Why I started Compass + Nail.
There’s a better way to be in business. Better for society, better financially. Better for the planet. Just plain better.
Currently, the zeitgeist of business operations, management, and marketing is steadfast in its self-interest cajoling, convincing, inducing, coaxing, wheedling, beguiling, and even twisting someone’s arm into purchasing their product or service.
In that effort, brands have enlisted a number of tactical approaches, cohort analysis being one shining example of many examples, however, let’s just chat about cohort analysis for a moment.
The not so new practice of cohort analysis is utilized by brands to detect tendencies within and between groups of customers that can be leveraged to trigger a purchase. Cohorts are groups of people with similar, or like, characteristics. For example, cohorts might be all women between the ages of 25 and 35 who buy red dresses, or all first-time purchasers that have not made a purchase in the past 90 days, or etc, etc.
The practice originated as a ‘type of research design that follows groups of people over time to understand human health and the environmental and social factors that influence it.’ With the advances in digital analytics, business operators have come to apply this same practice in the interest of understanding usage patterns based on consumers’ shared traits to better track and understand their actions. Not unlike A/B testing, cohort studies are great for discerning likelihoods. As example, during my stint at Patagonia, we came to identify a cohort of technical shell (jackets) buyers who had a high propensity to buy Capilene underwear. In response, we would present Capilene as part of the “you may also like,” collection on technical shell product detail pages. It worked. Based on the data, we made it easier for the discovery of Capilene (a perfect companion to a shell jacket) to happen for would be technical shell buyers. As a result, on average, we increased the AOV of that cohort of shoppers.
The above is a good example and a good story. And, there are myriad more good examples and good stories applying this thinking. It is what ecom managers, digital marketers, UX designers, email marketers, digital advertising managers should be doing. Learn it. Do it. It works.
But, the thinking behind it is also the root of the inertia that is keeping good businesses and good brands from being great. It’s a classic case of not seeing the forest for the trees.
Compass + Nail transforms businesses. We do so using a framework of understanding of how and why your best customers become your best customers. This framework is based on empathy. Understanding. Listening. We have defined ‘Brand Equity’ as the efficiency of activating marquee customers. We are the first (and only) firm to have benchmarked, quantified, and indexed Brand Equity for use in a practical process and software application for brands to form relationships with their customers, thereby helping businesses scale and increase profitability. In a nutshell, we optimize Brand Equity by designing and architecting brand ecosystems that create brand advocates. This is the forest. Cohort analysis is the trees.
Our goal is to maximize Brand Equity among the ‘Fortune 1M,’ the small businesses that account for over 44% of the US economy. We aim to empower this community to create an empathic civilization, spearheading a new imperative for brand leadership to understand how connections are made between us, between people, between brands and people, as the foundation of how to create a following. Without literally claiming a movement, enabling, empowering, and inspiring brands to operate empathically instead of selfishly, a greater good is accomplished.
“More and more people are valuing distributed, collaborative, lateral, connectivity for the good of the network (humanity). They see the world as an extended fictional family. They are beginning to see themselves as part of a larger consciousness and part of the biosphere. They are beginning to connect the dots, that everything they do affects everything else and every other being on the planet. This is a ‘biosphere consciousness’ that has never occurred before in history.”
Customers are looking for brands that they can be in relationship with, that are transparent, values driven, share a global consciousness, and don’t just create products and services that are of quality, but also demonstrate they are connecting these same dots within the context of this extended ‘fictional family’ based on shared worldviews. Never before has it been more true that individuals are seeking to be part of a newly imagined empathic civilization, and as such, brands are becoming an integral part of forming such a society.
Without the ability to understand how this awareness affects one’s brand, and without the ability to measure your own brand’s ability to forge relationships with people (with customers), and without the ability to operationalize these values, your brand will be left behind, competing on standards that are no longer relevant.
Cohort analysis, along with the myriad other tactical tools and techniques employed by brand managers to spur transactions among their “target audience,” ultimately, are incongruent with relationship building. Yes, these tactics serve a practical end; however, collectively, they are not considerate of what engenders a following by true brand advocates. Said another way, they do not provide the consumer with what they truly seek, which is a shared understanding and worldview, and a relationship with a brand they can form an emotional connection with over time. The inertia of transaction focused marketing and big data does not represent to the consumer an empathic embrace. There’s a better way to be in business. Better for society, better financially. Better for the planet. Just plain better. And this is why I started Compass + Nail.