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Examples of Brand Purpose in Action: When It’s Needed Most

How companies like Grab, Airbnb, Super Monkey and Glossier are turning purpose into brand success.

Crisis like COVID-19 is a touchstone for companies. Customers and employees are looking to their favorite brands to help solve problems, creating an enormous opportunity for companies who are purpose-driven.

But while purpose is essential for any brand today, just having one is not enough: Brands are on trial. Stakeholders are calling brands out on hypocrisy, mixed messages and failed initiatives. Even companies that thought they had a clear purpose need to prove they are investing in substantial change and not just “woke washing.”

“Customers and employees are looking to their favorite brands to help solve problems.”

Defining and living your organization’s purpose is hard. It’s messy. And it’s never-ending. But the most successful companies in these trying times will derive their purpose from shared human values, stay true to what they do and relevant to what their stakeholders need. And they’ll act on it every day.

These four companies are using purpose in powerful ways, and working hard to live it in challenging times:

Grab: Empowering communities with technology

Grab’s purpose started with a question – how can we empower individuals and better people’s lives and local communities through technology? This aspiration became more important than ever as the economic impact of the pandemic shook its employees, customers and neighborhoods.

Facing the crisis, Grab stepped up. On top of financial contributions to various COVID-19 community funds and meal schemes, Grab introduced over 100 initiatives that leverage its technology, ride-hailing and food delivery networks to support and safeguard its users, partners, communities and frontliners. For example, GrabCare is an around-the-clock, on-demand service enabling healthcare professionals to travel to and from medical facilities seamlessly.

Committed to empowering local communities, Grab accelerated its merchant-partner onboarding processes to help over 78 thousand small traditional businesses go online. The company also encouraged the community to help each other. Through its new “Meal for your driver” feature, Grab users purchased more than 700 thousand meals for its delivery partners and drivers. “Only when we come together and support one another, can we then overcome this challenging time together,” said Yee Wee Tang, Managing Director of Grab Singapore.

Airbnb: Deepening authenticity

When a company’s purpose ties directly to what it does, brands feel more authentic. This becomes even more important during times of change. Airbnb exists to “create a world where you can belong anywhere.” With sweeping travel restrictions and lockdowns, the company had to pivot quickly to find new ways to express hospitality. Open Homes for COVID-19 frontline workers gave hosts an immediate way to help. And it began creating online experiences that allow guests to learn new activities and meet people from around the world. By enabling people to connect, even while stuck at home, Airbnb is finding new ways to stay relevant.

Glossier: Listening builds a shared community

Shared purposes are not just relevant to one audience, they are felt deeply by each–employees, customers and communities. That calls for genuine listening to make sure that actions, products and services align with the values and beliefs of those stakeholders. Glossier’s purpose is “to give voice through beauty” by “leveraging the power of the personal narrative.” Throughout the COVID-19 crisis, Glossier’s most frequent request was for a product to help with increased irritated skin from repeated handwashing. Inspired by stories and comments, Glossier quickly developed a hand cream, donating thousands of units to first responders.

The company is also recognizing that obsession with that external community has a downside, leading it to prioritize the needs of customers over that of its own workers, especially people of color. When shoppers engage in racist behavior, for example, the company’s “the customer is always right” stance gets toxic. Glossier isn’t running away from that dissonance but trying to learn. The lesson? Make sure your purpose is grounded in shared human values–including employees–and take responsibility when things go wrong.

Super Monkey: Energizing your life with fitness

The final dimension emerges when companies demonstrate that purpose is not just an empty promise. If companies can’t deliver, it doesn’t matter how inspiring or authentic they are.

Chinese fitness chain Super Monkey is known for its exceptional community-based experiences as well as a near-perfect retention rate of coaches. The company became an industry disruptor with its innovative business models known as “Urban Spot in Motion” and drop-in classes that can be booked directly via WeChat. All of its initiatives are rooted in Super Monkey’s brand purpose of “integrating sports into life,” or making fitness accessible for everyone.

COVID-19 has put Super Monkey’s purpose to the test. The company first offered a 10,000 yuan interest-free loan to every coach, in order to protect the normalcy of their life. Two days later, Super Monkey quickly launched free live-streamed fitness classes, dubbed “Super Monkey At-Home Squats,” in an effort to deepen connection with members and encourage them to stay active. More than 170,000 people joined its first session. To go a step further, Super Monkey continued to create more innovative fitness routines so that members could encourage their family members, no matter old or young, to exercise together – integrating sports into everyone’s life.

Despite the crisis, Super Monkey has reinforced its brand purpose with action, outshining the competition. During its recent Singles’ Day sales event, Super Monkey sold store credits worth over 100 million yuan in 24 hours, a testament that Super Monkey is becoming a synonym for a fit and energetic lifestyle in China.

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FINAL THOUGHTS

Just as people look to friends, family, and government during hard times, they are holding a magnifying glass up to businesses. Customers expect companies to treat people well, engage the community and evolve to meet a changing world. Workers are questioning employee value propositions. They want businesses to put people over profit. Words and actions matter.

Companies need to ask hard questions and revisit them often. Does your purpose…

  • Make the world better? Even companies with a pragmatic purpose can inspire others.
  • Create believers? When businesses connect purpose to the way they earn money, it’s authentic and makes perfect sense.
  • Apply to all audiences? The right purpose resonates with employees, customers, communities and investors.
  • Translate into action? If an organization can’t deliver on promises, everything else is pointless. Enabled by leaders, companies constantly need to bring their purpose to life.

