Martin Lindstrom on “Small Data”: An interview by Bob Morris

LindstromAt the age of 11 Martin Lindstrom opened the doors to his own Legoland, optimistically anticipating hoards of visitors from near and far. Not a single person showed up.

Aware that something more than mere brilliant design was needed to attract visitors, young Martin suddenly had a flash of inspiration: he would advertise! He promptly persuaded the local newspaper to run an ad, and sure enough, the following week 131 people streamed through the garden gate. Including two lawyers from LEGO, who very politely informed Martin that if he persisted in using the name ‘LEGOLAND’ he would be guilty of trademark infringement. That’s when he first realized the seductive power of marketing and advertising.

As a result Martin opened up his advertising agency at the age of 12 – and the rest is history. He is today one of TIME Magazine’s “World’s 100 Most Influential People”, he ranks #18 among the world’s top business thinkers according to Thinkers50 and since 2013 and over three consecutive years 30,000 marketers has selected Martin as the world’s #1 branding expert.

Martin is the author of seven bestselling books including his latest New York Times, Wall Street Journal and USA Today bestsellers: Small Data: The Tiny Clues That Uncover Huge Trends (St. Martins) and Buyology: Truth and Lies About Why We Buy (Crown) he is also an adviser to the “Who’s Who” of brands such as Nestle, LEGO, Pepsi, LEGO and Disney.

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Morris: Before discussing Small Data, a few general questions. First, since childhood when I set up a lemonade stand in front of my home in Chicago, I have believed that the primary purpose of marketing is to create or increase demand for the given offering. To what extent (if any) has that process changed?

Lindstrom: I think it is fair to say that the end goal might be a demand yet your focus when building brands should rarely focus on this objective. Here’s the reason why – in a world where authenticity increasingly is in focus, consumers are seeking more than brands who focuses on revenue – consumers want to support brands with a purpose – one that justifies an emotional engagement. Once such emotional engagement has been created – demand will always follow – yet one could say the “side product of your effort is demand” the primary purpose is to create love.

Morris: Here’s a two-part question. In your opinion, what is the primary purpose of brand management?

Lindstrom: Remember, that the logo is really the dot on top of the i. It’s an encapsulation of an emotion. Products are produced in the factory; brands are produced in our minds. A brand is an emotional construct. It helps you to project an image to the world which you’d like to own. Branding is not about what something says or what it means, but how it makes us feel

Morris: Henry Ford and later Steve Jobs (among others) have challenged the value of asking people what they want. Ford said they would want faster horses and Jobs said they don’t know what they want. What are your own thoughts about all this?

Lindstrom: Where big data is all about seeking correlations – and thus to make incremental changes – small data is all about causations – seeking to understand the reason(s why. Once you know the reason why – you’ve defined your white space of canvas on which you can paint and create a new concept idea. No matter how creative you are — and thus how much creative space you need — there’s always some fundamental values and drivers your brand should seek to address — in order to become successful. Small Data defines this space, identifies the imbalances we all have and thus the gap these imbalances represents for your new innovation. Small Data is not about testing concepts – it is more to create the foundation for innovative brand thinking.

Morris: You have much of great value to say about the manipulation of consumers. In your opinion, is that more extensive, less extensive, or about the same as it was (let’s say) 15-20 years ago? Please explain.

Lindstrom: Both – here’s the good (or perhaps bad) news, depending on who’s reading this. The consumer has become increasingly sophisticated in the way they obtain and digest information – of the simple reason that they’ve become comfortable about building and maintaining their own personal brands. This has thickened their “filter” and as a result made them become more critical towards advertising and communication. Thus ideas like subliminal advertising today rarely works and or even exists.

That said – new techniques – often spinning out of technology and lack of privacy has resulted in new manipulative communication formats. Here in particular the idea of contextual communication – i.e. communicating the right message, at the right time to the right audience – seems to generate an increasing effect on the consumer in a manipulative way. Why? Because we’re always more woundable when caught at exactly the time where we’re in the mood for that particular product or service – and as Big Data increasingly are able to pick up on clues revealing desire – automated systems are increasingly able to hit at exactly those moments, across those channels we move – with an offer matching exactly what we’re desiring.

