Episode 68: "Segmentation, Satisfaction, and the Future of Brand Communications" with Dr. Annie Wilson, The Wharton School

Matt: I'm Matt Swain, and you're listening to the "Reimagining Communications" podcast, where we discuss the opportunities and challenges facing companies on the road to optimizing their communications for the future. Today, I'm excited to be joined by Dr. Annie Wilson, a senior lecturer of marketing at the Wharton School of the University of Pennsylvania, and a former behavioral scientist for the Vanguard Group. Annie, thanks for joining me today.

Dr. Wilson: Thanks so much for having me.

Matt: Certainly. Annie, can you share a bit about your background, expanding on your role as a behavioral scientist at Vanguard and then your path to Wharton?

Dr. Wilson: Yes. So, I did my PhD at Harvard Business School in consumer psychology. And when I finished my PhD, I decided to go on the corporate path rather than the academic path. I took a job at Vanguard as a behavioral scientist, where my job or my team's job on the experimentation team was to help investors make better financial decisions, and to also help advisors help investors make better decisions, and also change our user experience and our customer experience in ways that would facilitate that better decision making. I was at Vanguard for a couple of years, and then the opportunity to go to Wharton came up. And that was truthfully the dream school when I entered graduate school where I wanted to end up. So, I ended up moving over to Wharton, but not because I had any interest in leaving Vanguard so much as I was excited about the ability to teach again at Wharton.

Matt: Very cool. And just any brief points about what you're doing at Wharton.

Dr. Wilson: Yes. So, I teach consumer behavior, intro to marketing, and principles of advertising. And I study how brands grow. I do a lot of case study writing. Right now, I'm writing a case study on Tony's Chocolonely. I just finished a study on Quest Nutrition, and one on Stanley, the water bottles. And so, I spend a lot of my time trying to figure out the underlying frameworks for why some brands grow successfully and why others don't.

Matt: And on that note, you recently published a book as well.

Dr. Wilson: I did. And it is on How Brands Grow. It's called "The Growth Dilemma: Managing Your Brand When Different Customers Want Different Things." And it is how to manage some of the pains and difficulties of growing.

Matt: I actually want to dig into the second half of that title, "Managing Your Brand When Different Customers Want Different Things." It feels like it's getting harder for companies to please the masses. I'd be curious to hear how you're seeing companies address this.

Dr. Wilson: Yes. I think that's true. And I think it's true in part because customer expectations have risen. So, because there are some companies that serve customers really, really well, we expect a higher bare minimum from all companies now. And when companies fail to deliver that, then that is even more disappointing. Like, the companies that people are never unhappy with are those that don't promise really good customer experiences. Like, no one's unhappy with Spirit Airlines. No one's unhappy with Planet Fitness because their model is, like, you get what you pay for, essentially. But what tends to happen or what I see happen a lot now is the overpromising and underdelivering, like these beautiful ads of this brand that, like, really cares about you. And then you go on the platform or talk to a representative. And it's, like, very far from that glossy advertisement. And that's really where you see that mismatch, in my mind, happening a lot right now.

Matt: That's really interesting. I have a similar talk track around that relative to some of the research that we've conducted, where we've seen that consumer dissatisfaction with customer experience has nearly doubled since 2019. And often I take a similar track of saying it's because the brands that we put on a pedestal are setting the new benchmark for what a great experience is. I would be curious if you find that data point surprising. But then also, what's capturing your attention lately in the world of consumer experience?

Dr. Wilson: Yes. I mean, as a consumer, I don't find that surprising. I find myself increasingly disappointed with experiences. And to me, it feels like a lot of it originates from an increased desire to automate the experience or to relegate it to AI or bots, which can save companies a lot of money, but doesn't always offer a better experience. I guess, in my experience, a lot of my frustration comes from I just need to talk to a human because this need that I have is actually unique. Like, it can't be solved by pressing all these numbers down to the end of the customer experience logic chain. And I can't get to the human representative. And then that's really frustrating.

I see a lot of people experiencing that. Like everybody else in the world right now, I've also been thinking about AI from the perspective of where it can be really helpful from time saving and cost saving and making consumers' lives easier and experiences better and more personalized and quicker, but then also where it gets less human or in some cases overly personalized to the point that you lose the brand in it. On top of a million societal things, what I worry with AI on a brand level is if you over-optimize on every given individual, what is happening to the image of the brand from a cultural and consumer perspective?