At Prophet, we help brands unlock growth– beginning with the “DNA” and purpose of their businesses. Let’s connect to learn more about how we can strengthen yours.

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Five Reasons Why the CMO is Becoming the Best Salesperson

As sales and marketing become more aligned, some CMOs are cultivating traits to get closer to customers.

Today, marketing plays an outsized role in shaping the experiences of customers and prospects. Chief marketing officers are increasingly responsible for delivering on company growth objectives, which means playing a larger part in the selling process. And this trend is intensifying as more customers demand highly-personalized interactions, requiring much deeper marketing and sales alignment.

These shifting dynamics position a CMO as the best tool, ally and salesperson the company may have. Let’s uncover five traits of great salespeople, where many CMOs already excel.

1. They’re hungry.

The best salespeople are eager to take on new accounts— aggressively delivering for the company.

With more digital marketing and measurement in place for most firms, the C-suite now expects marketing to not only contribute to growth objectives but also lead and deliver in a measured way. Increasingly, CEOs expect marketing to drive the bottom-of-funnel demand generation. With availability 24 hours a day, the modern marketing engine is constantly targeting advertising to attract new customers. More targeted marketing leads to more targeted customer-segment success. Both, marketing and sales teams are eager, hungry and incentivized to take on business outcomes by delivering an insightful view into how best to attract, convert, and serve the most desirable customers.

Many marketers are already there. Our Altimeter 2020 State of Digital Marketing report finds that the top objectives for digital marketing are to acquire new customers (40%) and increasing revenue from current customers (39%) are the top objectives for digital marketers.

2. They’re empathic listeners.

Top sellers have to be great listeners. They must understand the customer’s needs and how best to position the company, its products and services to suit them.

Listening to customer needs and delivering insights isn’t a new marketing function or capability. What has changed is the breadth and depth of that involvement for marketing. Marketing is much more involved, using insights to drive segmentation strategies leveraged by many different channels to sense and differentiate experiences based on segment needs.

Emerging self-service and “always-on” digital channels that can initiate interaction and carry it through to a sale are becoming more common, even in complex B2B selling scenarios. As marketing plays a critical role in developing customer experiences, the need for more personalized content, driven by marketing and sales, is also growing. As before, marketing must play a key role in listening to customers in all channels to generate meaningful insights. Marketing is also best positioned to enable more and better interactions, playing back sufficient empathy for customer needs in real-time.

Our research found that 95 percent of companies can personalize messaging and experiences based on customer data, with almost one-fifth using AI-driven predictive analytics to do so. (Altimeter 2020 State of Digital Marketing)

3. They build trust.

Effective selling requires strong relationships built on trust. That includes internal relationships. 

There has been a notable increase in collaboration with sales, with 75 percent of companies in our research said they have stepped up the way the marketing and sales functions work together in the last two years. And 60 percent have increased collaboration between marketing and customer service.

As prospects enter a firm’s funnel, marketing plays a critical role in capturing, quantifying, measuring and reporting more data on behaviors exhibited by different prospect groups. As marketing’s personalized interactions drive interest and affinity, the coordination of sales and marketing efforts highlights opportunities to build trust and loyal relationships with customers.

Just like a good salesperson remembers birthdays and children’s names to build familiarity, marketing is now capturing important details to reinforce important and tailored messages. Marketing can also scale this level of intimacy with existing customers to improve repeat purchases, cross-sell, up-sell and grow advocacy to gain new customer referrals.

There has been a notable increase in collaboration with sales, with 75% of companies increasing collaboration between marketing and sales in the last two years, and a 60% increase in collaboration between marketing and customer service. (Altimeter 2020 State of Digital Marketing)

4. They are prepared to optimize efficiencies.

The best salespeople are always well prepared. For full closed-loop reporting and deep customer insight to be achieved, marketing and sales are linking their data to back-office data.

Stitching together this back-office account information to customer behavior is the next big play for companies. It’s how they can deliver better experiences, improve operating models to focus on business outcomes and enrich overall decision-making.

It’s not surprising that the most desired skills for digital marketing new hires were data analysis (42%) and marketing automation expertise (39%).

Much of this work starts with more alignment of sales and marketing incentives and integration of their processes. This complete view allows the organization to coordinate marketing and sales efforts for greater efficiency. Marketing can then leverage AI/machine learning to automate many processes, delivering both marketing and sales interactions. Marketing can now sense the next customer need. When marketing is fully prepared, sales can show up ready for anything, armed with the right insight and offer at just the right time.

It’s not surprising that the most desired skills for digital marketing new hires were data analysis (42%) and marketing automation expertise (39%). (Altimeter 2020 State of Digital Marketing)

5. They’re polished.

Even the most likable salespeople underperform when they aren’t professional and organized.

While it’s wonderful that so many sales departments are rebuilding Customer Relationship Management systems, Content Management Systems and Campaign Automation technologies, these silos need to be linked together effectively. Whether they are from Microsoft, Adobe, Salesforce or others, they can become vast repositories of disconnected data.

“When marketing is fully prepared, sales can show up ready for anything, armed with the right insight and offer at just the right time.”

Companies can and are stitching these technologies together to drive integrated workflows for both sales and marketing. One central area that highlights this collaboration is demand generation, where marketing and sales integrate information for identifying, scoring and routing marketing leads. This streamlining and automating joint sales and marketing processes drive speed and efficiency, allowing both marketing and sales to show up as thoughtfully coordinated. They can deliver a polished customer experience.

