This week’s thought: Inclusivity is business 101.

Brands get bigger by selling to more people. The only way to add more people is to have an appeal that is inclusive of everybody. Inclusivity is the fundamental requirement of brand growth, which makes inclusivity business 101.

Put another way, the biggest brands offer something that everybody wants to buy. By definition. That’s why they’re big. And because they sell to everybody, they are inherently inclusive. Everybody is included as a customer.

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Universal appeal doesn’t necessarily mean a universal message or benefit, though. It just means that everyone can find a connection with a brand, one that is valuable to them. It need not be the same connection for everybody, but everybody needs a connection. The biggest brands have figured out how to make their franchises accessible and welcoming to a full panorama of consumers.

A big challenge in doing so is that inclusivity sits at the intersection of commercial and social priorities. Generally, the commercial imperative of inclusivity makes brands a leveling force of unity and integration, even if sometimes a reluctant one. But not always. During the Jim Crow era, for example, restaurants would sell to everybody, with one entrance for white people and another for black people. So, while inclusivity as a commercial principle puts brands in a unique position relative to social priorities, it does not equate automatically with social justice.

Nevertheless, brands are attuned to social issues and, by and large, try to do what’s fair and respectful for everybody. Brands are motivated to get it right because when brands get it wrong, they find themselves in the crosshairs of controversy. And controversy is bad for brands.

Controversy risks conflict. Conflict will almost assuredly alienate part of a brand’s prospect and customer base, thereby choking off the growth potential of inclusivity. Growth is first and foremost for brands, so the profit motive is an engine of inclusivity.

This is why brands and politics are a bad match. The models don’t align. Politicians win with one more vote, so divide-and-conquer is a good strategy. Brands only win by selling to everybody. Brands must shy away from controversy, not invite it. It’s better commercially for brands to accommodate and conjoin differences than to discriminate, accuse, provoke or evangelize. Stitching diversity together in civil, uncontroversial ways is the superpower of big brands.

Every brand targets; most brands segment. Many brands have plenty of upside growth potential within a niche or specialty. But this doesn’t mean that inclusivity isn’t relevant. It points instead to the way that the best brands do their knitting. They deliver a compelling solution for a shared problem, whether niche or mass, thus bringing together diverse groups in need or want of the same benefit. Brands being better brands makes for inclusivity.

It’s okay for brands to deliver demographically or culturally or economically specific communications. Just not controversial communications. Of course, this moment in time has made it harder than ever to duck controversy, but that just calls for better insights, more testing, better tracking and more real-time response. It’s not easy, but it’s not outside the ken of what brands do in the ordinary course of business.

This may be a riskier moment, but there is never a moment for writing off potential customers, either by walking away from them or by estranging them. Brands must stay current and inventive in order to figure out fresh ways of being inclusive without getting punished by controversy, conflict or politics.

In today’s fraught atmosphere of political division and social discord, brands offer a counterpoint of inclusivity, a recipe to study and follow. Because inclusivity is business 101.

Contributed to Branding Strategy Insider By Walker Smith, Chief Knowledge Officer, Brand & Marketing at Kantar

The Blake Project Helps Brands In All Stages Of Development Gain An Emotional Advantage, A Distinctive Advantage And A Connective Advantage

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This week’s thought: Business is inherently aspirational.

Harvard marketing guru Ted Levitt made his mark with a number of pithy ideas about the role of marketing and the purpose of business, all of which rested on the foundational insight that brands solve problems. In his first book, The Marketing Mode (1969)—a long-neglected book that should be required reading for every modern marketer—Levitt noted that a “customer’s purchasing activities” should be understood as “problem-solving activities.” Eleven years later he turned this insight into one of his classic aphorisms, to wit: “Products are problem-solving tools.”

From that insight, it is a small step to the asseveration for which Levitt is probably best known. Which is that people don’t want quarter-inch drill bits—they want quarter-inch holes. People buy solutions not products. People buy benefits not features. People have problems and they buy brands to solve these problems.

