One - Warmth and Competence
There's a brief anecdote about the Panera bread incident, in which a customer posted public praise of the chain for having prepared a special meal for his grandmother (who had pancreatic cancer), which drew 730,000 "likes" and 24,000 comments on Facebook within a few days, with people praising the company. But it wasn't the company, just one manager who went the extra mile for a customer - albeit in the context of a brand that encourages (rather than punishes) employees to break policies and procedures when necessary to provide exceptional service.
Social science research shows that the two qualities that inspire trust in others are warmth and competence. Warmth is judged by assessing the kindness and good nature or another person - whether they are sincere and considerate of the interests of others. Competence is merely their skill and ability to succeed. Naturally, both must be present, as one without the other is insufficient.
It is further suggested that the perception of warmth and competence influences more than 80% of human social behavior, and it is applied to individuals and groups, as well as to animals and machines. When a car "acts up" or a computer seems to have a mind of its own, we attribute human qualities to them.
(EN: Machines and other objects are a special case because when we become annoyed with them, we are reacting to the design - we understand that when a car or a computer is inconvenient, it is because the maker designed it to work a certain way and in so doing succeeded or failed in considering the needs of its user. We tend to be more forgiving of mechanical failures, except inasmuch as we blame the manufacturer for not making things more durable. Interestingly, people are less prone to accept personal blame for using things incorrectly or improperly than they were in the past.)
The assessment of warmth and competence are basic survival skills. Our first reaction, instinctively, is to assess whether something is a threat and to avoid it if we are uncertain. Failure to identify something as a threat is a matter of life or death, less often in the modern era than to our primitive ancestors, but it is still a valid consideration.
As such, our consideration of warmth comes earliest and carries far more weight in our perception. We also assess threats very quickly - within as split second of seeing someone's face we can consider whether they seem hostile. Even a seemingly minor comment or action can cause us to raise shields.
The author suggests that the assessment of competence arrives "a fraction of a second" later, when we assess the capability of the other person to harm us. If we were to flee from everything that seemed like it might pose a threat, we would be able to do little else. So not only does something have to seem threatening, but it must have the capability to actually do harm.
(EN: The author doesn't seem to look into this, but the consideration of threat is not binary - things are not just harmful or helpful, and most are quite neutral and we are indifferent to them. Considering whether something might be helpful is a much more elaborate cognitive process that requires us to consider what we wish to achieve before we consider whether another person might help us to achieve it. The assessment of competence comes much later in our decision to engage than our decision to avoid.)
The perception of threat precedes even the evolution of verbal communication, which is what makes nonverbal communication so critical to human interaction. We judge a person by their looks before they say the first word to us. And even then, if their appearance and their verbal message are at odds, we tend to believe more in appearance than in message.
However, the traits that signify warmth and those that signify competence are often at odds, and are very much split across male/female paternal/maternal stereotypes. A person who is "warm" is friendly, likable, sincere, empathetic, and caring. But to be perceived as competent, they must be capable strong, self-confident, and serious.
There's some reference into research into the judgments people pass on others due to their role or character. Disabled people and the elderly are viewed with pity and neglect because they are considered to be harmless and incompetent. Homeless people, welfare recipients, and drug addicts elicit feelings of contempt because they are self-centered, needy, and incompetent. Successfully people are seen as competent but self-serving, the poor as warm but incompetent. About the only group that people respond to well are the working class individuals who are judged as being both warm and competent.
Naturally, the thrust of this research is to encourage people to question their prejudices - but in terms of the present book, we acknowledge that these stereotypes exist and people react to them on the basis of warmth and competence.
Brands Are People Too
The various research into the warmth and competence we expect of individuals translates directly to commercial concerns. Brands are perceived in the same way as people, and companies are perceived in the same way as groups. The author asserts that prior to 2010 researchers largely considered brand to be the equivalent of a "thing" that was largely lacking in human qualities, but it has since been recognized that the way in which people react to a brand is more analogous to the way they react to another person.
Consider statements that people make about companies, brands, and products: "The insurance industry is out to cheat me," "My cable company doesn't care," or "I love my cell phone" all are expressions of human emotion attributed to companies, brands, and products.
The public reaction various incidents of corporate misbehavior (Tylenol, Exxon, Enron, etc.) has seldom focused on an individual, but treated the brand as if it were a person. This is often because the actual individuals who should be held responsible for a decision are invisible to the public, and they can only identify the brand as being to blame.