But it isn’t easy. Fifty-two percent of our respondents say that integrating technology in this manner is their top digital marketing challenge. (Altimeter 2020 State of Digital Marketing)

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Is your CEO pounding the table and demanding more results? Marketing is increasingly becoming the sales department’s strongest ally. And in many ways, we’re finding that CMOs can (and should be) the sales teams’ biggest champions.

To learn more about enabling CMOs and their marketing departments to super-charge sales, contact Hanif or David.

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The State of Digital Selling 2020

Selling has always been a team sport. But as digital excellence builds, boundaries are even blurrier.

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Insights for Driving Sales Productivity & Resilience

Digital has long been a key ingredient in sales teams’ success, even before disruptive technologies made digital transformation a business-wide imperative. Now, in the face of the COVID-19 pandemic, digital selling is more important than ever.

In our 2020 State of Digital Selling research, we sought to understand the capabilities and key success factors enabling the digital transformation of selling among B2B businesses.

Based on a survey of 506 sales professionals across North America, Europe, and China, this report offers a comprehensive view of how B2B sales teams are leveraging digital in their sales processes.

Key Learnings From the Report

  1. Now, more than ever, selling is a team sport.
  2. Sales teams need to make the digital mindset shift.
  3. High-touch, high-value cross-functional selling outperforms automated high-volume selling.
  4. Top performers focus on the customer through customer-focused metrics, cross-functional teaming, and selling by vertical industry.
  5. As teams build digital excellence, boundaries are likely to blur between sales and marketing teams.
  6. Digitally mature sellers are outperforming less mature teams through the global COVID-19 pandemic.

For all the data and insights, download the full report below.

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Back to the Office: Reimagining the Workplace

Modern workplaces need some places that promote collaboration, and others that enable concentration.

After months of working from home, some businesses are eager to return to the office–and many remote employees can’t wait to get out of the house.

But as case numbers continue to surge, employers are moving deeper into pre-emptive planning. When will it be safe to go back to work, and when it is, what should offices look like? How should they function, especially with millions of people planning to continue to work remotely?

Workplaces used to be default destinations–a place we went just because we had a job. Now, as 42 percent of Americans continue to work at home, we have learned we don’t need to be in an office building to be productive. But the truth is, we all seek human connections, and many companies are aware that while the work is still getting done, leaders worry that employees are not as engaged or collaborative as they used to be – the jury is still out.

“The truth is, we all seek human connections, and many companies are aware that while the work is still getting done, leaders worry that employees are not as engaged or collaborative as they used to be

The design questions keep multiplying. First, there’s safety. How many people in an elevator? Are HVAC systems adequate? What about contact tracing? Fairness is also an issue: Can workspaces integrate and support digital workers and those who are physically in the building? And perhaps most importantly, there are concerns about adaptability, how do we design offices for a hybrid workforce that will use spaces in ways that continue to evolve and change?

As Prophet reconfigures our own workspaces, we’re taking into account a need- and desire- to be physically together, at least some of the time. And we’re using service design to zero in on the four major “use cases” that our new offices will need to support: connection, collaboration, concentration and culture. While these principles have always been a big part of our work lives and office design, they will be enabled in the workplace in different proportions now.

A more intentional design inverts the current allocation of space from productivity to collaboration. Besides potentially reducing square footage by 20 to 30 percent, it also requires that the office become a place that supports the work of both physically present and remote team members.

[Figure 1a & 1b:] A more intentional design would invert the current allocation of space from a “productivity” orientation to be more “collaboration” focused.

Flexibility is key to these plans. The question for all businesses isn’t so much who will work remotely and who won’t, but rather, when do team members need to be in an office and when will they be working from other locations.  The share of working days spent at home is expected to climb from 5 percent, pre-COVID, to 20 percent. Experts say employers should envision a world where people work remotely from one to three days per week. How can they work better when they are remote? And what “jobs to be done” should be supported on days when they choose to work from an office?

While offices must accommodate the activities of some specialists, the new space configuration must primarily work for an interdisciplinary workforce and support a wide variety of activities. Multi-functionality and flexibility will be important to feasibly and practically accommodate these four use cases.

Connection: Co-workers need each other

The need to connect goes beyond the transactional aspect of production and knowledge sharing – even the most intense introverts need to know they are part of a larger whole. We’re envisioning this space as informal, with cafes, kitchens and casual spots to catch up, as well as digital, with places to check-in and gather daily information.

[Figure 2:] Connection includes digital check-in capabilities, casual touch base areas and kitchen amenities.

Collaboration: Building better ideas

For many companies, the biggest emerging challenge in remote working has been in encouraging innovation. Like Netflix CEO Reed Hastings, some call working from home “a pure negative” when it comes to ideas and creativity. We have been employing effective ways to be creative with a more distributed workforce, but after canvassing our team we recognized a need for providing ways to work together in our offices.

We see the need for at least three types of space: traditional–but teleconference enabled–conference and teaming spaces, more fixed “studio” areas with workstations and equipment that doesn’t travel easily and work that benefits from collective interactions, and flexibly outfitted areas that can accommodate medium to large groups in easily re-staged, digitally supported environments with moveable equipment, furniture and fixtures.

[Figure 3a & 3b:] Collaboration spaces include digitally-enabled conference and team rooms, flexibly outfitted spaces for medium to large groups and more fixed studio areas with workstations that enable collective teamwork.

Concentration: Alone together

Perhaps one of the pandemic’s biggest take-aways is that not everyone can focus while at home, with working parents especially struggling. And even those in more collaborative roles still need a quiet space to write a memo or a phone booth for a conference call.

Quiet rooms for more individual “deep work” like copywriting or product design and development, are becoming a destination for those jobs requiring more solo work, more mental focus and concentration. But they still want to be close to others, creating more of an “alone together” feeling.

