, so it created the Scion brand of entry-level cars to appeal to 18- to 24-year-old drivers.
Toyota knew traditional marketing wouldn’t work with this age group, so it took a different approach in

using a variety of tools to engage them. Toyota created posters and ads at movie theaters to drive
consumers to its websites so they could learn more about the Scion. The brand sponsored the
VBS.TV show Thumbs Up! and Gaia Online and launched a viral-marketing website
(www.scion.com/broadband) to promote the artists and events that it sponsors. Scion also used
shows like Slick’s Picks to go around the country interviewing artists, stores, and events and putting
short videos on the site. To demonstrate the individuality of the car owners and the cars themselves,
Scion also created a campaign that featured more than 300 Scion owners’ vehicles.
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Consumers visit to design their own car with graphics, decals, and accessories.
Dealerships made it clear that this was not the typical car-buying experience. For each model it sold,