But in the process it was discovered that people evaluate their emotions toward brands and companies by the same standards by which they evaluate individuals: warmth and competence. Those who exude both earn loyalty (and forgiveness), those who exude neither are dealt with reluctantly, out of necessity, and are quickly anathemized.
Consider specifically the incident of tampering with the Tylenol brand of pain reliever. Because the brand had been reliable and its parent company (J&J) had a reputation for being concerned and caring, the crisis was viewed as a short-term accident and people appreciated the quick response the company undertook. In fact, customers reported "substantially higher" purchase intent and brand esteem for Tylenol during the crisis than they did for competing brands who had a blemish-free record.
(EN: I recall a study of "brand recoveries" that took it a step further. When a crisis arises and a brand responds in a genuine and effective manner, it bolsters its reputation in the market and public esteem for the brand and company end up being higher in the wake of the crisis than it had been beforehand. It has been suggested that this only applies to brands for which customers have a neutral or positive regard in the first place - though this was anecdotal and observational.)
By contrast, British Petroleum had a solid reputation, especially in comparison to Exxon, at the time of the Deepwater Horizon incident in which an oil rig spilled oil into the Atlantic. The company's cold denial of responsibility and publicity of the slow and incompetent way in which they took action was devastating to the public perception of the brand.
Brands can be matrixed according to warmth and loyalty, to find that:
- Desired brands (high warmth, high competence) - Brands that customers admire the most greatly, purchase from loyally, and are forgiving of
- Admired brands (low warmth, high competence) - Brands that are admired for product quality, but which are regarded as arrogant and detached. People purchase these brands but feel no loyalty to the firms.
- Pitied brands (high warmth, low competence) - Brands that are regarded as inferior but likable. People will occasionally purchase these brands in spite of a lack of confidence in the product quality, when their need for the solution is not dire.
- Hated brands (low warmth, low competence) - Brands that are shunned and only purchased when there is no other affordable alternative to meet a need, and even then with a sense of dissatisfaction.
It's noted that government agencies and charities are often regarded as either pitied or hated brands, regarded as fundamentally incompetent, depending on the amount of warmth individuals feel in interacting with them.
A specific research project is mentioned, which focused on chocolate manufacturer Hershey. Few people are aware that the firm's majority ownership is a charitable trust, and most of the profits from the chocolate business provide funding for the Milton Hershey School for underprivileged children. The participants' perception and purchase intent was gauged before and after they were informed about the ownership of the firm - and more than 80% of respondents indicated more favorable views of the company after being made aware of its situation.
A follow-on study with fictional brands found that not only did people feel inclined to reward a warm and caring company with their business, but also wished to punish callus and indifferent companies by refusing to purchase and dissuading others to interact with them. This is, again, very much in the same manner that people wish to shun and anathemized an individual for their misconduct.
The Language of Loyalty
Research conducted by the Coca-Cola corporation considered the various qualities attributed to a brand, and found that warmth and competence "explained nearly fifty percent of customer behavior." Examining the results in greater detail, it was observed that warmth and competence were most influential among the companies "fanatical supporters" - indicating that these qualities lead a customer to have the sense of a more personal, one-on-one human relationship with a brand.
Additional research into the use of websites also finds that those that project a warm and competent tone are more likely to engender feelings of having a more comfortable and human relationship, as evidenced by the test subjects' tendency to speak of the experience in the same terms as they would use to describe an encounter with a human being, even though the customer is interacting with a machine rather than a human being.
It is suggested that it is human nature to interact with everything in our world in the same way we interact with other human beings: "Our mental apparatus perceives brands as stand-ins for people, logos as substitutes for faces, and companies as the equivalent of a tribe or social group."
It's suggested that considering consumers' perception of brands might enable business to sort out their notion of loyalty, which is presently based solely on the size, recentness, and frequency of purchases. Companies are often surprised at how quickly these "loyal" customers defect - but unless they consider brand perception, they may be overlooking other qualities that maintain loyalty.
That is to say, people may seem to have been "loyal" because the brand was the cheapest or most convenient option available to them - but as soon as a suitable alternative comes available, there is an exodus of customers whose previous purchasing behavior implied loyalty. Truly loyal customers aren't merely frequent purchasers, but are those who also have positive sentiments toward the brand.
(EN: Another vague memory comes from a lecture about expansion strategy, particularly in the franchise model. Firms not only need to consider the number of potential customers in a location by the degree to which competition exists, but also the sentiment people in the area have toward the brand - whether they "want" a franchise in their area, or desire to do business with the firm if only there were a convenient location.)