[Figure 4:] Concentration supports workstations and furnishings and lighting to enable deep thinking for solo practitioners.

Culture: This is who we are

Finally, shared spaces need to do something less easily defined. They should express what an organization stands for, accommodate its rituals and project its values. Again, flexibility is critical–how can these spaces make occasional large group interactions and events possible? How can they bring teams together–both in-person and virtual–in new ways to reflect a new way of working?

Ultimately, this piece of the puzzle may be the most important. The pandemic has taught us that “work is not a place;” and that the workplace can be so much more than a lobby, a desk and a conference room.

The spaces and functions of the workplace need to come together for a purpose–and with a purpose; representing and enabling what an organization stands for and believes.

[Figure 5:] Culture space includes flexible but well-equipped environments with fixed and movable equipment and furnishings that support external meetings and internal gatherings.

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Organizations must continue to envision their future by balancing the threat of rising case levels, the hope for vaccines and the genuine costs of remote worker burnout. But designing offices for a return to “normal” is not enough; we must challenge our default assumptions and build on what we’ve learned to reimagine the workspace. We believe that the best designs will accommodate hybrid office-based/distributed workforces–and they will also say something about who we are.

Is your organization thinking about how to return to the office and what that might look like for its employees? Reach out today to our team of innovation strategists and experienced designers.

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Report: Benchmarking Digital Maturity in B2B Companies

Discover the main drivers of digital transformation investments and initiatives for B2B companies, based on 170 interviews.

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B2B organizations have made drastic changes in response to COVID-19 – shifting to remote work, digitizing customer offerings and moving commerce online. Digitization planned to take years happened in months.

Based on conversations with 170 senior B2B transformation leaders and C-suite executives, this report reveals the main drivers of digital transformation investments and initiatives for B2B companies in 2020.

Here’s what you can expect to learn:

  • Substantial Operational Shifts Due to COVID-19
  • COVID-19 Exposed Significant Gaps in Digital Selling Capabilities
  • Marketing Transformation Continues Despite and Because of the Pandemic
  • Five Stages of Digital Transformation Maturity
  • Most Companies Continue Transformation Initiatives – Digitally Mature Are Accelerating
  • Application of Digital Tools Varies by Maturity Stage
  • Technology Priorities Reflect Level of Digital Transformation Maturity
  • Digital Transformation Sponsored Primarily by CIO/CTOs and CEOs

Download the full study to explore additional findings and examine detailed charts for each of the headlines provided above.

About the Authors

Fred Geyer and Joerg Niessing are co-authors of The Definitive Guide to B2B Digital Transformation, curators of B2BDigitalTransformation.com – an online resource center for B2B transformation leaders and facilitators of a monthly webinar series featuring senior B2B executives discussing the challenges of B2B digital transformation. For more information about the guide, the webinar series or to gain access to the online resources go to B2BDT.com. Fred is a Strategic Advisor at Prophet, a leading growth and transformation consultancy and Joerg is Senior Affiliate Professor of Marketing at INSEAD and director of INSEAD’s “B2B Marketing Strategies” and “Leading Digital Marketing” programs.

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A Model for Driving Organizational Transformation in Today’s Business Landscape

It’s time to look deeper into your organization’s DNA, mind, body and soul.

Everyone acknowledges that orchestrating organizational change is a crucial component of successful business transformations, so why is it always the Achilles heel?

Business Transformation

Many organizations have struggled to meet the challenges of the modern business landscape, where stakeholder and customer needs and demands continue to change dramatically and new market entrants threaten disruption. Companies need to ask themselves the following:

  • “What would our organization look like if it had been designed in the last 10 or 20 years?”
  • “In what different ways might an organization like that create value?”
  • “What customers would it serve and how?”
  • “How might you work backwards from that vision to build a roadmap for bringing your digitally transformed organization to life, properly leveraging the assets and value they already have in hand?”

Customer-led Transformation

No matter how digital organizations become, it will still be humans who ultimately run the organization. Many organizations – some digitally native and some not – understand and treat their humans well. But we’ve also observed that some of those companies have lost track of some equally important humans outside of their organization: their customers! The products, services and experiences they are offering are frustrating the very people who will ultimately determine the survival of the business.

These organizations need to change dramatically to continue to have relevance in the marketplace. They need to inculcate a customer-centric mindset and identify if skills gaps are preventing them from creating more relevant products and experiences. They need to understand where and how their operating model might need to change to support the kinds of pivots and adaptations needed to reconnect with customers and other important stakeholders.

Prophet’s Human-Centered Transformation Model

We view all organizations as a macrocosm of the individual: having a collective DNA, Body, Mind and a Soul. An organization’s culture needs to be understood as a holistic ecosystem and successful transformation today requires leaders to think about every aspect of this ecosystem.

DNA

The DNA is comprised of things that provide direction and tend to change infrequently. The elements that define the destination and direction of travel such as the corporate purpose, values, brand, strategy and employee value proposition.

Soul

It is the elements of the Soul which motivate employees to believe in the DNA. Those are the mindsets and the daily behaviors and ways of working those mindsets motivate; and it’s the stories and symbols that are used to signpost what an organization will and will not embrace.

Mind

The skills and capabilities of an organization’s talent are the Mind of the organization and when properly cared for and nurtured, enable goals to be achieved.

Body

The Body is how collective efforts can be directed. It’s the operating model and organizational design, and the governance, processes, systems, and tools which enable it to cohere.

“An organization’s culture needs to be understood as a holistic ecosystem and successful transformation today requires leaders to think about every aspect of this ecosystem.”

