Social science research tells us that over 80 percent of our judgments can be predicted by fundamental warmth and competence perceptions. Below, Chris Malone and Susan T. Fiske discuss how the application of warmth and competence theory can help companies and brands strengthen their relationships with customers, and argue that in an age when social media can make or break reputations, our capacity to express warmth and competence offers huge benefits.
The reality show Survivor, which is also known as Expedition Robinson or Koh-Lanta in some European markets, has proven to be one of the most durable ratings franchises for the CBS network since its American debut in May 2000. Its first-season finale attracted 52 million viewers, second only to the Super Bowl that year, and since then it has spawned an entire industry of “last player standing” reality show knock-offs. What accounts for such extreme popularity? Perhaps it’s because all these shows tap into something we are hard-wired to recognize and appreciate – the primeval human struggle for survival and the remarkable skills we all possess to perceive, judge, and form mutually-supportive relationships in order to survive. Survivor and all its imitators offer us insights into the eternal, into the essence of being human, rooted in our prehistoric past.
Social psychologists have deduced that primitive humans were forced in their struggle for existence to develop a primal, unconscious ability to make two specific kinds of judgments with a high degree of speed and sufficient accuracy: What are the intentions of other people toward me? How capable are they of carrying out those intentions? Today we judge others almost instantly along these same two categories of social perception, which are known as warmth and competence. Our ability to quickly judge others according to these criteria has been developed and tested for ages through the harsh process of natural selection. Social science research in nearly forty countries now tells us that over 80 percent of our judgments can be predicted by these fundamental warmth and competence perceptions.
We apply warmth and competence judgments in all our relationships, including those involving commercial transactions. Companies and brands have the same capacity to stir up these hard-wired primal passions as people do, so we engage with them on same basis. We experience feelings of affection and admiration for companies and brands that do well by us, and we feel insult or even rage when we believe that those companies have treated us badly.
For the past several years, we have been researching how the application of warmth and competence theory can help companies and brands strengthen their relationships with customers. Since June 2010, our collaborative research has evaluated more than 45 companies and brands in ten separate studies. When we applied warmth and competence dimensions to Coca-Cola’s customer loyalty model, the predictive validity of the model among Coke’s most fervent drinkers went up by 146 percent. We uncovered the direct correlation between customer loyalty to Hershey’s chocolate and awareness of the philanthropic activities of its parent company. Our studies also pointed to warmth and competence as a major factor in why Johnson & Johnson has been able to maintain its strong reputation following several disastrous product failures, while BP and others have not.
We have also documented the extent to which many major companies and brands are perceived as lacking in both warmth and competence. Many companies are seen as selfish, greedy, and concerned only with their own immediate gain. The research also reveals striking psychological evidence for why people hate banks, oil companies, and cable companies so much. The constant pressure for faster and larger profits has steered companies in these and other industries into violating all the prerequisites for trust that we all unconsciously expect of them.
[su_pullquote]We apply warmth and competence judgments in all our relationships. Companies and brands have the same capacity to stir up these hard-wired primal passions as people do, so we engage with them on same basis.[/su_pullquote]
Mass production, mass distribution and mass media are all largely responsible for this state of affairs. It may be hard to believe today, but humans were never mentally wired to trust and enjoy standardized, manufactured goods made by strangers. Prior to the rise of the railroads in the 1880s, there were hardly any packaged goods or ready-to-wear clothing. Prices for goods were normally negotiated and often barter substituted for money. For all these reasons, commercial exchange entailed little distinction between the seller and the product or service offered. People in every culture in all of world history knew their butchers, bakers, and candlestick makers by name. Customers were, in effect, buying the person who stood behind the product along with the product itself.
Then the first national product brands arrived on the scene, including Bass, Cadbury, Levi Strauss, and Heinz, and modern marketing and advertising arose to acclimate people to buying these manufactured products. Producers came to believe that the mass communication of features, benefits, and positioning would be enough to yield lasting customer loyalty, without actually having to deal directly with individual customers. It is a commonly held myth that mass communication heralded a kind of golden age of brand marketing and customer loyalty. In truth, mass communication has systematically eliminated meaningful customer relationships and diluted brand loyalty.
[su_pullquote]Once you become familiar with the ideas in The Human Brand, you will start to see everything around you in a different light. You may even come to realize that we’ve made understanding the world around us much more difficult than it needs to be.[/su_pullquote]
These and other myths, from what we call the Middle Ages of Marketing, are now being shattered every day. The Internet, social networks, and mobile communications have all worked together to create a business environment that increasingly resembles commerce before the Industrial Revolution. Customers are now abandoning many of the largest and most established consumer brands these days in favor of smaller companies that are more transparent in the ways they communicate with customers. Companies such as Honest Tea, Panera Bread, Lululemon and Chobani yogurt have managed to build large numbers of loyal followers without the benefit of mass media, by building reputations for warmth and competence through word of mouth, social media and direct community outreach.
We contend that a new Relationship Renaissance between customer and company is emerging out of the Middle Ages of Marketing. Thanks to Twitter, Facebook and other social networks, customers have near-instantaneous power to pass judgment on how companies and brands conduct themselves, power that will continue to grow for decades to come. The only companies thriving in this new environment are those that put customer relationships first in all their dealings, earning high marks for warmth and competence.
