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Three Examples of Successful Business Model Innovation

A business model is the backbone of how a company creates, delivers and captures value. When a company innovates on just the customer experience without considering the underlying business model, it not only reduces the value that can be delivered to customers but also fails to realize the full value that can be captured by the business. Over time, that reduces the business’s ability to invest in creating experiences that will power the business of tomorrow. As Ben Thompson wrote in his analysis of Facebook, “succeeding on the Internet didn’t simply mean making a digital product, but also finding a business model that was native as well.”  

Business model innovation is the creation of outsized value – in the form of market share, margin and defensibility, by reconfiguring multiple elements of the business model. Here are three examples of business model innovation that created more value for customers while also increasing the amount of value available to be captured by the business: 

Amazon’s Subscription Model Grows Customer Lifetime Value

Customers can automate the replenishment of household items through Amazon’s Subscribe and Save program. Many parents struggle to equitably distribute the management and execution of tasks in their household, with the greater share often defaulting to women. 

For instance, before buying detergent, someone must remember that it needs to be bought and what type to buy in the first place. This idea leads to friction that forces customers to outsource tasks in order to better distribute the load. The Subscribe and Save program makes it easy to personalize recurring deliveries and gives members the benefit of saving more as they spend more. For the business, it creates a recurring revenue stream while decreasing customer motivation to shop around and price compare each month. And finally, sending multiple items in one box each month lowers the marginal cost of fulfillment. 

Airbnb’s Value Chain Grows the Total Addressable Market

Airbnb modularized the supply of short-term rentals available, making it easy for travelers to compare options, read reviews and book. By integrating the supply of rooms onto its platform and completely owning the customer relationship, it created the conditions necessary for guests and hosts to trust one another, even without Airbnb owning a single room. In digital businesses, the winner is often the company that can reconfigure the value chain to modularize supply and own demand because it makes it difficult for suppliers to squeeze margins and it creates a virtuous cycle of new demand driving new supply. Airbnb is an example of disruptive innovation because it began in the underserved, low-end part of the travel market by offering inexpensive room rentals outside of tourist districts. After building a great reputation based on customer experience and trust, the platform was able to move upstream to mid-tier, business and luxury segments of the market. 

Microsoft’s App Store Pushes the Industry Towards Open Marketplaces

During its acquisition of Activision Blizzard, Microsoft announced a set of open app store principles, just months after Epic Games accused Apple of anti-competitive practices in the iOS app ecosystem. Microsoft’s leadership is seeking to create a “universal store” in direct contrast to Apple because it believes that outside developers must thrive in its ecosystem to deliver the best experience to customers, even if this means forgoing near term profits that could be gained by showing preference to its own apps, requiring its payment systems be used or acting as a gatekeeper between developers and customers.  

An NFX assessment recently found that 70% of value in tech is driven by network effects. By creating an open app store, Microsoft is betting that network effects will grow the overall value of the gaming industry enough to make up for leaving some value on the table in the near term. By focusing on overall value creation rather than just profit maximization, business model innovation prioritizes models that will create the most sustainable value for all stakeholders in the ecosystem.  

And When it Goes Wrong – Clubhouse’s Fatal Flaw

The goal of business model innovation is to configure business model components in a way that maximizes the total amount of value available to be created, delivered and captured. An offering that fails to solve a real customer problem will never gain traction in the market and a desirable value proposition without a mechanism to capture value for the business won’t last long.  

For example, Clubhouse quickly attracted a sizeable user base by solving a unique problem presented by Covid 19 – the newfound difficulty of getting together. The audio-only, originally invite-only social media app allowed newly homebound people to gather for live conversations around common interests. Rather than commercializing components of the value proposition, such as through subscriptions, advertising or commission fees, the founders focused only on user growth.  

“Business model innovation is the creation of outsized value – in the form of market share, margin and defensibility.”

However, the problem was that Clubhouse’s value proposition was easy for tech giants to replicate. Twitter quickly rolled out Spaces, which solves the same user problem without requiring users to join a new platform. Additionally, due to network effects, these features are more valuable on a platform with a larger user base. Twitter also already had a mechanism in place to allow hosts to monetize, making it a more attractive platform for content creators, while also offering the capability of capturing value with commission fees, as well as growing a new offering that will be valuable for advertisers in the future. 

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Because business model innovation is about exploring what could be rather than what has been, there is no standardized answer—but we do have a standardized approach based on human-centered design methodology. The process begins with a thorough economic analysis of the existing and adjacent markets, consumer behaviors and new technology to model many configurations of value exchanges.  

A successful business model innovation will solve new problems for customers and create entirely new use cases – such as employees using Airbnb to work from anywhere during the pandemic. Business model innovation requires multidisciplinary teams of strategists, designers, and technologists to think divergently about what could be, model the highest value opportunities and rapidly test and iterate in-market. At Prophet, we are uniquely equipped to do this because we always start with the customer and the problems they are trying to solve, so we create business models that are in harmony with getting the experience right.  

Interested in learning more about how business model innovation can enable and sustain both incremental improvements and disruptive paradigm shifts in your market? Get in touch.  

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Organizing Brand-Demand Marketing Teams for Success

In the fifth and final installment from our Brand-Demand Love series, informed by our conversations with marketing leaders across industries, we’ve outlined the steps to integrating brand and demand marketing capabilities to win in a complex and dynamic landscape.

If we think of marketing organizations as households, they are often not very harmonious, thanks to the common tension between brand and demand generation teams. Our blog series has described why these two marketing disciplines struggle to work together to achieve mutual success. To attain productive and peaceful integration, brand and demand teams must define the best ways to organize people and teams, collaborate productively and deploy the right capabilities and tech.

Overcoming Fragmentation 

In our discussions with marketing leaders, the brand-demand split in organizational structures was a common challenge. “One of the big barriers for marketing in our industry is how we’re structured,” a technology CMO told us. “There’s the performance marketing team on one side and then there’s everyone else, including brand people, on the other.”  

In many businesses, brand and demand are viewed as unrelated capabilities, run by disparate teams with little to no insight into each other’s activities or results. Other common symptoms of unhealthy brand-demand organizational structures include:  

  • Separate planning cycles and budgeting exercises 
  • Distinct KPIs that often do not align with broader business objectives
  • Lack of knowledge sharing
  • Talent deployed to standalone channels or capabilities, with little cross-functional collaboration or rotational assignments  

When marketing teams are organized this way, it’s impossible for brand and demand teams to communicate openly, share data freely, or collaborate productively – much less fall in love again. 

A manufacturing vice president of marketing told us that fragmentation is largely down to leadership:

“If your teams are fractured and chaotic, that’s because your leadership is fractured and chaotic.”

This speaks to the importance of leadership in ensuring different functions work together toward shared, big-picture goals. 

Rethinking the Marketing Organization Chart  

There’s no single ideal structure for a marketing organization, but certainly, brand and demand should not be managed as separate entities. Some top performers organize their teams around customer type, while others use product line, channel or functional discipline. Again, there’s no definitive best practice. A B2B manufacturer that restructured its marketing operation around how customers buy, rather than product lines, became more responsive to business needs.  

Marketing at 7-Eleven is organized by discipline, according to CMO Marissa Jarratt, but with a recognition that no one works in isolation. For instance, the company established a customer analytics and insights team to inform business decisions. “Then came the responsibility to socialize those learnings across the organization in a thoughtful way,” she said. “You can have really smart people, but it has to be a team sport.”  