Why We Use the Model

Transformations frequently stumble on cultural roadblocks, which is best expressed in the time-honored truism attributed to legendary business theorist Peter Drucker: “Culture eats strategy for breakfast.”

We apply our Human-Centered Transformation Model as a lens for unpacking and refocusing the complexities of organizational and cultural dynamics into specific components that can be more easily digested, explored and understood.

We believe that our model’s holistic nature enables us to look clearly at all the interrelated elements that ultimately manifest in the experience of an organization’s culture. It ensures that our understanding is appropriately layered, helping us to make connections between the explicit and implicit elements that sometimes go undiscussed. Most importantly, it supports nuanced diagnoses of organizational challenges and helps us to design a clear roadmap for change, against which progress can be measured.

If you’d like to discuss taking a human-centred approach to your transformation, then our expert team can help. Contact us today. 

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The Human-Centered Transformation Model helps us think comprehensively about the vision for a digitally transformed organization, the skills and competencies it requires and how to design an operating model that will bring it to life. It helps us think comprehensively about increasing customer centricity, identifying the capabilities needed to create more relevant products and services and how to design an operating model that will enable increased focus on the marketplace. And our experience is that by failing to address the elements of the model holistically, the transformation will not be sustained, nor deliver the value anticipated.

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What Amazon Pharmacy Means for Organizations Looking for Post-COVID Growth Moves

This latest disruption is potentially enormous. It also exposes plenty of behavioral white spaces.

Amazon just announced its online pharmacy, news the healthcare world has long expected. And while much will be said about what Amazon Pharmacy means for the $1.2 trillion prescription drug business, we believe there’s something even bigger going on here. And it offers lessons to every company seeking growth in the post-COVID-19 world.

Amazon is proving once again that digital transformation isn’t just about technology. It’s about moving at “the speed of digital” and giving customers what they need. The e-commerce giant is merely acting on a template for growth that works in every industry and for every brand: When people begin to start moving through their lives differently, it creates upheaval, revealing new pockets of need. And the space between these changed behaviors offers abundant growth opportunities for every business willing to study them closely and act. We call these pockets of new opportunity behavioral white spaces.

Amazon’s timing offers an important lesson. This move has been brewing for years, even before its acquisition of PillPack in 2018. The company’s value proposition–getting people what they need, fast–made pharmacy an obvious extension. Who wouldn’t like to get routine prescriptions filled online, as quickly and seamlessly as every other Amazon Prime purchase?

But while it had been laying the groundwork for years, COVID-19 changed the way the world views healthcare. Consumers have always been eager for digital solutions to staying healthy and making their lives more convenient. The pandemic is clarifying, crystallizing and augmenting these new preferences, creating the perfect moment for Amazon’s launch.

Assessing the new playing field

Growth strategists should look beyond the inevitable “Amazon set to crush yet another industry” headlines. First, we are not sure it will prove to be true. Secondly, the news is more significant than that, highlighting an equal-opportunity growth moment. While there are multiple moves available, the best choices will differ depending on each company’s purpose and value proposition. Amazon is just following the universal rules of innovation and customer-centricity: What are the new customer needs, and how can we meet them in new and better ways?

There are many ways to win within today’s environment. Other companies have capitalized on the need for home care and the benefits and convenience of home delivery. Take Express Scripts Pharmacy as an example which relaunched its enhanced digital experience and consumer-centric brand earlier this summer. Unlike Amazon or new entrants in the pharmacy space, they’re building upon their deep clinical expertise, legacy in practicing pharmacy, ease and convenience of home delivery, coupled with 24/7 access to specially trained pharmacists.

“The space between these changed behaviors offers abundant growth opportunities for every business willing to study them closely and act.”

Express Scripts Pharmacy used key insights to understand that for many consumers, particularly those with multiple chronic conditions, pharmacist expertise matters more than convenience. And it’s worth pointing out that Americans have enormous trust and respect for their pharmacists, with Gallup reporting they are just behind nurses and doctors.

That’s just two players attacking the space from two different angles. There are certainly many other moves still available.

One way to analyze potential growth moves is to think about three different roles organizations can play as consumers continue to speed through these rapid changes in both needs and expectations. We like to use the “transformers, creators and invaders” framework when thinking about industry disruption. Healthcare provides some stellar examples.

Express Scripts Pharmacy is a transformer. It’s an example of a company reinventing itself and its offerings, using experience-first initiatives to reach its customers in new–and better–ways. Companies, like Teladoc, Oscar and Higi, are creators. And then there are invaders, like Amazon, moving from one category to another.

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Whether one’s ambition is to be a transformer, creator or invader, the lesson is the same: For enterprises prepared to meet the moment, dive into these behavioral white spaces and listen to consumers, the opportunities for uncommon growth are there for the taking.

Wondering what behavioral white spaces are opening up for your organization and how to map out the best growth opportunities in the post-pandemic world? Contact us today.

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5 Leadership Traits Needed to Reignite & Reimagine Your Business

This latest disruption is potentially enormous. It also exposes plenty of behavioral white spaces.

Between the global pandemic and widespread protests demanding racial justice, organizational transformation feels more important than ever. But true change requires a new leadership mindset. Building the resilience to navigate these world-altering shifts takes a ge­nuinely human-centered approach.

“While our research validates that these individual leadership traits are important, those who have them are keenly aware that for transformation, individuals matter less than the collective.”

