The Rise of Nike: The Psychology Behind Its Success

 “[Sports] give people a sense of having lived other lives. When sports are at their best, the spirit of the fan merges with the spirit of the athlete.”
— Phil Knight, Co-founder of Nike

Founded in 1964, Nike originally called Blue Ribbon Sports started with only USD 1,200 in the bank. Now worth USD 38 Billion, they are the undisputed kings of sportswear and control nearly 50% of the global athletic shoe market.
Nike’s success is down to deeply understanding customers and — consciously or not — applying behavioral science and psychology to its experience. Here’s how it used science to grow from a tiny reseller to the world’s biggest shoe brand.

1. The Shoe Dog and the Mad Scientist
The story of Nike is really the story of two men — Phil Knight, its CEO, and Bill Bowerman, a legendary Olympic track coach. People tend to trust and be persuaded by those in positions of power, like professors or experts in their fields.
When professional runners wear Nikes, like the legendary long-distance runner Eliud Kipchoge  — Nike knows it would make their shoe must-haves for amateurs and hobbyists.
Why? Because amateur joggers would look at pros like Kipchoge as authorities on what brands to trust. Phil Knight even told Harvard Business Review that in the early days they didn’t do any marketing at all, and instead focused on what we’d now call influencer marketing. As Knight put it.
“We just tried to get our shoes on the feet of runners.” 

2. Be Like Mike
In hindsight, it seemed obvious that Michael Jordan would partner with Nike to create his signature shoe, the Air Jordan. But back in 1984, when he was shopping for a shoe partner, Nike was still focused on track and field shoes, and relatively tiny. 

Jordan first approached Converse, the home of the NBA’s biggest stars. But Converse told Jordan he wouldn’t get as much attention as other players because, at the time, he wasn’t a big name. Michael Jordan’s last choice for a shoe partner, one that he had to be convinced by his mother to even consider, was Nike.
Eventually, the Jordan brand would be worth more than USD 10 Billion. But why did the brand take off? Of course, Michael Jordan’s talent and stardom had a lot to do with it, but it’s also down to a psychology principle called the Halo Effect.

What is the Halo Effect?
The principles describe people’s tendency to let one positive trait guide their overall opinion of a person, product, or experience.
Halo Effect: People’s tendency to let one positive trait guide their overall opinion of something.

3. Nike’s Two-Word Marketing Plan
From the earliest days of “Just Do It” to the more recent, Nike excels at marketing that doesn’t just appeal to our rational minds, but our emotions as well. 

This approach sets them apart from most other athletic companies. While many other brands focus on product features or new technology in their ads, Nike links customers to its brand through the emotion of sport. There’s science behind this approach — it uses a principle called Emotional Salience. What is Emotional Salience?, When something is Emotionally Salient, meaning it arouses our emotions and we’re more likely to remember it.

And when Nike creates emotional salience for customers, its products are more likely to be chosen over a competitor’s. Phil Knight put it this way.“Our advertising tries to link consumers to the Nike brand through the emotions of sports and fitness. We show competition, determination, achievement, fun, and even the spiritual rewards of participating in those activities.”That’s why Steve Jobs once said you could sum up Nike’s entire marketing strategy in only two words:“No products.”

4. Slice Up the Market
When people think about Nike basketball, they usually think of Air Jordan. But did you know that there were actually three sub-brands in Nike basketball? Air Jordan, Air Flight, and Air Force

That’s why breaking all Nike basketball down into Air Jordans, Flight, and Force worked. The categories were easy for customers to understand. It made each sub-brand more meaningful because Force, Flight, and Air were for different people, and Nike sent a clear message about what made each shoe special. 

What is Chunking ?, This principle says that peoples’ brains break down big sets of information into smaller chunks. It then rearranges these into groups that have meaning and helps them more easily make a decision. Chunking: Our brains like information that’s broken down into small, easy-to-understand chunks

The Bottom Line. Nike knows, and acts on, what few other brands do — that focusing on what motivates customers can drive massive growth.

Although Nike might be savvy in applying psychology and behavioral science, they don’t just “nudge” customers. They use these principles in a way that drives short-term sales conversions and long-term brand growth and know that their real competition isn’t other brands, but themselves. As Phil Knight put it, “Beating the competition is relatively easy. Beating yourself is a never-ending commitment.”

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