Fostering Collaboration 

No matter the organizational model companies choose, collaboration is key. Collaboration can take many forms:  

  • Joint strategic planning sessions 
  • Monthly knowledge-sharing sessions 
  • Flexible campaign planning exercises and roles, including metrics definition and budget allocation  
  • Integrated campaign performance readouts 

All of these activities can – and should – include external agencies, consultancies and other third-party providers, as well as in-house agency capabilities where relevant. “We need holistic collaboration from our partners to help us work through our evolution,” said Shelley Haus, CMO of Ulta Beauty. Indeed, several marketing leaders who we interviewed considered external partners to be part of the marketing organization and capable of helping bridge the brand-demand divide. 

Collaboration can also help solve tactical issues. For instance, brand and demand teams both want efficient and effective content marketing capabilities, which require coordination and asset sharing. “We need atomized content approvals and integrated digital asset management flows so content and images can be reused quickly and easily by many teams,” said a senior marketer at a large financial services firm. “Otherwise, teams can’t streamline timing or use a ‘test-and-learn’ approach based on integrated results from everywhere.” 

Boosting Brand-Demand Integration Through Capabilities, Talent and Tech 

Several marketing leaders we interviewed talked about the pressing need for new talent. Everyone is looking for data scientists, business analysts and digital strategists; thus, brand and demand teams should look to share in-demand specialist resources.  

More than one marketing leader described the need for more communication and training across disciplines to promote better understanding. Job shadowing and rotational assignments can help in these areas. Another challenge involves varying experience and backgrounds: “Brand marketers run the show and they all went to the same business school, while performance marketers all come from DTC brands,” said Ashley LaPorte, ex-CMO at Seventh Generation. Organizational design and cultures that emphasize collaboration and shared goals can help overcome these barriers.  

Compensation models and incentives are other effective levers for driving integration between brand and demand. Defining joint performance goals tied to overall business performance may facilitate the shift away from time and expense cost models to more incentive-based pay models, which would encourage brand and demand marketing teams to collaborate more frequently.  

Technology has a role to play as well. A strong MarTech stack can successfully integrate data across disparate sources and promote connectivity among different functional areas. Adopting content personalization at scale requires integration across brand and demand teams – and their corresponding tech stacks. Performance marketing functionality can also be embedded directly into tech platforms to give brand teams more access to relevant insights and tools.   

The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact.
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We believe the most successful and productive relationships – in business and in life – involve shared goals and commitments. Achieving these goals requires collaboration, communication and an effective division of labor. For brand and demand teams to deliver optimal performance in line with their shared goals, they must organize their “home” in ways that reflect and support these principles. Because brand and demand must live together, we’d recommend they aim to do so with utmost harmony and respect for each other’s unique genius and power. That’s how they can reignite the love in their relationship.  

Do you need help breaking down the silos separating your brand and demand marketing teams? Our Marketing & Sales practice can integrate your teams to achieve mutual success. Get in touch. 

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Teladoc Health: Building Purpose-Led Consumer and Employee Experiences

Every year, Prophet surveys thousands of consumers and asks, “Which brands play an important role in your life at why?” And every year we crunch the numbers, synthesize their feedback and produce a ranking and insight-rich report for business leaders to leverage as they transform and grow their businesses through innovative customer and employee experiences.

This year’s survey focused on questions about the “head” and “heart” of consumers. While companies that won over the “heads” of consumers brought pragmatism and convenience, “heart” winners found ways to connect with them on an emotional level. The top brands – aka relentlessly relevant all-stars – did both.

In the 2022 Prophet Brand Relevance Index® (BRI) leading healthcare entities—pharma, providers, suppliers—gained traction and awareness for bringing innovative solutions during the COVID-19 pandemic. Pharma giants like Pfizer, Moderna and Johnson & Johnson grew in name recognition and brand value as they stepped up to the world stage with life-saving vaccines. Non-traditional care platforms also gained traction as consumers opted for telemedicine experiences.

But which healthcare organization was the most relevant to the lives of 13,500 U.S. consumers? Teladoc Health, the multinational telemedicine and virtual care healthcare company, ranked as the #1 healthcare organization and #21 overall.

The pandemic forced the adoption of virtual care and Teladoc Health’s newly transformed experience was there to meet the moment – providing whole-person digital-first solutions to patients. And with gaining momentum, more and more consumers have begun to embrace digital native health platforms. These platforms are rapidly scaling to become not only the digital care continuum for patients but the care continuum. Traditional sectors of healthcare are drawing inspiration from modern digital healthcare players like Teladoc Health who are taking center stage (and top spots in rankings).

Stephany Verstraete, chief marketing and engagement officer at Teladoc Health, joined Prophet’s brand leadership team in the Prophet BRI webinar to share her take on the organization’s rise in consumer relevancy.

What was the focus of Teladoc Health’s brand in 2021 and is that changing as we step further into 2022?

The pandemic created this unique moment where Teladoc became relentlessly relevant – hitting both on the needs of the ‘head’ and the ‘heart.’

We’ve reached an inflection in the adoption curve of virtual care. Which is something that is pretty rare in the world of healthcare. And I think that really stemmed from being there in the moment of people’s needs. In 2020, suddenly something they had taken for granted – access to a doctor – was compromised. And fundamentally, it transformed the relationship they had with our brand, from being largely “head” dominated, focused on convenience and value, to increasingly meeting those needs of the “heart” side as we became a place that they could safely turn to, speak to, without leaving their home.

How do you ensure brand relevance is at the core of building the brand and customer experiences?

We have been digesting our recognition on the list for the first time and are using the brand relevance construct to put a framework around what we are focused on this year.

People naturally gravitate to Teladoc for the “head” needs – like simplification and transparency – and how it can provide individuals in system-centric environments with experiences that are more “person-centric.” As we think about moving forward, we want to focus on how to make those deeper focuses on the “heart” as we deliver innovative experiences. We want to change the way people think about the Teladoc Health experience – from just sick care to healthcare. This brand thinking is transformative for how we go to market, from a marketing perspective, all the way through how we infuse it in our experiences.

Outside of marketing, what do you do to drive relevance in other aspects of the business? How do you inspire the rest of your organization around a brand?

Getting your employees to be power users makes them your greatest brand evangelists. They are the first line of feedback that we incorporate into our experience.

Fundamentally, the Teladoc Health team is inspired by our mission of enabling all people everywhere to live their healthiest lives. Our 5,000 global employees are really the power users of our services. And I would tell you, as a marketer, who has not spent a career in healthcare, this is unique.

We are very intentional about keeping consumers front and center in all of our strategic conversations. For a lot of our DTC marketers, this would seem like an obvious statement but as you get into a healthcare context, it’s really important. For example, we start every strategic meeting with a story from one of our members. It really has a powerful impact on how to keep us grounded in our company’s true north. That is the experience we are delivering and the people we are helping. We are defining a category and something for consumers that is new. When I talk about the brand, it is critical because our brand relevance is still being formed for a lot of consumers.

It is rare to see a study of this kind that can parse out innovative and traditional brands in a way that is relevant and meaningful for all of them. That’s something that we’ve really appreciated.

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The Prophet BRI serves as a roadmap for building relevance with consumers, the type of relevance that leads to business growth. Contact our team to learn how to apply the insights from the 2022 Index to your organization.

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How Sales and Marketing Drive Relevance

While sales and marketing have always required a bit of art alongside science, Prophet’s latest 2022 Brand Relevance Index® (BRI) shows that the balance is shifting. The COVID-19 crisis has changed how people consider brands, increasing the human tendency to consume emotionally. In today’s climate, we want to feel brand love before we deploy our dollars. We want to buy from companies that make us feel good, seamlessly marrying depth of relationship with convenience and meaningful experiences. And, ultimately, that’s changed how demand is actualized.

