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The Authenticity Handbook

Four practical steps for brands to embrace authenticity and win customers

By Andrew ReidPhotography by May Truong

2 O F 29

Introduction How the King of Beers Lost its Throne

The Authenticity Effect

Four Steps to Embrace Authenticity

Conclusion Bud Battles Back and Suffers Blowback

About the Author

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CONTENTS

PG 3

PG 6

PG 10

PG25

PG 28

3 O F 29

How the King of Beers Lost its ThroneJust how far can a great brand fall Consider the case of Budweiser a brand so ubiquitous in North America and around the world that it calls itself King of Beers yet which has suffered through 25 consecutive years of declining sales1 Back in 1988 one of every four beers sold in America was

How can Big Beer win back customers Authenticity

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INTRODUCTION

4 O F 29

a Bud Now itrsquos one in 12 Every attempt to arrest the decline by the brandrsquos owner Belgium-based global brewery giant AB InBev has failed and the companyrsquos stock price has fallen along with the value of its top product

Budweiser isnrsquot losing market share to its tradition-

al rivals Many other major brewers are facing a similar problem Coors Light now Ameri-carsquos top-selling beer is also beset by declining salesmdashand its parent company MillerCoors doesnrsquot expect them to recover until 20192

Rather itrsquos craft breweries that are gaining at the expense of Big Beer Their growth has accel-erated in lockstep with Big Beerrsquos decline There were a mere 199 craft brewers in America in 1988 today there are more than 34003 Yet their

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In 1988 one of every four beers sold in America

was a Bud

Now itrsquos one in 12

5 O F 29

growing numbers have not diluted their suc-cess the segment posted sales growth of more than 17 percent last year Today one of every 10 beers produced in America is craft-brewed The segment once negligible is worth nearly $20 billion in annual sales

It seems improbable that a pack of such puny rebels could knock top brands from their thrones But the craft brewersrsquo size is their strength it allows them to forge a stronger customer bond They manufacture on a small scale often sourcing ingredients locally Their marketing campaigns tell the quirky stories of their brewmasters And because most focus on purely regional distribution they become a source of pride within their communities If every beer has a personality the major brands are the boorish out-of-towners invading the local pub while craft beers are the witty conver-sationalists whose company you most enjoy

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6 O F 29

The Authenticity EffectThere is a single word that describes what craft brewers have that major brands do not authenticity

Todayrsquos empowered customer is driven to purchase products and services from companies they perceive as authentic the ones that earn their trust by reflecting their values their per-sonal aspirations and their unique sense of self

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Small brewers are winning the authenticity game Authenticity

7 O F 29

and community These are the motivations that influence peoplersquos purchasing decisions not just for their beer but for all the goods they consume

One recent survey by the Boston Consulting Group found that being authentic was a major driver of customer engagement for all demo-graphics but especially for Millennials the cohort born between 1980 and 2000 which will soon hold greater purchasing power than the baby boomers4 The BCG survey found that ldquoauthenticityrdquo meant different things to different age groups Boomers tend to trust brands with a long history and heritage and that resolve conflicts quickly Millennials are more drawn to brands that have a sense of personality and support worthy causes5

One thing is clear in a new consumer land-scape driven by authenticity and trust major brands in any consumer segment are at a disadvantage The 2015 Trust Barometer

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8 O F 29

compiled by the global PR firm Edelman showed that overall consumer trust in business fell last year for the first time since the Great De-pression6 But that mistrust isnrsquot spread evenly according

to the research firm Mintel half of Americans trust small firms to do the right thing but only 36 percent trust large firms to do the same7

This customer preference for authentic com-panies is having a notable effect on the bottom line The Catalina Grouprsquos most recent perfor-mance survey of the top 100 consumer brands showed that their combined sales volume had flatlined8 Even more tellingly 90 of the top 100 brands lost category share last year

They all face a similar challenge smaller firms innovative upstarts and more nimble competitors who convey a stronger sense of

