The Compass and the Nail

Summary Written by Ingrid Urgolites
“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

The Big Idea

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

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.

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Insight #2

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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Craig Wilson

Founder of Compass and Nail, Craig is a leading authority on loyalty, brand development, and direct marketing and counts some of the world’s most iconic brands in his listing of experience including Kiehl’s, Patagonia, Seventh Generation, prAna Living, Burton Snowboards, and Revolution Living, among others. He’s a three-time NCAA National Champion coach and a passionate observer of human behavior.

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