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If brands don’t solve problems, brands have no value and thus no reason for being. Solving problems is the purpose of business. Everything about marketing follows from that.

Maybe this seems too obvious to repeat. But it wasn’t so obvious that Levitt felt it unnecessary to say time and again. Nor is it so obvious that we wouldn’t benefit from a reminder today.

The best ads lean hard into aspiration. A personal favorite is Apple’s “Think Different” campaign. I’m not alone—this campaign won many awards, spawned a cult following and still finds its way into Apple materials. The ad celebrates genius with a free-verse poem voiced over black-and-white images of famously pioneering people—the misfits, rebels and square pegs who changed things and “push[ed] the human race forward.” These “crazy ones” are the geniuses whose spirit, verve and influence changed our lives for the better. Apple celebrates it, and in doing so, allies its brand with the height of aspiration.

Aspiration is true of all brands, not just Apple, though Apple modeled it best with “Think Different.” All brands offer something better, something to aspire to. A better product. A better lifestyle. A better self-image. A better value. Always better; never worse. Brands may fall short on delivering something better, but the goal is always aspirational.

Marketing succeeds by making aspiration persuasive. Or as Ted Levitt put it in another of his famous phrases, by getting and keeping a customer. Which begins with a better solution. This sort of forward-looking view is integral to business.

Business stands apart as intrinsically forward-looking and aspirational. All too often, politics gets stuck in the mud of retrenchment, reversals, slurs and slights. Many religious sects are more about iniquity and negation than uplift and exultation. There is plenty of elation to be found in sports and entertainment, but no shortage of dark shadows either. Looking up can be found in every arena, but only for business is it the very keystone of engagement and success.

This is why controversy is bad for business. Politicians can win with divide-and-conquer. They just need one more vote. Brands get big only by selling to everyone. Brands must be universally appealing and inspiring. Alienating customers is not in keeping with being aspirational.

This is also why marketers tend to follow trends rather than lead trends. Brands follow what people want and need—the problems people have. It’s not aspirational to deliver something people don’t want, need or even know about. This is not to say that brands shouldn’t raise people’s horizons with new ways of thinking. Only that brands aren’t about creating problems; brands are about solving problems.

Levitt’s contention that business is about getting and keeping customers echoed legendary management thinker Peter Drucker who said the same thing in his 1954 book, The Practice of Management—another book that should be on every marketer’s reading list. With ‘creating customers’ first and foremost, Drucker argued that only two functions are “basic”—marketing and innovation. “All the rest,” he wrote, “are costs.”

You don’t have to read between the lines to see that Drucker was saying that business is inherently aspirational. The truly forward-looking functions are marketing and innovation, and thus only these two functions are basic or essential. Because only these functions grow value.

Maybe the most important thing I’ve learned about marketing over the years is that marketing is the steward of aspiration, which is the essence of problem-solving and thus the heart and soul of business. Yet, many of the senior management leaders I’ve known and worked with relegate marketing to a position of secondary importance. I guess marketers don’t sell themselves as well as they should, but it’s also true that lots of companies succeed in spite of themselves. Because business is inherently aspirational.

Contributed to Branding Strategy Insider By Walker Smith, Chief Knowledge Officer, Brand & Marketing at Kantar

The Blake Project Helps Brands In All Stages Of Development Gain An Emotional Advantage, A Distinctive Advantage And A Connective Advantage

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education

This, perhaps, has never been more evident than in the recent murder of UnitedHealthcare CEO Brian Thompson, shot in the back in midtown Manhattan as he was walking to an investor conference. A 262-word manifesto found in the possession of the suspect now in custody appears to confirm early speculation that frustration with health insurance coverage was, at least in part, behind the shooting.

More telling, this act of violence unleashed a torrent of angry, odious vitriol denouncing the health insurance industry. This outpouring of venomous opinion got to the point that it became front-page news in major media outlets like The New York Times and The Wall Street Journal, sitting alongside breaking coverage of the manhunt for the killer.