Matt: Great points. We often think about how our clients can do a better job of sending communications that are personalized to the desires of their recipients, knowing that there are a lot of different choices out there and different recipient preferences in how personalized the content is and how it's delivered and what it includes. I'd be curious about your thoughts on how organizations can better operationalize choice, and fairness, and personalization at scale.

Dr. Wilson: Yes. In my perspective, I think, what I see a lot of companies do is over engineer segmentation, or they try to create these really elaborate segmentation schemes internally. And they get segments statistically, but they're not based on anything that's really easily interpretable from a value perspective and from the perspective of, okay, what communications do I send these customers, or what does this mean in terms of what they want? There is a lot of interpreting based on, like, some clumps of demographic features like, oh, these people must care about, the emotional value of advice. And maybe there's some correlation there. Often, I've seen there's not.

Unless you're a company like Amazon and you have every data point in the world and you can actually personalize at scale pretty efficiently and you have the bandwidth to do that, I think there's more room for versioning in the customer experience, just like we see with pricing where you get good, better, best, that you could do that with customer experience, whether it's good, better, best in bells and whistles and features or in capabilities, but also just different. Like, this is the kind of investor experience I want. This is the kind of experience I want when I'm working with my insurance provider. And maybe you have, like, three to five of these experiences that are oriented around values that tend to be separable for different types of customers. To me, that would be cheaper, more coherent. And the majority of people would probably be happy with it rather than kind of guessing on these really messy data points and segmentation schemes.

Dr. Wilson: We forget that we can ask the customer things. I mean, there's the idea in marketing, obviously, like, you can't ask the customer because they don't know, or everybody is going to say they want something cheaper. That doesn't necessarily mean they are actually going to buy it when you make it cheaper or you're leaving money on the table. But I do think there are certain things in customer experience — in many cases, this is one of them — where we do roughly know what we want, and we can actually self-report it that I'm sort of interested in why there aren't more customizable experiences with, like, toggling on and off in a dashboard. I want more of this. I want less of that. Or when you get an ad and they ask, is this relevant to you? Like, I would love to be able to do that and increase my own optimization toward what I really want in my investor experience or really with any brand.

My partner and I joke, like, when we get an ad on Hulu or whatever, and it's, like, not the right fit for us, we, yell out, like, miss, we don't own a dog because we're sort of joking that they're listening. But, like, you missed. And then sometimes we are like, hit. Like, that is the kind of product we'd buy. And so, I think customers would be okay giving that feedback, particularly in spaces they care about, like finance or any of those high-stakes areas where I do want the information that I want. And I want to be able to at least say yes, helpful, no, unhelpful, or this is the level of detail I want.

For example, I'm what people call a money petter. I don't plan to make any changes in my investments. I'm very much a long-term investor, but I look at my accounts a lot to make sure that they are still where I roughly expect them to be. And so, I would love communication that's just, like, reassuring me, like, you're still good to go, like, continue, stay in the course versus someone who's more of an active investor who may want to really be monitoring because they're making regular decisions on what they're trading, and on a more daily basis than I would be, for example.

Matt: Are there certain industries that you feel do a better job at serving the diversity of consumer needs than others based on the companies you have worked with?

Dr. Wilson: That is a great question. Well, I think consumer packaged goods companies tend to do a better job because they can, like, create more tangible differences in terms of, you know, repackaging the same seltzer in a different can that, like, now, it's for the pickleball player versus, like, the football spectator. So, I think CPG companies tend to do better with that. From a customer experience perspective, I'm not sure there's any particular industry that's better or worse. I guess, any of the companies that listen to their customers and, like, co-create with them, those companies tend to be better. In our book, we talk a lot about Crocs. I don't personally like Crocs as a product, but I'm obsessed with Crocs as marketing. They do a fantastic job of creating a really warm, friendly, and expressive customer experience for their customers.

Matt: We talk a lot about design thinking, and that's a bit of co-creating, right? In practice, how often are companies taking that approach? And is it sometimes a veiled approach that they talk about the customer first, but really, they have their own goals and lead the witness?

