These are heady days in the behavioral sciences. Hardly a week passes without an article in the popular press documenting some new discovery on people's decision-making process. Most highlight the quirks and anomalies that demonstrate just how bad people are at it.
People are vulnerable to all manner of decision-making errors.
Rather than rationally evaluating the available evidence for and against a decision, for example, people often use simple, efficient rules of thumb called "heuristics" to make decisions. These rules -- what Financial Times columnist John Authers calls "mental short-cuts that help [people] survive in the hurly-burly of normal life" -- can have irrational results, such as people's tendency to overestimate the likelihood of an event based on how typical the event is.
It turns out that people are vulnerable to all manner of decision-making errors. They tend to overestimate the likelihood that others will see things and behave in the same ways as they do. They overestimate their individual contributions to joint tasks and underestimate how long tasks will actually take. And importantly, they perceive the exact same things -- objects, institutions, situations, and people -- differently from others.
Indeed, Homo economicus -- that figurative species of human who rationally and dispassionately maximizes his or her economic gain -- has given way to Homo humanus -- the individual who is subject to all the inherent foibles, flaws, and feelings that come with being human. And one thing is certain from all this scientific and scholarly activity: Our emotional, cognitive, and perceptual apparatus places limits on how rationally or accurately we can view the world around us -- and these limitations have a profound effect on the decisions we make.
This has enormous implications for comprehending how your employees, customers, and prospects understand (or misunderstand) your organization and your brand's identity. What if your customers don't "get" your brand? Or what if they get it wrong? What are the consequences if your employees, your customers, or your prospects disagree on your organization's core identity in the marketplace? These are the questions Gallup sought to answer in our research. After all, organizations have invested heavily over the years to develop, communicate, and evolve their brand's unique identity.
Gallup studies what makes organizations great, and it turns out -- not surprisingly -- that a strong brand promise that clearly differentiates an organization from the rest is a crucial element. But what many organizations miss is the need to ensure that the brand identity that a customer or prospect perceives is the one the organization intended.
Equally important is ensuring that the brand identity an organization's employees understand and deliver is the one the organization intended. In our previous research, we found that organizations' performance on this dimension is particularly poor, especially among front-line employees. And perhaps most important of all is the need to ensure that the brand identity an organization's employees deliver is the same one its customers expect.
All these issues fall under the general heading of identity alignment. Research suggests that the "new normal" for brand development will not rest on how aware people are of any given brand but rather on how aligned each organization is with its identity and promise among customers, employees, prospective customers, and prospective employees.
Gallup wanted to learn more about this concept of identity alignment and how consequential it can be for organizations that successfully align their core brand identity with consumers who are already familiar with them. Hint: It's worth a lot -- but only when that identity is well-understood in the marketplace. Our research suggests that the more consumers can accurately verbalize the principal characteristics of the brand promise of some well-known American brands, the greater the share of their business they give those brands. In short: Greater alignment brings greater success.
To identify the core elements of a brand's identity, Gallup studied the primary marketing emphasis of six major American brands representing the airline, hospitality, food and beverage, financial services, automotive, and retail industries, along with input from some of those organizations' executives. The resulting list of core identity elements was used to determine alignment.
Next, more than 6,600 respondents -- who were familiar with but not necessarily customers of these six brands -- completed Web surveys. Respondents were asked the open-ended question "How would you describe what Brand X represents, and what makes it different from its competitors?" The responses were compared to the list of core identity elements. Gallup then determined the degree of alignment based on whether the open-ended responses matched any of the elements from the list.
This research revealed some startling results. Across the six brands, there was significant range in the organizations' success at aligning the elements of their core identity. For both the major retailer and the airline, for example, brand alignment was at or above 90% among consumers who were already familiar with the brands. This represents extremely high levels of successful top-of-mind recall of the core brand elements. For other brands, however, the degree of alignment was much less successful; the automotive brand exhibited 35% alignment among consumers familiar with it.
