‘I’ll always go back to that hotel'

Editor’s note: Tom Neveril is managing partner at Storybrand Consulting, Santa Monica, Calif.

Conventional wisdom says it’s cheaper to keep customers than acquire new ones. So given the current global economic slowdown, we should expect belt-tightening marketers to continue making loyalty a top priority.

But a more important reason to focus on brand loyalty is the changing consumer mind-set. After several years of hyper-competition, consumers now perceive fewer rational differences between brands. So their loyalty is based on more emotional reasons. For example, the book Habit: The 95% of Behavior Marketers Ignore reported on a study on brand loyalty across several categories which showed that 85 percent of customers who defect report being satisfied with their previous brand.

The critical challenge for marketers is figuring out how to be on the winning side of these more emotional decisions. And specifically, how can market research help marketing teams create more loyal relationships?

The best approach to uncovering the emotional drivers of the subconscious mind is behavioral study. Patterns of behavior, like our rituals and habits, are the foundation of all emotional relationships, good or bad.

Customer storytelling

In my view, ethnographic or on-site observation is the best approach to studying behavior. However, it’s often impractical or impossible to study brand experiences as they happen. For example, consider how difficult it is to study the use of flu medications. So past behavior must be explored. For this work, the unconventional - and often misunderstood - approach of customer storytelling is well-suited.

Storytelling is not easy because it requires respondents to probe their memories. Therefore, it’s important to use an interview structure that will contribute to recall. Chronological ordering of topics is ideal. For example, a market researcher might explore how customers behave during the typical timeline of brand experience: gaining awareness, shopping, consideration, selection, purchase and usage. Tracking down this “purchase funnel” chronology will help trigger associations and memories.

Once a format has been determined, how might a researcher evoke stories?

Set the stage for storytelling. Storytelling can be conducted on site or in a traditional research facility setting. In either situation, it’s important to take advantage of the fact that sounds, products, scents and flavors can stir up memories. The senses are critical to putting your target customers at ease, so they can think, feel, talk and - most importantly - behave in an authentic way.

So, if your brand involves socializing experiences, consider interviewing in restaurants, bars, etc. If you’re in the car business, buckle up and go for a drive with your interviewee. If it’s impractical to pursue on-site story-gathering, creativity can help: Even a sterile market research facility room can be transformed with artifacts of the customer’s experience; products, photography, music, food, etc.

Know how to identify a good story. Before embarking on a customer storytelling project, it’s important to know the basic elements of a useful, compelling story.

From the grandest novel to the urban myth to a simple joke, all powerful stories have four elements. The first element is plot - a sequence of related events. That’s a no-brainer. Secondly, on top of plot, all good stories have conflict. Conflict is only possible when we have a protagonist with humanlike motivations, who takes action that is in conflict with an antagonist.

Plot and conflict naturally occur in the everyday experience of being a consumer. Conflict occurs as people move toward a specific brand, and then competitors or other influencers attempt to steer them in a different direction. To gather plot and conflict, it is crucial to understand the need the consumer was attempting to satisfy and the people or personalities that stood in the way.

Useful stories also contain surprise. The definition of surprise is the situation produced when an expectation about life comes into conflict with reality. When listening to someone’s experiences, keep in mind that it’s not necessary that we as researchers are surprised, although we often are. Rather, it must be plausible that the customer has experienced a surprising situation.

The most meaningful surprises occur when someone stumbles upon an unexpected barrier in their quest to satisfy their need. As an example, consider the way FedEx might describe its typical customer experience: a protagonist mailroom guy uses a competing service that invariably creates a surprising, frustrating shipping delay.

The function of surprise in a story is to illuminate the fourth element: lesson, also called theme or moral. A lesson is what the protagonist learns at the conclusion of the conflict. It is possible only when we have the preceding elements of plot, conflict and surprise. But it doesn’t need to be philosophical or complex. For example, the simple lesson of the typical FedEx customer story is that using FedEx eliminates risk.

Evoke good stories by focusing on their “markers.” While every useful story has all four elements, researchers don’t have to look for all four. The fast track to evoking good stories is by asking about surprises and lessons. They are far more memorable than the zillions of plots, conflicts and boring chronologies floating through our minds.

Here’s an example of a question that might evoke a good story: “Do you remember a time when you were surprised by Brand X’s customer service?” The answer will likely reveal plenty about someone’s experience in the category. For example, I put that question to a frequent business traveler several years ago, and he replied the following memorable experience at a foreign hotel:

“I’d been on a business trip, staying at the hotel for several weeks. I kept on missing calls from my family. I was so frustrated. The hotel concierge took it upon himself to call my secretary, get a photo of my family, frame it and put it in my room. And next to it was a faxed note from my youngest daughter that said, ‘Miss you, Daddy.’ I’ll always go back to that hotel.”

Once you have completed the research and gathered stories like the one above, you must begin to plan how to best use them.

A bit more interpretation

Unlike most survey and opinion research where the data often speaks for itself, behavior research requires quite a bit more interpretation and editing. The obvious first step is centralizing - gathering all of the stories and raw elements of stories. Here are a couple tips for how to proceed after that point.

Organize thoughts and themes. A good place to start is by creating a list of consistent themes involving the concrete story elements. For example, what are the similarities among the protagonists, their antagonists, their goals, their consistent perceptions of places and actions? What surprises them about the category and what do they eventually learn about it?

Find a single story to guide brainstorming. From these raw materials, a prototypical customer story should be found - or created - with a plot, conflict, surprise and lesson. It is crucial to have all four elements. They are all needed to capture how the brand surprisingly satisfies - or could satisfy - the customer.

Bring the story to life. There are two main tips that can improve most storytelling. The first is to make sure to communicate the surprise of the story without telegraphing it. Your audience must be able to relive the experience, including the struggle, expectations and surprise of the story. The second tip is to practice telling the story so you can tell it from memory and truly engage your audience. The resulting story will naturally fire the audience’s imaginations and develop new brand interaction ideas.

Loyal relationships

My work with a hospital system in Southern California offers a good example of how a powerful customer story can help marketers see past category conventions and develop more emotional, loyal relationships.

In this market, as in others, hospital advertising typically focused on advanced treatments like “robotically-assisted procedures.” And as a result, local consumers could often attribute specific procedures to certain hospitals. But a storytelling project with actual patients revealed that people ultimately don’t make important treatment decisions based on advanced equipment. Instead, patients diagnosed with serious conditions typically turn to their current family doctors and/or specialists for treatment decisions.

The key implication of this story is that trusted relationships need to be established before any serious diagnoses. So the hospital developed marketing tactics that create more habitual interaction among doctors and patients. For example, the hospital focused on providing more mini-conferences, inviting local family doctors to connect with hospital specialists. The hospital also expanded community education and screening programs to connect their specialists with local residents.

These small-scale efforts are now paying off with stronger relationships. For example, admissions to the hospital’s cancer center were up substantially in 2008, while the number of cases in Southern California remained relatively flat.

Gaining an understanding

Today’s consumers will continue to appear increasingly fickle for many marketers. However, it is still quite possible to create strong brand loyalty. The key is gaining an understanding how consumers behave during and around the brand experience. Behavior is the best indicator of opportunities to create new habits and strengthen emotional relationships.