Michael J. Silverstein is a leader of The Boston Consulting Group’s global consumer practice. He specializes in helping the senior team at large multinationals transform their companies through superior consumer insight, accelerated organic growth, and M&A. His clients include some of the world’s largest and most prominent consumer goods companies and retailers. He is a frequently cited expert on consumer buying behavior, retail and packaged goods innovation, and market development. Michael is also one of BCG’s most prolific authors.
For example, he is the author of $10 Trillion Prize (2012), the story of how rising affluence among Chinese and Indian consumers will create a vast new market. His earlier groundbreaking research with 20,000+ women in 21 countries led to the 2009 book Women Want More about the rising female economy. Before that, Silverstein’s research focused on “new luxury” goods and discount products, leading to two books: Trading Up (2003), and Treasure Hunt (2006). His latest book, Rocket: Eight Lessons to Secure Infinite Growth, was co-authored with Dylan Bolden, Rune Jacobsen, and Rohan Sajdeh, and published by McGraw-Hill Education (October 2015)
In addition, Michael is the author of two Harvard Business Review articles and more than 30 BCG publications. He has been interviewed often on the national TV programs of CNBC, ABC, CBS, NBC, and Fox News. He also has been quoted extensively in leading publications such as The Wall Street Journal, The New York Times, The Times of London, the Financial Times, The Economist, The New Yorker, Time, Newsweek, and The Washington Post, among many others. He holds an MBA with honors from Harvard University and a BA in economics and history from Brown University.
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Morris: Now please shift your attention to Rocket. When and why did you decide to write it with Dylan, Rune, and Rohan?
Silverstein: Choosing co-authors is important. I did most of the writing. But Dylan and Rohan are experts on demand spaces. This is BCG’s proprietary research tool that allows you to understand why people buy and what technical, functional and emotional benefits they are seeking. Rune is our global retail expert. It was an amazing team effort.
Morris: Were there any head-snapping revelations while writing it? Please explain.
Silverstein: The 8 rules for growth are the head-snapping revelations. They allow a company or entrepreneur to really drive growth.
Rule #1 is don’t ask your customers what they want. This is based on the view that they probably don’t know. You have to fully understand them, the context for their needs and their major dissatisfactions.
Rule # 2 is wooing your biggest fans. This one says concentrate your efforts at understanding on the 2 percent of consumers that personally drive 20 percent of sales and invite their friends and colleagues to enjoy you.
Rule # 3 is always welcome your customer’s scorn. This one says read the complaint letters. Categorize them. Decide how you are going to wipe them out.
Rule #4 is looks do count. Deliver visually stunning merchandising. Engage at the point of sale. Help consumers shop with their eyes.
Rule #5 is transforming your employees into passionate disciples. Teach. Create apostles. Give people a calling, not a job.
Rule #6 is better ramp up your virtual relationships. Companies think omni channel is the correct answer. This is not enough. The information explosion for consumers makes 24/7 and full and complete engagement possible.
Rule #7 is take giant leaps. Too many companies are into incremental innovation. The only thing that moves markets is violent turns. Major differences. Don’t get caught in the trap of small steps.
Rule # 8 is find out what schismogenesis means. Schismogenesis is anthropology. It says relationships between people are not stable. They are either moving up or moving down. The same is true for brands. You need to understand where you are.
Morris: To what extent (if any) does the book in final form differ [begin italics] significantly [end italics] from what you originally envisioned?
Silverstein: Writing a book is an adventure. The original idea for the book was something we called “One and 99.” It was about how the one percent can help the 99 percent and help themselves. We move to something much broader, aiming for a permanent impact on business with the “branding bible.”
Morris: What did you learn while writing it in collaboration?
Silverstein: Collaboration was actually easy. My co-authors are very very busy. They wanted surgical participation.
Morris: Who have had the greatest impact on the development t of your thoughts about brands and how they can help to accelerate organizational growth? Please explain.
Silverstein: My client work delivered for me. In Rocket, we tell real stories about Victoria Secret, Toyota, Hilton, Frito Lay. They are the core of the book.
Morris: How important are the social media to effective brand management? Please explain.
Silverstein: I used to have a rule that I called “the rule of 10 and 100.” If you pleased a customer, they would tell 10 of their friends. If you displeased them, they would tell 100. Now if you displease them you they will use social media to tell 1000 or more. Epidemics of “bad” voice can kill your reputation overnight.
Morris: You recommend rewarding converts with experiences worth sharing. For example?
Silverstein: Consumers are time constrained, budget restricted and less loved than they would like. Give them a wonderful experience and they will share it. Capture their soul and win big time.
Morris: In your opinion, what is the Disney Company’s most powerful brand?
Silverstein: The Disney Parks are the touchpoints for the company. They are wonderful assets. Remember that operating a theme park is a fixed cost business. You make money when you get visitors to go through the entrance at capacity. Disney has delivered dreams and experience. They have continuously added additions that increase the number of days of visiting. They have used these new parks to extend out appropriate age range of guests. In Rocket we tell the story of one consumer who dreamed her whole life about a Disney themed wedding. She finally got it and had her dream come true. She and her family go every year. They love the experience. It is an annuity. The opening of Shanghai Disney opens up a market for more than 1 billion consumers. This brand within a brand refreshes with each dollar invested. Look for the Star Wars exhibits to drive new growth and repeat visits. It is a wow of a business. A far stretch from Walt Disney’s original Disneyland in California.