The healthcare industry knows that it is poorly perceived. A recent Gallup poll found only 44% rate healthcare quality as good or excellent, down every year since 2020 and well below the high this century of 62% in both 2010 and 2012.

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Science, too, has taken a hit in recent years. A Pew survey last year found that confidence in “science” has been steadily declining since 2020 — among both Republicans and Democrats.

But it’s not just healthcare. For two decades, the National Customer Rage Study, conducted under the auspices of Arizona State University, has been tracking dissatisfaction with brands and customer service. The most recent survey found 74% of consumers reported at least one problem with a product or service during the previous year. This is a record percentage, way more than double the 32% reporting a problem in a 1976 White House survey and nearly double the 39% on average reporting a problem over the first four waves of this study from 2003 to 2007.

The National Customer Rage Study also finds that 63% of those with a problem became extremely angry — a.k.a.: enraged — when trying to get the problem resolved. Do the multiplication, and it’s almost half of Americans who get pissed off about some product or service every year. By comparison, that same multiplication two decades ago finds just 28% enraged then. Anger is more commonplace than before.

This frustration is about trust. The trust equation is simple. People trust experts and institutions when they perceive there is an alignment of interests. Which is to say people want to feel reassured and confident that their interests are being advanced not shortchanged when experts and institutions maximize their interests. Much of the disconnect these days comes from a feeling of misalignment — from the perception that experts and institutions are pursuing their own interests at the expense of others.

This is certainly what’s in evidence in the anti-health insurance bombasts that have abounded on social media since Thompson’s murder. “Thoughts and deductibles to the family…Unfortunately, my condolences are out-of-network,” read one particularly hateful comment in a CNN thread.

This is a difficult situation for brands. In the strategic choice between value-add and value-out, brands are often forced into the latter. During the worst of the post-pandemic inflationary spike, many FMCG brands had to engage in shrinkflation to hold unit prices. Private equity owners often saddle portfolio companies with so much debt that brands have no choice but to reduce the quality and scope of their offerings in order to stay afloat. In the natural progression of greater cost efficiencies, companies have turned more and more to outsourcing and tech-assisted DIY options for customer service, which has seeded untold numbers of memes about wasted time and unresolved problems.

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While technology has improved many points of interaction between brands and consumers, it has also created more ways to annoy, frustrate, and anger people. The more technology is applied, the more risks that emerge. For example, with social media now used as a customer service platform, consumers are newly at risk from imposters posing as online service agents who then steal information and money.

And not just social media. It’s the whole array of things that can create frustration and annoyance, whether IVR (interactive voice responder) or chatbots or outsourcing. Not to mention data breaches and hackers.

The biggest challenge for brands, though, is other brands, which can poison the waters for all. People angered by one brand often carry over that foul mood and mistrust to every brand. Sullen customers are more likely to act out no matter what a brand does. Indeed, it is often the case that some small glitch with a brand is the proverbial last straw. It’s not the brand in that moment — it’s everything else leading up to that moment, especially other brands. Increasingly, this is the consumer that brands encounter, which is difficult and costly.

It’s discouraging to realize that incivility is the backdrop of life nowadays. But that is the situation in which people find themselves. The litany of incivility is long and onerous. Road rage shootings and mass shootings are up. Hate crime incidents and school bomb threats are up. Unruly airline passenger incidents and speeding-related auto fatalities are up. Swearing at work is up. So, too, being treated rudely by work colleagues. Obviously, this is not everyone. But it’s the context within which everyone must navigate their daily lives. And it keeps people on edge. To say it again, this is the consumer that brands encounter.

Brands have always been a positive, uplifting influence on culture and society. The best advertising is aspirational. The best products improve lives. The best entertainments enrich the world.

Making things better by solving problems is the very essence of marketing. It’s needed more than ever. We’ve just gotten another wake-up call about it. Time now to recommit our brands to pleasing people, not pissing people off even more.