Morris: Jackie Huba and Ben McConnell recommend the creation and sustenance of what they characterize as “customer evangelists.” Is that a [begin italics] sustainable [end italics] process?

Lindstrom: I’d say so but probably would add my own theories on top – spinning out of my neuromarketing work where, based on scanning the brains of 2,000 respondents’ brains using fMRI, we learned that there’s a huge correlation between religion and branding – and thus the way that brands intend to generate customer evangelism are to be constructed. On the basis of this study we identified the following nine ingredients:

1) A CLEAR VISION: The cornerstone of religion, a clear vision can inspire great action and firm conviction. To see how this translates into branding, take L’Oréal’s mission: “We sell hope.” Then there’s Apple’s 1982 brand vision: “Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them.” These companies’ visions drive them and guide them.

2) A SENSE OF BELONGING: What do Harley-Davidson, LEGO, and Apple have in common? They’re all based on communities. Considering LEGO’s considerable brand equity, you might expect that the company must have a marketing budget in the billions. Not so. In fact, LEGO’s marketing budget is so modest that if I recorded it here, you’d probably think it was a typo. LEGO doesn’t do its own talking; it lets LEGO maniacs talk for it.

3) AN ENEMY: Imagine Pepsi without Coke. Impossible, right? A competitor is a valuable foil that unites a company from within and pushes the brand’s boundaries. The enemy shapes the brand.

4) SENSORY APPEAL: If you were to close your eyes and walk into a place of worship, the sounds and smells would alert you to where you were: ringing bells, incense, the rumble of a massive organ. Most brands are lacking these sensory stimuli. Visit your local supermarket or retail chain. You’ll experience a lot of visual stimulus, but it’s unlikely that your other senses will encounter any compelling messages.

5) STORYTELLING: The world’s holy texts are built on ancient oral traditions. Storytelling has driven faith and religious practice, keeping them alive for millennia. Just as every hymn, icon, and stained-glass window in a church links to a story, brands have the potential to build holistic identities.

6) GRANDEUR: It’s all about thinking big. Really big. Cathedrals are massive in scale, and brands should think big, too. Consider the Fifth Avenue Apple Store in New York, the latest Prada store in Tokyo, or Burj Al Arab, the world’s first seven-star hotel.

7) EVANGELISM: Today’s evangelism is just as likely to take place via chat rooms and viral videos as it is in a personal conversation or a sermon. Word-of-mouth is powerful, trusted, and cheap. Brands must make use of the inclination of consumers to be persuaded by friends. Consider Brazilian cosmetics brand Natura, which deploys a direct-sales force of more than 718,000. By knocking on doors, it has established a vibrant network of brand supporters.

8) SYMBOLS: We’ve already talked about this but. Imagine a smashed stained-glass window, a page torn from a Bible, or a snippet of choral singing. You would still recognize their religious roots, wouldn’t you? In 1915, Coca-Cola designed a bottle so unique that if it were smashed into thousands of pieces, from a single shard of glass you’d still be able recognize the brand. We call such a device a Smashable. It can be anything from a color to a sound, from a pattern to a smell to an icon.

9) RITUALS: Rituals build brands. Placing a wedge of lime in the neck of a Corona bottle helps sell those beers. And where did that ritual come from? One story has it that two bartenders in California were curious how fast a ritual could spread. Astonishingly fast, they discovered.

Morris: What are the unique challenges for those who rely almost entirely on online marketing

Lindstrom: There are three unique challenges: First of all, studies shows independently that online only campaigns only resonates and lasts with us for a shorter period of time compared with offline campaigns. The reality is that what we see off-line – in particular out of home (billboards) campaigns or signage systems in the physical words — are not only longer lasting in our memory encoding but we also trust these messages more.

But in addition to this, we’re also more affected by aspirational signals in an offline world where it is more difficult to “hide” and thus indirectly increases the influence from others. Finally, online marketing rarely is able to appeal to more than two senses – yet offline often (if utilized the right way) represents the option of multi sensory appeals.

