The Science Behind Interacting With Brands

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. Well, why do people buy one product over another? Why do they buy a BMW versus a Tesla versus a car maybe from Ford? Or why do they spend thousands of dollars on a trip to Disney. Perhaps it's about a connection that they feel to a brand of a company. Emblem is an agency focused on what's referred to as brand intimacy, that connection

that people have between themselves and brands. Mario Natarelli is managing partner at Emblem. Mario this Afternoon joins us on the phone from New York City. Mario how are you good afternoon? Doing great? Thank you? Yeah, thanks for joining us. We wanted to get you on the program because you've got this brand intimacy study for the year two and there are a lot of really familiar names on the list. But I want to hear how you define brandontimacy and

why it's so important for companies to consider. Well, I thought you did a phenomenal job that, thank you. I would add, yeah, I would add that I think of it as the emotional science behind the brands that we use and love. We know that behavioral scientists have proven that emotion drives our decisions, but in marketing and in many other fields, emotion is often under considered. So we've been on a twelve of year journey trying to define a science and method around measuring that emotion that we

have with the products that we use and love. Well, how do you measure that emotion? I would love to know. Yeah. Well, um, we started by actually looking at how people bond with each other and we found some interesting patterns. And ironically, we bond with brands much like we do bond with each other. It's reciprocal, it's fluid, it's always evolving, and the way we measure it is um. Not to get overly technical, but we basically use quant and call and

now we're using social listening as our data sources. And we observed to mass at two basic elements. One is what is the characteristic of the bonds that you're forming, and there's six unique patterns to those characteristics. And then what's the degree of intensity? Uh, and there's three stages

of intensity to the way you bond with brand. That formula has been evolved and tested and like I said, over twelve years we've refined it where we feel like it's stabilized now and that we're getting some really rich and powerful insights from it. Okay, well, I'm want to get to some of these names. They're on the list because there there's some everything in here is someone is

something that someone knows. So we got Disney coming in at number one, we got Apple at number three, We've got Android at number nine, We've got Netflix at number eight, Mercedes at number six. I'm kind of bouncing around here because I want to focus on number two, which is Tesla. And the reason I want to talk Tesla's because earlier this week we had a story out in Bloomberg that talked about how Elon Musk's antics are starting to get to people who have even been you know, the most

die hard Tesla fans. So how do you how do you get to a score of sixty seven point four score for number two of Tesla given all the problems that Elon Musk has found himself in and all the attention that he has. Yeah, great question, And you know, most of the questions we've we've received on the study have been around Tesla because of the antics of Musque. So this data is um pre dates Tesla's or Musk's

adventures with Twitter. So we would imagine if we ran the data right now that there would probably be some performance loss. So the Tesla ranking, I will say, that's the first time that Tesla has ranked in the top ten in the twelve years that we've been doing this, and it essentially rocketed of the fan of the findings. This is a brand that's really hitting on all cylinders from a brand performance perspective. You know, people that drive Testa's,

if you know any really love their Testlas. You see it in the language that they're using, and you see it in the performance um today. Now, like I said, Uh, how much damage has been created in the last let's say three to four months. It would be interesting to see. I would suspect that it has fallen. Yeah, yeah, I mean Tesla and Musk. I mean such a polarizing sort

of figure there. But let's talk about number one Disney, and I mean when I think about the emotions attached to Disney films, to the Disney parks, that seems to make a lot of sense to me. Mario, Yeah, this is um. What's great about brands that do very well year over years that they generally do well across their entire portfolio, So whether it's about retail or in their case, content or their theme parks, um, etcetera. Brandon Apple is another one that does very well across all demographics and

across all channels. What's interesting about the ask me is it also is benefiting from the effects of the pandemic. So the more we were looking for powerful stories to uplift us or uh, to drive us to a more positive outlook, Disney sort of I think gained in terms of that appreciation. As the world also opened and the theme parks open, people were eager to take their families places, and I think Disney also again um benefited from that

positive trend. Mario, we only have thirty seconds left. But what advice would you give the companies that are not high on the list that want to get there? Well, this is the reason we do the study. We think there's uh boodles of findings and interesting things that you can take from the study. Ultimately, if you think about your stakeholders, all of them internal and external, and the bonds that you're forming with them, you know, really try to nurture them and invest in them and maintain them

