Consumers can always smell greed and will punish you for it
Strategy expert James Sykes discusses how the marketing hyperbole of old has become the next generation's fake news.
The people of marketing town have banged on about trust, company culture and brand purpose of late.
I think it’s a rehash of brand authenticity, which was a warmed-up version of Ben & Jerry citizenship, itself a knock on from the triple bottom line, which was born out of the 1970s stakeholder movement.
What’s oddly distinct is the blip in the 80s, when Gordon Gekko screamed out how greed was good and everyone joined in. Tom Cruise and Duran Duran still haunt us from that ugliest of decades when money shouted loud and we admired anyone who flaunted as much of it as they could.
It feels that this unfettered greed has elbowed its way back in recently. Not the kind that’s in your face like Gordon Gekko, but an underlying stench of institutionalised selfishness that won’t go away. There are clouds of it in the huge piles of corporate cash stashed into Bermuda, and Silicon Valley’s disregard for paying tax.
Closer to home there’s the obvious CBA debacle, but also tiny whiffs of it when you hear Jim’s Mowing angling for a slice of the estate agency pie, proposing a 48k franchise fee nobody thinks is anywhere near reasonable.
Here’s what I think’s happening…
Greed never goes away. It’s the force of self interest that drives free markets. Love it or hate it, we’ve opted for it by default. What does change is when growth rises in times of plenty and collapses at times like GFC. Just as the tide conceals those swimming naked, a strong economy keeps the underlying odour of greed at bay.
Each time growth slows, a new generation smells that greed whichever way their noses have been trained to find it. My teenagers have a keen sense of it today now we’ve entered a low growth phase, but their nose is a little different to mine.
They believe in their little brands, their craft beers, sourdough breads and the dudes they follow in crowdsourcing. They can get their heads around how investment of effort and profits work at this small scale, and they appreciate what good business is. But no matter how awesome the utility, they have a massive distaste for the self interest of Facebook, Amazon, Netflix and Google, the banks, telcos and just about any institutionally invested enterprise that operates at scale. They’re not quite sure why, they just know a greedy stench when it’s there.
Maybe a nose for greed is like a nose for wine, it takes experience to grasp the nuance of a complex shiraz, just as it takes years to appreciate vested interests in institutional shareholdings, board governance and the interdependencies of the finance sector.
So what’s the point in all this?
Consumers instinctively know when they’re dealing with greed. It’s a hind brain function and every generation smells it, because it’s always been there. It’s passed down like the instinct for being afraid of spiders.
Business leaders and marketers should always be conscious of what their public understand as justified returns and good business practise. When the balance tips towards greed there is serious trouble looming.
I remember the clever provisions Virgin made when they first took on the airlines. Virgin were smart enough to know they’d make stupid mistakes, because running an airline is hard. But every missing bag or bumped passenger was showered with free gifts and other generous benefits to compensate. Those disgruntled but quickly delighted customers told all their friends, because Virgin made them feel so good. That expensive over-compensation strategy was an investment that paid off, because it suddenly exposed how other airlines positively reeked of greed. Perhaps Apple sensed this recently in providing $29 batteries for old iPhones.
Learn from the little brand’s efforts to explain why they do what they do and how they make their money – why an expensively idiosyncratic beer needs a particular yeast, or an avo smash suddenly costs the same as three lattes.
We call it brand transparency, but I think it’s more defined. It’s a conscious effort to publicise what are justified returns and good business practice. Easy when you’re small and difficult once you’re big, but that’s no excuse for not even trying.
It’s a grandly sweeping generalisation, but my hunch is the next generation want to know more and are willing to listen, because in their world it matters. In a gig economy where you’ll never own a house and the big salaried jobs are for the fortunate few, the marketing hyperbole you and I grew up with becomes their fake news.
No amount of promotional language will distract their finely calibrated noses from a whiff of greed and they’ll punish you for it.
James Sykes is director at Get Strategy Consulting, and former global head of innovation and design at Beam Suntory and strategy director at WPP Europe.
Ultimately it’ll come back to bite them.
I wonder how this would play out if there were more women on boards?
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@Inked: are you implying that greed is an exclusively male trait?
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…and yet corporations that could be accused of serious ‘greed’ still seem to be doing very well.
A couple of examples: VW emmissions scandal? Not a problem. VW took over Toyota as world’s biggest car manufacturer in 2016 and is till there. Nestle (amongst others) are still being accused of aggressive tactics (https://www.theguardian.com/lifeandstyle/2018/feb/27/formula-milk-companies-target-poor-mothers-breastfeeding), but Nestle is till the biggest FMCG company in the world (https://www.statista.com/statistics/260963/leading-fmcg-companies-worldwide-based-on-sales/). No signs of being punished…
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