When asked which types of companies

they believe will act responsibly

Americans sided with the little guy

Small Firms Large Firms

50 36

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9 O F 29

mission and purposemdashwhether itrsquos craft beers small-batch sodas artisanal foodstuffs hand-crafted housewares empowering fashion eth-ical online retailers or still othersmdashare eating away at their customer base And technology has made every competitor large or small a force to be reckoned with Online retailers such as Amazon and Etsy make it easier for any product to reach a large audience while tech firms such as Shopify can provide even the smallest retailers with slick online boutiques accessible to consumers around the globe

But you donrsquot need to be small to be authentic you just need to know what your firm stands for understand how customers engage with your brand and make that knowledge count in every customer interaction In a new consumer land-scape driven by authenticity the advantage will go to companies that are best able to forge last-ing emotional connections with their customers

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10 O F 29

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For the companies that have it authenticity brings immediate and tangible benefits Em-powered customers are more loyal to brands theyrsquore invested in personally and emotionally

Four Steps to Embrace Authenticity

1Speak to Human

Experience

2Share What

Your Company Believes In

3Be Honest

4Engage

With Your Customers

INTRODUCTION

11 O F 29

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And they will advocate on behalf of your brand telling friends and acquaintances about it be-cause they believe theyrsquore assisting others by doing so

Authenticity-driven ldquobrand advocatesrdquo are the ultimate satisfied customers Like all high-ly satisfied customers they spend more than twice as much as average customers on the brands they are loyal to They generate word-of-mouth buzz and positive online contentmdashan invaluable asset on social media where 80 per-cent of people wonrsquot buy from a business that has negative reviews And they drive down the cost of new customer acquisition which can be seven times more expensive than retaining an existing one by doing that work on your brandrsquos behalf9

Though it seems elusive even large firms can cultivate authenticity in their customer rela-tionships by taking the following four steps

12 O F 29

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1 Speak to Human ExperienceIn todayrsquos authenticity-driven consumer land-scape empowered customers have instanta-neous access to all kinds of information about the brands they buy They know how to spot spun messaging dud products and meaning-less marketing campaigns In short they have

Taco Bell understands young customersrsquo sensibilities Authenticity

13 O F 29

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no patience for fakery Even though companies can be large enterprises with hun-dreds or thousands of em-ployees customers expect them to have a single coher-ent personality and to relate to them on a human scale not a corporate one

Authentic companies rec-ognize this reality They donrsquot try to be something theyrsquore not but instead recognize what they are what they do best and what customers val-ue most about them Authentic companies are in touch with the emotional benefits that keep customers loyal to their brand whether itrsquos a sense of belonging freedom security altruism happiness or just plain fun

Authentic

companies

donrsquot try to be

something they

are not but

instead recognize

what they are

what they do

best and what

customers value

most about them

14 O F 29

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Authentic companies also know how to amplify those benefits through everything from packaging and market-ing to social networking For Taco Bell and its customer base of teenagers and millen-nials enhancing customer engagement meant stoking irreverent fun on social me-dia The company set up a

petition on changeorg to lobby for the creation of a taco emoji10 ldquoWhy do pizza and hamburg-er lovers get their own emoji but taco lovers donrsquot THE TACO EMOJI NEEDS TO HAPPENrdquo read the petition perfectly speaking its teenage customersrsquo idiom The petition was a success garnering nearly 33000 signatures and loads of earned media11 And it worked in 2015 taco emojis were introduced to text messages

33000Signatures

gathered by Taco

Bellrsquos petition for

a taco emoji

15 O F 29

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2 Share What Your Company Believes InAuthentic companies are open about what drives their business They donrsquot hide their motivations They speak candidly about their mission and theyrsquore transparent about their business practices so that empowered custom-ers can judge for themselves whether the

Patagonia appealed to customersrsquo environmental concerns Authenticity

16 O F 29

Authentic

companies are

transparent

about their

business

practices so

empowered

customers

can judge for

themselves

whether the

company is

living up to the

standards it sets

for itself

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company is living up to the standards it sets for itself

