• by Karlene Lukovitz  @KLmarketdaily, September 26, 2013

"Engaging" with socially-empowered consumers is no longer enough: To survive and thrive, companies and brands now have to be "human." 

That's the premise of a new report from Lippincott and Hill Holliday, based on an analysis of Lippincott's BrandView consumer survey data for more than 1,000 global brands. 

The report identifies which brands in several industries act most "human," based on the characteristics of authenticity, empathy and vitality. 

The report posits that as a result of social media and other technology, the democratization of information and "the ascendant power of the individual," we've moved away from traditional societal beliefs and values characterized by respect for authority, stature and a perception that big businesses were always the economic leaders.

It says that we're now in a "Human Era" in which company life cycles have been compressed (the life expectancy of an S&P 500 company is 15 years, versus 75 years in 1937), and trust in institutions (including Congress, big business, newspapers, public schools, the medical system and organized religion) has plummeted.

"Connected consumers quickly expose and accentuate corporations’ flaws," the report says. "Consumers crave relationships where businesses view them as individuals — and respond in a much more transparent, personal way than ever before...At the core of the Human Era is the realization that the expectation of meaningful connection — the search for trust — extends to organizations and brands as well as people."

In today's environment, brand-building requires an "authentic story" that's delivered not just through messaging and advertising, but through an "inspiring experience" that's consistent with that messaging, say the researchers. Further, delivering that experience requires "establishing organizational values and commitments that are customer-driven" and reflected in daily decision-making and employee behaviors.

"Experience leaders" outgrow their counterparts by 4% in total shareholder value, according to Lippincott's BrandView-based research. And across industries, "intimate" relationships with customers, driven by customer insights, lead to higher profitability, larger share and stronger market value, states the report. In contrast, companies that fail to become more human "risk a steady decline in relevance and value."

Human Era "stories" and experiences appeal to people's "citizen" side (values such as mutuality, empathy, integrity and purpose) as well as to their "user" side (their functional experiences with a brand), says the report. Human stories are expressed in acts rather than ads, are localized and personal, convey transparency through simplicity, and are characterized by demonstrating listening, conveying a sense of always helping, and focusing on collaboration.

Brands identified as leaders in this human model share several traits: They have a deep cultural trait of customer empathy; they "talk and act like people"; they are "open, real and even flawed"; they "aren't boring"; they "care intensely about little things"; and they empower employees to "be the brand." 

Leading "Human" Brands 

Lippincott and Hill Holliday created a "Human Era Index." The index ranks brands based on customers' perceptions and experiences (BrandView data spans 30,000 customers on four continents) across three, equally-weighted brand traits associated with strong, human connections with customers.  

Those traits: Does the brand "truly care for and about" its customers? Is it trustworthy, real and authentic? Does it have a personality that is unique and vital?

A brand's composite score can range from 1 to 10. The average brand in the U.S. has a score of 6.

The leaders for selected industries include:

*Airlines:  Virgin America and Southwest (tied at 6.9). Virgin focuses "on a differentiated customer experience that is infused with personality." Southwest makes flying "fun, without the trappings" (and notably, doesn't charge baggage fees). 

*Grocery:  Wegmans (7), is "known for its extraordinary assortment and knowledgeable, friendly employees," and its leaders "live their values, encouraging employees to innovate, make changes and stay connected to the customer experience."

*Retail:  Amazon.com (7.5) is "proving that you don't need to have face-to-face interactions to deliver a human experience," and has "set a new standard for understanding how shoppers really want to be treated." Nordstrom, with the second-highest score among 50 retailers, delivers exceptional customer service by giving employees one rule: "Use best judgment in all situations."

*Consumer electronics:  Apple (7.8) has shown an "uncanny ability to understand our unspoken needs and connect in simple and meaningful ways to make life enjoyable," through employees who "truly embody the brand's human personality and provide individual, customized service and education to consumers."

*Media and entertainment:  Disney (7.9) delivers "an unbeatable combination of emotive stories and characters, and attention to detail that creates magical experiences at the parks."

Netflix also ranked near the top. Its internal culture, based on nine values that empower employees -- and its innovation and willingness to "humbly admit mistakes" -- have enabled its remarkable rebound after its Qwikster launch and "pricing misstep" of 2011. (After losing 800,000 subscribers, it now has more subscribers than HBO.)

*Restaurants:  In-N-Out Burger (8.3), which scored almost twice as high as McDonald's (they were both founded in 1949), has "defied fast-food conventions" by continuing to provide customers with the same, trusted quality throughout its history. In-N-Out doesn't franchise, use pre-frozen ingredients or offer promotional items (instead sticking with four popular menu items) -- and it "doesn't treat its employees as disposable."

Chick-fil-A, ranked second among the 50 restaurants, scored highest on the "caring" dimension among restaurants. It combines quality, brand personality and exceptionally friendly, helpful customer service.

Starbucks, ranked third among restaurants, manages to "stay connected in a personal way while serving over a billion cups of coffee a year." 

*Financial services:  USAA  (9.4--the highest score across all industries). Founded 90 years ago on the concept of "military brothers looking out for one another," USAA lives up to its mission of having "the world's best employees serving the world's most honorable customers." It respects its employees, imbuing a shared sense of purpose and values, and invests heavily in training and IT to address customer needs and enable employee focus on relationship-building with members.

Portland, Wash.-based Umpqua Bank is the top-rated commercial bank (7.4). It designs itself as a retailer rather than a financial services company, with a welcoming, store-like branch design and "training missions" for its employees to other retail and hospitality leaders. It empowers employees, and strives to feel like a community bank.

The full "Welcome to the Human Era" report can be downloaded here.

"Worker assisting woman in plant shop" photo from Shutterstock