Timothy A. Koonce: Why did Nike do what they did?

nike

By Mark Schaefer

This week Nike rocked the worlds of sports, business and politics with one of the polarizing marketing campaigns in history, taking a man who has been vilified by much of America and turning him into the hero of a new ad campaign and product line.

Many people thought this was insane and the outfall included videos of protesters burning their Nike shoes in the streets. Many business leaders and investors thought the move was insane.

But was it?

I’m working on a new book (Marketing Rebellion will be out in early 2019) and have been immersed in new research that demonstrates why Nike’s move made perfect sense. I thought I would make a video and take some questions on this development and I’ve posted it here:

You can see this on YouTube: Nike Colin Kaerpernick ad

Or, you can read the transcript of my video, without the Q&A:

Nike has created a new ad and product line around Colin Kaepernick, the American football quarterback who’s had a very polarizing impact in America. You can read all about this in many places, and you probably have.

I have some very strong thoughts about why Nike did what they did. In fact, it really is aligned with a lot of the research that I’ve been studying for my new book which will be coming out in early 2019. The name of the book is going to be Marketing Rebellion, and it’s going to be all about how do you connect with customers and build a brand in world without loyalty.

End of loyalty

There was a seminal research report by McKinsey a few years ago that showed that two-thirds of our marketing is not our marketing — two-thirds of our marketing is taking place someplace else.

And everywhere I go, I see that marketers are stuck trying to figure out what’s going on … how come things aren’t working like they used to? They haven’t caught up with this idea that we’re not in control, the consumers are in control.

Additional research in Harvard Business Review a few months ago takes us deeper. This report addressed some marketing myths:

“Customers want to have relationships with our brand.” They found “no” in the research, that is not true. 77% of customers do not want to have a relationship with our brand. In fact, 87% of customers shop around, there’s almost no brand loyalty today.

Myth number two — customer engagement builds relationships. That’s a big factor in social media marketing, right? And content marketing, right? We want to create engagement. The research said no, customer engagement does not build relationships with brands.

And another myth is that the more interactions we have with our customers, the better the loyalty. Once again, no. There is no correlation between customer loyalty and brand interaction.

Now, here’s where it’s where it gets interesting. Of the factors that these researchers looked at, in terms of brand loyalty, there was only one factor, just one, that could be associated with brand loyalty. That is “shared meaning.”

Now what does that mean? Shared meaning would say that your values as a brand align with the values of your consumers. That is the only thing that drives loyalty today.

Nike strategy

This is also been confirmed by research from Edelman that shows between 60 and 70 percent of customers seek out brands that align with their values. There was another research report that showed that this was the number one factor that customers considered. In fact, 70 percent of consumers say that they will not shop with a brand if it doesn’t align with their values.

So this is a big idea. This is a big message which is against almost everything we learned about in business school.

In business school, what did they teach you? We would never do something like this, right? What did Milton Friedman, the famous economist, tell us that businesses are about creating stakeholder value? That is the only thing a company should focus on.

What the heck is going on here? Nike has a revolt on their hands. They have people burning shoes in the streets. That’s not what Milton Friedman would tell us is a good thing.

That’s what the world is asking brands to do today. Consumers want brands to take a stand, they need them to take a stand. It is the only thing that results in brand loyalty.

Now, I’m not here to say Nike picked the right cause. That’s another debate.

But I think it’s important that if a brand decides to take a stand like this, it has got to be really, truly deeply aligned with the values, the mission, the purpose of the company and its consumers.

The brand stand

Nike has some of the smartest marketers in the world. I have studied this company for a long time. And I can tell you something, this was not a decision that was made lightly. They ran the numbers, they knew there would be a revolt, they knew there would be a loss in market value. Yesterday, the company lost nearly $4 billion in market value in one day.

This is a long-term play because they know their customers, they see the research going on and they’re driving for this shared meaning and purpose that connects with consumers.

I want to leave you with a quote from a young man I talked to about two weeks ago. He is a really cool guy. He’s a young marketer that I’m working with on a project down in Atlanta. And this was a very, very interesting quote that he had:

“My favorite brands stand for something and I hold them accountable. Just like a friend of a friend of mine did something that was disrespectful or wronged me in some way, I expect them to make it right.

“I used to be a big fan of Nike. I bet I had 50 pairs of Nike shoes. But they haven’t done anything to be a human to me. People are being shot over sneakers. People aren’t being paid for their designs. They have supply chain issues. I’m sure they do some good things, but it doesn’t mean something to me. They have to stop the wrong and make things right.

“I’m not really loyal to a brand. I’m loyal to people.”

This is one data point. It’s one voice. But this is probably very representative of the sort of feedback Nike has been getting from their consumers. They have had a ton of controversy going on. And it’s not been all good as this young man said.

By aligning with a consumer’s values, this might be the way to get some customers back.

Keynote speaker Mark Schaefer Mark Schaefer is the chief blogger for this site, executive director of Schaefer Marketing Solutions, and the author of several best-selling digital marketing books. He is an acclaimed keynote speaker, college educator, and business consultant. The Marketing Companion podcast is among the top business podcasts in the world. Contact Mark to have him speak to your company event or conference soon.