The pursuit of happiness

Vincent Rousselet observes that a growing body of literature is devoted to the measurement of human happiness in addition to the traditional economic metrics. Especially in recessionary times, marketers should heed these findings and consider their implications in planning strategies

IN THE first episode of Mad Men, Don Draper reminds us of a fundamental marketing principle: “Advertising is based on one thing: happiness.”

In the name of happiness, then, marketing and advertising are undeniably at the root of many strange propositions. Some of those are simply peculiar, such as selling a cup of Kopi Luwak coffee for £70 (available in London since last December). To most of us, it’s a surprising price to pay, but presumably someone is paying it.

Other marketing practices are questionable, although quite legal. I remember, many years ago, talking to an alumnus of my business school – I was a graduate at the time and he was a global executive of a major drinks company, based in Paris.

Looking back on this, I am surprised how easy it was to be taken in by the ‘drink responsibly’ line of argument he used. Perhaps the bottle of champagne he gave me as I left his office had something to do with it.

Fast forward a couple of decades and alcohol promotion, particularly to minors and using social media, remains a hot debate today. Other offerings are, frankly, sinister. In the Mad Men era, it was smoking, supposedly innocuous to human health; now it is the PIP breast implant scandal. So perhaps marketing has gone off-course somewhat, losing sight of its moral compass.

At the same time, capitalism appears to be in serious crisis. In Europe, the first month of 2012 alone saw news of France and Austria losing their triple AAA rating with Standard & Poor’s, and UK unemployment reaching a 17-year high. The UK and Spain are both now in a double-dip recession and numerous downward trends are being experienced by other major economies in the world.

What’s more, there are few signals that the headwinds are going away in the short to medium term. In fact, there is hardly a day when the FT’s headlines do not scream the urgent need to reform the system.

Are the two trends connected – the capitalist model running out of steam and the marketing discipline losing its way? Could it be that we, as marketers, have forgotten about the true meaning of happiness in an unending quest for profit and growth targets? Not happiness that gives its name to a perfume bottle or a fast-food meal for a quick high, but happiness that is genuinely felt and sustained individually and collectively.

Let’s broaden the question and ask whether people and economies can be successful not just because they are rich, but because they are happy. As recession looks to be here to stay, should marketing as a profession not rethink its role, and the tools and techniques it uses? In other words, what does marketing in a recession era look like? And can it make the world happy?

Let’s first get something right. There is happiness and happiness. Forget ‘Open happiness’, ‘Happy Meals’ and the other over-commercialised uses of the word. Michael Porter writes about creating shared values1, Bill Clinton calls for the alliance of capitalism and charity and Umair Haque talks convincingly about ‘economics for humans2’ and ‘thick value’. These thinkers are trying to redefine capitalism to reignite growth, but a growth that is defined differently and where the happiness of the individual and the collective has a central place.

THE JAPANESE EXPERIENCE

Take Japan as an example. I visited Japan eight times in 2011 for a total of almost three months. We know about the ‘lost decades’ of Japan – 20 years of anaemic economic growth. To make things worse, the country had a particularly difficult year in 2011, with the earthquake, tsunami, nuclear catastrophe, recession, deflation, being overtaken as the second largest world economy by China, a corporate governance scandal and a change of Prime Minister.

While I was there, I observed the enormous resilience of my colleagues, their families and the population at large. Then, in December, the Japanese government announced an intriguing plan to develop a ‘happiness index’ that will complement the more traditional GDP and export indicators.

During times of uncertainty, customers tend to gravitate towards familiar brands

An odd thing to do at the close of Japan’s ‘annus horribilis’? An overt attempt at making the Japanese people feel better? Actually, in thinking about happiness seriously, the country is in good company.

Over 40 years ago, Robert Kennedy declared: “The gross national product measures everything except that which makes life worthwhile.” Not surprising, perhaps, coming from the country where the pursuit of happiness has been enshrined in the national ethos since its Declaration of Independence in 1776.

THE GROWING 'HAPPINESS' LITERATURE

Dig a little more and an entire body of literature and statistical analysis has developed over the past 20 years to complement, or even replace, GNP with Gross National Happiness.

The Kingdom of Bhutan was the first to implement it in 2005. In a separate effort, the Paris-based think-tank OECD shows Denmark, Canada, Norway, Switzerland and Sweden taking the top five spots in its 2011 life satisfaction index. Researchers in the US, Canada, Belgium and the Netherlands are also active in the field. France has announced its intention to monitor its citizens’ happiness and, in the UK, so too has prime minister David Cameron. Instead of wealth, income, consumption and trade, researchers in the happiness field put the spotlight on health, wellbeing, job satisfaction, the environment, personal achievement, social contact and, of course, love.

Mention love… and the French are at it. Brittany-based technocrat Pierre Le Roy has assembled since 2000 a Global Happiness Index, based on 40 criteria grouped into four categories: peace and security, democracy and human rights, quality of life, intelligence and culture.

Go back further, to 1972 – the year before the first Oil Shock. Antoine Riboud did not know it then, although he probably foresaw it, but it was to be the final year of three decades of uninterrupted post-war growth that the French know as the ‘Trentes Glorieuses’; average annual growth during the period was 5%.

The founder and president (between 1966 and 1996) of what would become Danone chose 1972 and Marseille to present to his peer group of French business leaders a vision for sustainable development that respected the value and happiness of the workers.

Quoting philosopher Raymond Aron and his notion of “disillusion with progress”, Riboud emphasised that “there is only one Earth and we live only once”.