Leaders of this year’s index–our seventh–reveal these new patterns. The best brands are increasingly finding success in our new normal by the way they connect with us as humans. Some go right to the heart, building emotional resonance. Others appeal to the head, drawing us in with practical benefits. A small group of all-stars, led by Apple, Peloton, Spotify, Bose and Android, manage to do both.

Even when faced with significant speed bumps, these companies know customer relationships are everything in the world of demand generation. Relationships sit at the intersection of growth, experience and data. Brands that understand that dominate this year’s index. They are prioritizing innovation investments in the service of customer needs. The most relevant marketers push beyond the status quo, driving brand marketing investment to conversion.

We see them acing demand generation in two ways. Relevant brands are …

Deepening Relationships

The next iteration of acquisition and retention is maintaining devoted relationships with customers. Peloton, which ranks #2 overall and comes in first in our “Heart” metrics, perfectly illustrates that brand passion. Devotees could care less about its sputtering stock valuation. They just prize it for the rich experience, and the ongoing value exchange between consumer and company, across channels and touchpoints.

Relevant brands like Peloton have built products that seamlessly integrate into the lives of their customers and then rely on advocacy to promote pipeline. When something is indispensable to us, it’s easy to inspire others to participate. Tactics like Peloton’s “refer-a-friend” are mutually beneficial and authentic.

Spotify (#3), PlayStation (#7) and USAA (#10) are also thriving on the rich sense of discovery and community-building.

Fostering customer relationships requires a transition from investment to brand perception metrics. And it calls for prioritizing improved retention and loyalty models that focus on relationship longevity.

Demand generation and performance marketing allow brand marketers to relentlessly test and learn. When relevance is a moving target, performance branding will enable us to reach customers in new ways and experiment with tactics. Performance marketing is the finger on the pulse of all relationships.

Monetizing Experiences

It’s not news that the brands at the top of the index are known for providing engaging and unforgettable experiences for customers. In turbulent times, relevant brands help people feel safe and make life easier. They encourage us to experience parts of ourselves that we’ve missed in this constrained pandemic period. Generating demand and monetizing these trusted experiences requires careful finesse.

Increasingly, we see opportunities for investment in revenue streams through user interface and experience. Innovative brands are reframing go-to-market strategies. For example, some are redefining sponsored commerce beyond traditional search and banner ads, building an ecosystem for media that can extend into brand-owned properties, channels and ad units. These brands have an opportunity to explore what we call “BYO (build your own) Walled Garden,” obtaining both valuable first-party data and ad revenue.

“Innovative brands are reframing go-to-market strategies..”

Apple is the most obvious example, moving from device-driven relationships to becoming an arbiter of news, music, video and apps. It’s no surprise that it’s ranked #1 since we started our relevance research in 2015.

Companies like Fitbit (#8), TED (#9) and Teledoc (#21) are also flourishing through expanding ecosystems.

Others are gaining relevance through the rise of open payment architecture. Afterpay (#11) leads our index in financial services, showing that consumers value digital-first, customizable solutions that are reliable and transparent. Of the 293 brands we measured, it ranks #1 in the “Lives up to its promises” attribute. These “Buy Now/Pay Later” models afford trusted and convenient opportunities for customers to transact in channel. And they create new revenue streams for savvy organizations.

These customer-acquisition efforts have a direct influence on brand perception–both positively and negatively­­. And they are increasingly defining cross-channel customer strategy. As the marketing value chain collapses, we have instantaneous feedback between brand-marketing investment and revenue attribution. Growth-minded CMOs find the delicate balance in customer experiences that support both brand and demand.

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The Future of Branding is Performance-Oriented and Vice Versa

We see first-hand the value clients achieve when they overcome capability silos–even within marketing. Coordination across customer-facing disciplines is fundamental for building relevance through customer understanding, targeting and addressability. It’s also critical in achieving greater precision in measuring upper-funnel brand impact, both due to data and experiential continuity.

To achieve uncommon growth, brands have to measure the sales stimulation that arises from brand awareness and perception shifts. With marketing fatigue and increasing budget pressure, the onus is on brand advertising to evolve from “spray and pray” to value-added and relevant placements.

Likewise, performance marketers need to lean into the incredible value of a beloved brand. Demand generation must support–not undermine–brand trust, love and relevance.

Get in touch today if you’d like to learn how to develop effective go-to-market strategies to unleash your company’s “Brand-Demand Love.”

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Brand-Demand Love: Achieving Success and Satisfaction Together

Informed by the conversations we’ve had with CMOs across industries, this fourth installment from our Brand-Demand Love blog series explores how to integrate brand and demand marketing capabilities to win in a complex and dynamic landscape. 

Even in the most complimentary relationships, financial matters are often a source of significant stress. For brand and demand-gen marketing teams to achieve the fully integrated and highly productive marriage we have been describing so far in our series, they must address the potential friction points involving budgeting, investment and performance measurement.

Agreeing on big-picture goals and investment priorities is the first step, followed by defining metrics to track performance. Receptivity to new approaches and flexibility to adjust as needs change is also key. As our research with marketing leaders has made clear, these issues are critical to unleashing uncommon growth through more effective and agile marketing capabilities across the customer lifecycle. Brand and demand teams ultimately share a pocketbook and prosper (or struggle) together.

Building Balanced Budgets and Allocating Investments Equitably

Many marketing leaders confess to being “obsessed” with finding the right investment mix. There is no shortage of conventional wisdom on how to allocate budgets and balance the investment mix. One common industry standard is the 60/40 rule, an investment recommendation proposed by Binet & Field’s 2013 study. The thesis: Allocating 60% to brand and 40% to demand yields the most effective balance of near-term acquisition and long-term performance.

Such rules of thumb seem to offer quick, evidence-based solutions. They also help defend brand investments, as many marketers want—and feel an urgent need to do—as e-commerce and digital have gained the upper hand in budget battles. However, this may not fully account for the variables of consumer behavior, broader market trends or the unique business contexts faced by different organizations. Modeling investment and measurement decisions against product lifecycle stages (e.g., product launches, mature offerings) can help marketers track progress toward specific goals.

Marissa Jarratt, chief marketing officer of retailer 7-Eleven, seeks to manage marketing investments like a portfolio. She balances higher-risk bets that offer big potential upside while also making safer plays that bring more predictable returns. “This is becoming more of a science,” said Jarratt. “We’ll take risks if we think it can drive a target downstream impact or outcome.” Such a balanced view of risks and rewards helps optimize the media mix across funnel stages and seasons.

Sudden market shifts put a premium on agile planning and budgeting. As Ashley Laporte, director at communications firm RALLY, told us:

“It’s not about finding the perfect proportions to balance brand and demand but finding a flexible framework that understands how everything connects.”

Mastering the Metrics and Digging into the Data

Performance metrics and attribution models continue to proliferate and evolve. There has been a pronounced shift away from brand surveys toward more agile measurement approaches. The leaders we interviewed expressed uncertainty about which metrics and KPIs are the most accurate and how to enable insight-based decision making.

Even firms that can transcend traditional difficulties in measuring brand performance face challenges. As Jennifer Warren, VP of global brand marketing at Indeed, told us, “Business and finance leaders want to know how a 2% lift in consideration translates to sales and revenue.” Such visibility is difficult to achieve, as is determining ROI on long-term, multi-year brand investments. Marketers are now being asked to develop KPIs to measure the effectiveness of purpose-driven strategies around sustainability, for example, or diversity and inclusion efforts.

Despite the challenges, being data-driven enables marketers to speak the language of the business. As Portia Mount, VP of marketing, commercial HVAC Americas at Trane Technologies, put it, “When financial leaders say, ‘let’s cut all the brand stuff and just do demand,’ our job as marketers is explaining what the impact will be if we shut something down.” Better performance data and stronger customer insights make for more productive conversations in explaining that choosing between brand and demand is not a zero-sum game.

