Nike Scores A Customer-Values Touchdown

Unless you were on the Appalachian Trail for a few weeks, you know what I’m talking about. I’ll start with this paragraph from our newly published analysis of Nike’s “Just Do It” campaign featuring Colin Kaepernick, called “Nike Makes No Sacrifices":

Judging Nike’s decision is difficult because there’s so much conflicting evidence. In concept, values-based appeals can pay off big: 52% of US online adults said in 2017 that they actively consider company values when making a purchase. In practice, it’s not always obvious . . . Nike brand-related social media chatter grew by 8x within a day of the ad being released and 60% of that buzz was emotionally charged, compared to less than half the week before. That likely paid off in USD 163 million in free word-of-mouth marketing . . . Many consumers are not in favor. A vocal minority (33%) even feel “disgusted” at the campaign, and 29% say they will stop engaging with the Nike brand altogether. Conversely, only 26% report a positive emotion in response and a mere 13% say they will start engaging with Nike more often. Yet short-term online sales spiked, and in the days since the ad’s launch, the stock price has gone up, putting Nike at an all-time-high market cap of more than USD 135 billion.

What’s a marketer to think? Is this the shortcut to rags or riches for Nike? To find out not what consumers will think today but how they are likely to feel — and act — toward Nike in the future, we applied a new method called the consumer energy index. We have been cooking this all year long — some of you have seen sneak peeks of the method at our events this year — but we haven’t published it yet. And then Nike happened, and we realized we had the perfect shot at testing the method. So excuse us for being so darn agile, but this report lets some of our horses out of the barn. We think it’s worth it. We hope you read it and agree and finish wanting more information about the consumer energy index. Stay tuned!

The whole occasion also gave us a chance to stop and think about the meta-trends driving Nike's decision, leading us to conclude that Nike is opening a door that many brands will follow it through. Here's my mini-essay on that point.

This Moment Was Destined To Happen, And It Will Happen Again

The conditions in which today’s consumers and marketers find themselves practically require that this kind of thing will happen again and again. Consumer energy is constantly in flux, and the brands that understand that know that:

  • Consumers have too many options. This is precisely what digital technology promised and will continue to deliver. Consumers evolved to deal with a tribe of 150 or so neighbors and a handful of environmental characteristics that they could observe and manipulate firsthand. But today they have access to the opinions and antics of millions of people that they will never meet. They are offered a dizzying array of products and services from an equally baffling array of possible providers. Choosing will get harder each day, and consumers will default to the brands that most evidently cut through the noise.
  • Emotion will come to the rescue. Emotion helps us to select which things to pay attention to and remember. In this overwhelming information environment, our emotions are more necessary than ever before. But that doesn’t make them more effective or capable of guiding us to the best decisions. This makes us not only vulnerable but eager to seek out and accept the emotional invitations that can focus our attention and reduce the complexity of our choices. The irony is that this emotional response is a completely rational outcome.
  • Brands will turn up the frequency of emotional messaging. Emotion has always been important to marketers. However, daily emotional interaction with customers is now more possible thanks to digital technology. And for some brands and categories — especially those that wish to maintain a premium price strategy like Nike — regular emotional connection is now necessary. Because if you fade to the background of your consumer’s emotional relevance monitor, they will be open to emotional messages from direct competitors as well as attention hogs from other industries. This is the emotional threat of Amazon, for example, even for those companies it does not compete with.
  • Values-based appeals will draw more brands under its spell. Brands used to construct their story with themselves at the center, where they are cast as a heroic brand helping a customer. But as that story becomes tired and less salient, brands learn to join the story that the customer is already telling themselves about their own world and their heroic journey in it. Values-based marketing, when it succeeds, does exactly that. It joins a brand into a show already in progress in the customer’s mind, reinforcing the things the customer already cares about, thereby inserting the brand into the customer’s daily narrative in a highly relevant way.

Forrester’s James L. McQuivey, Vice President, Principal Analyst; Anjali Lai, Data Analyst; and Keith Johnston, Vice President, Research Director contributed to this blog article. It was originally published here.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect those of CDOTrends.