Share of Life - A New Marketing Era?

Share of Life - A new Marketing era?

July 2007

James Burke - in his PBS series (The Day the Universe Changed, Connections) brought to public life the notion that a sequence of events in time can create the requisite ripple effects which can ultimately lead to significant transformational changes.

Today we are on the verge of such a significant transformational change led by a technological nexus where bandwidth, connectivity and communication mobility will create profound changes in how we view and interact with those around us and indeed within a global community.

This convergence has already begun to impact the marketing world - which will usher in a new era - which I would like to call the era of Share of Life marketing. Looking back to just the last 70+ years we have seen two other important eras: Share of Mind and Share of Wallet.

Share of Mind

Share of Mind focused on supporting and defending a brand’s positioning in the market using the 4 P’s of marketing - 1948 and Unique Selling Point (USP) 1940’s - which albeit crude by today’s standards, utilized mass channels of communication to adress a mass audience. Everyone recognized there was no such thing as an average consumer - but there was simply no way of reaching out consistently and cost effectively.

Share of Wallet

With greater data capture and outreach capability we saw the emergence of a new era - Share of Wallet - which focused on maximizing a profitable purchase stream with select customers and evolved from a variety of influences. Key milestones in its development included – Purchase Continuity/‘Loyalty’ programs 1929, Direct(ed) marketing 1950’s, BCG Growth-Share matrix 1970, Database marketing 1980’s and CRM in the 1990’s. During this era we plundered databases scrutinized its entrails to squeeze out new linkages and relationships amid geometrically exploding database farms. The goal was straightforward - increase profitable share of wallet. Offer preferential treatment and up sell/cross sell programs based on their value score.

Share of Life - “WE”

The Share of Life era/philosophy will use many of the same tools that marketers currently have at their disposal. The difference is that Share of Life draws its spark from an emerging sense of (real and virtual) community and connectivity and with it a sense of “WE” displacing the earlier self-centric “ME” eras. Drawing on the foundation set by social marketing (1971) and cause marketing (1983), at its very centre – Share of Life recognizes the power of responsibility. That responsibility can focus, catalyze and therefore transform.

Share of Life might be called CRM 2.0 - or strategic CRM. However it is called, Share of Life is by RSVP only – you won’t be able to spend your way in – you’ll need to earn it. Brands that have shown themselves to be mature, responsible and forward thinking will be prime contenders. Hence this battleground will be comprised of fewer but more formidable adversaries. Those that have been granted permission will be charged with two levels of responsibility – providing BOTH category leadership AND social involvement/leadership.

Why are brands being held to this higher standard? Consider that in 2006 Wal-Mart’s sales of $349 Billion rank it as the 30^th largest ‘economy’ in the world based on GDP (PPP basis) just behind Ukraine and ahead of Belgium, Exxon at $335 Billion is # 33 ahead of Egypt, General Motors at $207 Billion is #48 just behind Portugal.(see Table 1) When corporations and their brands generate this level of economic activity – it is only natural they also begin to take on some of the statesmanship duties that countries do.

Share of Life will place a greater premium on organic growth (while still recognizing the need to acquire customers). However with organic growth, existing customers will become the primary advocates for the brand as the brand - (which in fact is a bundle of valued benefits promised/delivered by the enterprise) will acquire converts through its ability to continuosly evolve and solve customer problems. Share of Life will be about a long-term partnerships that will allow enterprises to better plan and invest in those areas that reinforce those relationships.

From the customer’s viewpoint, Share of Life is about a growing sence of maturity, the growing realization of the interconnectedness brought on by the ever powerful communication modalities and about the power this puts back into the customer’s hands. In the previous (Share of Wallet) era customers were not able to access the information on brand performance, price and value to the extent they can today - and to the much greater extent they will be able to tomorrow. And so the premium customers will place on delivering the brand promise in a fair and equitable manner will be elevated to newer levels. Pricing will be assumed to be comparable - so the differentiation will shift to the brand’s ability to deliver solutions. In deed with the increasing ‘granularity’ of marketing occasions, the dimension of price will need to be redefined as technology will enable a brand’s price to be situationally defined to the individual.

