INTRODUCTION
How to Transcend the Transactional

Advertisements are so numerous that they are very negligently perused, and it is therefore become necessary to gain attention by magnifi cence of promises and by eloquence sometimes sublime and sometimes pathetic.

—SAMUEL JOHNSON, 1759

Have you ever started up your car and had the warning bell start going off , but it wasn’t obvious what was making it ring? You open and shut the doors, check to make sure everyone’s seat belts are on, slam the trunk a couple of times, and still it dings. Only after you give up and realize you’re driving against resis tance do you realize that your parking brake is on. Unclick it, and you’re off.

That’s what I see happening with entrepreneurs and executives in every size of business, in every sector, around the world.

I talk with these people every day for a living. There are three things they say they’re most stressed about:

1. Growing the business (Growth)

2. Beating the competition (Winning)

3. Posting the right “content” to the right social media channel at the right time (Content)

While the first two of these are worthy objectives, the levers that most executives and entrepreneurs try to pull in order to achieve them are, like slamming the trunk, barking up the wrong tree. The number-one limiting factor of almost every business is neither growth nor the competition. It is disengagement. It has been since at least 1759. More on that in just a bit.

The third question is a beast of its own. “What should we do on social media?” sucks up a stunningly disproportionate amount of time and energy at the highest levels of almost every company I meet for such a tactical issue.

These are the wrong questions. We’re having the wrong conversations. Here’s how I know.

I was the VP of marketing for the world’s largest digital health company. The company was called MyFitnessPal. Our logo was a little orange dancer. We called her “tiny dancer.” She was clip art, from a time when the founder built the app in a back room, just he and his cat.

Yet, with these brand assets, the founder grew that company to have 45 million users, over eight years. Then we grew from 45 million to over 100 million users in 18 months. We started a blog with zero readers that had ten million uniques a month less than ten months later.

And we did it with zero paid advertising.

How?

We paid attention to the humanity of the people we served. We paid attention to how they wanted their lives to be different and how we could help them achieve that. This deep, human motivation— transformation—is one of the most elemental reasons people do the things they do. The drive for their lives to be diff erent and better than they are right now is the pure, primal force underlying nearly every purchase decision and brand interaction people make.

In particular, there are three ways in which people have wanted their lives to be different throughout human history. And each of these involves a set of behavior changes that are extraordinarily difficult for people to make.

   They want to be healthier.

   They want to be wealthier.

   They want to be wiser.

Those of us who have taken on business as our life’s work must now elevate our thinking. We must dare to be different. Let’s stop fixating on which pic to post on which channel. Instead, dedicate yourself and your company to the endeavor of becoming an agent and facilitator of the transformations that people want to make in their lives.

That’s what we did at MyFitnessPal. Our business model, our product, our marketing, even our internal culture—everything about the company was devoted to helping our customers change their behavior to make progress on their transformational journeys.

That’s how we achieved greatness. Even with an orange dancer logo. Even with the word “pal” in our brand name.

This might sound like it’s difficult to do if your company sells soap or paper products. It might sound impossible if your company has sold drugs or home-improvement supplies for 100 years. This might sound really hard if your business model is B2B enterprise software or retail or grocery or even apparel.

Trust me when I say that it can be done. And if you choose to take on this challenge, which this book explains how to do, you can opt out of the disengagement epidemic and transcend the transactional nature of your company’s relationships with customers.

Meet the Protagonist of Your New Love Story: The Transformational Consumer

Transformational Consumers are a massive and growing group of people who see life as a never-ending series of projects to live healthier, wealthier, wiser lives.

They spend a great deal of their time and money on the products, services, and content that can help them make these changes.

They are early adopters. Th ey influence the buying behavior of everyone around them. And they engage in joyful, two-way love affairs with the brands that change their lives.

They are triathletes, Crossfitters, and fitness walkers. They do Soul-Cycle and the senior exercise classes at Kaiser Permanente. Some of them are hardcore health nuts. Others might call their lifestyles “healthy-ish.”

If you have been vegan and Paleo, at different times in your life, you might be a Transformational Consumer.

Transformational Consumers pick carefully the things they put in, on, and around their bodies.

They are always studying a course in something, exploring a new certification, or starting a business on the side. They read lots of business and wisdom lit erature, such as this book.

They experiment with frugality. They think a lot about designing their lives and course correcting the total picture of what they do with their work, their careers, and their time. They may have rejected a regular day job to drive for Uber or rent out their spare space on Airbnb, so they can work on their art or their entrepreneurial endeavors.

The specific aspirations of an individual Transformational Consumer at a given time don’t matter right now. For now, the most important thing to understand is how these people define and view themselves. Transformational Consumers consciously view themselves as committed to growth, development, change for the better, and constantly making pro gress toward living a healthier, wealthier, wiser life.