over time. It sounds easy, it's not. It takes dedication and perseverance. All right, we gotta leave it there, Mario. Not a rally managing partner at Emblem, it's an agent see that focuses on brand intimacy. They've got this brand new brand intimacy study out. Mario, really appreciate you've taken the time. He joins us on the phone from New York City. This is Bloomberg Business Week with Carol Messer

and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, as I mentioned, we've got Mr Laney Agafa Poulu in the Bloomberg Interactive Broker Studio. She's personal finance reporter for Bloomberg News. The reason we've got her in here is because she's got a Bloomberg exclusive out today. It's about a sneaker head who allegedly operated a massive air Jordan's Ponzi scheme. Missy, it's great to have you back with

us on Bloomberg Business Week. How does a Ponzi scheme work when we're talking about shoes and not stocks and bonds. That is a great question. And I know you mentioned stocks and bonds, So I feel like we should try to explain to anyone listening why we're talking about sneakers right now. And I think the reason is this became a massive asset class that all the people started trading during the pandemic. A lot of people were at home,

they had nothing to do. If they could get their hands on sneakers whose price would go up uh later on, you know in the year, they could buy them, sell them for higher make money off of it. So a lot of people sitting at home with you know, those

um COVID checks, Stimmy's ready to spend money. We're really trying to find ways to get access to these really highly coveted sneakers, and this company in Oregon, Zade Kicks, promised them what their dream scenario could be access to these sneakers that were extremely hard to get, like you would have to wait in line to get them in normal stores or pay for them in the resale market for like hundreds of hundreds of dollars for what they

go for. So they'd offer these sneakers at a discounted price, um, a few weeks after they were dropping. And so what this man did is essentially sell shoes that he didn't have, and so these customers started buying up these shoes. There's a great example in the indictment from the federal government about how he sold six hundred thousand pairs of Nike Air door in but he only had six thousand pairs in stock. This is what prosecutors are alleging, right, this

is what prosecutors are alleging. He's actually showing up an Oregan court as we speak, Um, he is going to plead not guilty to sort of running this scam of an operation. Who you know a lot of it sort of comes back to the pandemic again, because what federal authorities are saying is this guy has been around since he has been running this business where he's selling shoes.

When things went really south was during the pandemic again, because he saw this surge of demand from people wanting access to these sneakers um and I think he started taking orders without necessarily realizing that he would never actually be able to get these orders to people. And so we have a lot of victims on the record saying that they've lost thousands of dollars by sneakers that they put money in for but never arrived. And how did

this unravel? What led authorities to this sneaker ponzi scheme as it appears to be so, I think that authorities

had seen this happened, they were monitoring the situation. What the lawyers for the man behind the company told us is that he actually turned himself into authorities back in May because he realized that everything had gotten out of control and he owed so much money to people that he couldn't really pull back, and so the you know, he essentially turned himself in and surrendered and dissolved his company. And now he's going through the bankruptcy process where he's

trying to essentially get people's money back to them. But of course we all know that, you know, there's people here who might never really get their money back. Okay, so what's this guy like. We're talking about someone you describe as a Lamborghini loving sneaker head. What's he like? Yeah, so again, sold a ton of sneakers that he didn't have. Back to that example of the six hundred thousand Nike

Air Jordan's that he sold. Um, he made seventy millions off of that, and according to the indictment, federal authorities state that he was spending it on really expensive cars Lamborghini's, Porchet's, Mercedes Ferraris, but also all of the luxury goods that's one can imagine, like Louis Betton purses fors jewelry and watches that caused up to six thousand dollars UM. And what's also very interesting is he did not keep that quiet.