Morris: What about Zappos?
Silverstein: Zappos is the story of service and availability. They take a totally different view on incoming calls. For Zappos, a call is a chance to relate to a customer and to lock them in for life. Tony has a unique view on business. He is among the first proponents of an engaged workforce. I’m glad to have met him first hand. The chapter on Zappos is very engaging.
Morris: I agree that happy employees create happy customers and that fun at work makes the difference in attitude and morale.
Silverstein: Too many companies are happy to have workers to dread working. They have the wrong attitude because they have the wrong leadership.
Morris: Here is one passage that caught my eye: “Headline: Use a Common Phrase as the Point of Engagement and the Decision Point on What the Right Answer Is — The Golden Rule.” What is this passage’s key point or take-away?
Silverstein: The Golden Rule works. It really does. Treat people the way you want to be treated. Kindness begets kindness. All great companies have spirit and culture. Mean spirited returns mean spirit. In the book we talk about Four Seasons Maldives. In the face of tragedy, every associate stayed on premises until all guests could be evacuated. You don’t get this kind of a universal response without care in recruiting, training, and on boarding. At this great hotel chain, promotions are from within. Everyone gets a chance to be employee of the month. The least well-paid associate is paid a living wage with real benefits. Same is true for the bulk of the companies we both respect and profile.
Morris: Screen, Train, and Enable Your Team: What is this passage’s key point or take-away?
Silverstein: The top 25 at every company really set the tone. Everyone watches them. They need to be present and focused. No slackers at the top. They need to meet in combination every recruit. They need to meet them on the first day. They need to teach by example. This is the lesson that great companies teach.
Morris: The Digital World Is Real, Not Virtual: What is this passage’s key point or take-away?
Silverstein: People underestimate the power of the Internet. For some consumers, it is the source of all information. Younger adults are on their phones more than they watch television. They don’t read newspapers. It is their real world. It is not a set of virtual lenses.
Morris: What is the single most important lesson to be learned from how Amazon manages its brand?
Silverstein: Amazon practices Manifest Destiny. It’s like James Madison is alive and well. They pledge to take the whole of retail and they seem undeterred. First books then DVDs, household products, staples, food, clothing, hardware and more. The brand is about value, convenience; ease of use and within arm’s reach. They now have 40 million plus Prime users. They are rich and middle class. Amazon aims to supply 100% of their retail needs. It’s profound and nearly impossible to compete for store-based retailers.
Morris: For more than 25 years, it has been my great pleasure as well as privilege to work closely with the owner/CEOs of hundreds of small companies, those with $20-million or less in annual sales. In your opinion, of all the material you provide in Rocket, which do you think will be of greatest value to leaders in small companies? Please explain.
Silverstein: In fact, Rocket was written to serve as a checklist for all orfganization, whatever their ize and nature may be. You can turn to virtually any page and get great content. If you follow the lessons you will win the battle for first position in the consumer’s mind. If you innovate broadly, focus on the customer experience, and deliver everyday a great product, you will gain share. I admire many entrepreneurs. They bring energy, excitement, youthful enthusiasm. What they lack in process, they make up for in gumption.
Consumers cannot think in abstractions. They cannot envision a new concept. They cannot predict their behavior. They can only compare against their current frame of reference. So you need to make the big leap for them. You need to provide them with a reason to buy, a reason to brag to their friends. Expect new-to-the-world ideas to fall on deaf ears. Consumers will, however, change their tune when they can see, touch, and explore.
In our book, Rocket, we tell the story of entrepreneurs who have courage and curiosity. We wanted to create an illustrated branding bible. We believe the stories and the eight lessons have applicability to both big and small companies.
We believe the starting point is to create a qualitative understanding of market drivers. You need to get into the head of the consumer and be able to tell her story. It is both art and science. The purpose of the market map is to define dissatisfactions, hopes, dreams and fears. Winning solutions respond to the distinct and specific needs of a group of consumers.
Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?
“What should the reader do after reading this book?”
1. Completely understand the customer by seeking an intense, complete and empathetic understanding.
2. Respond to your customer’s dissatisfactions with precision and power
3. Define a winning proposition that is consumer right and delivers margin accretion
4. Take an expansive view of the consumers needs and expand beyond your current boundaries
5. Deliver infinite growth having your customers talk about you, exclaim you and tell their friends and colleagues about you.
Ask yourself these questions: Where is the profit core? How can I build a business based on this core idea? How do I fill it out completely so I own every segment? How do I take my core users and satisfy their every demand? How do I drive an organization with the simple phrase “What are we best at?”
Own one idea. Complete it. Map the current model of purchase and usage. Change how it is done so at least some part of the market uses only your product. Extend from that core user to a much broader universe. Describe your concept in a very short, “six-word story”—a la Ernest Hemingway: “For sale: baby shoes, never worn.”
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Please click here to read Part 1.
Michael cordially invites you to check out the resources at these websites:
Amazon page link
Rocket book page link
Boston Consulting Group link
BCG’s Michael J. Silverstein in conversation with Mondelez’s Sanjay Khosla link
Feather Factor interview link