And Transformers are the companies that transcend the transactional by understanding, reaching, engaging, and serving Transformational Consumers in the same way these people see themselves: through the lens of change.

Disengaged and Disgusted: The Trou ble with Transactional

Most companies are very fixated on growing sales and increasing revenue. So they look at customers through the lens of the transaction, tasking their teams with one overall objective: how can we get people to buy more of what we sell? Even so-called Customer Relationship Management and loyalty programs often focus most closely on the desired transactions themselves, funneling customers toward making purchases and rewarding them when they do.

This transactional focus pervades the relationships these companies have with their customers. Strictly transactional relationships with your customers are a quid pro quo. You provide a thing, and they buy the thing. Th at’s that.

The thing is, this type of tit-for-tat, transactional relationship is what my dear grandmother would call a hard row to hoe. Because it’s a row that has to be constantly seeded. Incessantly seeded. Expensively seeded.

And that’s exactly what most companies do. They hire growth hackers. They pay for “user acquisition.” They spend millions on brand marketing. They spend all their money trying to plant new seeds in new fi elds, getting new customers into the top of their funnel, because they can’t count on their existing customers to visit again, buy more, or get their friends to come into the fold. This is a losing game, unless you can count on it being cheaper to acquire new users over the long run than to engage the customers you already have.

Spending millions to acquire disengaged “customers” who buy your product or download your app and never buy it again, never tell anyone about it, never read or watch your marketing messages again is an unsustainable business model.

On the other hand, any company, of any size, in any sector will be successful if it engages two audiences, over and over again: customers and employees.

Unfortunately, most companies are not doing so well with either:

   One in four mobile app users abandon apps after a single use. ¹

   Viewers avoid well over 60% of commercial messages simply by turning their heads. ²

   Nearly 70% of employees, the people we pay to be engaged, rank somewhere between mildly disinterested and actively, toxically hateful when it comes to their employer and their work. ³

Let that sink in for a minute. We can’t even pay people to be engaged.

The other problem with taking the transactional approach is that it tempts companies into short-term thinking and bad behavior. Imagine, if you will, that a New York Times article about your company triggered readers to describe your company as “cravenly amoral,” your products as a “dystopian disaster,” and your strategy as “crony capitalism.” That’d be a nightmare, right?

Well, that nightmare came true for a number of Big Food companies in February 2013, when an excerpt from Michael Moss’s Big Food exposé Salt, Sugar, Fat: How the Food Giants Hooked Us ran in the New York Times, eliciting those real-life reader quotes. ⁴Under the headline “Th e Extraordinary Science of Addictive Junk Food,” the piece told how Moss discovered overwhelming evidence that food companies make “a conscious effort to get people hooked on foods that are convenient and inexpensive.” ⁵

Unfortunately, these same foods played a disproportionate role in kick-starting America’s obesity and diabetes epidemics.

Moss wrote of meeting a pioneering “food optimizer” who had “no qualms about his own pioneering work on discovering what industry insiders now regularly refer to as ‘the bliss point’ or any of the other systems that helped food companies create the greatest amount of crave.” He wrote about a meeting he had with the food scientist Steven Witherly, bringing the well-known food optimizer a bag of junk food from which Witherly immediately extracted Cheetos:

“This,” Witherly said, “is one of the most marvelously constructed foods on the planet, in terms of pure pleasure.” He ticked off a dozen attributes of the Cheetos that make the brain say more. But the one he focused on most was the puff’s uncanny ability to melt in the mouth. “It’s called vanishing caloric density,” Witherly said. “If something melts down quickly, your brain thinks that there’s no calories in it . . . you can just keep eating it forever.” ⁶

The result? More Cheetos sold. More transactions. In the short term.

This decades-long campaign to get people addicted to unhealthful foods is exactly what people think of when they think of companies trying to create habit-forming products. They think of big, evil conglomerates on a sinister mission to get people addicted to retail, screens, friend feeds, and bad foods, while they laugh all the way to the bank.

This sort of bad behavior happens when a sector of companies has exclusively transactional relationships with customers.

Cravenly amoral. Disgust, distrust, and, ultimately, disengagement. (Fortune reports that soda sales are down in 2016 for the 11th year running.) ⁷That taking a transactional approach to your customers is bad for business seems like a serious understatement.

What Does a Love Affair with Transformational Consumers Look Like?

This whole behavior-changing business scenario could have played out a totally different way. It’s already starting to, in some of the great businesses of our time. Th e fl ip-side conclusion of Moss’s investigation is that businesses are in the position to understand how to change and infl uence people’s behavior, even the hardest ones to change. There’s nothing that says companies can’t wield that influence for good, instead of for evil.