Most brands these days are sensitive to environmental concerns but empowered au-thenticity-driven consumers are constantly on the look-out for ldquogreenwashingrdquo firms brands and products that claim to be more ecologically sensi-tive than they actually are To counter this perception the California-based outdoor gear and apparel maker Patagonia produced The Footprint Chron-icles12 a series of websites vid-eos and fact sheets that explain the steps in its supply chain and the environ-mental impact of each item in its catalogue By detailing both the positive and negative impacts

17 O F 29

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of its products Patagonia admits itrsquos not perfectmdashbut simultaneously earns trust

And being authentic doesnrsquot necessarily mean devotion to great global causes A compa-ny may be committed to simpler principles itrsquos the

genuineness of the commitment that makes it authentic Nordstrom stands for superior cus-tomer service Nikersquos ldquoJust Do Itrdquo slogan is about helping customers get fit and stay fit Googlersquos iconically simple uncluttered interface stands for the power of human curiosity Such com-mitments help each of these companies forge emotional bonds with customers by making them feel important and helping them to be-come the people they want to be

The challenge for companies beset by a lack of authenticity lies in renewing their mission

$600 million

Revenue of Patagonia in 2013 The company

tripled its profits while touting its ecological

responsibility

18 O F 29

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and rediscovering their social commitment Bell Canada one of that countryrsquos oldest firms and most dominant telcos has also long ranked as one of its least favorite and least trusted brands Seeking to rebuild public trust Bell rec-ognized that its core business was quite simple helping people talk to each other13 And it trans-lated that mission into social action with Bell-LetsTalk a social media campaign designed to end the stigma associated with mental illness by encouraging people to speak openly about it

With Bell offering to donate five cents for ev-ery Twitter message that featured the BellLet-sTalk hashtag politicians and celebrities from Prime Minister Justin Trudeau to talk-show host Ellen DeGeneres jumped into the fray with their legions of followers14 The result over $6 million raised for mental health initiatives and a different customer perspective on what the company stands for15

19 O F 29

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3 Be HonestAuthentic companies tell it like it is They hear customersrsquo concerns and emphasize accountabil-ity Authentic companies earn high trust capital because they respect their customers as people

McDonaldrsquos long beset by urban myths about the ingredients in its products in 2014 launched

McDonaldrsquos showed a commitment to honesty Authenticity

20 O F 29

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an online campaign designed to counter mis-information titled ldquoOur food Your questionsrdquo The campaign gave McDonaldrsquos customers the chance to ask any question they wanted One video takes customers inside the Fresno-based Cargill processing plant where McDonaldrsquos hamburger patties are made and makes a point of demonstrating that they contain none of the rumored cow lips or sawdust

McDonaldrsquos isnrsquot pretending to be something itrsquos not It freely admits that the cattle which produce its beef are fed genetically modified grains and are treated with hormones And it also admits there are 17 ingredients in its fries16mdasha revelation that generated a fair deal of online criticism But most of that criticism came from organizations already aligned against fast food17 Everyday consumers who already eat McDonaldrsquos fries already know the food isnrsquot healthy but eat it occasionally as a convenience

21 O F 29

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meal They are the audience McDonaldrsquos was trying to reach and they were less swayed by the outrage of entrenched organizations than by the restaurantrsquos newfound transparency The McDonaldrsquos campaign is not a commitment to sustainability itrsquos a commitment to honesty And when it comes to passing the authenticity test telling the truth matters most

Honest companies also admit mistakes Au-thenticity doesnrsquot mean perfectionmdashin fact itrsquos the opposite of perfection Empowered cus-tomers donrsquot expect brands to be infallible but they do expect them to fess up when things go wrong and to remedy any problem they creat-ed German-based auto manufacturer Volkswa-gen is learning this lesson the hard way When the world discovered last September that the company had installed software in its diesel automobiles that cheated emissions tests CEO Martin Winkertorn immediately apologized18

