Stanford, California - Storytelling is a great tool for businesses seeking to connect with their customers and employees, a Stanford expert says.

Some stories in particular – signature stories – are extraordinarily powerful in shaping a company’s brand, culture and future. A strong one can transform customers’ experiences, re-envision products and services, and spark new business opportunities.

Such inspiring, clarifying narratives help people relate to a company and typically include “heroes.” They may be even more important than many people realize, contributing to a company’s overall strategic planning, and not just advertising.

“The development of signature stories can be a vehicle to understand what a brand or organization should stand for at its core,” wrote Stanford social psychologist Jennifer Aaker in a new article published in California Management Review. “Signature stories get beyond functional benefits by providing a perspective in which other richer concepts can have a voice.”

Examples of signature stories include a young John Nordstrom agreeing to refund a customer’s two “well-worn” snow tires – he later went on to build the Nordstrom company on such a “customer first” policy, according to the paper. Another was when the Molson Canadian Beer Company showed how it shares a passion for hockey with its customers by building a hockey rink in a remote part of the Canadian Rockies and flying in customers for a game there.

Then there is L.L. Bean, who in 1912 launched a boot company only to discover that a stitching problem in the first 100 boots caused them to leak. His response? He refunded all his customers, though it almost bankrupted him.

Signature stories, she said, may be standalone stories like those of Nordstrom, Molson and L.L. Bean that have one version of a narrative that is complete. Or they may consist of several stories based on similar messages and themes. Either way, they can inspire both customers and employees.

Beyond their clear communication and marketing value, such stories can drive a company’s brand vision and emphasize its organizational values, she said. As a result, the best signature stories actually take on a conceptual role in creating a company’s core business strategies.

Power of stories

Stories and storytelling are hot topics in marketing communication today, said David Aaker, co-author of the paper, professor emeritus of business at the University of California, Berkeley, alumnus of Stanford Graduate School of Business, current vice chairman of a branding consulting business – and Jennifer Aaker’s father.

“There are many studies in psychology and elsewhere that document that facts are much more likely to be remembered if they are part of a story,” he said.

The power of stories has been demonstrated throughout the ages, he added. Consider Aesop’s fables from the ancient world, or the impact of Uncle Tom’s Cabin, the 19th-century novel that arguably affected the outcome of the Civil War.

Stories are persuasive, studies show, because they can change attitudes and even counter arguments. In fact, stories may beat “facts” alone. The scholars cite research showing that signature stories have more impact with customers than simply listing and highlighting “features” or facts about a particular product or service.

Leveraging stories

Looking for “story heroes” is the first step to finding a signature story, the researchers wrote. Stretching one’s imagination a bit, these heroes may be discovered in customers, programs, suppliers, employees, the founder, business strategies and even the actual offering (product or service).

But coming up with compelling signature stories is only part of the strategy, Jennifer Aaker said. The challenge is to efficiently leverage them on behalf of a company’s brand vision, growth goals, customer relationships and business strategies.

Internally, she said, executives and employees should communicate these stories in their activities, whether at workshops or when dealing with partners, for example.

Externally, the challenge is greater, according to David Aaker. A concerted program must connect stories with target audiences. This can involve articles, books, blogs, websites, media appearances, interviews, public relations projects and advertising.

Increasingly, he noted, social media plays a highly valuable role by circulating signature stories online and getting customers and supporters to spread those stories and their messages to friends and contacts – a multiplier effect, of sorts.

But when many signature stories exist, company spokespeople may not immediately understand which one works best, whether for a speech, advertising campaign or commercial, Jennifer Aaker said.

To solve this, the co-authors recommend that firms use a “digital story bank” that is well structured and easy-to-use in categorizing different signature stories.

“When good, effective stories become part of an active library; they do not have to be rediscovered again and again,” David Aaker said.

For more on the Aakers, see the Stanford Graduate School of Business video Dueling Professors.