The importance of storytelling in business, with examples


December 07, 2018 - Gini Beqiri

Humans have always told stories and they're a vital part of our daily communication, but stories have meaning beyond entertainment value. In fact, storytelling is a strong business skill and when implemented effectively, it can boost a business in a number of ways, such as improving customer loyalty, creating a strong marketing strategy, increasing profit and so on.

In this article we discuss the importance of storytelling in business and provide examples.

Why is storytelling important in business?

Storytelling conveys purpose and businesses with purpose are noticed and win the loyalty of consumers. So it's not enough to have a product or service that solves a problem - your company needs to stand out.

We have discussed the reasons as to why storytelling is important below.

Business development

When you come up with an idea for your business there will be a story behind it - whether it's to do with developing a new product or growing your business. Tell this story and provide the context so your customers and stakeholders understand why your service or product is worth buying/investing in.

Your idea has been created to solve a problem so tell the story of how you were affected by this problem and how this led to your product/service. Ensure that you're making the story relatable to the audience by using real-life situations as this makes it easier to see why your goods will add value to their lives.

Using storytelling in this way helps the audience to connect with you so they trust you, the human, and therefore they trust the brand. This is especially the case when the story is very relatable, which also has the added benefit of being easier to understand and more memorable as it's personally relevant - the audience can see themselves as the character in the story.

Sara Blakely, founder of Spanx, uses storytelling to explain how she came up with the product (first couple of minutes).


Sundar Pichai, CEO of Google, uses storytelling to explain how new features on Google Photos can improve photo sharing and photo quality (Minutes: 2:25-4.25).


Steve Jobs used storytelling to introduce the first iPhone in 2007.

Competitive advantage

There is so much information that consumers are exposed to so it's easy for a business to be lost in the noise. A business may be selling something that is better than its competitors but decision-making is more emotional than logical so telling a story can help distinguish your company from competitors.

Researchers Walker and Glenn showed the value of storytelling by auctioning off insignificant objects on eBay with heartfelt and purpose-written short stories. The items, which were purchased for around $1.25 each, sold for nearly $8,000 cumulatively. This shows how a smart storytelling approach can increase the perceived value of something and generate ROI.

Maintains attention and increases understanding

Simply, stories are very engaging. Whether you are using a story in a pitch, an advert etc, you are less likely to lose your audience's attention. This is why public speakers frequently begin presentations with stories.

Stories are also highly structured forms of communication so they help with the audience's understanding.

Marketing and advertising

Storytelling can form a powerful marketing strategy - people want to connect with brands and businesses and the best adverts do this by, again being relatable, or evoking emotions, such as the John Lewis adverts in the UK or this Budweiser advert. Advertising needs to be more than cheap tactics, such as using sex appeal.

A good brand campaign should also be transparent so consider telling people what the business struggle was and how you pulled through (known as a monomyth story). This will lead the audience to care about you and consequently your product or service.

Ensure that you keep this story consistent across all mediums e.g. adverts, social medical, your website, your employees etc. You want your audience to understand your vision and a consistent brand story will do this.

Increases employee efficiency and engagement

Employees are the heart of the business, they are the company's best asset and a business only succeeds when its employees do. However, research indicates that there is widespread non-engagement, for example, Gallup's research suggests that 70% of US employees are not engaged or actively disengaged from work.

You can cultivate the right culture at work by using storytelling. This goes beyond sharing a successful vision, instead share stories about the company's history, its struggles, its values, aims etc. Share what's important with your employees and explain what this means for them. This will give them something to believe in and consequently they will believe in the company and their motivation to work will increase.

You are essentially giving your employees a greater sense of purpose and meaning by making them part of the company's wider story. Further develop this by allowing your employees to share their own stories.

Decision-making

People look for stories to make decisions, for example, when you think about buying a product you look at reviews which are essentially stories and not just facts and features. This is the same for looking at businesses - when people think "why should I get involved with this business?" they are trying to think of the reasons so they look for stories.

Each business needs to use storytelling to answer the simple question of "why should people care?", whether they are targeting customers, potential employees or stakeholders.

Humanising a brand and increasing profit

The most successful companies have deep and thoughtful stories behind them that stir a sense of larger purpose and meaning into what they do, such as Google and Apple who are not just businesses - they are brands made by visionaries who want(ed) to transform the world. If your business has a vision that audiences can believe and buy into then you are more likely to be successful.

People want to buy from companies that they believe care i.e. empathetic companies. This has been highlighted in the Global Empathy Index (2015) where the businesses near the top of the list were amongst the most profitable and fastest growing businesses in the world.

The top ten companies also generated 50% more income and increased in value more than twice than the companies in the bottom ten. So use storytelling to show your company's empathetic nature as this is more likely to lead to your company's success.

Due to social media people can now directly engage with brands by asking questions and sharing their thoughts and feelings as though the brand is a person. Tell a good story so you show your company's personality and humanity - don't just become a faceless company that consumers feel unconnected from and uninspired to interact with and buy from.

Transfer values and beliefs on to your audience

When people engage with your stories you can create beliefs by showing them how you came to believe something. Transferring values and beliefs is done through your story's character having an epiphany because your audience will also experience this. So take what you know and believe about your product/service and transfer it into the minds of your audience.

Emotionally connect people and create loyalty

The best stories evoke emotional reactions - people genuinely relate and connect with these stories and they believe in the company and what it stands for. When people listen to a story, they feel what the protagonist of the story is feeling so a good way of using a story to connect with an audience is to tell a story about a mistake you/the company made, a failure or maybe life wasn't going well for you or the company in the past.

People will relate to this as we have all experienced mistakes and failures. The more the audience relates to you or understands what went into creating the brand, the more likely they will like you and your company.

Remember that humans typically make emotional not rational decisions so being able to evoke emotions through storytelling is a powerful tool. So transfer your vision into a captivating story and clearly communicate it using a sincere marketing strategy.

Memorable

We remember stories better than other types of information, such as data and facts, because stories are more engaging. Before paper and computers, knowledge and information travelled mostly in the form of stories told orally and over half of human conversations occur through storytelling so it's a natural part of our thinking and communicating.

Also, if you're delivering a pitch or presentation, telling a story provides a break for the audience and as stories are memorable your audience will at least remember your story even if they forget everything else.

In a 2009 speech Bill Gates, after providing statistics on the issues of malaria, opened a jar of mosquitoes in the presentation room.

Stories create purpose and drive action

Stories give the audience purpose and a motive to take action. For example, Wharton School of Business (2007) found that when participants were asked to collect donations in a call centre, those who were told how the money would improve the lives of others earned more than double than the group that were told how the money they earned would improve their own lives. The sense of purpose led to the first group earning more so if you want to trigger action then tell stories.

In conclusion

Today, it's difficult to find a successful brand that does not have a good story behind it. Stories provide meaning, create context and evoke a sense of purpose. Most humans are more receptive to stories than compared to facts or data as stories help us relate, empathise and remember. This is why more businesses are increasingly recognising the importance of storytelling.