His approach has been incredibly influential, not just at Danone but across many French companies, national and global, who incorporated in their approaches and processes – including their marketing – a distinctive regard for customers and employees as individuals, each deserving to enjoy a happy life.

CHANGES TO MARKETING?

So now that recession – or flat growth at best – is back, and we’ve established that happiness is a serious matter, what needs to change in marketing? And what needs to be the same? If two of marketing’s primary roles are to drive growth and to build brands, both these missions are going to be much more difficult to achieve.

With unemployment of 2.8 million predicted across the UK in 2012, disposable income will reduce. Levels of savings will likely drop as households use their financial reserves to cope. Turn to the B2B market and risk aversion, lack of visibility and low confidence in economic upturn conspire to delay and depress investments. In a recent paper, Rita Gunther McGrath3 shows that the number of companies consistently growing annually by 5% over a five-year timespan dropped by half in the period 2005-2009 compared with the five preceding years. The impact of the Great Recession has been sorely felt, and there is no real reason why this should stop under a low/no GDP growth scenario.

Encourage retention

This should encourage many marketers to refocus their efforts on customer retention, rather than acquisition. An illustration of this was an incredibly successful direct marketing campaign I ran when working for American Express in the early 1990s. Targeting Amex Corporate Card applicants who had previously been turned down for credit rating reasons, but since reassessed positively, the campaign achieved double digit conversion rates that I had not seen before, nor have since, sadly.

Meeting personally some of the card members at a later event, it was clear that the two-step retention campaign had made them deeply happy by the end of the experience.

Examine segmentation

What is behind this example, and what really makes it stand out as a success story is, of course, segmentation. Reading Laurie Young’s book, The Marketer’s Handbook4, one is struck by the continued applicability and relevance of this key technique. In the same week as France lost its AAA status, Rolls Royce Motor Cars announced 2010 as its best year ever. Investigating further the geographic segments the firm had been pursuing, China was revealed as its largest market, overtaking the US. This is likely to be a metaphor for what the new world economic order will be before the end of the decade: despite national recessions, sectors may be saved by segments outside their borders.

Brands should think positively

Another basic tool in the marketing kitbag that remains highly relevant in a recession is branding – but with a twist. Marketers will also find it harder to build new brands.

But there is also evidence that, at times of generalised uncertainty, customers tend to gravitate towards familiar brands. Experimenting with new providers, even in what may be a familiar category, is likely to be resisted by customers and be more costly for brand owners.

Based on this insight, brand deployment at Fujitsu has been primarily aimed at our 175,000 employees. The 75th anniversary of the company in 2010 gave us the impetus to create a new tagline – ‘Shaping Tomorrow with You’ – and it was natural to evidence this by ensuring that all employees could live that promise before investing strongly in any substantial media campaign.

Other multinationals have been much more overt than Fujitsu in linking their messaging in times of recession with happiness. In line with the mark left by Antoine Riboud, some French examples are worth mentioning. Accor, the hospitality group, has long used ‘We build smiles’ as its tagline, while drinks group Pernod Ricard says it is a ‘Créateur de convivialité’.

Carrefour, the multinational retail company, is a particularly interesting case study. In 2009, it reintroduced in France the ‘positive’ campaign it had run for almost 10 years from 1988. Under the banner ‘The positive is back’, it re-energised its customer base with a very familiar slogan, updated to suit the times and its new store formats. Notice how the word happiness is not used, but is implied and contextualised in an active form – we can build, create and engage, and this leads to happiness.

Keep a finger on the pulse

Finally, a recession is also a fantastic opportunity for marketers to assert their strategic and research skills, beyond what can be sometimes an exclusive (and arguably narrow) attention given to campaign execution and marcomms. Who apart from marketers are better placed, through customer insight and research, to set expectation for what is achievable for the enterprise?

Chatting the other day with an ex-client, now a friend and the MD of the UK arm of a multinational firm, our conversation turned to expectation management. It became apparent to her that the objectives set on the UK business by the US parent were almost inconceivably disconnected from the reality of the local market.

Through careful use of customer, competitor and market research, driven by her UK marketing director, she has been able to rectify the perception of her management and set more achievable targets (and ultimately make her team happy, whilst redefining what marketing is about in the company).

In many B2B markets, such as IT and technology, where I operate, this analysis and data which has enhanced the company’s knowledge about its environment and used internally first can be repurposed without much effort for an external audience in the form of thought leadership.

Marketers in a recession should therefore think about reorienting in a number of domains: retention rather than acquisition, nurturing the brand rather than launching new ones, deploying strategic analysis skills as well as comms.

MARKETING A HAPPINESS INDEX?

If they happen to find a spare moment in the midst of this necessary and, I believe, salutary adjustment to a marketing fit for our recession era, there is one more thing marketers can do. That is to work on raising the awareness of the Global Happiness Index.

To catch up with its older brother, the Gross Domestic Product, and its cousins the balance of trade and the balance of payments, the Happiness Index needs some serious communication support. It has statistical rigour, it has political support widely around the planet, from Tokyo to London. It needs a good marketing campaign, aiming to make the world happy. We are after all both marketers and individuals.

This article featured in Market Leader, July 2012.

Vincent Rousselet is strategy director for international business at Fujitsu [email protected]

References

1. Michael Porter and Mark Kramer, Harvard Business Review, January 2011

2. Umair Haque, Betterness: Economics for Humans, Harvard Business Press Books, December 2011

3. Rita Gunther McGrath, How the Growth Outliers Do It, Harvard Business Review, Jan-Feb 2012

4 The Marketer’s Handbook, Laurie Young, 2011, Wiley & Sons