“I don’t think that there is a silver bullet for measurement,” said Tyrell Schmidt, U.S. chief marketing officer, TD Bank. “We are really careful not to oversell performance, which is easy to do because it always drives the fastest results.”

A Shared View Builds a Shared Stake

Demand-gen leaders also face challenges in tracking performance as major tech companies like Google and Apple work to shift away from the use of cookies. Consumer goods firms struggle to get point-of-sale performance data from partners (e.g., e-commerce platforms and big-box retailers) and look to fill the gap with third-party data (e.g., credit card records, basket analysis). The bottom line: as much data as marketing leaders have, they are always looking to attain the most relevant data.

The lack of alignment between brand and demand adds another layer of complexity. Today’s “incongruent” KPIs result from a lack of incentives to “play nice,” according to one CMO. Ideally, rich data and aligned KPIs are used within an agile budgeting and forecasting model that incorporates multiple time horizons (annually, quarterly, daily) and enables opportunistic, real-time adjustment.

Integrated performance dashboards accessible by both brand and demand teams have enabled some firms to generate holistic insights by combining both short-term (e.g., search data) and long-term (e.g., Net Promoter Scores) metrics. These efforts reflect the need for marketers to experiment and innovate in their approach to financial matters. At Prophet, we recently partnered with a health services client to develop an integrated performance dashboard across brand, demand and customer experience teams, enabling a cross-functional understanding of campaign performance.

Summarizing the Questions You Need to Ask

Looking ahead, brand and demand teams must commit to open communication and engagement to achieve a strong and harmonious relationship. When it comes to financial matters, flexibility is also key. In order to pave the way to a household of shared finances, you need to ask the right questions and the following are worth considering in setting the right investment priorities and measuring the effectiveness of collective efforts:

  • How much impact does brand marketing have on conversion?
  • What impact do customer acquisition efforts have on brand perception?
  • What’s the appropriate level of investment across brand and demand without sacrificing overall performance?
  • What do specific metrics tell us? Which metrics are most meaningful and why?
  • Are we measuring campaign performance holistically and across the funnel?
  • Do we have a shared view of brand and demand and how they connect to the business in the short and long term?
  • Are key measurements used to inform annual planning cycles?

The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact.
Download today!

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In our next post, we’ll look more closely at how to set up a “happy household” ­– that is, organizing teams and building the right capabilities so brand and demand can have a comfortable nest for their life together. 

If you’d like to learn more about how your organization can overcome common challenges while integrating brand and demand marketing capabilities then get in touch here. 

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How Financial Services Brands Can Become Relentlessly Relevant

Prophet has released its latest Prophet Brand Relevance Index ® and it’s clear that banks, insurers and other financial services firms need to do more to energize their brands. This has been true for large and traditional financial services brands for several years running, though newer digital-native brands and fintechs have gained traction quickly, both in the market and the Brand Relevance Index.

At a high level, it’s clear that consumers are increasingly willing to give new and emerging brands a chance and will reward those that offer compelling value or a winning experience. In some cases, the edge comes from building a better mousetrap (e.g., easier payment transactions); in others, it’s more about articulating clear values and attracting people who share them.

For this year’s study, Prophet’s BRI team updated the methodology with more detailed questions about how consumers engage with brands emotionally (the heart) or intellectually (the head). Not surprisingly, financial services brands rate more highly in the latter category, particularly in areas like dependability, consistency and filling important needs. The best brands, however, are capable of connecting through both the head and heart, which is how they become brands consumers can’t live without.

Looking at our rankings, we can identify what differentiates the top brands across all sectors and how financial services firms might bolster their brands and become relentlessly relevant.

Top Ranked Financial Services Brands Showcased Two Things

1) A Clear Purpose That Creates Relevance and Passion

USAA, the top-ranked financial services brand in our index at #10, might show the way forward for financial services firms. It has a clearly articulated purpose and mission and a strong customer-centric orientation. Put simply, USAA knows its job and whom it serves. That clarity results in stronger emotional connections with customers, as evidenced by USAA’s top heart score among financial services brands. Online bank Ally (#87) also communicates a notably customer-centric value prop in its marketing efforts, which helps explain its relatively high heart rankings for the category.

Once an organization has made clear what it is and who it’s for, it can reorient the customer experience with a laser focus on customer needs, as well as align the organization around the vision. Our latest research into customer-centricity shows what success looks like for banks and other financial institutions and some recommendations for how they can achieve it.

2) A Sharp Focus and Frictionless Experiences

Among our top 10 brands, Peloton (#2), Spotify (#3) and PlayStation (#7) all have well-defined value propositions and deliver people exactly what they want again and again. Within financial services, highly focused and easy-to-use apps – such as Afterpay (#11), Zelle (#39), CashApp (#52) and PayPal (#56) – that do one thing (or just a few things) very well far outrank financial supermarkets. The same is true for TurboTax (#46), digital insurer Lemonade (#100) and trading app Robinhood (#107).

These brands are relevant because customers know the value they receive for engaging. Highly effective – even elegant – experiences that remove friction from core transactions are also part of the success equation. For these brands to continue growing, they must retain the focus even as they add more services.

Afterpay and Robinhood are very much “of the moment” brands, so it will be interesting to see how their relevance rises or falls in future surveys. For traditional firms to compete more effectively against these “less is more” experiences, they need to ensure their transformation investments are aligned to innovation and growth.

All Head, More Heart

Consumers understand the usefulness of and need for financial services firms. They provide vital services that are indispensable to the daily lives (not to mention the long-term plans) of countless people and businesses worldwide. But they are, for the most part, not very inspiring and rarely make emotional connections with consumers.

“There’s a real opportunity for banks, insurers and investment firms to meet people where they are emotionally.”

After two years of widespread financial uncertainty and with more consumers looking to boost their financial confidence, there’s a real opportunity for banks, insurers and investment firms to meet people where they are emotionally. Insurers that have offered premium holidays and discounted rates for people driving less are on the right track. So too are banks looking to lead on sustainable finance and “greening” the economy, provided their commitments are backed up with meaningful action. Financial services brands that can show some emotion and empathy and demonstrate their human values will have the best chance to increase their relevance.

For newer financial services players, the growth challenge starts with retaining customers and expanding their offerings once they’ve reached a critical mass. How far will inspiring brands take them if they can’t master the practical, “head” side of customer relationships?

More established brands should look for ways to emulate the energy of their newer competitors, injecting some emotion into their customer relationships. At the same time, they should seek to refine their operations to achieve the optimal balance of head and heart.

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It’s safe to say that uncommon growth – the type of growth that is purposeful, transformational and sustainable over time – in financial services won’t be possible without increasing brand relevance. Consider how banking, insurance and investment brands increasingly compete with companies from outside the sector, including many that are absolute masters at brand relevance. The top-ranked brand in our study this year was Apple – a technology company that has become a leading player in mobile payments and has an expanding pool of customers for the Apple Card. Their presence makes brand relevance a strategic imperative for incumbent financial services companies.

These are just a sampling of our findings. To see where your brand ranked, you can find the full 2022 Prophet Brand Relevance Index ® here.

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Webinar Recap: Getting to Customer-Centricity in Financial Services

61 min

Prophet recently hosted a webinar on customer-centricity in financial services – what it means today, what firms across the industry are doing to achieve it and how they measure success. We were joined by several senior leaders who graciously shared their insights and experiences:

  • Beth Wood, Chief Marketing Officer, Principal Financial Group
  • Andrea Schultz, Head of Workplace Retirement Marketing, Equitable
  • Kai Sakstrup, Chief Strategy Officer, US Bank

The questions and inputs from attendees made for a lively session, and we wanted to share some follow-on thoughts based on the big ideas that emerged during the discussion.

