April 24, 2012

The golden rule of the Kinship Economy:
“Would you do this to your mother?”

The big message in J. Walker Smith’s talk on the new “Kinship Economy” is that process  -the conduct of the company in delivering the product – is an increasingly bigger part of the value proposition. While process is now more important, product (the product features and benefits) is not less important than before – it’s just the balance that has shifted.

Backdrop to the new Kinship Economy: The Changing Marketplace

Consumers are savvier now and are trading off vs. trading up, realizing that they can’t have it all in this economy.

The marketplace is being changed, but not just because of the economy.

We are leaving behind the era of the PC and entering the era of mobile. By 2016, 4G will be nearly universal.

There are also significant demographic shifts taking place, similar to those of the 1960’s and 1970’s.

The guiding principle for connecting with consumers in the new marketplace is “kinship”

In the Kinship Economy, growth will be rooted in relationships and conduct. The models we use and ways of delivering products and services will change. The product features will still be important, but it’s the process that will be differentiating.

We have moved from a marketplace dominated by features and gizmos, status and styling to one that puts importance on how we get it.

For marketers, what’s different now is how you engage consumers.

Interactions are about how people relate to one another, where experience is how they relate to products. Consumers want brands to facilitate interactions with other people. They don’t want relationships with brands.

An example of how we have moved from product to process:

Whole Foods now sponsors Local Farmers’ Markets in their parking lots. Whole Foods is demonstrating commitment to sustainability and to fresh food, and facilitating interactions between consumers and the people who grow their food.

Is Materialism Passe?

Acquiring material things has not lessened in importance, but meaning has increased in importance. Well-being and happiness are now the big deal. France is now measuring happiness vs. the GDP. Zappo’s is about “delivering happiness”; Coke is about “Open happiness”; a company in the U.K. has a Chief Happiness Officer.

How the Economy Affects Materialism vs. Meaning

There was the same amount of volatility in the economy in 1987-2007 as there is now, but we feel differently about it. In 1987-2007, there was a sense of control, of “we’ve seen this movie and we know how it ends”. Now, there’s a feeling that the world is out of control.

Consumers’ reasons for becoming more conservative in spending has less to do with personal loss of income or jobs and more to do with concerns about the future and the economy – people are scared and worried.

New Aspirations

The American Dream is still alive and well today. There is no difference in material wealth between those who believe in it vs. those who don’t. The difference between those who believe in it and those who don’t is about process – people have lost faith in the process. They don’t believe that businesses care about consumers.

Shift in Reference Groups

Before, trading up meant looking up to those with more. Now, more people are looking down – their reference group is those with less.

People are risk-averse – they are asking, “How do I avoid winding up like that?”

Once, there were shared global aspirations. Now, aspirations are split. Self-reliance is on the rise (albeit a “networked self-reliance”). Faced with a broken system, more people are taking on problems themselves that they might have left to governing bodies before – more problems are being perceived as personal – “my problem”.


Marketers are trying to tap into this. It’s all about interactions, relationships and conduct.

  • Virgin America – we’re all in this together.
  • National Association of Realtors  – what matters most (is family and friends)
  • Yahoo – howgoodgrows.com
  • Bud – the brand that facilitates good relationships

Kinship on the Internet

The trend is toward more intimate social networks: Google+, Diaspora, Path.

Opportunities for Marketers

The gold standard in relationships is family. Marketers seeking “kinship” with consumers should aim for that standard. Key elements of family relationships to emulate are:

  • Bloodlines: get consumers to claim you as part of their family
  • Intimacy: total transparency – no secrets
  • Altruism: be willing to bend over backwards for them

An example of the new kinship in action is businesses decoupling products from services and offering services that help people in ways that do not directly relate to the product. E.g. airlines helping people with more stages of their trip than just the acquisition and use of the ticket.

It’s more challenging for marketers to market to lifestages, since lifestages have changed and are no longer linear or universal. The traditional path of graduating from college, getting a job, getting married, having kids is less and less being followed in that order.

The old paradigm of needs analysis –> product –> relationship is changing. The new model starts with the relationship.

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Posted on June 4, 2013 by Anonymous

The notion that people don’t have relationships with brands, but instead use brands to facilitate relationships with other people is an interesting one. At first it shifted my mind to a new and different perspective. But then I thought about my trusty Trek bicycle. I love the Trek brand. It takes me places that allow me enjoy myself in a way no other can. I ride alone to unwind and free-up in a place expressly without other people. I tried to rationalize how this brand relationship facilitates my relationship with other people and I come up empty or stretching a little beyond realism. I have an adventurous and somewhat exclusive relationship with my Trek. It promises me a reliable, smooth, freedom ride every time. Though I do think brands facilitate relationships among humans, I’m not sure that is an exclusive statement, but rather one inclusive of “brands are relationships among people and products.” Just a thought from frenchonbrand.