The Authenticity Factor

1
The Authenticity Factor

• An important emergent phenomenon reshaping green
  business
• Integral Partnerships,LLC

2
The Authenticity Factor

• Personal Authenticity Concept
• Real, genuine, honest, trustworthy, true, natural
• What you see is what you get
• Walking your talk
• True to your own natural self
• Being real and self-revealing in relationships
• Mutuality and trustworthiness in relationships
• Inauthenticity Concept
• Fake, hype, pretense, hypocritical, deceptive,
  hiding, lying, shilling, artificial, false
  claims, advertising come-ons, exploiting the
  unwary

3
Four Levels of Authenticity

1. Simple Honesty Telling the truth
2. Personal Authenticity Truth-telling Personally
   Self-revealing
3. Social Authenticity Truth-telling Transparency
   Fair Dealing with Stakeholders Showing
   Ecological Processes of an Organization
4. Systemic Authenticity System-wide context
   creates truth-telling accurate feedback
   process transparency wiser long-term views of
   whole system

4
The Growing Demand for Personal Authenticity in
America

• 1900-1950 - Existentialists a few 100s
• 1950s-1990s - Civil Rights, Womens, Peace and
  Humanistic Psychology Movements Popularized
  Walking your talk Living an authentic life
  from 100,000s to Millions
• 1995 39 of US Adults 76 Million Adults
• 1999 47 of US Adults 92 Million Adults
• Europe is probably stronger than that!

5
3 Key Drivers of Authenticity Trends Since the
1960s

• Personal Authenticity popularized by Civil Rights
  Movement, Womens Movement, Peace Movement,
  Self-Help Personal Growth Psychology,
  Alternative Health Care
• Knowledge Economy as a System cant afford
  distortion and poor quality feedback. It needs
  Social and Systemic Authenticity
• Planetary Ecology Triple Bottom Line Changing
  cost structure Survival of planet Planetary
  issues. ALL of these are only soluble with
  Systemic Authenticity

6
The Authenticity Factor

• 70-75 of Americans distrust Big Business
  because of its inauthenticity
• Business Authenticity is Commitment to whats
  real, and to the honest truth
• To find out whats real and true
• To act from whats real and true
• To take a public stand for it
• To align organizational culture with it

7
Demand for Business Authenticity is the Demand
for Transparency

• Investors burned by business fraud Dot.coms,
  Enron, WorldCom, etc., etc.
• Customers burned by advertising lying, cheating,
  come-ons, bad products
• Stakeholders burned by corporate lying
• Voters burned by politicians lying
• Citizens burned by environmental destruction
  corporate lying

8
Authenticity and Transparency

• Cultural Creatives will judge how good you and
  your product are by your degree of transparency
• The way you show who you are
• Who your employees are
• Your sources for materials, products
• Sustainable production processes
• How you treat your customers
• How you treat your stakeholders

9
Authenticity sets the context for Whats Real
vs. Whats Fake

• Whats real? is a new, emergent factor in the
  Western World
• Cultural Creatives are the key
• They raise the questions,
• They account for the trend
• They are the opinion leaders
• Personal
• Social

10
The Cultural Creatives

• Based on 15 years of research
• 150,000 (cum.) people surveyed
• 500 focus groups
• 60 in-depth, 4-8 hour interviews on life
  histories

11
THE CULTURAL CREATIVES50 million in United
States 26 of U.S. Adults80-90 million in
European Union 30-35 of E.U. Adults
12
THE CULTURAL CREATIVES Total Disposable Income
(After Taxes) 1.2 TrillionUnited States
Population, Year 2000
13
THE CULTURAL CREATIVES Driving customer force
of the LOHAS IndustriesLifestyles of Health
and SustainabilityUS LOHAS Sales2005 est
280BWorldwide Sales2005 est 800B
14
THE CULTURAL CREATIVES

• US LOHAS Industries in Year 2000
• 1. Ecological Lifestyles 81.2B
• 2. Sustainable Economy 76.5B
• 3. Alternative Healthcare 30.7B
• 4. Healthy Lifestyles 27.8B
• 5. Personal Development 10.6B
• Total 226.8B
• Source Natural Business Communications

15
ValueGraphics

• Values and Lifestyles Segments from Cultural
  differences
• NOT Psychographics or individual differences
• Cultural Creatives an emerging subculture, with
  all psychological types smart/dumb,
  inward/outer, good/bad, enlightened/regressive.
• As distinctive as French Canadians in Quebec

16
ValueGraphics

• A Subculture has different
• Values Most important priorities
• Worldview How Life works. Whats real.
  What Life is all about
• Lifestyle What to buy. How to live

17
The Culture Wars 50 Years Ago
50TRADITIONALS
50 MODERNS

Secular, materialist

Conservative, pious

The big city

Small town, country

Hip, up to date

Square, out of date

Style efficiency

Character, reliability

Cary Grant

Jimmy Stewart

Lauren
Bacall

June Allyson
18
There are 3 Subcultures Today

Traditionals
24.5

Moderns
49.4

Cultural
Creatives
26.1
Total
100
19
Three Preferred Cognitive Styles

• Traditionals Fend off a bad, complex,
  ill-understood world. Black-and-white,
  good-and-evil, simple categories.
• Moderns Tightly focused attention on what
  succeeds. Ignore side effects. No
  distractions. Linear analysis.
• Cultural Creatives Synthesize, take in from a
  wide range of sources. See the whole system.
  Inner experience is valid.