The State of Customer-Centricity in Financial Services

For years, customer-centricity has been a hot topic for banks, insurers, investment firms, credit agencies and other industry players. Tech-driven disruption, increased competition and rising consumer expectations have kept it near the top of the strategic agenda for marketing, sales and service executives, but indeed all types of business leaders and throughout the C-suite.

As we highlight in a recent report, the business case for customer-centricity – which is based on revenue growth, increased share of wallet, stronger loyalty and higher Net Promoter Scores (NPS) – remains as clear and compelling as ever. But many organizations still face longstanding challenges to achieve true customer-centricity. The most common barriers include:

  • Complex organizational structures
  • Post-M&A integration difficulties
  • Heterogeneous customers with diverse needs
  • Rigid legacy systems and fragmented data
  • Regulatory constraints

Collectively, these challenges lead many customers to feel as if they’re dealing with different companies when they engage with more than one business unit or product from the same organization. As Kai put it, “customers should not see our org chart.” But legacy operational models with siloed product lines and busines units make it challenging to offer seamlessly integrated customer experiences. Andrea commented that she was “jealous of FInTechs” because they don’t have to contend with all the outdated tech and can execute around a clear customer-centric vision.

Customer-Centricity in the Big Picture

Beth spoke on the need to “empathize with customers and to identify what each touchpoint really means to them.” This could emphasize tactical actions, such as data cleansing and harmonization to ensure all business units have access to complete and timely customer data.

There are unique elements of the customer experience – which Beth called the “visible edge of the brand” – that should be owned by business units. But it’s critical for marketing leaders to “build bridges and open doors and windows” between all parts of the organization so that experience is unified and as seamless as possible for individual consumers. After all, marketing leaders are often the most passionate advocates for satisfying customers.

Collaboration between business units is how customer experience and human-centered design can be truly embedded within and throughout the business, rather than being bolted on. Beth added that “customers are the avenue to scale transformative change.” Advanced technology can help operationalize such change, as well as promoting consistency in the customer experience, though it takes more than just the latest to be truly customer-centric. Indeed, chasing the newest tech can even distract some organizations from delivering what customers want. To become customer-centric, organizations need to align strategically on holistic transformation.

How to Drive Customer-Centric Transformation: Actions and Advice from Senior Financial Services Leaders

Seek Ongoing Feedback to Enhance Customer Knowledge
Success starts with deep knowledge and understanding of consumer needs and wants. While most companies would say they know their customers, the reality is that it’s much harder than it looks. And simply having lots of data doesn’t equate to customer knowledge.

Detailed journey mapping and segmentation exercises can help convert huge volumes of raw data into actionable insight. These efforts must also be supported by active and ongoing feedback mechanisms to track the effectiveness of every touchpoint.

Principal conducted a global study to learn what was going on in the hearts and minds of all of its consumers, across age and socioeconomic bands. “Do your homework on who you are, what you want to be, and then talk to your customers about what’s important to them,” added Beth.

Prioritize Diversity

The need for insight has only increased with the spotlight on diversity, as one participant question highlighted. Some consumers perceive that the financial services sector has historically focused on wealthy white males, a perception that true customer-centricity can powerfully counteract.

According to Kai, deep research on all customer segments helps prevent marketers from “assuming that we are the person that we’re serving, which can lead to bad outcomes.”

Champion the Promise Amongst the C-Suite
There was consensus among the panelists that buy-in and leadership from the top of the organization (including from product and business unit executives) are critical to realizing the promise of customer-centricity. Shifting the mentality of the organization involves getting more people thinking about the business from the perspective of the customer and talking about customer needs.

Marketers are often responsible to ensure that customers are represented in such discussions. Kai spoke of taking inspiration from senior-level advocacy and engaging “the people within the organization that actually do the work day to day.” Making customer-centric change sustainable requires incenting and rewarding the right behaviors. It also requires ensuring that the business case for change is clearly explained; you don’t want to imply that people have been doing things wrong.

Find the Right Talent

Talent is another key variable in the equation for success. All of our panelists are looking for more data science and analytics talent, as well as targeted expertise in engagement strategy, social media and other areas.

There is increasing interest in bringing in talent from other industries, with the goal of challenging conventional wisdom and energizing marketing teams. Fresh thinking is more valuable than knowing about financial services regulation, for instance. After all, new hires from consumer packaged goods and retail can always learn the industry. Our panelists agreed that such talent is critical to generating strong returns on their large-scale investments in technology and data.

Track and Celebrate Incremental Progress

NPS and customer sentiment are among the top metrics for tracking customer-centricity. But it’s also important to track the small nuances of consumer behavior that can serve as leading indicators. Andrea believes the key is to know how customers feel about individual interactions and their willingness to go through them again. “Those are universal metrics that drive change, because everyone can understand them,” she said. Plus they provide more detail about what’s behind NPS.

Though firms should adopt an agile approach to upgrading elements of the customer experience, customer-centricity is more like a marathon than a sprint. “You want to say ‘within two quarters, we’re going to transform this business,’ but I think that’s the wrong approach,” said Kai. “You have to realize there’ll be milestones along the way and identify how to incrementally keep moving forward.”

Andrea agreed. “When it comes to customer-centricity, you have to play the long game, because the wins you’re going to see won’t show up on the balance sheet in a year.” That’s why leading marketers orient their customer-centric change efforts – including strategies, budgets, resources and their teams – around the target customer behaviors and business outcomes that matter most.

Final Thoughts

Our recent webinar, along with our ongoing client experience, shows the intense interest senior marketing leaders have in instilling customer-centricity in their organizations. Their passion will serve them well in advocating for richer and more personalized experiences and creating momentum for the long-term journey.

Watch the full replay here or get in touch with our financial services team at Prophet.

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How Relevant Brands Capture the Head and Heart of Chinese Consumers

In Prophet’s seventh Brand Relevance Index®, we once again explored the powerful way that brand relevance drives impactful, profitable growth. As the world continues to shift and settle into the “new normal,” brands are breaking through to connect with us on a more human level. This year, our analysis found that successful brands are evolving, building relevance with consumers by appealing to the head and the heart.

As we revealed the top 50 most relevant brands in the U.S., we asked our colleagues in Shanghai to share their perspectives on what some of China’s most relevant brands are. Here are their thoughts on which brands stand out.

HEAD: Redefining the Everyday

Manner Coffee

“Manner Coffee truly democratizes coffee for the average Chinese consumer in a way that no other brand has. Manner connects to the head through ruthless pragmatism and pervasive innovation. Its price point of 15 RMB for a hot latte is less than half of one at Starbucks, yet it maintains high standards for the quality of its beans and its baristas. Its menu is constantly updating with seasonal drinks and limited-edition collaborations. Manner also holds a unique perspective on what a coffee shop should look like. Beyond office buildings and subway entrances, Manner is also integrated into the fabric of the city, with locations in theaters and fresh markets alike, turning it into a simple yet classic component of life.”

Tom Zhang, Associate Partner

Wuling Hongguang Mini EV

“Wuling Hongguang Mini EV is a micro-sized, four-seater electric car that debuted in 2020 and has since become the best-selling electric vehicle in China. The EV offers a convenient yet affordable option for daily transportation in China’s dense urban areas. Its advantageous size makes it easy to navigate, park and charge – perfect for dropping kids off at school, stopping by the grocery store and commuting to work. Also, Wuling continues to launch new models such as a convertible version and customizable options. The competition from traditional players is fierce though, and Wuling must go beyond being solely a pragmatic choice and define what it stands for as a brand in order to achieve relentless relevance with consumers.”

