The Only Way Is Up

Tuesday, 18 August 2009 - Sao Paulo, Brazil

Presentation Summary

Speaking to the HSM World Sales and Marketing Forum in Sao Paulo, Kevin Roberts outlines how to create a world beyond recession, using the organizing idea of Lovemarks. Talking survival, creation, innovation and endurance, Kevin gives the key drivers to deliver priceless value to consumers who are reframing in the light of today’s tough times.

Since I was here with HSM two years ago, thirteen trillion dollars of consumer wealth has been incinerated. It went up in a casino called America.

The rollercoaster of exclusive capitalism that brands roared on for 50 years is a mangled piece of history.

In the minus, the slipshod mob of pollution, hunger, disease, war, crime and recession are rolling out a crisis of confidence that is rolling in a social crisis, where shock, anger and frustration bolster the mob.

In the plus, advances like the Internet, computation, mobile phones, renewable energy, transport velocity and trade are sparking solutions for a united world.

A new model is being raised up from the forest floor. From San Francisco to São Paulo, radical optimists are rallying to an inclusive standard. Examples:

• Brazil is pressuring the rich country club, championing the countries of tomorrow.
• Digital is pulling down the barricades and powering up participation. Twitter silences censorship. YouTube publishes you.
• Sustainability is moving side-stream to mainstream, textbook to playbook.
• Women are taking charge: Lithuania’s first woman president has a black belt in karate…

Inclusion is the new black, and the real challenge.

I’m going to talk about creating the world beyond recession, beyond brands – with an organizing idea we call Lovemarks. We’ll talk survival, creation, innovation and endurance.

For marketing and sales samurais, tough months lie ahead. It’s about Winning Ugly on top of your beautiful moves.

In business, Winning Ugly strips you back to what makes a difference. Here’s how to win every day:

• Face the truth. Tropicana did when its packaging redesign led to a sales drop of 20%. It’s back in the loved, familiar pack.
• Act fast and decisively. Solve problems in three days: one day to identify the problem, one day to send the solution upstairs for approval, one to put it into action.
• Reframe all your beliefs about value. If you don’t reframe, consumers will. Fedex (Kinko’s) offered free resume printing days for job-hunters.
• Control what’s controllable. Eliminating cost and waste aces any price reduction. To make up for a 5% price reduction, you need a 19% increase in sales. Not likely any time soon…
• Measure only what matters. In advertising, only two questions matter: “Do I want to see it again?” And “Do I want to share this?”

Technology, choice and competition have stripped brands of power, and handed it to the people.

• Brands are owned by management, marketers and stockholders. Lovemarks are owned by the people who love them.
• Brands are built on Respect. Lovemarks are created out of Love and Respect.
• Brands build Loyalty for a Reason. Lovemarks inspire Loyalty Beyond Reason. And beyond Recession too…
• Great Brands are Irreplaceable. Lovemarks are Irresistible.

The Love / Respect Axis busts it down. Let’s recap:

Low Respect. Low Love. Raw materials, raw actions, raw experiences. Basic commodities, dollar stores, illegal deforestation, US Airlines.

High Love. Low Respect. The creative zone of “NEW” and “NOW.” Fads go ballistic, then die. Croc shoes mocked fashion, soared, then plummeted.

Some fads leap to Lovemarks, or get serious as brands: Text messaging, once a kid’s fad, now generates $100 billion a year in revenue for telcos.

High Respect. Low love. “e-r” words: faster, bigger… cheaper. Here’s where most investment has gone over the past 50 years, where brands battle, where sustainability raises the respect bar.

High Love and High Respect. Lovemarks – authentic and lifting people’s lives. From Havaianas through to Natura.

Lovemarks can go global. They live in the local.

Fact: 74% of Facebook’s anticipated 2009 Ad Revenue will come from local, location-based ads. (Borrell Associates)

People live locally and participate globally only when it suits them. We define ourselves by our differences. In Football, think Brazil vs. Argentina.

This Local / Global truth is world changing.

Local passion, not global policy, is the secret to sustainability.

