The Compass and the Nail

“This is the decisive moment: Clearly establishing a foothold understanding where your organization’s values intersect with your audience, then digging into the detail as a means to create process and an operating principle to move forward. This is the new means to create lasting value in the relationship between an organization of any kind and the people it serves; applied to politics, economic strategies, causes, businesses, etcetera. It’s a universal truth.”

- The Compass and the Nail, page 33

Consumers have an ever increasing selection of similar products and services to choose from that will meet their needs. However, some brands inspire connection and consumers consistently choose them over others, and advocate for them. What transforms customers into passionate brand advocates? Craig Wilson explores a practical model for connecting with customers through shared company values to develop a fervent following in, The Compass and the Nail: How the Patagonia model of loyalty can save your business, and might just save the planet.

Wilson explains the science of advocacy in-depth. Ethics is at the heart of generating an intense following. People want to be part of something bigger that makes the world a better place. When they find a company that shares their beliefs they form a bond and become intensely loyal. Wilson quotes Sir Walter Scott, “A rusty nail placed near a faithful compass, will sway it from the truth, and wreck the Argosy.” The quote is referenced in the title of the book: corruption of values will steer an organization off course. For this summary I’ll focus on how maintaining a consistent character attracts a core of believers that sustain long-term success.

The Big Idea

The Big Idea: The biggest takeaway from the book

Character Repels or Attracts an Audience

"This is the basis for long-term sustainable relationships. As long as the company’s character is tended to deliberately, the manifestation in product and service will remain valuable. A first impression leads to validation of that first impression, which leads to deeper understanding and an alignment of beliefs; blink, test, bond, love. We move from a superficial introduction to a deep state of resonance."
- The Compass and the Nail, page 60

In the eye of the customer, it’s the company’s character that sets it apart from the competition. A company can build and lose loyalty for different reasons. Some companies build loyalty on convenience but, followers will be swayed if a competitor offers a better price, is closer, or faster. Other brands built loyalty on promotion but, big-budget advertising is necessary to keep the name visible. Some brands focus on supplying a superior product, but their following disappears if a competitor develops a more innovative product. Many organizations that identify with a mission or cause have a charismatic leader that inspires a faithful tribe. Tribes have a committed following as long as the leader doesn’t compromise their reputation or authenticity. If a brand’s loyalty is rooted in ethics, the organization must stay true to the deeply held beliefs of its followers, and dishonesty is quickly detected. These are all characteristics customers use to distinguish and choose, one brand over another. A brand must stay true to it’s identifying characteristics to inspire long-term relationships with a core group of advocates.

Wilson describes the stages of customer loyalty from prospect to brand advocate as blink, test, bond, love. The customer progresses through these steps because the company’s values resonate with the customer. Straying from that identity undermines customer confidence, and the group will not form a strong fan base.

Insight #1

An actionable way to implement the Big Idea into your life

Cater to Values Instead of Customers

"The mistake to avoid is believing that your most avid buyer, your most profitable customer, defines your brand. They don’t. They follow your brand because of what you stand for. They follow your core users because of what they stand for as well."
- The Compass and the Nail, page 98

Early adopters initially form the group of core supporters, and they are the first group to resonate with the company’s values. Late adopters follow the initial group of core supporters, and they resonate with the early adopters as well as the company’s principles. Late adopters may eventually join the core promoters if they develop a deep connection to the organization’s values. The group that follows the core advocates is much larger than the loyal core. The more substantial followers have broader values and needs, and they may generate more profit than the core group.

It might be tempting for a company to change its characteristics to cater to the large and profitable group of casual supporters in an attempt to enlarge their group of core users. In part, this category follows the company’s core advocates, and if the company changes the characteristics that resonate with these advocates, they will lose their support and consequently, the support of casual supporters. It might seem intuitively right to pursue profitable customers by tailoring your brand to their needs. Instead, changing may eliminate the reason they buy from you.

Insight #2

An actionable way to implement the Big Idea into your life

You Have to Earn Loyalty

"Ideally, loyalty should conjure up a vision of your organization’s actions: the actions that lead to committed behavior from your customers. Do you know what those actions are? Do you know where the missteps are? Do you know how healthy your relationship (loyalty) truly is?"
- The Compass and the Nail, page 137

Customer loyalty programs dilute the meaning of loyalty. These programs, discount cards, airline miles, awarded points, and others, give customers something or pay them to buy. These incentives may generate sales but not avid loyalty. Price loyalty is fragile, customers will buy from a lower bidder and are easily dissatisfied with some other aspect of the product or service.

Statistics are also often quoted with the word loyalty. Companies often rely on statistics that measure customer satisfaction such as the Net Promoter Score (NPS). These statistics provide information about a customers satisfaction rating. They don’t analyze specific actions the company took to earn their satisfaction nor do they supply insight on building stronger relationships and genuine loyalty.

It’s more useful to determine what actions the organization takes that resonate with and inspire core supporters that are passionate, loyal advocates. It may be the customer’s experience with a salesperson or customer service representative or their online exposure. It could be a beautiful catalog depicting the quality and value of the items for sale balancing the company’s principles. There may be many different ways customers interact with the company, and all of them are opportunities to take actions that resonate with shared values.

To build an avid fan base, find the place where your organization’s principles connect to your following. The connection is the reason people choose you instead of another association. Develop your company around these values. Make them omnipresent in every interaction with your audience. Don’t abandon these ethics to suit a broader set of prospects; these morals are the reason people choose you. People fall in love because they resonate with who you are. Your consistency of character is the reason they select you repeatedly and advocate intensely.

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Ingrid Urgolites

ABOUT Ingrid Urgolites

I work for Citigroup in operations. I have a varied background, and I enjoy service-oriented work. In addition to business, I have a keen interest in food and nutrition, and I have been vegetarian or vegan my whole life...
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