I mean, if you look at his social media, his Instagram was, you know, full of evidence that this guy was living a very lavish lifestyle, assuming you know, from the sort of profits he can make out of this out of this company. And of course, like you said, he's an appearing in court as we speak. But what is he exactly being charged with and what could a

possible sentence look like? So he's UM being charged with wire fraud, conspiracy to commit bank fraud because he also UM provided a lot of false statements to banks to get funding that UM we're based on falsified information and also money laundering. And so he's facing as much as thirty years if convicted UM on the most serious count, which again is conspiracy to commit bank fraud. All right, we got thirty seconds left, Missy. What are customers you

spoke you're saying? I mean, I think this is what's really interesting about this story is like they made a lot of money from this company because they were still able to get some sneakers flip them and really just double and triple their investments. But I do think a lot of them are facing like hundreds of thousands of credit card debt because that is where they would charge

these sneakers is across level of credit cards. And what they're doing is they're trying to go to credit card companies and essentially file chargeback claims to get some of their money back. Some of them are succeeding, some of them are not UM, but all in all just all of them sort of looking at this trial and hoping to see something positive come out of it. Mr Lanny Gaffapulu, personal finance reporter for Bloomberg News. This is an exclusive story.

It's on the Bloomberg Terminal and at Bloomberg dot Com. It's about a sneaker head allegedly operating a massive air Jordan Ponzi scheme. Be sure to check it out. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Katie Greifeld and I have been in here chatting about what it's like to be a manager. And you know what, spoiler alert, neither of us are managers. Know somehow, I'm not in charge

of a single person other than myself. It's probably a good thing for both of us. I know, it's a lot of work. It's really interesting because it's something that Julie Jaal writes about. She's the co founder of In Spirit and also the author of the new book The Making of a Manager, What to Do When Everyone looks to You. Julie joins us this afternoon from the Bay Area out west. Julie, how are you I'm doing great.

How are you all doing. We're doing well. Thanks. Um. Take us back to your mid twenties and when you got this promotion and you became a manager. That is sort of the genesis of this book. So I was years old. I had just joined a scrappy startup three years prior. It was a little college social networking at the time. Facebook heard of it multily for me, you know, to start ups grew and grew, and so within a couple of years we had added a lot more people, and so I was one of the early people there.

One day, my manager turned to me and said, you know, we have four new designers joining next week, and I don't have time to meet with them. Why don't you be their manager? And at this point, you know, I had no training at this about how to lead, how to manage. But yet I found myself in this situation needing to ramp up new people and help our team grow. And this is a very common story in Silicon Valley or in any context where a small team starts to

take on bigger and bigger goals. Uh. And that is how I found myself in that role. Um, without that preparation, I made every single mistake in the book about learning how it is to manage and lead people, And ultimately, some years later I decided to write all that down and um hopefully make it seem like I'm having a coffee chat with somebody else finding themselves in that situation. And so, I mean, if you could go back in time and talk to younger Julie Newly in that situation,

what would you say? What would be the main bullet point there? The most important thing I would tell somebody in that situation here is what the job of a manager is. Because here's the thing. We grow up, we watch movies. We have a sense of like, what does the boss do right? And we think about the boss as the person who makes decisions, the person who hires and fires people, the person who gets to tell everyone

else you know, what's right and how things go. And the reality is, in my experience, like, that's not really what great managers do. So the first thing I wanted from to understand is what exactly is the job of management? And very simply I define it as the manager's job is to help a group of people be able to achieve more together. So how do they do that right? How do they actually get a group of talented people to achieve more together. There are three main levels that

a manager has. The first is people. You know, you need to bring in talented people who have the skills to be able to do what the group wants to do together. The second is process us. So do you have all of these great people okay? How should they work together? You know? How do they come up with new ideas? How do they resolve disagreement? Who should do what? You know? How does their work get divided? And finally, purpose, which is defining what does success look like for this

group of people? How do we know what a good job is? How do we know what a great job is? How do we know what a mediocre job is? All that has to be shared in terms of all of the members on the team in order for this to two team to go on and do great things. I'm wondering about people who may not be managers yet and may not even aspire to be managers. And how you know, we talked about this idea of managing up and the idea of working with your bosses in a way that

is productive. What advice do you have for people in those situations? The most important advice I have for somebody when they think about managing up is make sure you know these two things. Make sure that your manager knows what you aspire for, what your goals. Goals are in your career. Do you want to get a promotion, do you want to manage when did? Do you want to take on big projects? Or or you know, are you very happy doing what you're doing? You know what kind