In our 2020 research study, “Catalysts in Action: Applying the Cultural Levers of Transformation,” we spoke to 500 transformation leaders across four regions – the U.S., the U.K., Germany and China – and uncovered that the leaders best prepared to drive transformation share five traits. We also found that the leaders who feel most optimistic about the future are those who cultivate these traits and understand that they are required to build organizations that are human-centered.

Based on our research, here are the five leadership traits needed to reignite and reimagine your business this year:

1. Harnessing Many Voices

Executives tend to see themselves as the primary drivers of change. But in reality, transformation can’t work that way. One of the most crucial leadership behaviors we found across each of the four regions in our study is the ability to harness the “employee voice” of an organization. This leadership trait was revealed when leaders enabled and elevated the ideas, opinions and feedback of everyone at every level of the organization to allow for deep cross-functional collaboration and engagement. The leaders who do this recognize that often, middle managers–not the C-suite–are the key change agents. Encouraging ideas and fueling co-creation has become a key element to enable organizational transformation.

2. Embracing Empathy

Empathy per se is not a new concept – it is about understanding how people deal with uncertainty through change. But in times of constant change, transformation leaders must understand their employees’ sentiments towards it and help them cope with it accordingly. In the current context, this means physically protecting people, encouraging remote work, staggering shifts and massive disinfectant efforts. But more important, it means protecting people emotionally, understanding employee feelings and acknowledging the uncertain transition to the other side. Leaders need to bring leadership traits rooted in empathy, certainty and change readiness together to help employees feel confident that they can safely navigate the change, even when change continues to be the new norm.

Demonstrating empathy for employees was particularly heightened among leaders in the U.K., as well as in Germany.

3. Allowing Agility and Curiosity

On its own, agility helps companies pivot in new directions and create value in different ways. But what actually generates the ideas for these new directions requires curiosity. Curiosity is what directs leaders to explore and try new things. While agility allows them to adapt to those new ways of doing things quickly. Taken together, they form a powerful combination.

We expected agility to emerge as especially important in China. COVID-19 was fully present there as we fielded our survey, and it was clear to leaders that they had to find entirely new ways to respond to the devastating illness and frightened, grieving workers. But it appeared as essential in all regions, closely linked to leaders’ self-assessed ability to steer companies through a global crisis.

4. Fostering the Development of Others

Leaders today need to integrate a dedicated approach to agile development across the board, equipping the workforce for the Digital Age, and not leaving anyone behind. This commitment to developing organizational talent came through as one of the top-rated characteristics overall  – notably in China and the U.S. Based on the recognition that transformation requires a high degree of personal growth, leaders should look to foster the development of others. They should encourage a “fail-fast & learn” mentality, where experimentation and failure are permitted, as a key leadership trait. Only this will allow employees individually and the organization as a whole to move forward – more meaningful individual contributions will help achieve the company’s ambition better and faster.

5. Staying the Course

The most optimistic leaders have made an impressive commitment to personal growth, with many closely identifying with the “growth mindset” first researched by American educator Carol Dweck. They think they can develop their own talents and abilities through effort, persistence and education–continually improving upon their leadership traits. This is especially pronounced in the U.S. and the U.K. Even in the context of COVID-19, those leaders that acknowledge the interplay between personal growth and optimism in the face of adversity – using the surrounding disruption as a learning opportunity – will emerge from this crisis stronger and better able to find a path forward.

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While our research validates that these individual leadership traits are important, those who have them are keenly aware that for transformation, individuals matter less than the collective. These leaders see themselves as well prepared to build the cross-functional collaboration and engagement required for genuine change.

In the post-pandemic world, it’s even more complex–right now, nothing is guaranteed. So, there is a two-speed transformation going on that puts even more pressure on leaders. They are trying to transition to the immediate needs amid disruption and transform for the future at the same time. One would be hard enough–managing two speeds of change is particularly challenging.

That’s why a modern leadership “A” game matters so much now. We believe these leadership traits will only become more relevant in the challenging times ahead.

If you would like to learn more about how leaders can chart a clear way forward in uncertain times then get in contact today.

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Reflections on Prophet’s Listing as a ‘Best Firm to Work For’

This challenge is teaching us to think even more deeply about what it means to nurture and develop talent.

Our values vibrate throughout our organization. We see this in the way our teams support one another and the way we show up for clients. We are fiercely committed to offering quality solutions to challenging business problems while holding on tight to our humanity in the process. Clients often note Propheteers’ ability to deliver high-quality thinking and solutions, without compromising their best selves. It is the depth with which people embrace, build upon and live our values, that has led Prophet to be honored with a ‘Best Firm to Work For’ award by Consulting Magazine.

Given this honor, I wanted to take the time to reflect on this past year – a whirlwind of a year like none other.

We’re all continuing to adapt to these challenging times – both in the consulting industry and in our personal lives.  What’s most fascinating is the crossover between the work we are doing internally to keep Prophet’s business moving forward and the ways we are supporting and guiding our clients. At the beginning of the pandemic, Prophet took swift, empathetic actions to address the sudden changes in the market. As we uncovered solutions that worked for our business, we’ve been able to share ideas to help our clients find their footing at the same time.

Along the way, we’ve learned that no one can eliminate risks. But if we can find ways to be empathetic, transparent and supportive as we navigate this context together, we can strengthen our bonds, elevate our sense of community and feed off of each other’s energy to unlock the strength we need now and in the days ahead.  By focusing on our people and our relationships with clients, we became more comfortable leaning on one another and navigating this together. We became more confident in our intentions and our commitment to moving forward.