Contributed to Branding Strategy Insider By Walker Smith, Chief Knowledge Officer, Brand & Marketing at Kantar

The Blake Project Helps Brands In All Stages Of Development Gain An Emotional Advantage, A Distinctive Advantage And A Connective Advantage

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education

In a book on the cusp of the new century, maverick Coke CMO Sergio Zyman announced the end of marketing as we know it. The primary focus on creativity would give way to a primary focus on sales, he said. But since then, we’ve rediscovered the primary place of creativity in driving sales.

Which is precisely why, in his pandemic-era book, social media maven Carlos Gil declared the end of sterile digital marketing based on clicks and views and the need for more human connections. Yet, digital marches on, and along the way, has invented ways of humanizing engagement.

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Even more than the end of marketing, there have repeated declarations of a marketing revolution at hand. From Robert Keith, ex of Pillsbury. From Kevin Clancy, ex of Yankelovich and Copernicus. From Michael Ray, ex of Stanford. From the one-to-one gurus, Don Peppers and Martha Rogers. From the dot-com era Cluetrain Manifesto. From old media like Newsweek and from new media proselytizers like CES. Just to mention a few.

Despite all this sound and fury, the core ideas of marketing have endured unchanged. No end. No revolution. But maybe it’s different this time with AI. So, with a bit of trepidation and all the obligatory caveats, let me offer some thought-starters about AI as the end of marketing.

1. AI For Consumers

Some clarification first about what I have in mind when I’m talking about AI. Not what marketers are doing with AI, which is largely efficiency related. It is all about improving existing processes, channels and conversion.

AI for consumers will also be used for efficiency. But it will have the effect of removing people from marketing and shopping. Stripped down, the consumer journey moves from consideration to evaluation to purchasing to usage, and then back again. When AI mainstreams as a consumer tool to handle each of these steps (including things like biometric monitoring during usage), the consumer is inherently less involved.

AI will not be a complete substitute for consumers in every category or every decision, but AI will be used regularly as an assistive tool. As AI matures and improves, more and more people will use it to save time and reduce risks. That will make AI the consumer. As I have preached since 2013, marketing in a future of smart technologies is “advertising to algorithms.” Which means an end to marketing as we understand it.

2. AI Means An End To Consumer-Centric Marketing

This is a foundational concept in marketing. But it is derivative. Marketing is consumer-centric only by task, not by definition. That task is changing.

To paraphrase the late Harvard marketing guru Ted Levitt, consumers don’t buy products, they buy solutions. And thus, Levitt says, companies are in the problem-solving business. That’s the corporate purpose. The purpose of marketing derives from that.

Traditionally, marketing has put consumers at the center because, historically, consumers did everything—watched ads, visited stores, made decisions, assessed experiences, etc. But as consumers use AI for much or all of their shopping and usage, AI will be the driving force at every point of contact.

Marketing will have to target AI in order to support the broader business purpose of solving people’s problems. Meaning that marketing will have to shift from consumer-centricity to AI-centricity. A business must continue to be consumer-centric, but in support of that, marketing will have to put AI at the center.

Marketing will have to influence AI to influence consumers. Which means that marketing will have to figure out what persuades AI rather than what persuades consumers. Consumers will always be the end users, but to get solutions into the hands of consumers, marketing will have to be AI-centric.

3. AI Means An End To Segmentation

Part of AI’s promise is an enhanced ability to customize offerings and communications. This is an age-old marketing ambition, so we should take a show-me approach to this. But the ability of AI to process information is exponentially better than before, so the possibility of true, real-time personalization is finally on the table.

If AI can realize the promise of customization, then segmentation will be beside the point. We often forget that segmentation has always been understood as a stand-in for personalized products and advertising—the best we could do for now on the road to customization. Segments are a halfway step of customization. Not perfect, but at least a group of like-minded customers who share an affinity for a particular message or feature that is less well-liked by people who are not part of that segment.