of projects are you excited to take on? What kind of challenges are meaningful, and what kind of things you hate doing? Make sure your manager understands that, right, So ask yourselves, does my manager understand what my aspirations are, what my strengths are, what my weaknesses are, and if not, go ahead and tell them right, tell them in a one on what make sure they know. And the second question is do you want to understand what success for my manager looks like in regards to what I can

do to help them? Because if you don't feel like you know what your manager is aspiring for in regards to the team that you're a part of, or what success for you looks like, you know you're gona be basically talking past each other. So both of these things need to be true. And if they're not clear. That's what you know. Time with the manager in one on one setting is for right. Make sure they understand your goal,

make sure you understand their goals. And Julie, what would you say, not necessarily to a new manager entering a situation, but a manager that maybe has already had some struggles with their team, with their reports, who has you know, maybe lost faith. How do you rebuild that sort of trust there? It's super critical that managers have the trust

with their team. And you know, everyone makes mistakes. I've certainly made many as a manager, and in those cases, what helped me the most was being able to admit my own vulnerability and uh and and come clean with people. Right. The thing is a lot of times managers have immense pressure on them. You know, they might think I'm the manager of the boss, I'm the person who should have all the answers. But that's just too high of an

expectation to have on anyone. There's no single person to company who should feel like they have the answers to every single problem. That's why we have a team, That's why people come together to work on big problems. And so in the cases in which you know, as a manager, you made the wrong call, something happened. Just to own it. Just admit that there was a mistake, you know that you made You thought certain things. It didn't happen the

way they expected and complete and ask for help. Ask the team, Hey, you know, this is one of the things that we need to do together as a team. I don't have all the answers. I would like ideas from all of you. What do you think we should do. The best thing I've found for myself as a manager, the thing that gave me both a lot more impact but also a lot more power, is to be able to leverage the expertise and the wonderful talent among the people on my team. Julie Joe, we got to leave it.

Their co founder at the advisory Firm in Spirit. It's an organization that partners with tech companies to help scale and build products. Julie also spent years at Facebook, where she helped build the app into one that's used by more than a billion people. She's the author of the new book The Making of a Manager, What to Do When Everyone looks to You. Joining us this afternoon from the Bay Area in California. Julie, thanks so much for taking the time a journal. Yeah, but you let me drive?

Oh no, no, no, no, who's honey? Please gravels let me. I want to drive. It's good question. This is the drive to the Globe on Bluebird Radio. All right, we got lesson ten minutes to go, and as Charlie mentioned, we've got a rally underway. Taking a look at the S and P five hundred up one point eight percent, the nasdack up two point eight percent. Let's get into it with Katie Nixon, chief investment officer at Northern at Trust Wealth Management. Katie joins us on the phone from

right just outside of New York City. Katie, how are you? Um? Great? How are you? We're doing pretty well. What we're trying to figure out is whether or not this equity market has gotten ahead of itself, given what we're hearing from FED officials, because it sounds like they're saying it has well, it's been I mean, as you have started off the segment, that's been a crazy day in the market today, a huge risk on rally here in particular with the riskiest

areas of the market. The nastack up so strongly, and you know, I think we came into this really with with such low sentiment, with such a negative positioning that we were due for a nice bounce like we've seen last week and sort of into this week. But I think you asked the right question, which is is it sustainable in the phase of a bed that appears to be hell bent on not stopping not stopping um? And that's certainly where what we're looking at right now as well.

You know, how far will the said go um, and how will markets be able to digest how the final destination? And Katie, I mean, I'm sure you've heard this one before. Don't fight the Fed, And just you know, thinking about what we've heard in the past forty eight hours or so from Feed officials looking at a one point eight percent rally on the sp Now, is that not kind

of the definition of fighting the Fed? It really is, you know, the if you think about it, the stock market and the bond market are both fighting the Fed right now. Um. And it's really I think a function of the fact that we're all data dependent and the market is interpreting some of the data as suggesting that growth is slowing down here, but so is inflation. So the market is basically saying to the Fed, you're not going to have to go as far as you think