Charlotte Zhang, Marketing Manager, Asia

HEAD: Reinforcing Promises with Performance

Bananain

“The innerwear category has exploded in China in the past few years, with several new players taking on traditional industry leaders, and Bananain is at the forefront. Bananain leaps ahead by positioning itself as a technology company built on patented somatosensory technology (e.g., Tagless, Zerotouch, Airwarm) rather than simply an innerwear brand. This technology-led approach is deeply integrated into their growth strategy and design process, allowing their products to deliver on the functional benefits they promise. With the belief that people should ‘focus on the inside,’ Bananain exists to ‘raise the baseline’ and elevate the standards for self-care.”

Baron Zhang, Senior Associate

HEART: Creating Magical Escapes

VETRESKA

“With hundreds of new, local brands entering the pet industry, VETRESKA has identified a unique formula for success: Viewing pets as their owners do, as family members. This strategy worked especially well with the rapidly growing segment of young, female pet owners who have rising disposable incomes and a discerning eye for quality and design. With backgrounds in fashion, VETRESKA’s cofounders have gone beyond typical pet products to create a shared fantasyland for pets and humans alike. As a mom of two cats myself, VETRESKA allows me to provide the best for my pets and brings us closer together.”

Flora Wang, Engagement Manager

Songtsam

“With borders closed and international travel restricted during the pandemic area, Chinese travelers are rediscovering domestic destinations and seeking out best-in-class experiences. Songtsam is a boutique luxury hotel group in the remote Yunnan and Tibetan areas of China, providing access to what were once hard to get to destinations. Songtsam connects intimately with the hearts of the guests who stay there. The brand offers  a both undeniably indulgent and deeply reflective experience inspired by nature and the local culture, with a staff that is over 90% Tibetan.”

Tracy Xu, Senior Associate

næra Hotel

“næra Hotel is similarly creating an immersive and escapist experience, located closer to Shanghai. The hotel integrates local Jiangnan cultural elements in its design but also combines modern aspects, exhibiting the artwork of 35 local and foreign artists. In addition, næra’s experience is anchored in its nearby 3,000-acre organic farm, which supplies produce for its restaurants and allows interested guests to pick their own vegetables. Songtsam and næra represent a new breed of boutique hotels in China that are elevating the standards for domestic travel.”

Will Chiang, Associate

HEART: Enabling Shareable Experiences

Holiland

“Holiland, a traditional Chinese bakery chain, turns 30 this year. It recognized the need to keep up with new market trends in order to surprise and delight customers and stay relevant. It aimed to be seen as not only reliable but distinctive as well. To do so, Holiland collaborated with many in- and out-of-category brands – including Toblerone, Diantaixiang Hot Pot and UCCA Center for Contemporary Art in Beijing, to launch new and unexpected products. The brand also refreshed its visual identity and retail concepts, creating sleek, futuristic retail concepts that invite young consumers to come together to socialize and snap photos with friends.”

Yang Yu, Associate

MOBI GARDEN

“MOBI GARDEN is at the forefront of the new camping craze that has swept China. Originating as an OEM for foreign high-end brands, MOBI GARDEN combined its deep industry expertise and production capabilities with a unique understanding of the domestic market. This insight was key in their offerings of high-performance, cost-effective products that deliver safety and comfort as well as a premium “glamping” experience. The brand also recognized the need to position “glamping” as a lifestyle, creating shareable content while engaging with consumers through social media channels such as Douyin (TikTok) and RED. By making the outdoors more accessible and shareable, MOBI GARDEN offers a new form of social currency for China’s rising middle class.”

Shirley Liu, Finance Lead; Lily Xu, Talent Lead; Wynee Zhang, Executive Assistant

RELENTLESSLY RELEVANT: Elevating Modern Living

Swire Properties (Taikoo)

“Swire Properties, under the Taikoo brand in China, is redefining what urban life in China looks like. In an industry that is known to be stale, Swire creatively transforms urban space, community and culture through adaptive reuse, innovative retail concepts, and hyper-localized experiences. Its newest project in Shanghai, Taikoo Li Qiantan, features an open-plan and lane-driven architectural design that appeals to the head and unique experiences centered on wellness that appeal to the heart. The stores featured are a mix of well-known brands, rotating pop-ups and pioneering concepts such as Starbuck’s first Greener Store Lab in Asia. As a native Shanghainese, I can see this project putting the new Qiantan area on the map in a way that few other developers could.”

Joey Zhang, Associate

RELENTLESSLY RELEVANT: Inspiring Through Technology

Tesla

“Chinese consumers, once known for flaunting brand names and logos, are increasingly choosing brands that reflect their own perspectives and values, and Tesla embodies just this spirit. Tesla’s industry-leading technology fuels a mission that goes beyond itself or even cars in general – ‘to accelerate the world’s transition to sustainable energy.’ Elon Musk himself is a big part of the brand as well, speaking his mind and sometimes taking a stance that is at odds with other western brands and media. This characteristic appeals to Chinese consumers greatly. When he tweeted a cryptic, ancient Chinese poem in November 2021, the topic went viral on Chinese social media platforms as netizens praised his cultural knowledge and raced to decipher its meaning.”

Sean Hong, Senior Associate

RED

“When I think about brands I cannot live without, RED is at the top of the list. The social media platform allows me to experience life from new perspectives, places, interests and people, whether I’m on the go or in my daily living. On RED, I’m constantly inspired by users around me. It is not just following the latest trends, it is where trends are created. When I want to know something, I no longer use Baidu or Google. Rather, I turn to RED to get a more personal, unique perspective from influencers I trust. RED is also keeping up with the latest in tech innovation, launching its own NFT platform, R-SPACE, late last year where users can directly purchase NFTs within the app.”

Chuck Deng, Senior Associate

“Successful brands are evolving, building relevance with consumers by appealing to the head and the heart.”

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FINAL THOUGHTS

As marketers and consumers, we’re constantly intrigued by the way brands, old or new, continue to stay relevant in the ever-evolving China market. But we are even more impressed by the holistic way they can connect with our heads and speak to our hearts. From elevating our daily lives to creating fantastical escapes, relentlessly relevant brands have the ability to surprise, delight and deliver unforgettable experiences.

To learn more about our research, including how to assess, create and maintain brand relevance, download our 2022 Brand Relevance Index®.

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The State of Digital Transformation in Europe

The state and success of digital transformation varies considerably around the world, with some distinct disparities between the digital “haves and have-nots.” The latest global research report from Altimeter, a Prophet company, provides not only detailed insights on the differences between individual markets but also some key learnings.

The U.S. market, for instance, is largely looking past digital transformation, having invested heavily during the last 10 years to replace legacy infrastructure and migrate more operations to the cloud. U.S.-based firms today are focused on strategic innovations (e.g., greater customer-centricity, digital product development). However, China, which never had to contend with outdated systems, was able to leapfrog ahead to advanced apps and immersive digital experiences.

In Europe, there is a wide variance of digital maturity. The U.K. market looks more like the U.S., but Germany is not quite as far along on its digital transformation journey. It’s also important to note that the most advanced firms in Europe have reached the same level of digital maturity as digital leaders in China and the U.S., but average firms generally lag compared to their global peers.

Europe is Catching Up in Its Digital Transformation Efforts – Quickly Enough Though?