Brands that become engaged in a Share of Life relationship with its customers, will see real gains in financial/market performance as the halo effect attracts both the Share of Life brand franchise and the crowd milling about on the sidelines. Consumers will continue to make micro decisions regarding their day to day category requirements – but within a smaller competitive set. As long as the proffered value proposition (price, service and the rest of the brand value chain) to the consumer is within normative parameters – the transaction will not come under scrutiny – after all we are now dealing with a partner brand that shares some of our values and which has a respectable history of providing innovative category leadership. Why not support a solution?

For marketers that engage in Share of Life – many will look to life stage segmentations as a natural starting point to develop the necessary underpinnings of the relationship. There are any number of segmentation protocols but they share the commonality of demarcating the key life stages ie singles, young vs established families (kids in grade school, kids in high school, kids in college, adult offspring living with parents), empty nesters, grand parents living with parents, grandparents in assisted living….

More refined segmentation structures will depend on the specific sector for example it may also incorporate specific accommodation settings (apartments vs home vs condo) or perhaps financial instruments (mortgage, rrsp) because of its particular additional relevance to the sector.

How to implement a Share of Life paradigm:

At the risk of over simplifying the significant strategic and tactical issues that will need to addressed (more on this in an upcoming article), there are 3 basic steps that will help prepare a brand to compete within the Share of Life arena.

Step 1: Setting the vision:

Create a public statement of principles and values clearly identifying where the brand/company wants to evolve to in concert with its various communities and constituencies.

Step 2: Optimizing the brand configuration:

Ensure the brand value chain is delivering what the key customer segments deem to be of value – at a better/best-in-class level. Get a deep understanding of what the pain points are, what problems/solutions customers are in need of, are not being met, would like to have solved.

Step 3: Extend a helping hand – let your actions speak for you:

Engage your customers in your shared community involvement initiatives. Set objectives for the good works initiatives just as you would for your business units. Report on progress.

Some high level sketches of what a Share of Life strategy/execution might look like for a Financial Institution and a Grocer. Community involvement is taken for granted – but for the sake of completeness a generalized Good Works strategy has also been outlined below.

Financial Institution: A FI would probably want to look at developing an encompassing life stage perspective – of becoming a partner with their customers through the good and the bad times. In its grandest form each customer would have a balance sheet, a risk profile and a statement of their short, medium and long-term financial objectives. Working with the financial advisor (live or on the internet) the appropriate mix of financial services/instruments would be deployed and a triggering mechanism put into place to flag deviations to the plan. Regular meetings would review past performance and emerging changes.

Within this framework interest rates, service fees are still rendered – but the fundamental shift is that the FI and the customer are now lifelong partners developing and deepening significant relationship linkages as they work together to help deliver the customer’s goals.

Depending on the customer’s stage of life their needs and objectives would differ as would the bundle of financial advice, services and fees to meet those needs. The stickiness of this dynamic is radically enhanced and the commodity nature of the sector is a mere fraction of what it was before.

Grocer: We go to grocers every week and stock up on brands and commodities. A share of life perspective would try to gain deeper involvement by focusing on delivering longer-term solutions.

One such solution could be the grocer’s ability to be the central point of contact for delivering meal solutions. With that framework customers would be able to create their own dietary profiles and then trigger the resultant weekly family meal plan. This meal plan could outline the relevant ingredients generating a grocery list, pricing options, relevant specials, promote local produce, suggest healthier alternatives…

Taking this to an even higher evolved state – would allow customers to interact with the recipes by voting on their favorites, sharing feedback and perhaps allowing customers to upload their favorite treasured family recipes for all to enjoy.

An amazing transformation which will see the creation of a shared community, centered on solving problems and becoming a much more integral part of their customer’s lives than ever imagined before.

Good Works Strategy:

A scan of the world around us finds over 82,000 Canadian registered charities representing a dazzling array of causes in 5 basic categories (health, environment, injustice, disadvantaged, protection) seeking support. Which causes you extend your resources to should really depend on what was identified as the brand vision in Step 1. Avoid the temptation to get behind a ‘name brand’ cause because it makes the decision easier – to be most effective – it has to be synergistic with the brand personality – much as McDonalds supports sick kids.