[su_pullquote]Thanks to Twitter, Facebook and other social networks, customers have near-instantaneous power to pass judgment on how companies and brands conduct themselves.[/su_pullquote]
If putting the customer’s needs before your own sounds expensive and unprofitable, it’s not. Sprint Corporation, America’s third largest wireless carrier, in 2012 was able to pull off the highest single-quarter price hike in telecom history after investing billions in better customer service. Grocers such as Publix and Trader Joe’s are able to avoid issuing costly so-called “loyalty cards” because their high levels of customer focus earn them true customer loyalty and industry-leading profits. When Dominoes launched a new pizza recipe in late 2009, the CEO shot commercials in which he apologized that the old recipe hadn’t been very good. His honesty earned such high marks for warmth and competence that Dominoes in 2010 enjoyed the largest single-quarter revenue boost in the history of the fast food industry.
Once you become familiar with the ideas in The Human Brand, you will start to see everything around you in a different light. You may even come to realize that we’ve made understanding the world around us much more difficult than it needs to be. It seems that every week there’s a new theory and explanation of how the world works – or doesn’t work. The best of these ideas have substantial elements of truth to them, but where is the logic in how they all fit together? From Maslow’s hierarchy to the psychology of persuasion, from the innovator’s dilemma to emotional intelligence, from level 5 leadership to conscious capitalism—what is the unifying principle that might put all of these great ideas to work for a better tomorrow? The answer is warmth and competence.
The question this book should raise in your mind is not whether business people are warm and competent. It’s whether they’re perceived that way. Even if they believe they’ve demonstrated warmth and competence to others who are important to them, can they be sure others experience them as such? And what would they be willing to do about it if they learned otherwise?
[su_pullquote]Most of the customer loyalty and trust issues that companies and brands struggle with today are rooted in an excess focus on short-term results and shareholder returns.[/su_pullquote]
Most company and brand executives, after all, believe they are acting reasonably and prudently when they make critical business decisions. Like most people, they view themselves as being both warm and competent, and expect others to view them as such. However, in reality they are largely unaware of how their decisions and resulting actions are perceived by their customers and other stakeholders.
In order to build a stronger reputation for warmth and competence, we recommend the following three fundamental imperatives for action:
1. Become More Self-Aware
In this digital, mobile, and networked world, it has never been more important to be aware of how our words and actions are perceived by others in terms of warmth and competence. However, as sophisticated as we are at judging the intentions and abilities of others, we also suffer from dangerous blind spots that prevent us from seeing how we are perceived. Companies and brands that genuinely desire the trust and loyalty of their customers need to commit to measuring and managing perceptions of their warmth and competence as diligently as they assess and manage their finances.
To help facilitate this process, we’ve created a free and simple tool at LoyaltyTest.com. There you can quickly and easily solicit anonymous feedback on how others perceive a particular company, brand or celebrity from a warmth and competence perspective. The resulting feedback will offer you a basic demonstration of these principles and some insight into the level of trust and loyalty others feel toward that organization or individual. You may be surprised by what you learn from the Loyalty Test, but you will come away from it with a much better understanding of the changes that will need to be made to more reliably earn the trust and loyalty of others.
2. Embrace Significant Change
Once they better understand how they are perceived, companies and brands must be willing to thoroughly examine and significantly change their priorities, policies, and practices to better align with the warmth and competence expectations of customers. Social media demands that companies be more open to accepting how they are perceived, even if those perceptions seem mistaken. This often means they must change their attitude toward customer communication from one of control, defensiveness and unresponsiveness to one of receptivity, understanding and prompt attentiveness.
Two-way communication is the basis of any healthy relationship, whether it be with people, brands, or even companies. We now expect to be able to communicate with companies, and we expect them to listen. Ultimately this requires that the people behind the brands must genuinely want to engage in lasting relationships with their customers. The alternative is likely to be a future filled with cold, faceless commerce; transient customers; unfulfilled employees; and thin profit margins.
3. Fundamentally Shift Priorities
Most of the customer loyalty and trust issues that companies and brands struggle with today are rooted in an excess focus on short-term results and shareholder returns. While shareholders should certainly earn a fair return, this cannot be sustained when it comes at the expense of customer’s best interests and their lasting loyalty. Doing so simply creates a vicious cycle of distrust, disloyalty and higher costs of doing business. Sustained growth and performance requires a fundamental shift in priorities to ensure that the interests of all stakeholders are well served, especially those of customers and the employees that serve them.
In this age when social media can make or break reputations around the world in a single day, our capacity to express warmth and competence is among our most precious assets. The most natural and sustainable way to achieve any kind of meaningful success—personal, professional, or commercial—is to earn the lasting loyalty of others by keeping their best interests at the center of everything we do. Doing so doesn’t require that we recklessly disregard our own interests. Rather, it recognizes that our success as humans has always depended on the cooperation and loyalty of others. In that regard, keeping the best interests of others in balance with our own is simply a form of enlightened self-interest.
Adapted from The Human Brand: How We Relate to People, Products, and Companies, by Chris Malone and Susan T. Fiske (Wiley, 2013). For more information, please visit www.TheHumanBrand.com.
About the Authors
Chris Malone is Managing Partner of Fidelum Partners, a research-based consulting and professional services firm.
Susan T. Fiske is Eugene Higgins Professor, Psychology and Public Affairs, at Princeton University.