From this vantage point, the Transformational Consumer framework poses a challenge, a revolutionary new possibility: what if companies used what we know about building habits and changing behavior to help people create the healthy, prosperity-inducing habits that people are out there trying to build on their own? What if we aligned our business models with people’s personal goals for themselves, to change their behavior for the healthier, wealthier, and wiser?

Massive, massive change, that’s what would happen. Healthy, prosperous people whose behavior aligns with their higher hopes and dreams for their lives.

And the consumer response to businesses would change, too. Love and long-term, sustainable profi tability. That would happen, too.

These “what ifs” point to an alternative realm of possibility for company-customer relationships, a path beyond the epidemics of distrust and disengagement. In this new realm, business becomes a force for beneficial transformation in individual customers’ lives. There, companies and their customers have real, deep, lasting connections. Customers look forward excitedly to the opportunity to buy their products, tell their friends about it, open, click, like, and review.

I’ve seen it happen, firsthand. I saw it when I worked with HGTV, when I worked at Trulia, and defi nitely as the chief marketer for MyFitnessPal. This new possibility for business is anxiously waiting in the wings, just itching to replace the tired status quo of companies begging for attention, stuck and limited by disgust and disengagement.

In this new realm, customers are the hero of their own life journey. Th ey take on a never-ending series of quests to change their lives for the better, coming back from each quest challenged and changed. Every time they go out on a quest to live a healthier, wealthier, wiser life, they seek and fi nd mentors, advisers, and tools to help them overcome their challenges.

And every time they return home from a quest, they inspire their friends and loved ones to go out on life-changing quests of their own—to be the heroes of their own journeys.

In this new realm, these thriving, engaging companies have a single thing in common: they are the knowledgeable mentor, the compassionate adviser, and the invaluable, transformational tools these customers can’t bear to be without (and can’t stop telling their friends and loved ones about, either).

This new future is already reality for start-ups like the ones I mentioned earlier. It is also the new reality for much-larger, more mature incumbent, nondigital companies, such as CVS/health and Target. It is possible for companies in the health, fitness, and lifestyle-design industries, but it is also already manifesting itself for companies in much less obvious verticals, such as Airbnb and Apple.

There is a uniquely human force that these brands have all tapped into, whether by design or out of their sheer love for their users. This force is bigger than any brand, bigger than any product, bigger even than any demographic group—even millennials, even boomers, even moms.

This future, in which companies engage in wild, two-way love aff airs with their customers by helping them along their journeys, is available to any company or brand that gets serious about tapping into this force.

It is available to you and your company.

This force is the human drive for transformation.

And the companies that are tapping into this force have pioneered a path to the other end of the engagement spectrum, with their customers and employees.

They are consistently ranked as the most innovative companies in the world. They are consistently ranked among the most beloved, engaging brands. They consistently achieve stellar growth and beat their competition. They are consistently crowned the best places to work.

By helping their target audience make the critical life changes they crave, these companies have become linchpins in the lives of a powerful group of consumers. They have engineered—and sometimes reengineered— everything about their business to serve Transformational Consumers.

And Transformational Consumers are responding. They engage in love affairs with the companies that help them change their lives, their habits, their bodies, and their finances for the better all the time. But these love affairs don’t always look the way you might expect. Brand-love, affi nity, or sentiment metrics begin to capture the emotion of this phenomenon, but they do little to reveal the profound business impact of the “love” of a Transformational Consumer.

Some of those love affairs are wild and rollicking and sexy. The love of some Transformational Consumers for lululemon gear or SoulCycle spin classes is something they proudly proclaim, literally wearing their hearts on their sleeves (and headbands and pant legs). This doesn’t mean these relationships are necessarily short-term infatuations. Rather, the branding and subject matter and life-improving impact of these brands has enough power and cachet that people tend to talk about them, a lot.

But many Transformational Consumer love affairs with the products that make their lives healthier, wealthier, and wiser look much more like a long, lovely, devoted marriage than a heady entanglement. Customers may not wander about starry-eyed or head over heels, but they do read the blog every day. They do open the newsletters. They do share the content. Th ey do buy or use the product every day, week, month, or every time it becomes relevant in their lives. They do tell their friends, when asked, what their go-to budget or online learning software is and who their go-to real estate broker, life coach, CPA, or insurance agent is.

I may not go about wearing T-shirts proclaiming my love for my go-to protein powder, but I buy it every month.

Unprecedented growth, beating the competition, lifelong customer loyalty, and word-of-mouth referrals: that’s what it looks like when Transformational Consumers engage in lifelong love affairs with the companies that help them change their lives.

How to Use This Framework

Leaders, brands, and companies use the Transformational Consumer framework to get clear direction and answers to the kinds of questions that executive teams struggle with regularly:

   What products should we build or invest in next?

   Will this marketing, message, content, or campaign resonate with people? What messages will work?