The narrower and more focused the segment, the better. Although with greater specificity, cost considerations eventually come into play as a limiting factor. But if AI can facilitate affordable personalization at scale, then it means an end to segmentation.

4. AI Will Put Loyalty Back Into The Marketing Vocabulary

The debate about loyalty versus penetration as the better way to grow has settled out on penetration as the thing to do.

Penetration is a leaky bucket idea. Customers come in but eventually leak out and thus must be won back again with penetration strategies. The bucket is best kept full with more water at the top, not with less water out the bottom.

Loyalty is an idea about plugging the holes in the leaky bucket. But well-researched experience has found that loyalty strategies can’t do this well enough to keep the bucket full. Only more water works, not plugging holes.

If AI succeeds at personalization, though, loyalty will need to be reconsidered. Even more than that, in many categories, AI will be used simply to reorder. Brand choices will be repeated by AI rather than randomly made or concurrently influenced at point-of-sale. Thus, AI will maintain brand consistency. Penetration theories presume that consumers are somewhat (if not largely) indifferent to brands, which means that AI-enforced consistency will be just as acceptable to consumers as today’s inconsistency.

In fact, some tech-driven applications rely on consumers prespecifying preferred brands in advance. Then the AI app keeps repeating those preferences over and over. This would completely bypass the kind of loyalty-eroding, point-of-sale randomness that makes penetration strategies better than loyalty strategies. AI will put loyalty back into the marketing conversation.

5. AI Will Make Many Service Businesses Scalable

The knock on service businesses is scalability. Because service growth entails hiring more people. A single person cannot be made infinitely productive, and thus a bigger service business always grows with roughly equivalent costs, not with shrinking costs.

AI changes this equation because many AI applications can mimic the things that people do. Chatbots are one example. Financial advice is another. Annual medical check-ups are another. Psychological counseling is yet another. Future homes built with sensors that feed data into AI systems may not require a service visit to check on the HVAC or figure out a flickering light. Same for cars.

While service businesses will never be scalable like a digital business, AI will change the economics, thereby opening up service opportunities. Brands will be able to roll out services and experiences more affordably as a value-add. Follow-up care and consultation could be automated and made available.

Scalable services will enable more of the marketing for brands to be embedded in the experience of service and usage. This will be particularly important with AI in-between brands and consumers during the shopping experience.

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6. AI Will Make Mass Media More Important

My final thought is not so much the end of marketing as back to the future. It is to note that as consumers delegate more to AI, marketers will not only have to advertise to algorithms. They will have to figure out how to get around algorithms as well.

AI will optimize the match of brands and preferences. Advertising to algorithms is about the match. Getting around algorithms is about preferences. If preferences remain unchanged, then marketers will be captive to AI. But if marketers can change preferences, AI will have to change the match it makes.

It is easy for consumers to delegate digital media to AI, but harder to do for mass media. That’s how marketers can tell stories to change minds. As marketers have always done.

Focusing solely on performance at every touchpoint will eventually hand marketing over entirely to AI. Which is not bad per se. But it locks in the status quo. It is stagnant and reductive, not transformative. It reduces everything to efficiency. Again, not bad in and of itself. Just not imaginative and thus an end to marketing rather than a new beginning.

Contributed to Branding Strategy Insider By Walker Smith, Chief Knowledge Officer, Brand & Marketing at Kantar

The Blake Project Helps Brands In All Stages Of Development Gain An Emotional Advantage, A Distinctive Advantage And A Connective Advantage

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education

Immediately after Election Day, I will assess the implications of the results for brands here on Branding Strategy Insider and the character of the marketplace ahead. But even before we know the outcome, seven things stand out.

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1. Divisions Have Hardened

This may be the most common observation about this election. Nearly everyone made their mind up early. Despite furious campaigning and record amounts of money, few voters have changed their minds. The polls have barely budged. Red counties have become redder; blue, bluer. The geography up for grabs is rarer territory than ever.

