The Importance Of Customer Identity


This XSeed blog was written by former XSeed Fellow, Bella Rozenkrants, PhD candidate at the Stanford Graduate School of Business.

Customer identity plays an important and often overlooked role in a firm’s marketing messages. The things people own and products they use become extensions of who they are, and come to reflect what people and, sometimes, companies stand for1. Marketing leaders in startups should consider taking thoughtful actions towards how their product messages align with their customers’ desired identities. Whether it is the identity of an individual consumer or of an organization, customers desire to choose products that match and are consistent with their perceived identity. This identity can be an existing or aspirational one; for example, a company may already hold a reputation as a cutting edge technology firm, or perhaps it wants to hold that position in people’s minds. Additionally, an identity can reflect a company’s culture (e.g., traditional or fun), or the type of product a company makes (e.g., an enterprise software company will likely have a very different identity than a gaming company). Research done by Jennifer Aaker at Stanford confirms the notion that people look to match their own identity with that of a product or brand they are buying. In one of Jennifer’s studies, participants with a rugged, tough, and outdoorsy identity were more likely to choose a brand that matched those traits2. Thus, one thing to consider for a firm’s marketing strategy is how the product’s identity relates to the customer’s identity.

One powerful way that a product can convey an identity to customers is by signaling distinctiveness, or how a brand or product reflects a specific identity that differentiates it from other alternatives. Distinctiveness theory3, a prominent theory in psychology, suggests that it is not only important to have positive attributes of an identity, but that it is also important that these positive attributes are perceived as being distinct and unique. For example, being an “innovative” marketing firm is more likely to be a relevant company identity only if most of a company’s competitors are not generally seen as being innovative. A distinctive identity has the advantage of giving people and companies a higher signal to noise ratio of self-expression, especially in highly competitive markets.

Research in customer behavior gives us some insights on how companies can give their products a distinct identity. Jonah Berger’s work shows that in identity relevant domains, people choose products that are preferred by a minority of other customers4, as this choice signals unique and distinct preferences. This is especially true when that minority group of customers does not include out-group members (e.g., competitors). My recent work with Christian Wheeler and Baba Shiv shows that in identity relevant domains, consumers prefer products with polarizing reviews (i.e. products that are greatly liked by some and very much disliked by others) to products with generally positive reviews5. Again, preference for something that is not unanimously liked signals unique and distinct preferences. Interestingly, these findings suggest that the need for self-expression outweighs people’s inherent negativity bias (the tendency to weigh negatives more than positives). That is, despite the fact that polarizing reviews have more negative feedback than generally positive reviews, consumers prefer products with polarizing reviews when those products help express their identity. Indeed, the need to feel unique and distinctive can be a strong driver of consumer choice.

It is important for leaders of companies to note that identity signaling to customers should not come at the expense of quality. In fact, the effects described above primarily hold for products and product attributes that signal tastes or individual preferences rather than the functionality of the product. For example, a phone preferred by a minority of people probably means that the phone is of poor quality, and the preference by a minority of others is not a desirable identity signal. Thus, it is important to categorize products based on product attributes that reflect customer identity and attributes that reflect product functionality. This, of course, is not a clear-cut distinction, as functionality (recall the integration of the click wheel on iPods) can also be an identity signal (e.g., I’m the type of person who likes innovative and minimalistic design). Still, even a rough categorization of a product’s attributes can help target the product to match a customer’s identity. Similarly, it is also useful for marketing leaders to sort customer feedback based on identity and functionality attributes. If the feedback is somewhat polarized on the functionality attributes, then there may be a problem with the product. However, if the feedback is somewhat polarized on the more self-expressive attributes, then there may be some useful insight on how to segment the market.

Research on identity and customer behavior also highlights a potential pitfall when companies attempt to create a product that is “everything to everyone.” By trying to please too many parties, a company can make a product that may end up being in a middle ground and appeal to no one. Product attributes that help segment and target specific customers span the gamut of packaging, user interface, promotions, and product functionality. Product and brand managers should consider where they get insights on the identity of relevant product attributes. Because companies and people are often aware of the identity they would like to convey, asking customers how they view themselves, and getting feedback on a customer’s experience with a product are important ways to focus a company’s messaging. Given that a customer’s desire to maintain a consistent identity plays an important role in product choice, maintaining a product identity consistent with the customer’s identity is an important consideration for a firm’s product and marketing strategy.

1 Belk, R. W. (1988). Possessions and the extended self. Journal of Consumer Research, 15(2), 139-168.

2 Aaker, J. (1999). The Malleable Self: The Role of Self-Expression in Persuasion. Journal of Marketing Research, 36(1), 45–57.

3 Vignoles, V., Chryssochoou, X., & Breakwell, G,M.  (2000). The Distinctiveness Principle: Identity, Meaning, and the Bounds of Cultural Relativity. Personality and Social Psychology Review, 4(4), 337–354.

4 Berger, J., & Heath, C. (2007). Where consumers diverge from others: Identity signaling and product domains. Journal of Consumer Research, 34(2), 121-134.

5 Rozenkrants, B., Wheeler, C., & Shiv, B. (2013). Identity Cues in Product Rating Distributions. Talk presented at the annual meeting of Society for Consumer Psychology, Austin, TX.