Imagine a billion-plus people inspired to do one thing in their lives that’s better for them and better for the world, whether social, cultural, environmental or economic. Anything from flex fuel to putting plants next to light switches to mentoring at-risk youth.

At Saatchi we call this “True Blue”. The heart of True Blue is to inspire people to make the best choices for themselves and for the planet.

• Green demands: “What’s to be done?” True Blue asks: “What can I do?”
• Green is about Limits. True Blue is about Possibilities.
• Green is about Obligations. True Blue is about Opportunity.
• Green is about the Planet. True Blue is about the People who live on it.

Saatchi & Saatchi S, our True Blue agency, is rolling Personal Sustainability Plans through companies like Walmart out into the wide world. We call this DIY contagion DOT, Do One Thing.

DOT Examples:

• My DOT is to take public transportation to and from airports whenever possible.
• I use the same bottle for water each day every day.
• I am going to stop smoking.
• I no longer use plastic shopping bags..
• My family will no longer buy water in plastic bottles.
• I turn off the tap while brushing my teeth.
• I buy ecologic food and supplies, when possible.
• I will not eat meat for at least once a week.
• I will drink coffee from a reusable mug whenever possible.
• To find my bike in the cellar – yes, and to use it!

Business is the big game. The role of business is to make the world a better place for everyone.

Your Job: is to inspire everyone in your own company to take sustainability seriously and to DOT. Difficult. Yes. Impossible. No. Nothing is Impossible.

Five ways to create Lovemarks

#1 TO CREATE LOVEMARKS: THINK WITH YOUR HEART

A banker with an exotic derivative is like a four-year old with a loaded handgun – impending disaster. The business case for rational human behavior is closed.

Emotion has no limits, up or down. Its potential to create (or destroy) sustained value is explosive.

Consumers are beyond rationality, beyond benefit face-offs. People want joy and happiness. As they reframe choice and value, you must give it to them.

The opportunity is to feel her emotion, to tap it, to share it, to pour it through you as a constant.

People are 80% emotion and 20% reason. Reason leads to conclusions. Emotion leads to action.

Your job: Let your emotions rip!!

#2 TO CREATE LOVEMARKS: PLAY IN THE JUNGLE

“Saatchi & Saatchi will never know more about cars than Toyota — and we will never know more about the people who buy them than Saatchi & Saatchi.” Yoshi Ishizaka, Toyota

Cancel all your meetings, burn all the research – most insights are agglomerations of fact. Consumers are not driven by analysis or numbers.

If you want to understand how a lion hunts, don’t go to the zoo…go to the jungle. We call this Xploring.

Work alongside your customer, explore her inner feelings, and find a revelation. If it’s not emotional, it’s not a revelation. If it doesn’t astonish you, it’s not a revelation. It has to blow you away. To win today, you need an astonishing disclosure of truth.

Truth is out there. Consumers are evaluating more, experimenting more, connecting more, switching more. The revelations are that people want:

1. Health and indulgence
2. Familiarity and novelty
3. Time and money
4. Shopping more and spending less
5. Online and in store, as two worlds become one.

Match revelation with the unreasonable power of creativity. Unleash a Big Idea across every touch point. The more people participate in an idea, the bigger it gets.
Your job: deliver ideas that travel.

#3 TO CREATE LOVEMARKS: DELIVER PRICELESS VALUE

Value Insights:

• “I don’t just want things that have value, I want them to reflect what I value.”
  It’s what the brand adds to my world.

• “I’m into the challenge of finding creative solutions.”
  Ingenuity is the new innovation.

• “Little victories give me more satisfaction than ever.”
  A reward is beating the system and getting something extra.

• “I’m sorting true value from false economies.”
  People want smart abundance, not rubbish.

• “I’m not cutting back on luxuries, I’ve just redefined what luxuries are.”
  People still treat themselves, just not in the same way.

As consumers reframe value in tough times, Lovemarks fill the gaps, bringing hope and joy. Price is what companies put on the tag. Value is what lifts her world, a priceless feeling you deliver.