20
Cultural Creatives Values

• Ecology, beyond environmentalism
• Planetary awareness
• Social Responsibility Concerns
• Authenticity
• Relationships, Helping others
• Personal Growth, Spirituality
• Feminism

21
Demographics Are Almost UselessValues Go Deeper

• CCs a bit more upscale, overall wide range of
  income, educ, occup.
• Close to national averages on age, race,
  ethnicity, region
• BUT 60 women overall
• Core group (opinion leaders) are 67 women, or
  21 womenmen
• Where are all the good men?

22
The Cultural Creatives Story

• Its about floods of new information world-wide
  over last 40 years
• Planetary environment/ecology
• Health beyond catastrophic medicine
• Organic food vs. environmental-poisons
• Spiritual traditions from everywhere
• Nuclear, infotech, biotech, nanotech - all go
  from promise to threats

23
The Cultural Creatives Story

• Its about womens values and concerns going
  public for the first time in recorded history
• Its about the role of the new social movements
  and consciousness movements in educating the
  Western world over the past 40 years

24
Origins ALL the new social movements of past 40
years

• Civil Rights, Social Justice
• Peace (1960 to 1990, and Now, again)
• Womens (to Eco-Fem, Fem-Spiritual)
• Environmental, becoming Ecology
• Planetary Anti-globalization, Hunger
• Personal growth New spirituality
• Alternative Health Care
• Organic Food Natural Everything

25
Cultural Creatives Lifestyles

• They drive the markets for
• Natural and Organic Products / Foods
• Alternative / Holistic Health Care
• Eco-Travel
• Socially Responsible Investments
• Education and Workshops
• Arts and Culture
• Personalization of Home
• Psychotherapy and Counseling

26
Cultural Creatives Lifestyles

• Theyre Foodies
• Talk about food a lot, eat out a lot
• Innovate, experiment, buy equipment
• Enjoy cooking with friends
• Buy any and all organic/natural foods
• Healthy cuisine, but not self-denial
• Try functional foods
• Healthy natural gourmet ethnic

27
Cultural Creatives Lifestyles

• Media Habits
• Watch Half as Much TV (Dont waste )
• Read Twice as Many Books
• Listen to More Radio
• Read More General Market AND More Lifestyle
  Targeted Magazines
• Just Now Catching Up on Internet Use
• Very Critical of the News Media

28
Green Market ChallengeThe Demand for
Authenticity

• The LOHAS / Green Customer says
• Show me the sources of your materials, and your
  process and your people, and who you are
• and Ill judge for myself whether you are a
  good company to buy from, or to have a
  relationship with.

29
The Green Market Challenge

• Every green and healthful product must first
  solve the whats in it for me? problem BEFORE
  it saves the planet
• Solve a practical life problem for the household
  and fit into its lifestyle
• And also solve a sustainability problem
• and thats just your basic requirement to play
  in this market.
• It doesnt buy you any extra market share.

30
The Green Market Challenge

• To gain market share you must add extra benefits
  beyond green
• Better technical performance
• Health benefits
• Convenience
• Style
• Prestige
• Virtuous Company

31
The Green Market Challenge

• To gain market share build up virtue points as a
  company committed to authenticity
• Be transparent
• Be green
• Be socially responsible
• Be customer friendly
• Be employee friendly
• Offer excellent service

32
In Marketing, Authenticity is all about our
CLAIMS for products and services, and the
personal authenticity of the people

• Its NOT about the products and services
  themselves except that theyre not faked on the
  outside to hide whats underneath
• The claim can simply be good value for money

33
In Marketing, Authenticity is all about our
CLAIMS for products and services

• When a salesman says, Its the real thing, grab
  hold of your wallet.
• Hes diverting your attention to the object or
  the service in front of you, and away from his
  tricky or exaggerated claims.
• Hes lying to get your money.

