Is Your Brand Ready for the Social Shopper?

If we've learned anything in the last few years, it's that the old marketing model is broken. We've witnessed the collapse of our advertising industrial complex, and we've watched shoppers pull out of our stores and retreat to their financial fallout shelters.

But despite the havoc, there is hope for battle-scarred brands. In the aftermath of the "shop-ocalypse," we're seeing the dawn of a strange new marketing partner—the social shopper. She has adapted to the alien economic landscape and emerged with new values, new behaviors, new tools, and, most important, new social systems.

This shopper, in all of her forms (consumer, buyer, user, loyal customer), is telling business she's through with top-down marketing relationships. Her new world order is bottom up, inside out, and sideways. And the marketer is no longer master of mass consumption.

A New Day in Marketing

As a result of this seismic shift in influence, marketers are just now learning what management scholars have known about motivation for decades—that people respond more favorably to intrinsic rewards than extrinsic rewards. For many brands, however, that kind of talk is heresy—against nature, against culture, against history.

Perhaps, then, it's time to take a serious look at a classic theory of human motivation that many business schools teach, but few businesses practice.

Nearly 40 years ago, Douglas McGregor's The Human Side of Enterprise introduced business to two different theories on worker motivation. The first, Theory X, assumes that people inherently dislike work and try to avoid it when possible. The other, Theory Y, asserts that people can, under the right conditions, enjoy work just as they enjoy play.

The main difference between these positions comes down to the satisfaction of personal needs. Think Maslow's hierarchy. Under X, we work to satisfy lower needs (food, shelter, etc.), and we use leisure time to fulfill our higher needs (esteem and self-actualization). Theory Y, on the other hand, suggests that work can address higher needs by allowing us to express our natural creativity and ingenuity.

Motivating the Workforce

When applied to management, these theories translate into two divergent styles. Theory X managers drive productivity through command-and-control environments with traditional carrot-and-stick incentives, whereas Theory Y managers stimulate performance through decentralized control, delegated responsibility, and accountability.

According to McGregor, the latter ultimately leads to greater satisfaction and productivity. After all, Theory X incentives have limited utility in a modern society where lower needs are easily satisfied.

In his book Drive, author Daniel Pink updates McGregor's ideas by introducing Theory I. Similar to Theory Y, it emphasizes the power of intrinsic motivation. Pink contends that the best motivators for today's workforce are autonomy, mastery, and purpose—not bonuses, benefits, and penalties.

Motivating the Marketplace

So how do McGregor's and Pink's theories connect with marketing and, specifically, with shoppers? Whether you're talking about employees in the workplace or shoppers in the marketplace, it all boils down to people exchanging value. And those exchanges require motivation.

Accordingly, I submit that marketers typically adopt one of two attitudes toward shopper motivation. Theory X brands see shoppers as inherently lazy creatures who respond best to extrinsic rewards, such as discounts, deals, and promotions. Theory I brands view shoppers as creative, social beings who respond best to intrinsic rewards, such as participative experiences, a sense of community, and social responsibility.

Leading the charge in today's Theory I marketing movement are brands such as Lego, Threadless, and TOMS Shoes. They have learned how to activate customers through meaningful, intrinsic rewards.

Lego engages fans through Lego Club, a program that is both an all-access pass to insider content and an invitation to participate in product innovation. T-shirt company Threadless goes a step further, giving customers the keys to its store via crowdsourced design and an online experience that emphasizes community over commerce. TOMS Shoes turns purchases into participation by involving customers in a common cause.

Price promotion certainly plays a role in modern marketing, especially in attracting new shoppers to your brand. But extrinsic rewards stimulate only temporary lift, not sustainable lifetime customer value.

Use Theory X-style incentives in combination with Theory I-style programs, however, and you'll surprise, delight, and motivate the social shopper.

What's Your Marketing Style?

To determine your brand's marketing style, take this quick quiz:

  • True or False: Our brand often solicits customer feedback and responds quickly to customer requests.
  • True or False: Our brand's retail experiences invite exploration, discovery, and play.
  • True or False: Our brand makes every effort to connect with shoppers via social media.
  • True or False: Our brand partners with local or national causes that are important to our customers.
  • True or False: Our brand gives customers a sense of community and shared purpose.
  • True or False: Our brand inspires customers to become experts, connoisseurs, or aficionados.

If you answered "True" to all of the preceding, then congratulations! You're a Theory I brand. Your approach will serve you well in the new age of shopper motivation.

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Ethan Whitehill is the CEO of Two West, Inc.