Here are three value drivers that deliver the feeling:

Value Driver 1: SURPRISE WITH THE OBVIOUS:

• Netflix delivers videos to your door.
• Virgin offers meals when people feel like having them, not on the airline’s schedule.
• Baker Tweet alerts UK customers when a fresh batch leaves the oven of a participating baker.
• Buy a Hyundai and if you lose your job, they’ll buy it back off you.

Your job: In the tough, deliver comfort of certainty.

Value Driver 2: JUMP SHIFT VALUE:

• P&G invited consumers to compare Tide Total Care with dry cleaning. Olay Professional Pro-X’s headline: “As effective at wrinkle reduction as what the doctor prescribed. At half the price.”
• Tata Nano compared their car with a scooter.
• Aldi – “Don’t change your lifestyle, change your supermarket.” Insulating families from recession.

Value Driver 3: TAKE THE LONG VIEW:

• Tylenol’s advice. Got a headache? Take a glass of water, wait 20 minutes and if you still have one then take Tylenol.
• Toyota gained market share in each of three major economic downturns of past 20 years:

1. By continuing to launch new products.
2. By investing in strong brand and marketing activities.
3. By going hard on rational value and priceless emotional value.

Fact: Eighty-five percent of the raw material used to manufacture a Toyota Prius is recyclable.

The human reframe will be more happiness with less stuff. Only respect and love will be bought.

Your job: is to listen first, and reframe second.

#4 TO CREATE LOVEMARKS: USE THE THREE SECRETS

Mystery – mixes dreams, icons and stories to create the attractions of the unknown. It’s what we don’t know that attracts. Examples:

• Starbucks stealth stores, back to the future!!
• Rachel Nasvik hiding 90 new handbags around New York, each loaded with night-life goodies.
• Swarovski inviting us to design our own jewelry.

Your job: Don’t give them what they want, give them what they never dreamed possible. As Nietzsche said : “We live our lives forward into mystery.”

Sensuality – excite all five senses. Sight, scent, touch, taste and sound are the portals to the emotions, which stimulate each other. Examples:

• Toyota iQ Mini-Car’s intelligent design. So hot, Aston Martin is introducing a luxe version.
• Apple stores take in around $4,000 in revenue per square foot of retail space. At Saks, $700.
• Naoto Fukasawa’s juice box designs. So real your eyes can taste them.

Intimacy – In down times, intimacy is the king connector. It’s the small touch, the perfect gesture that wins Loyalty Beyond Recession.

Intimacy is empathy, commitment, passion and humor.

#5 TO CREATE LOVEMARKS: RULE THE TWO NEW WORLDS

In the Screen Age, the screen and the store are the new playgrounds.

“Screenagers” get to play, marketers get junked. We’ve moved from A to A – to P.

This is the Age of Twitter, Bebo, Hula, Orkut and Tumblr. The world is online, alone, and thirsts to create, share and participate in joyful feelings.

We call the quencher SISOMO, sight, sound and motion fizzing through multiple screens.

The future is a tumbling of convergence and divergence. As platforms fuse and splice, consumers only take out what they want.

The job is to partner smart and let ideas with emotion live. The essence of community is emotion. Be spontaneous, fast and fun.

These are danger days for retail, and danger spells raw opportunity. It’s not about price and range. It’s about giving consumers a better life.

Winning in store is about:

• Experience: Havaianas new Flagship Store in São Paulo gets there –- designed as a landscaped public square flooded with light.
• Convenience & control: ready-made meals to in-store baby sitters to transparency at shelf.
• Interactivity: Mobile phones in stores are just getting started. The store will be handheld.
• Partnership: It’s not about below or above the line now. It’s partnering around big ideas.
• Priceless Value: In 2008 Aleve analgesics rode the switch from hoarding to caring. Its retail campaign “Buy one, give one.”

Your job: Move from price to priceless, from function to experience.

THREE THINGS TO DO TOMORROW:

• Write a 100 Day Winning Ugly plan. List 10 tough moves for 100 days, and execute.
• Put participation at the center of every communication. An idea is not an idea until people participate in it.
• Inspire your colleagues to DOT.

And start tomorrow, before it’s too late.