34
Authenticity Claims in Marketing

• WYSIWYG What you see is what you get
• Not faked the surface shows whats below
• Made from a good/appropriate substance with
  good/healthful properties, and no bad side
  effects
• The underlying stuff does the job materials,
  processes, parts, are clean-pure-unadulterated,
  has good properties
• Well made good parts, good design, good
  manufacture, no defects
• Performs as claimed

35
Authenticity Claims in Marketing

• Claims about the claim itself Its the Truth!
• Shows Transparency Evidence Origins, Sources,
  production process, quality controls, How you
  treat your people and customers
• Shows Precautionary principle No Harm
• More Evidence Justify higher cost It is
  well-made, in short supply, rare, or one of a
  kind
• Expert Authentication Origins, processes
• Celebrity Endorsement prestige claim
• Customer Testimonials Im satisfied
• All Obvious, Evidence-Bearing Truth-Tellers

36
The Big Green Marketing Problem

• BAD MESSAGEWRONG MESSENGER
• 1 Using Modernist Advertising
• 2 Using Modernist Direct Marketing
• Conventional ad agencies have no clue about the
  values of your customers
• so theyre losing business for you
• But most green businesses dont see any
  alternatives for building wider visibility!
• Solution Go to small creative agencies

37
The Big Green Marketing Problem BAD MESSAGE
WRONG MESSENGER

• It Looks Fake, So Its Rejected
• by Cultural Creatives market
• CCs hate admans direct marketers
• Cultural assumptions, language, imagery,
  inauthentic values
• Manipulative and coercive tactics
• CCs dont trust it Been there, done that

38
The Green Market Challenge Speak authentically
to your customers

• CCs lead the demand for authenticity in marketing
  communications
• Every message has to be honest
• AND fit their values and cultural assumptions
• Modernist messages offend them!
• Face to face communications have to be from
  authentic people

39
Show who you are

• Customers will judge both you and your product
  by your authenticity and transparency
• The way you show who you are
• Who your employees are
• Your sources for materials, products
• Sustainable production processes
• How you treat your customers
• How you treat your stakeholders

40
Bigger, Harder Inauthenticity Problems of Today

• Digital fakery of images is inherent in the art
• Easier to fake substances and appearances with
  new materials
• Harder to judge appropriate substitutions of the
  chemistry in products
• Medical advances/dangers are harder to judge
• Pollution and health problems are much greater
• Destruction of planet is vastly more dangerous
• Greenwashing is all too common, hard to detect
• Solution Be the Consumers Friend and Educator

41
The Authenticity Factor may disrupt your
internal processes

• Demand for instant responsiveness to new
  complaints and problems
• Need for very rapid development and market
  testing of line extensions
• Need to involve consumers at all phases of
  product development process. Get their feedback
  early

42
The Authenticity Factor may reshape everything
you do in customer relations and contacts

• Without authenticity, no advertising message will
  be believed
• Authenticity demands
• New marketing behavior to differentiate your
  brand
• New criteria for product development
• New sales behavior
• New customer service experiences

43
From Customer Interface to Customer Interaction
Field

• Bring customers into every part of
• Product design development
• Options development (Honda vs GM)
• Packaging and channel development
• Message development
• Breakdowns, complaints, problems
• Customer feedback
• Product evolution

44
Whats Inauthentic

• Transaction-Based Marketing Hype
• (Financiers Admen want it, NOT customers)
• Maximize Profits from Every Transaction!
• (Fits inauthentic Financiers)
• Generate lots of new contacts and transactions!
• (Fits Ad Agencies, PR firms, Media)
• Based on very short-term, cash-flow tactics
• (Burning your furniture to heat your house)

45
Whats Inauthentic

• Transaction-Based Marketing Hype
• Why disliked by customers?
• Built-in bias toward
• cheating,
• distorting the truth,
• short-life products,
• no mutual loyalty
• Theyve been burned in the past

46
Whats Authentic

• Relationship Marketing
• (Sales Should Grow Out of the Relationship)
• Maximize Profits over the Lifetime of the
  Relationship!
• Maximize Access to New Customers through Good
  Word of Mouth!
• Depends on repeat purchases
• consumables, replacements, upgrades, etc.
• Depends on cheaper repeat sales
• Cost of new sale 5 times the cost of repeat
  sale

47
Whats Authentic

• Relationship Marketing
• (Sales Should Grow Out of the Relationship)
• Why preferred by customers?
• Good long-term value for money,
• Long-life products and services,
• Mutuality and Fair Dealing,
• Honesty and Trust,
• Loyalty to the Relationship
• All are in everyones long-term best interest,
  so its a sustainable pattern

48
Managing for Authenticity

• Declare a soup to nuts and top to bottom
  organizational commitment to authenticity.
• Align organizational culture and management
  processes with processes that emphasize internal
  authenticity

49
Contact information

• Paul H. Ray and Dixon de Leña
• Founding Partners
• Integral Partnerships, LLC1630 North Main
  St,127Walnut Creek, CA 94596 USA
• 925-906-5366 or 415-897-2894
• ddelena_at_integralpartnerships.compaul_at_integralpar
  tnerships.com