22 O F 29

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It wasnrsquot enough to save his job19 His replace-ment Matthias Muller has been apologizing ever since20 telling the Detroit Auto Show in January21 that ldquoOur most important task for 2016 is to win back trustrdquo

On that score Volkswagenrsquos year hasnrsquot gotten off to a strong start In mid-January the state of California rejected Volkswagenrsquos proposed fix for 480000 cars with poor emissions stan-dards22 More than four months since the scan-dal first broke Volkswagen has provided count-less apologies but not one solution that meets the approval of American regulators leaving vehicle owners still awaiting a fix for their cars The longer the problem goes unresolved the more the apologies ring hollow Volkswagen has paid dearly for its deception Within two months it had lost to Toyota the title of worldrsquos largest automaker And the final cost of the scandal to the company could be steeper still23

23 O F 29

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4 Engage With Your CustomersNo brand can cultivate an authentic relationship with customers if they donrsquot know their deepest concerns and aspirations Authentic companies listen to and engage with their customers They try to understand why theyrsquore loyal to their brand and what drives a bond with their products

DEWALT engages with customers for actionable feedback Authenticity

24 O F 29

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Full disclosure meaningful engagement is precisely why my company Vision Critical pio-neered the idea of online insight communities Thousands or even hundreds of thousands of customers join these communities to provide feedback and insight to brands they care about feedback companies can use to build better products launch more effective marketing campaigns and improve customer experience

For instance the leading US tool manufactur-er DEWALT using a Vision Critical insight community engages with a group of 10000 tradespeople asking for their opinions on new product ideas and marketing campaigns The insight community gives DEWALT the opportu-nity to see its mission and its principles through its customersrsquo eyes24

By meaningfully engaging with customers companies build trust and ensure their success in todayrsquos authenticity-driven marketplace

25 O F 29

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CONCLUSION

Bud Battles Back and Suffers BlowbackIn 2015 as part of its response to the rising threat of craft beers Budweiser produced a minute-long Super Bowl ad to address the topic25 The ad stated that Budweiser was ldquoproudly a macro beerrdquo which was ldquobrewed for a crisp smooth finishrdquo But it took the message a step further making fun of craft beer and the people who drink it The message ldquoitrsquos not brewed to be fussed overrdquo appeared alongside images of a man with a handlebar moustache sniffing a glass of dark porter Another message read ldquolet them sip their pumpkin peach alerdquo

The reaction was swift and negative26 Social media lit up in outrage before the Super Bowl was even over Craft beer makers and drinkers all took exceptionmdashas did behemoth competitor

26 O F 29

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MillerCoors which issued a statement saying ldquoall beers are worth fussing overrdquo Many observers pointed out the adrsquos hypocrisy given AB InBev has been buying up craft breweries as part of its strategy to offset Budweiserrsquos declining fortunes

The lesson of Budweiserrsquos Super Bowl ad is that people didnrsquot see it as inauthentic at all They saw it as perfectly authentic a sign of the companyrsquos true colors the kind of brand arro-gance that leads to 25 consecutive years of declining sales

The stakes are high for companies now that customers expect authenticity from the brands they purchase To survive brands must estab-lish a strong sense of trust in their products and services though honesty transparency commitment and meaningful customer en-gagement Those that succeed will embrace the challenge of authenticity and put their best most human foot forward into the marketplace