Alignment and wallet share
To compute share of wallet for each industry, Gallup used a composite of different metrics appropriate to the industry. For the bank representing the financial services industry, for example, share of wallet was defined as account share with the bank, and the share of wallet for the company representing the food and beverage industry was based on the consumption share of its primary product. Wallet share for the companies representing the airline and hospitality industries was measured by usage, and wallet share for the automotive industry company was measured using current ownership and future purchase intent. The company representing the retail industry was evaluated based on share of visits and actual share of wallet.
The shares of all six brands were combined into a single metric for comparison. Regardless of the type of wallet share, in each case and without exception, consumers' alignment with each brand's core identity elements successfully predicted wallet share. Consumers who were already familiar with a brand and who successfully aligned with its brand identity rewarded those brands with double the share of wallet compared to consumers who were equally familiar with but not aligned with the brand.
Brand alignment affects all forms of wallet share, but some were affected more than others. For example, the automotive brand showed only slight differences in current ownership share among consumers who were aligned (39%) compared to those who were not aligned (35%). However, the gap widened considerably for future purchase intent: Share of wallet dropped to 34% among the aligned and plummeted to 18% among those not aligned. Though both groups showed a decline in the intent to purchase this brand in the future compared to current ownership levels, intent among the aligned group dropped by 13% compared to a 49% drop for the not-aligned group. In this case, alignment doesn't do much to boost current ownership share, but it does boost future purchase intent.
Make sure that your workforce is aligned with and empowered to deliver the core elements of your brand identity.
Identity alignment had a much larger impact on other brands. In the food and beverage category, the share of consumption among consumers who were both familiar with the brand and aligned with it was 52%, while the share of consumption among those who were familiar with the brand but not aligned with it was 15% -- a difference of 247%. For the retailer, consumers who were familiar with and aligned with the brand awarded a hefty 61% of their purchase share to the company compared to just 39% of those who were familiar with the brand but not aligned with it. Differences in the share of visits to the store were similar.
Implications for leaders
This research has significant implications for leaders of organizations in these industries and others. These findings suggest general principles that corporations -- and the brands they are known for -- must adhere to.
1. Know what your brand represents, clearly define your promise, and inject the core elements of this identity into the marketplace constantly and consistently -- across time, locations, and channels.
2. Develop the core elements of your brand identity and brand promise so that customers and potential customers clearly understand what makes your brand different from your competition. Make sure that your target audience makes a connection between your brand and these differentiators.
3. Continuously challenge your brand promise. Ask whether it is still strong enough to stand up to your competition, and ensure your leadership team is aligned with that promise.
4. Make sure that your workforce is aligned with and empowered to deliver the core elements of your brand identity and promise. Ask your employees -- especially those in customer-facing roles -- whether they know and believe in your promise.
5. Review your current communications. Ask if you are being consistent across all customer touchpoints.
Several of the organizations Gallup studied in this research try to differentiate their brands by the level of service they offer. The people who deliver this service must understand the core elements of the organization's brand identity and promise, be able to accurately and readily verbalize it, and feel empowered to deliver it. And don't underestimate the power of alignment among those who don't directly deliver the products or services to external customers. They are still key to your organization's ability to deliver on its brand promise, so they too must understand the core elements of your brand identity and promise and accurately and readily verbalize it.
Though the current research explores the relationship between brand alignment among consumers and key performance outcomes, alignment raises many questions relevant to leaders. How much, exactly, does employee alignment contribute to business outcomes beyond customer alignment? What would your organization gain if it could recruit people who are already poised to deliver the core elements of your brand identity and promise when they are hired? In what way, if any, do aligned customers or employees serve as ambassadors of the brand? How does brand engagement -- or the marketplace's perceptions of a brand's honesty, integrity, value, and irreplaceability -- complement alignment? We will explore these questions in future articles.
Results are based on a Gallup Panel study consisting of Web surveys completed by 6,612 national adults, aged 18 and older. The study was conducted in June 2010. Gallup Panel members are recruited through random selection methods. The panel is weighted so that it is demographically representative of the U.S. adult population. For brand-level results based on this sample, one can say with 95% confidence that the maximum margin of sampling error is about ±3 percentage points. Margins of sampling errors vary for individual subsamples. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.