Morris: Insofar as creating or increasing demand are concerned, my opinion is that social media are a two-edged sword: they can “cut both ways.” What do you think?

Lindstrom: Absolutely – but this is more a representation of the reality of our society rather than social media. The reality is that a brand can no longer afford to be “friends with everyone.” Powerful brands in the future will instead carefully choose who’d they’d love to be friends with – and who they’d be comfortable upsetting. Opinion free brands simply will struggle to survive in the future – of that simple reason that we increasingly want to associate ourselves with opinionated and authentic brands.

Morris: Now please shift your attention to Small Data. When and why did you decide to write it?

Lindstrom: Four years ago as I learned that business people increasingly were of the opinion that one can learn everything about the consumer by hiding behind a computer screen.

Morris: Were there any head-snapping revelations while writing it? Please explain.

Lindstrom: A ton – the fact that we all leave behind seemingly insignificant clues behind ourselves – emotional DNA or what I call Small Data – which are able to describe with an insane accuracy who we really are, our personalities and desires. But even more how we all represents out of balances – perhaps I feel too overweight, feel alone or feel I haven’t achieved what I’d hoped for when hitting 40. These imbalances are surprisingly visible when visiting consumers’ homes – and surprisingly invisible when relaying on Big Data.

Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?

Lindstrom: First, all the title changes from Desire Hunter to Small Data. Secondly it was originally meant to identify 10 human truths we all have as humans worldwide – and third was focused on what I called the “water moment” a moment where creativity occurs – often when we’re in contact with water. I did however realize that only 4% of the world’s population turns creative when in contact with water and thus we dialed this dimension down and changed direction.

Morris: You earn a living by recognizing “the tiny clues that uncover huge trends.” Obviously, you are very alert, very mindful. Should that also be true of consumers? If so, why?

Lindstrom: Yes for sure. We’re all obsessed with our smartphones and thus really don’t see anything around us. Think about it – what’s the first thing you do when waiting for someone who’s late? Grab your smartphone and do something with it …anything with it – so that you don’t look like a loser. However by doing so we’ve lost our ability to be present – to observe, to connect with others and most importantly to be bored. We’re no longer bored – in fact we’re petrified of being alone with ourselves getting bored. Yet boredom is the foundation for creativity – an asset slowly disappearing from our world.

Morris: To what extent can the cultural values of a country determine which “tiny clues” have the greatest significance? For example?

Lindstrom: Fear – for the U.S. has dominated and continues to dominate the society and thus products and brands activating fear – and subsequently removing fear are selling substantially better than in other countries. Fear can come across in absence of sharp corners, locked windows in hotel rooms, locks, passwords, security…fairytales (the type of storylines)…in fact everywhere.

Morris: In your opinion, when is the value of Big Data greater than the value of to Small Data? And vice versa?

Lindstrom: Big data is great when you want to verify and quantify small data – as big data is all about seeking a correlation – small data about seeking the causation.

Morris: In the Foreword to your book, Chip Heath observes, “In today’s business environment, Big Data inspires religious levels of devotion and Martin Lindstrom is an atheist…Big Data doesn’t spark insight. New ideas typically come from juxtaposition — combining two things that previously haven’t been combined.” For example?

Lindstrom: How we discovered that girls are shooting a selfie of themselves every morning – based on the size of a hole in a shampoo bottle found in shower cabins, yet discovered based on this hypothesis that the number was 17 – based on the volume of data they were uploading every morning (big data).

Morris: Long ago, Ben Graham told Warren Buffett, “Price is what you charge, value is what people think it’s worth.” Do you agree? Please explain.

Lindstrom: Yes – if we define value as emotions – and emotional engagement…i.e. love!

Morris: You spend most of your time observing other people. Of all that you have learned from that, what has been most valuable to gaining a better understanding of Martin Lindstrom?

Lindstrom: To see me when I’m drunk! 😉

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Martin cordially invites you to check out the resources at these websites:

His website link

Amazon link

LinkedIn link

Twitter link

YouTube videos link

Knowledge@Wharton link

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