27 O F 29

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ENDNOTES

1 httpwwwstltodaycombusinesslocal

bud-takes-new-aim-at-younger-consumers

article_390e8db0-ee35-11e1-aec0-

001a4bcf6878html

2 httpswwwcprorgnewsnewsbeat

millercoors-profits-fall-coors-light-sales-decline

3 httpswwwbrewersassociationorgstatistics

number-of-breweries

4 httpwwweconomistcomnews

business21678216-authenticity-being-peddled-

cure-drooping-brands-its-real-thing

5 httpswwwbcgperspectivescomcontent

articlesmarketing_center_consumer_customer_

insight_how_millennials_changing_marketing_

foreverchapter=3

6 httpwwwedelmancominsightsintellectual-

property2015-edelman-trust-barometer

7 httpwwwprnewswirecomnews-releases

56-of-americans-stop-buying-from-brands-they-

believe-are-unethical-300181141html

8 httpwwwcatalinamarketingcom

uncategorizedcatalina-mid-year-performance-

report-finds-challenging-market-for-many-of-top-

100-cpg-brands

9 httpswwwvisioncriticalcomresourcescost-

of-unhappy-customers

10 httpswwwchangeorgpunicode-

consortium-the-taco-emoji-needs-to-happen-2

11 httpwwwfoodworldnewscom

articles5255720151111taco-bell-emoji-yum-

brands-chain-celebrates-successful-lobbying-

campaign-the-best-possible-way-E28093-

releasing-600-taco-gifs-on-tacoemojienginehtm

httpwwwadweekcomnewstechnology

heres-why-taco-bell-created-600-gifs-and-

photos-its-new-social-campaign-168007

12 httpwwwpatagoniacomusfootprint

13 httpwwwhuffingtonpostca20130509

wireless-prices-canada-customer-

satisfaction_n_3247938html

14 httpwwwctvnewscahealthlets-talk

celebrities-add-voices-to-bellletstalk-

conversation-12754455

15 httpwwwcbccanewshealthbell-let-s-talk-

day-mental-health-13419194

16 httpbraveoneagencycommcdonalds-

french-fries-transparency-gone-bad

17 httpwwwtreehuggercomgreen-food

anatomy-mcdonalds-french-fryhtml

18 httpwwwcbccanewsbusiness

volkswagen-emissions-recall-13238329

19 httpwwwcbccanewsbusiness

volkswagen-martin-winterkorn-resigns-13239916

20 httpwwwbloombergcomnews

articles2015-11-19vw-takes-apology-tour-to-l-a-

car-show-readies-u-s-repair-plan

21 httpwwwbloombergcomnews

articles2016-01-12vw-ceo-flubs-interview-with-

u-s-apology-tour-off-to-rocky-start

22 httpwwwusatodaycomstorymoney

cars20160112volkswagen-carb-california-air-

resources-board-emissions-scandal78688056

23 httpmoneycnncom20151026autos

volkswagen-toyota-sales-emissions-sandal

24 httpswwwvisioncriticalcomcustomer-

storiesdewalt

25 httpswwwyoutubecom

watchv=siHU_9ec94c

26 httptimecommoney3695498budweiser-

super-bowl-ad-mocking-craft-beer

28 O F 29

visioncriticalcom

ABOUT THE AUTHOR

In 2000 Andrew Reid created Vision Critical to disrupt the way companies engage with their customers for meaningful feedback and insight Andrew transformed the industry with a customer intelligence platform thatrsquos now used by hundreds of companies to support secure online branded Insight Communities

What began as a start-up in Vancouverrsquos emerging and quickly growing tech scene has now turned into an award-winning cloud-based customer intelligence company with 16 global offices and nearly 700 employees

Andrew was a Vancouver Film School student and in 2011 he completed the Stanford Universityrsquos Graduate School of Business Executive Program He is a member of the BC chapter of the Young Presidents Organization and the New Media BC Organization He also sits on the Board of Directors for the BC Technology Industry Association and CASRO

PH

OTO

GR

AP

H B

Y A

ND

RE

W Q

UE

RN

ER

Andrew Reid

Vision Criticalrsquos founder

and president of corporate

innovation

MEMBER ENGAGEMENT AT THE SPEED OF BUSINESS

2

CONTINUOUS TRUSTED INSIGHT

DIRECT FROM YOUR CUSTOMERS

1

ENTERPRISE-GRADE TECHNOLOGY

4

SCIENCE OF MARKET

RESEARCH BUILT-IN

3

Vision Criticalrsquos revolutionary cloud-based customer intelligence software enables companies to engage their

customers for meaningful insight so they can make important decisions with confidence

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