Taking a closer look at Altimeter’s data in terms of C-level sponsorship of digital transformation initiatives, the U.K. has the highest tendency to appoint a CDO or CIO to own and/or sponsor digital transformation. However, Germany and the U.S. tend to rely marginally more on the CIO or CEO. At the same time, more American and Chinese firms report excellent results from their digital transformation programs, but most European companies report that they only have good or fair results.

A potential reason for this is that European firms are somewhat more conservative in their approaches to transformation overall. For instance, German firms prioritize employee engagement, digital literacy and operational efficiencies in their digital transformation agendas as much as they do growth. Innovation, on the other hand, is a much lower priority.

U.S. firms are notably more focused on profitability and revenue in their digital transformation programs than their European counterparts. It seems that many European firms are focused on keeping in step with their peers and competitors and that’s especially true in Germany. The implication is that many established European companies are still building a digital foundation for the future.

“more American and Chinese firms report excellent results from their digital transformation programs, but most European companies report that they only have good or fair results”

U.K. organizations are the most likely (69%) to cite using digital technology as an opportunity to become more efficient, perhaps partially reflecting the need to improve their lagging productivity rate versus the U.S. (46%), Germany (42%) and China (52%).

German organizations (58%) are the most likely to view digital technology as a priority investment to replace outdated or obsolete technology, as compared to the U.K. (40%), U.S. (39%) and China (18%).

Europe Invests Long-Term and the U.K. Adopts Agile Working Methods

Compared to U.S. firms, European firms also have longer-term expectations for their transformation investments. At least 40% of surveyed companies in Germany and the U.K. expect it will take at least two years to see positive results from transformation investments, versus 31% of U.S. firms. One reason for the longer time horizon is the relative lack of sufficiently digitally trained staff, which is a bigger challenge in the U.K. and Germany than it is in China or the U.S.

Of course, Europe cannot be considered a monolithic market. There are substantial differences between the U.K. and Germany. The U.K. firms surveyed have adapted better to digital transformation by, for example, adopting agile working to a greater extent than those organizations in Germany, which are more likely to have process-driven cultures.  Additionally, data silos are a much bigger problem in Germany compared to the U.K., which shows more leadership in data science.

In Germany, digital marketing is still mainly viewed in terms of ad campaigns. And in both the U.K. and Germany, digital marketing is generally below average in owning the customer experience. There are also varying priorities for the future: U.K. firms put less focus on hiring and training in digital transformation and as a result, business model changes are less likely to happen in Germany. Also, cybersecurity and cloud adoption are important priorities in the U.K., while cross-functional collaboration platforms are of less relevance in Germany.

Don’t Focus on Infrastructure, Focus on Creating an Agile Organization

Our digital transformation research, as well as our market experience, suggests that firms are better served by focusing on organizational changes and improved agility rather than updating infrastructure. After all, infrastructure is constantly advancing so that’s a job that will never be completed. But increased organizational adaptability and agility will help organizations adjust to ongoing change and proactively drive it.

Approaching these challenges in the right way is key. To do so, companies should follow a three-step approach:

  1. Digital Benchmarking: Conduct a rapid heatmap assessment of your organization’s (enterprise-wide) digital transformation maturity. Identify where the opportunities for improvement are, and how your business benchmarks against best-in-class digital maturity (both in your market(s) and globally).
  2. Digital Immersion: Run a digital innovation workshop with key stakeholders across your organization to share the latest digital trends (not just specific to your industry, but also apply learnings from other industries) and explore the digital art-of-the-possible to identify opportunities for augmenting your own digital transformation journey.
  3. Digital Mobilization: Build (or revisit your existing) digital transformation vision and roadmap, ensure all roadmap initiatives are tied to commercial value and make certain tracking mechanisms are in place to guarantee the realization of this value.

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FINAL THOUGHTS

Looking ahead, companies in Europe, particularly in Germany, must address many of the same challenges that U.S. firms (and the more digitally mature companies in Europe) have started overcoming already. That means breaking down data silos, converting raw data into actionable insights and adopting more agile ways of working.

How does your company stack up in the digital transformation stakes? Get in touch today if you’d like to benchmark, excite, transform, and unleash the full power of your business.

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How Effective Go-To-Market Strategies Unleash Brand-Demand Love

The third post in a series about integrating brand and demand marketing capabilities to win in a complex and dynamic landscape.

We think it’s time for brand and demand to fall in love. After all, they’ve long been attracted to each other’s strengths and can shore up the other’s shortcomings. When brand and demand build a strong, sustainable and mutually satisfying relationship of equals it lays a foundation for increased brand relevance and ultimately leads to uncommon growth.

Like the best marriages and strongest teams, a commitment defines what is possible. Bringing complementary skills together leads to greater mutual success. In talking to senior marketing executives, we heard passionate interest in unifying marketing at every level and taking an integrated, agile and data-driven approach.

If one were to equate a relationship’s declaration of commitment to a declaration of commitment between brand and demand marketing organizations, one may reference a marketing go-to-market (GTM) strategy. An effective GTM strategy provides strategic guidance for achieving an organization’s performance goals across key channels and disciplines. Despite the importance of this guidance, marketing organizations continue to face challenges in developing an integrated GTM strategy across their brand and demand teams, leading to misaligned activation plans which ultimately impact the efficacy of campaign efforts.

The Prophet-developed framework described below highlights the key components of effective go-to-market strategies that powerfully combine the best of brand and demand. They are important because achieving the appropriate brand-demand balance is a constantly moving target, meaning GTM strategies must be designed for flexibility and ongoing adjustment.

Key aspects of the CMO agenda – from audience strategy to creative and content – are central inputs to designing an effective brand and demand capability. Indeed, they are the vows by which brand and demand teams can build solid and successful relationships.

Marketing GTM Strategy Framework

There are six key areas to address as part of an integrated go-to-market strategy, each with its own set of requirements and implications for execution.

Brand Strategy: Brand Position, Architecture, Key Messages, Voice and Expression

The brand strategy forms the core of the brand identity and should manifest itself clearly and consistently across brand and demand campaign initiatives.

Audience Value Propositions: How to Win with Your Audiences

Audience value propositions describe the reasons audiences should have an interest in your brand, product or service.

Customer Data and Insights: What You Need to Know About Your Audiences

The successful utilization of customer information provides insights into their behavior and opportunities to convert across channels. Both brand and demand campaigns generate key customer insights which can be used to improve all campaigns (for example high-performing digital placements on the sports-oriented websites may provide a rationale for purchasing TV ads on sports networks and programming). Establish a pipeline for sharing customer data and insights between teams.

Pricing and Distribution: How and Where Audiences Will Find Brand, Product or Service

Understanding how customers can acquire your product or service, including the cost associated with that acquisition, is a key consideration. While demand channels can provide a direct path to conversion, the impact of brand channels shouldn’t be ignored.

Creative, Content and Channel: Content and Experiences Will Attract and Convert Audiences

Creative and content contain the messaging and imagery that will connect audiences to your brand, product or service. While creative formats vary across brand and demand channels, a holistic analysis of creative performance provides opportunities for greater insights and improved content creation.

Media & Channel Communications: How, Where and When You Will Find and Engage Audiences

The touchpoints by which a customer can be reached and converted are important facets of any GTM strategy. An integrated model requires a mutual understanding of media campaign strategy and channel selection.

When developing a go-to-market strategy, it’s crucial to understand the implications for both brand and demand marketing teams. While each team is responsible for the successful deployment of campaign efforts against their respective channels, their measure of success should align against the overarching goals of the organizations as set forth by the GTM strategy. Organizations should avoid us vs. them mentality when crafting their organization and recommendations but instead account for the holistic impact of their recommendations against an aligned, cohesive goal for the organization at large.