   What features do our customers really want—and will they want next year or three years from now?

   How should we take this product to market? How should we package and market it?

   Where are our customers, and what do they care about?

   Why are our customers disengaged, and what should we do about it?

It provides direction on some of the big, strategic questions to ask and clear direction for how to answer them:

   What is the human-scale problem we aim to solve, as a company?

   What do we have to do over and over in order to achieve the impact we want to have on the world?

   Should we focus on growth, engagement, or both, and which teams should be held to account for these objectives?

   How might we drive innovation here, on an ongoing basis?

And it also translates into more tactical guidance for R&D, product launches, and marketing campaigns:

   How can we reach our audiences? Who are they, where are they, and what messages will resonate with them?

   How can we create lifelong relationships with customers?

How to Use This Book

First, I’ll introduce you to the Transformational Consumer in a lot more depth. I’ll help you to understand exactly why it’s so important that you continue to study, reach, and engage these people. The business case for behavior change is a compelling one.

Then I’ll issue a call to action, a call to adventure, really, to you as a business leader.

The last half of the book is the change-management section. Th at’s where you’ll learn how to embark on the journey of actually reorienting your company to transcend the transactional by focusing on serving the Transformational Consumer. I will walk you through the process of elevating the way your teams think about five elemental focus points of your business: your customer, what you sell, your marketing, your competition, and your team.

All along the way, I’ll share stories, case studies, insightful data, and tools for asking higher-level questions and getting transformative answers.

Painlessly Get This Book into Your Brain

When I embarked on this project, I was told that people would buy this book, but 95% of them likely wouldn’t read it. I reject that. So I took it as a content strategy challenge.

I’ve built some recurring features that you’ll find throughout the book with the intention of boosting the chances that the most important content will have the opportunity to impact your business, your life, your team, and the lives of your customers and your employees, for the better:

   Transformational Takeaways. I’ve put the three most important points, in one-liner format, near the beginning of every chapter instead of at the end, so you know from the start where it fi ts into what’s important to you.

   Digital Dossier. If you’re more of a video person, have a short attention span for the written word, or simply want to continue your own journey, the interactive materials in the Digital Dossier at TransformationalConsumer.com is for you. There, you’ll also fi nd a set of free resources to help you gear up, craft, and carry out your individual and organizational action plans for transcending the transactional.

   Stories. Neuroscience researchers have found that our brains light up for several days when we read or hear a story. My mission is to help you meet, understand, reach, and engage the Transformational Consumer primarily by telling you stories and sharing case studies that make the case and teach the frameworks. Some will be from brands that are clearly transformational, some will not. But all will help illustrate the frameworks and flesh them out in a way your brain can retain.

   Transformer case studies. These case studies showcase examples of strategic product, business model, marketing, and cultural moves that a series of world-class companies have made to connect with Transformational Consumers. They then explain how these moves played out.

   The Transformational Consumer Self-Assessment: What Do You Need to Rethink First? To help you convert the concepts and marching orders in this book into an individualized personal and organizational roadmap, I’ve created the Transformational Consumer Self-Assessment: What Do You Need to Rethink First? (available from Berrett-Koehler Publishers at www.bkconnection.com/transformationalconsumer-sa). Take the assessment either right before or after you read chapters 5 through 9, to start sequencing your action plan and transcending the transactional.

If I tried to walk you step by step through how to execute every conceivable tactic for engaging the Transformational Consumer, this book would be many volumes long. Worse, it would be out of date by the time it went to press. This is not a textbook, though I do provide frameworks, principles, and guideposts for taking action on these insights.

My mission for this book is to impact the lives of billions of your customers for the better, by driving a fundamental change in the way you understand, serve, and connect with them. I want to change what you’re thinking about as you lead or run your business, whether you’re a personal trainer or the CEO of a public company. I want to change how you think about your customers. I want to elevate the conversation.

And I want to do that by injecting it with the beautiful vision for the world of customer-company relationships that I know, from fi rsthand experience, is possi ble. I want to share what I know works to help companies transcend the fray and engage customers in wild, two-way love aff airs, even in this era of digital overwhelm and customer fatigue.

Disengagement is not a digital problem. It is a human problem. And the solution is human, too. Once you understand the powerful motivation of the human drive to live healthier, wealthier, and wiser, clarity will replace confusion about how to connect with people.

Eternal principles of story and content and humanity and transformation will replace the dramatics about what social media channel you simply must be active on (this week). Deep insight into your customers’ journeys will provide clear, self-updating direction on where and how to reach them at any given time.

Every team and initiative of your business will be able to operate in a way that drives change for Transformational Consumers.

This is how your company becomes great: by transcending the transactional. And how you transcend the transactional is by becoming a force for transformation in the lives of the people you serve.