Maintaining morale by putting our people & culture first

Morale has remained remarkably strong. We’ve truly seen a collective spirit of resilience. This “fearlessness” – one of our company values – has always existed in our people, but we are seeing it play out in tremendous, fresh ways. We’re piloting new tools and programs for remote working, pivoting in-person client events to become engaging digital experiences and teaming and collaborating in new ways across disciplines and geographies. Our biggest business transformation project to date was launched in June without traveling to the client for months.

Our people are the life force that powers our business. And we’ve even seen resilience in fostering those relationships and finding unique ways to keep our culture alive. We asked a focused team to take this “culture and morale” issue head-on, and they helped us design new, fresh ways to engage our employees, build community and connectedness without the usual constructs of offices and typical gathering places. They’ve created new experiences that will become of the Prophet traditions of tomorrow, like a “Prophet Rocks” virtual concert from teammates (and their families) around the globe, the Prophet Summer Olympics, a soon-to-be-launched Prophet TikTok Dance Challenge, and so many more.  We also created space for weekly “Global Pulse Checks”; a time set aside for the entire firm to gather virtually as a community to unpack current events, share “kudos”, celebrate holidays and milestones and learn from and about one another.

But we also recognize that morale has its own ebbs and flows. The pandemic has put enormous strains on our people – both at work and at home. Over the past six months, we’ve encouraged our people to take the time they need to reflect, refresh and focus on their mental health.  And we focused more and more on creating spaces to welcome and facilitate ongoing dialogue, both in formal and informal ways. We listened as our colleagues grieved over Black lives lost to racism and demanded Prophet do more in the fight for racial equality. We’ve learned that the best way to maintain morale is through open and honest communication. That the more we can communicate, the better we can do for everyone– employees, their families and communities, our clients and society.

Being two years into our own firm transformation has elevated our focus

We began to accelerate our firm’s transformation agenda at the beginning of 2019. We created a Transformation Management Office devoted to aligning our efforts and strategy with our longer-term aspirations. We reconnected with who we wanted to be (an indispensable ally that helps our clients unlock uncommon growth), expanded our superpowers, built upon our strengths and embraced a period of internal growth. Through these efforts, Propheteers have come to embrace a ‘growth mindset,’ which helped us manage the ‘growing pains,’ discover agile ways of working and refreshed our sense of purpose.

We were happy we started this ambitious transformation when we did – as a large focus of it was our own digital transformation and upskilling employees on all things digital. Of course, as we adapted to the global pandemic, we were pleased that a lot of our digital processes were already in place, which made the transition to remote work easier.

“Our people are the life force that powers our business.”

As a leadership team, we remain committed to growing and adapting our offerings to shifting client needs, accelerating our growth momentum and developing a robust incubator and innovation pipeline with net-new offers and IP. We are excited to have the operational and financial strength to continue to invest in this transformation agenda in 2021 and beyond.

Strengthening our commitment to building a diverse, equitable & inclusive workplace

Most recently, we’ve put more investment behind our Diversity, Equity and Inclusion efforts and we know that doing so will play an instrumental role in our long-term growth as a firm.  It’s another reason for our people to be proud and energized to be here.  We have lots of work to do, but we have already engaged actively: Prophet is working to increase our diversity representation, we are developing firmwide training programs focused on antiracism, microaggressions, inclusivity and bias and we are donating $4 million of our pro-bono hours to organizations committed to racial justice.

Our DEI efforts are a large focus for the next six to 12 months. We are currently working with Collective, an outside DEI consulting firm, to evaluate the results of our firm-wide DEI survey, to audit our internal systems and processes and to help deploy a new DEI strategy for Prophet. We’ve rolled out an employee training on unconscious bias and microaggressions and look forward to embracing the other educational opportunities our Learning & Development team is putting together.

Our people team is busy recruiting top talent – including a new Head of DEI for our firm. Our employee resource groups – Women in Leadership, Pride at Prophet and Black at Prophet – are continuing to develop programs that drive the community and advance our inclusivity. Additionally, our offices are hosting monthly ‘Listening Sessions’ to create a space for honest and important conversations on the local level. We know that by making DEI a top business priority, Prophet’s business will only grow. And as we learn more, we will grow better, together.

FINAL THOUGHTS

2020 is a year that has tested us all in such profound and unexpected ways. If anything, this honor gives us an opportunity to take a step back to reflect on the resilience of our team, our culture and our clients in this extraordinary year and express our gratitude. The firm is changing and the change is powered by innovative ideas, new methods and digitally-powered workflows. This evolution is springing up organically all around the globe because everyone feels empowered to lead, innovate and change. Nothing lifts the spirit of people more during trying times than having the ability to drive meaningful, purposeful, high-impact work that improves the lives of people, communities and institutions.

So yes, we will use this as an opportunity to celebrate with our teams. Thank you to everyone for the continued energy, positivity and commitment that fuels our Prophet community and allows our teams to deliver smart, creative and innovative growth moves for our clients.

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Digital Transformation in Southeast Asia: Three Key Aspects that Accelerate Growth

Our research shows that optimism, commitment and ambition are powering major regional gains.

With the backdrop of the COVID-19 crisis, there is more pressure for digital transformation to accelerate in many organizations. In our latest global study, Altimeter, a Prophet company surveyed more than 600 key executives, including 100 in Southeast Asia (SEA) across Singapore, Indonesia and Vietnam, about how they are pursuing digital transformation and the impact of the pandemic.

Our study reveals interesting differences between digital transformation efforts and sentiment in Southeast Asia versus the rest of the world. (Download the full SEA report here)

There are three distinct aspects that made Southeast Asia companies’ digital transformation journey stand out.