Again, there is no set formula for effective brand-demand integration. Even if there was, it would fluctuate based on multiple market variables. That’s why these strategic principles are so powerful ­– they keep marketers pointed toward the “north stars” of business strategy and organizational purpose while enabling the necessary recalibration of campaigns, budget allocations and other levers that produce strong outcomes.

In our next post, we’ll look more closely at the financial and pocketbook implications of brand-demand love. Specifically, we’ll examine how:

  • To define shared goals
  • Set an investment agenda
  • Define smarter metrics for allocating budgets and tracking performance
  • Highlight how brand and demand can stop fighting about money

The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact.
Download today!

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FINAL THOUGHTS

Understanding where brand and demand might have shared foundational components, from brand strategy to creative and content distribution, can create shared value across marketing objectives and enable greater agility between brand and demand goals. This sort of synergistic and complementary relationship is what we mean when we talk about brand-demand love.

Get in touch today if you’d like to learn how to develop effective go-to-market strategies to unleash your company’s “Brand-Demand Love”.

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Webinar Replay: The 2022 Prophet Brand Relevance Index

Our research uncovers a new pattern of relevance, with brands appealing directly to the head and the heart

51 min

Prophet’s brand experts join executives from Sony and Teladoc Health to share the results of and discuss the most relevant brands in the seventh annual Prophet Brand Relevance Index® (BRI).

In this year’s Index, we asked more than 13,500 U.S. consumers about what brands are most relevant to their lives. Watch the webinar for insights on more than 293 brands across 27 categories.

Key Takeaways

  • A new pattern of relevance emerged. Brands are finding new and unforgettable ways to deliver experiences in the new normal by connecting to us as humans – appealing directly to the head and the heart.
  • Brand relevance = growth. The top 50 brands saw 133% more growth than the S&P 500.
  • How are top-ranked brands are winning with consumers? See which trends – from tapping into authentic expression to enabling self-care – consumers say they can’t imagine living without.

Panelists

The Prophet BRI serves as a roadmap for building relevance with consumers, the type of relevance that leads to business growth. Contact our team to learn how to apply the insights from the 2022 Index to your organization.

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Get Ahead in the Great Reprioritization

The best employer brands appeal to the heart and the head, with a clear purpose and distinct values.

For years, the workforce has accepted the dichotomy known as “work/life balance”: A fiction that these were two separate domains, compartmentalized from one another. Over the past two years, this illusion has been shattered. The pandemic collapsed domains of work, family, school, relaxation and wellness into a single reality. Knowledge workers were no longer able to easily compartmentalize their feelings about their work environments when there was no longer a physical separation for them to draw an imaginary line.  

Naturally, something had to give. For front-line “essential” workers, it was jobs that didn’t pay enough to compensate for the risk they assumed. For knowledge workers, it was employers who were inflexible; who were misaligned with their personal beliefs or values; or whose purpose no longer felt meaningful enough. Subsequently, large portions of the workforce recognized the illusion of work/life balance for what it was. And they recognized the truth hiding behind it: It’s ALL life. 

With that newfound clarity, a collective re-prioritization has been shifting the relationship and expectations people have with their jobs and their life. This has been variously named the Great Resignation, the Great Retirement and, perhaps most accurately in our view, the Great Reprioritization. Because in the end, that’s what is happening. The workforce is re-examining their priorities in relation to work and to employers. Now more than ever, there is a deep need to integrate personal values into the professional aspects of one’s life. But what is it that employees want?  

“We find that relentlessly relevant brands appeal to consumers simultaneously in the head and the heart—these brands, their products and experiences are pragmatic and innovative, personal and inspired.”

Prophet’s 2022 Brand Relevance Index® (BRI) and annual Organization & Culture research series, Catalysts, reveal a compelling story at the intersection of consumer brands and employee experiences. We find that relentlessly relevant brands appeal to consumers simultaneously in the head and the heart—these brands, their products and experiences are pragmatic and innovative, personal and inspired.  

We also find that the best employer brands are those that appeal to the heart and the head. These are organizations that have a clear purpose and values, and the ways of working, operating model, and training help employees accomplish their personal purposes. And it is the organizations appealing to employees’ hearts and heads that are coming out ahead in the face of the Great Reprioritization.  

The Head, Heart and Human-Centered Transformation Model™   

At Prophet, we describe the organization as a macrocosm of the individual. Its DNA includes its brand purpose and values; its Mind is comprised of its talent; its Body is the operating model that creates value; and its Soul arises out of the mindsets, behaviors, stories and symbols that generate belief in its DNA. Whether you wish to forge a heart or a head brand, you must think holistically about how best to align your firm’s DNA, Body, Mind and Soul to achieve the desired outcome. The greater the misalignments, the more room for a competitor to win and you to lose your customers…and your talent. 

Take USAA, for example, a Top 10 brand in this year’s BRI. USAA has relative strengths in the heart and head—namely in trust and dependability, meeting an important need and upholding beliefs and values that align with those of its consumers. In looking through the lens of Prophet’s Human-Centered Transformation Model™ we see USAA appeals to the heart and head by aligning the core elements of the organization.  

DNA 

For 99 years, USAA has been singularly focused on helping military families build financial security. Many employees seek out working for USAA to fulfill their desire to serve those who have served. Across sources such as Glassdoor, Indeed and Niche, employees remark how the company mission permeates operations and that employees are well taken care of “to encourage them to do the same for members.” As a result, 82% of employees at USAA say it is a great place to work compared to 57% of employees at a typical U.S.-based company according to Great Place to Work. 

Mind   

USAA has been a leader in digital member experience and was able to leverage such capabilities to keep members and employees safe throughout the pandemic. While doing so it also improved the efficacy of training. One example of this is USAA’s piloting the use of augmented reality-enabled glasses with field adjusters. This technology allows adjusters’ managers to see the damage without physically being present, thus eliminating dozens of hours of travel time for adjusters and enabling more efficient, practical training for new employees.  

More widely known might be the extensive and immersive training USAA employees go through which covers not only the fundamentals of their position but also helps employees understand the military culture. Prior to the pandemic, employees embarked on a boot camp-like training that simulates challenges military personnel experience regularly—such as eating meals-ready-to-eat (MREs) for lunch. The training is intended to give employees a better understanding of members’ perspectives and help them deliver more empathetic and effective service on the job. 

Body  

USAA has famously realigned the customer-facing components of the organization intuitively along the journey of its members. This effectively reduced the complexity and distraction of the full product portfolio to ensure that members are exposed to the products and bundles most relevant to their immediate needs.  

Internally, USAA is committed to leveraging technology to free up capacity for employees so they’re able to focus on service, not paperwork. For instance, USAA has deployed machine learning to digitize paper medical records and create materials for life insurance underwriting. The previous manual approach could take up to five days, whereas machine learning has reduced the time to just one day and has improved accuracy and capacity.  

Soul  

USAA’s commitment to immersing employees in the member experience is also embedded in the mindsets, behaviors, stories and rituals of the organization. One particular ritual is referred to as a “Mission Moment.” At the start of a meeting, an employee will share a story about a member. This story can be anything from their background, service, or interaction with USAA in moments that mattered along their journey. This seemingly simple story frames the rest of the meeting in a more member-centric mindset.  

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FINAL THOUGHTS

More than ever, organizations need to understand what matters to consumers and employees in order to create experiences, products/services and jobs that appeal to and satisfy the head and the heart of their respective audiences. And doing so authentically will require a holistic approach across the core components of an organization’s ecosystem. So, what are you waiting for? 

Are you interested in better aligning the core elements of your organization to be more authentic for both your consumers and employees? Our brand and culture experts can help, reach out today and hear how we are helping clients just like you. 

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