you do. Um and also you might have to start reversing course much sooner than you think you have to. Now, Be that as it may, the Fed, the Feed officials that are coming out with all of this sort of hawkish sentiment are doing exactly what they should be doing. They cannot afford to show any signs of capitulation or weakness right here. They have to keep consistently telling the market that they going to focus on inflation so that

they can maintain that all important credibility. And it's I mean, it's kind of interesting to me that if you look at break even inflation expectations, for example, they have come down quite a lot. I mean, it feels like that in and of itself is a vote of confidence in the Fed. But again, you just try to marry that with what's happening in the equity markets. I mean, what what is driving sort of this big rally that has

been going on for well over a month now. Well, I think you hit the nail on the head about inflation expectations. And that's kind of to my point earlier that you know, investors are telling you said they won't have to go as far as they think they need to go because inflation is coming off the boil. We have seen that through some of the p m I data with the prices paid. We've seen that clearly in the commodity complex, not just the energy market, but across

other areas of the commodity complex. So I think you're sort of seeing this broadly based plateau going, if not falling, in the inflation data, and I think it's giving market the confidence to fight the Fed. Okay, so, Katie, I want to talk more about the overall economy. Obviously, the market not the economy, but the two are certainly interconnected. Are we in a recession right now? Oh? No, that's the six or four thousand dollar question. You're right, market

is not the economy, but certainly they do. Rhyme um. I'll jump in the camp with with the most that say we might be in a technical recession, but I think for it to be a true recession, you need to see much more broad weakness, and we just haven't seen it. Friday is going to be a super important day to see what the job's data shows us, and we do expect some weakening, but we still anticipate that we're going to be in this healthy labor market for

the foreseeable future. So it's really hard to argue that we're in a recession when you have such low unemployment. And Katie, I mean, I've got to get your thoughts on the bond market because I look at the bench mark ten year treasury yield and the moves have just been amazing. I mean, seventeen eighteen basis points yesterday, another sort of reach Eastman today, but a lot of choppiness. And that's just this huge rally that we saw over the past month. I mean, you compare that to the

equity market. Sure we've seen big moves, but it feels like the bond market though, it's just hanging on every single word, every single data point. What do you make of some of the whips all that we've seen there. I think, unfortunately, we're gonna have to get used to it. We're going to continue to see volatility within range um in the bond market. And you know, our view is that we've probably seen at or close to the highs and the tenure. We have sort of a central tendency

for the ten year around three percent um. But as you can see as it creeps up toward that toward that level, it quickly comes comes back down as as investors longer term investors longer at the duration curve are anticipating much slower economy and also much less aggressive fed. That's what you're seeing priced into bonds right now. But

it's not. It's interesting because it's not a recessionary forecast because you look at some of the credit indicators and they are certainly not flashing red in terms of being concerned about there being an kind of a deep recession or any kind of a credit event. So it's very interesting time. It is interesting, and it's hard to untangle sort of the different relationships that are at play right now. But Katie, I am curious what you read on it

as to which market is leading which right now? Is it bonds leading stocks, is it stocks leading bonds, or are both as a classes sort of marching to their own drums. Right now you're a bit marched into their own drums because um kind of contrary to what we said before where the economy it rhymes with the market, what we've seen is this dissidence where we have had actually pretty strong earnings growth in the face of a

technical recession, which is kind of unusual. Um but it does show you that at this point in time things are a bit discombobulated, where we have had surprising strength and earnings despite the fact that we have a macro outlook that's that's certainly dimmed. Um. So I think stocks are kind of heaving a sigh of relief here that the recession story is not playing out in earnings, and bonds are telling you the go forward view it is

just slower, okay. So the bonds bond story is telling us that, okay, growth is going to be there, but it's slower. Yes, that's exactly what it's saying. And the equity markets are kind of catching up to what had been almost an uber bearers sentiment coming into July, where there were lots and lots of concerns about about the second quarter earnings period being much worse than analysts expected. As we're seeing it's actually surprising on the upside, quite

the rally that we're seeing today. I mean, look, the NASDAC up two point seven percent as we speak. Katie Nixon, chief investment officer at Northern Trust Wealth Management, joining us this afternoon from Rye, New York. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube. Search to Bloomberg Global News