The key to any good works strategy is transparency, integrity and involvement. Consider the following approach:

Give “5” registered vetted brand relevant charities from across range of causes (international, national, local) an automatic annual pool of resources - lets say $1 million dollars each. Heighten involvement by guaranteeing incremental funding (using any variety of formulas) to theses charities based on the brand’s community input.

Taking this to an even higher level of involvement, challenge the brand community to engage in some good works themselves and have them record their action via additional vote(s) for their favorite charity. What they do is really not that important – it could be helping their neighbor cross the street, picking up trash in the park, running around the block or scaling Mount Everest – the key is to have engagement and local action. There is no implicit need for ‘grand’ events. Small is sometimes more powerful because of its ability to impact local change.

Conclusion:

I started this article 3 pages ago by postulating that a convergence in global communication is leading to a new sense of community and with it (spurred by global warming concerns) a new sense of shared responsibility. This in turn has/is/will create an opportunity for marketers to help their brands make an evolutionary transition from managing icons (inner focused, engineered, purposeful, revered) to a rallying point for an integrated, living, breathing community.

Wishful thinking?

I look forward to hearing your thoughts.

Other articles of Interest:

Anatomy of a Brand Purchase

Brand Momentum

Brand Affinity Dynamics

Table 1:

Rank		2006 GDP*/Sales Billions (USD)		Rank		2006 GDP*/Sales Billions (USD)
1	USA	13,130		31	Belgium	342.8
2	China	10,170		32	Bangladesh	336.7
3	Japan	4,218		33	ExxonMobil	335.1
4	India	4,156		34	Egypt	334.4
5	Germany	2,630		35	Royal Dutch Shell	318.9
6	United Kingdom	1,930		36	Malaysia	313.8
7	France	1,891		37	Sweden	290.6
8	Italy	1,756		38	Austria	283.8
9	Russia	1,746		39	BP	265.9
10	Brazil	1,655		40	Vietnam	262.8
11	South Korea	1,196		41	Hong Kong	258.8
12	Canada	1,178		42	Greece	256.3
13	Mexico	1,149		43	Switzerland	255.5
14	Spain	1,109		44	Algeria	250.0
15	Indonesia	948.3		45	Czech Republic	224.0
16	Taiwan	680.5		46	Norway	213.6
17	Australia	674.6		47	Portugal	210.1
18	Turkey	635.6		48	General Motors	207.4
19	Argentina	608.8		49	Chile	202.7
20	Iran	599.2		50	Romania	202.2
21	Thailand	596.5		51	Denmark	201.5
22	South Africa	587.5		52	Daimler Chrysler	200.0
23	Poland	552.4		53	Chevron	195.3
24	Netherlands	529.1		54	Nigeria	191.4
25	Philippines	449.8		55	Peru	186.6
26	Pakistan	437.5		56	Venezuela	186.3
27	Columbia	374.4		57	Ireland	180.7
28	Saudi Arabia	366.2		58	Toyota Motor	179.0
29	Ukraine	364.3		59	Finland	176.4
30	Wal-Mart Stores	348.7		60	Total	175.1

Source: CIA The World Factbook, Forbes The Global 2000

*This entry gives the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation’s GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States. This is the measure most economists prefer when looking at per-capita welfare and when comparing living conditions or use of resources across countries. The measure is difficult to compute, as a US dollar value has to be assigned to all goods and services in the country regardless of whether these goods and services have a direct equivalent in the United States (for example, the value of an ox-cart or non-US military equipment); as a result, PPP estimates for some countries are based on a small and sometimes different set of goods and services. In addition, many countries do not formally participate in the World Bank’s PPP project that calculates these measures, so the resulting GDP estimates for these countries may lack precision. For many developing countries, PPP-based GDP measures are multiples of the official exchange rate (OER) measure. The difference between the OER- and PPP-denominated GDP values for most of the weathly industrialized countries are generally much smaller.