Dr. Wilson: Yes. It's sort of tough because a lot of the companies I work with are talking to me because they're having trouble with their segmentation. So, I'm biased toward believing that many companies struggle with their segmentation, but the ones who are doing a good job just aren’t talking to me. But I do think a lot of companies have a hard time with segmentation because there's constantly this balance between what you can observe and then what's valuable from a segmentation perspective that, like, how can I tap into really what the customer cares about in a way that I also can then know how to reach them and with what communication? So, that, I see a lot of companies struggle with, and there are companies that think they're doing it well, but it's not that great, or they're missing a lot of market or a lot of opportunity by not being more thoughtful in their segmentation.

Matt: Yes. Across those clients that you're talking to, Annie, are there common themes that our listeners could take away relative to improving on customer experience, customer segmentation, and personalization?

Dr. Wilson: I think so. What I see across lots of different industries, and this is both with the clients I work with and with students that I'm teaching who are working at various companies, is sometimes forgetting to really clearly define the problem and the objective first. And there's a tendency, particularly when people are stressed or when things aren't going how they want them to, for people to jump in with tactics, ideas, and ways to fix it. My recommendation is often, like, step back and think about, like, what is the problem here?

For example, in one of my first lectures in my consumer behavior class, we talk about motivation, opportunity, and ability, and that you have to have all three for consumers to act and behave in a way that you want them to. They have to be motivated to want to do the thing. They have to have the circumstances to act, and they have to be able to act. Otherwise, it falls apart.

And so, what we talk about in the class is just the importance of figuring out, what is the barrier fundamentally? Is it motivational? Is it they don't have the opportunity, or is it they don't have the ability or don't feel they have the ability to engage with your product? Because if it is a problem of opportunity or ability, it doesn't matter how fun and cool you make your content. You might be increasing motivation, but that's not the problem. So, you could spend a lot of money and time fixing something that is not the problem.

And I see that a lot, particularly in spaces like finance and investing, to go back to that, where consumers are highly motivated to engage, but there is some block. Like, most people, if not everyone, cares about their financial status. They care about their money. They care about what's happening, but something is in the way. Like, they don't have time. They don't have the financial literacy. There is something in the way there. And I think a lot of companies don't step back and think about, is this an issue that we're not interesting enough, we're not motivating enough, or our customers don't have the opportunity, the ability? Because that's, like, the best place to start of even what solutions should you be thinking about?

Matt: And selfishly, through our lens, from a broad range perspective, we think about the servicing part of that cycle. So, now that we have gotten somebody in the door, how do we help improve communications to create better advisor-investor relationships, or increase assets under management, just sticking with this investment angle?

Matt: I appreciate you joining me to dive into your area of expertise, how it plays into the world of communications through our lens as well. But if I may, one last two-part question. The first part is, how do you think communications will continue to evolve in the coming years? And then how can companies best prepare for consumers' future needs and preferences?

Dr. Wilson: I think communications are going to continue to get more numerous and voluminous. And the communications world is going to keep moving faster and faster, whether that's because of customer expectations that if there's some meme going around today, I expect even, like, my bank to respond with that meme in the next two hours, or that we have these AI capabilities where we can actually put out a lot of different communications very quickly. That sounds good enough.

I think that where brands then should be paying attention is in the monitoring and the tracking, which I realize is, like, one of the least sexy parts of marketing. But it's so essential to have robust measurement and tracking in terms of consumer sentiment, brand sentiment. How are people talking about and responding to the brands? That goes back to balancing that personalization, to me. I mean, I'm totally biased, but I would encourage tracking and monitoring at a brand level, and then also at a segment level. Like, as you're moving in one direction with your communications, what are each of your different segments doing in terms of how they're responding or feeling about that interaction and that experience?

Matt: Great. Well, Annie, thanks so much for joining today.

Dr. Wilson: Thanks for having me.

Matt: I'm Matt Swain, and you've been listening to the "Reimagining Communications" podcast. If you liked this episode and think someone else would, too, please share it, leave a review, and don't forget to subscribe. To learn more about Broadridge, our insights and our innovations, visit broadridge.com, or find us on LinkedIn.