• There is no bandwagon fusion emerging over the closing days that brands should expect to see as a shared sensibility or aspiration.

2. Culture Is Front And Center

The hardest parts of the division in the electorate are cultural issues related to immigration, race, gender, family, faith, home, community and abortion. The economy and crime are important, as always, but what’s competing for power in this election are diametrically opposed visions of culture and values. Ironically, many of these cultural values are wedge issues within each side, yet an intense dislike for the other side is holding the competing coalitions together.

• With culture ever more divisive, functional benefits have become more important for brand positioning and differentiation.

3. Mistrust Is Rife

Each side thinks the other is lying. And each side might be right. Misinformation to advance right-wing causes and candidates has been widely documented, but now it is characteristic of the left as well (as reported by The New York Times in early September). Already, a record number of lawsuits contesting electoral procedures have been filed. Not to mention criticism of the unusual candidate switch from Biden to Harris. Three-quarters of those interviewed in a New York Times/Siena College poll believe democracy is under threat.

• In this swirl of institutional misgivings, the goodwill and confidence essential for building brand equity and pricing power are harder to earn.

4. The Mood Of America Is Distressed

As the election draws near, stress and worry are spiking. Both sides stand ready to contest every ballot. Many are expecting the worst about the election and about what the winner might do. Mental health has become a public health crisis. Consumer sentiment is stuck in a recessionary mindset (even as spending has stayed strong and robust). All this is happening under a macro overhang of volatility, disruption and uncertainty.

• Consumers want a return to normality, or “boring” as I have described previously. In no small way, this election is a referendum on which candidate most people believe can get things back to normal (albeit, with differing definitions of normal).

5. People Are Turning Toward Themselves

Our term for this in the Kantar MONITOR tracking of lifestyle trends is “selfward.” Not to abandon the world at-large or broader social priorities. Rather, to give more priority to one’s own needs and satisfactions. It means more interest in self-care, in mental wellbeing, in rewards and indulgence, and in experiences. Consumers want a break from the stress and volatility of the wider world, politics in particular.

• The call to action that brands have answered since the surge of populism following the financial crisis is giving way to a desire for relief, serenity and shelter.

6. Violence Has Slipped Its Fetters

Two assassination attempts targeted Trump. Crimes committed by or attributed to undocumented immigrants have been a campaign issue. So, too, shoplifting, carjackings and public drug use. A shadow of criminality hangs over the election, from Trump’s criminal conviction and other pending charges, which some have labeled “lawfare,” to Trump’s forewarnings about how he intends to deal with these charges if he takes office. All of which follows a period just after the pandemic that saw a spike in incivility, some of it murderous, as well as record levels of consumer rage over product and service problems.

• In this climate of antipathy, brands have a very small margin of error for inconvenience, under-performance, service hassles and incommodious marketing interruptions.

7. Boomers Are On Their Last Legs

Perhaps the good news in this election is that it’s the last time we’ll have two Boomers, and maybe any at all, contending for the highest office in the land. Trump is a 1946 baby, the first year of the cohort. And Harris was born in 1964, the last year of the cohort. Many things have characterized the Boomer era of cultural, social and political dominance, but perhaps most of all is the “Star Wars” mentality that my co-author Ann Clurman and I described in our first book on Boomers, Rocking the Ages, as “a clash of moral principles — good versus evil.” The Dark Side versus The Force. No compromise is the hallmark. Which is how this election is being contested.

• Time to zero in on the generations emerging from the crucible of this transitional decade marking the end of Boomers. This election is not the future. It is an end, to be followed by a new beginning.

Contributed to Branding Strategy Insider By Walker Smith, Chief Knowledge Officer, Brand & Marketing at Kantar

The Blake Project Helps Brands In All Stages Of Development Gain An Emotional Advantage, A Distinctive Advantage And A Connective Advantage

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education