1. Optimism: Accelerating Digital Transformation Amid COVID-19 Crisis

While the rest of the world is becoming more risk-averse amid the crisis, SEA expresses optimism about the future. In fact, a significantly higher number of companies have accelerated their digital transformation initiatives and are focused on growth.

Figure 1: Digital Transformation Initiatives Shifted Amidst COVID-19
“How have your digital transformation initiatives shifted because of the spread of COVID-19”

Similar to the rest of the world, SEA companies have seen or are anticipating drop-offs of revenue as a result of COVID-19; however, the impact is less significant. Thanks to the massive and quick preventive measures enacted by the government at an early stage, Vietnam is suffering the least financially during COVID-19. Specifically, 27 percent of respondents stated that they have seen no impact on revenue or don’t anticipate any future impact, followed by Indonesia (15%) and Singapore (13%)

Figure 2: The Impact of COVID-19 on Financial Performance
“What impact has COVID-19 had on your financial performance?”

Vietnam’s commitment to transform digitally had already started before the pandemic with the launch of the National Public Service Portal and Resolution for Industry 4.0. It accelerated during the COVID-19 outbreak when offline economic activities slowed down because of strong government policies. In June 2020, the country launched a National Digital Transformation Roadmap to further advance digital transformation around three key pillars i.e. e-government, e-economy and e-society. The Singapore government also launched similar initiatives offering subsidies and grants to help companies embark or accelerate its digital transformation programs.

“While the rest of the world is becoming more risk-averse amid the crisis, SEA expresses optimism about the future.”

2. Commitment: Focused Executive Sponsorship to Carry out Change

There is stronger executive sponsorship on digital transformation in SEA. Here, digital transformation is primarily driven by the CEO (30% in SEA vs. 25% in rest of the world), and twice as likely to be owned by the CDO (27% in SEA vs. 13% in rest of the world) or Board of Directors (14% in SEA vs. 6% in rest of the world).

Figure 3: Executive Sponsorship for Digital Transformation
“Which executive officially owns or sponsors the digital transformation initiative”

Leaders in SEA not only sponsor digital transformation in spirit, but understand its importance and follow through with frequent and visible support. Seventy-two percent of the executives in SEA see digital transformation as one of their top three business priorities. Thirty-four percent say digital transformation is constantly connected to higher business strategy and a top priority (vs. 23% in the rest of the world).

Figure 4: Nature of Executive Leadership
“Which of these statements best describes the nature of executive leadership in your organization”

With strong leadership, digital transformation is optimistically embraced throughout organizations in SEA. When asked about their sentiment towards digital transformation, SEA companies appear to be more optimistic across multiple aspects — stronger culture, engaged workforce and stronger prospects. Leadership’s confidence in digital transformation is stronger than other global countries, with 90 percent leadership support vs. 76 percent in the rest of the world.

Figure 5: Overall Sentiment Towards Digital Transformation
“Please indicate how much you agree with each of the following statements, from 1 (strongly disagree) to 5 (strongly agree), T2B%”

3. Ambition: Investing in Technologies to Drive Exponential Growth

Comprising some of the world’s fastest-growing markets, digital transformation in SEA is about efficient market expansion and customer acquisition supported by agile and flexible operations, innovation and technologies.

The SEA market is highly diverse in terms of language, culture and behavior. Digital transformation ensures that the technology and data are in place to better support operations (48% in SEA vs. 32% in rest of the world), and allow agility and flexibility to quickly capture opportunities (36% in SEA vs. 30% in the rest of the world). With a more positive market outlook, SEA companies are less concerned about ‘playing defense’ with initiatives like creating a culture to handle disruption (8% in SEA vs. 15% in the rest of the world).

Figure 6: Top Drivers of Digital Transformation
“What are the key drivers of digital transformation within your organization?”

Thanks to higher proliferation of mobile devices and more affordable networks, internet users in SEA had exceeded 300M by 2019. In order to meet the growing demand of this community, technology investments in SEA are more about connectivity and social & consumer platforms.

E-commerce and ride-hailing are the most promising sectors in SEA, supported by investments from China and U.S. tech giants e.g. Alibaba, Tencent, Didi and Amazon. Relevant technologies are receiving higher attention than the rest of the world. Forty percent of respondents selected IoT as their investment priority (vs. 29% in the rest of the world), 26 percent selected e-commerce platform (vs. 19% in the rest of world), and 21 percent selected AR/VR (vs. 14% in the rest of world).

Figure 7: Prioritized Technology Investments
“What are your top priorities for technology investments in 2020”

While global companies are still at the testing or infancy stage of using AI, it is increasingly implemented on a regular basis and adopted in SEA. The majority of the respondents are leveraging AI extensively in driving new products, business models and customer experiences, much higher than the global (29% in SEA vs. 19% in rest of the world).

Figure 8: Use of Artificial Intelligence Within Organization
“To what extent do you use artificial intelligence (including machine learning, computer vision, natural language process, robotics, or deep learning) within your organization”

One major source of momentum is the booming of fintech and digital banking, the biggest adopters who use AI technology to enable mobile payment and fast lending services.

From a country perspective, Singapore is taking a substantial lead in AI development and adoption, fuelled by investments from the government on both software and physical infrastructure e.g., joint-innovation on intelligent robots, increased data storage capacity, open data and open government platforms, as well as high-speed network and advanced IT security.  Other countries such as the Philippines, Malaysia, Vietnam and Indonesia are lagging, but gradually catching up.

However, SEA is still catching up on developing more modern tech infrastructure e.g. cloud and cybersecurity (see Figure 7).

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Regardless of financial challenges, COVID-19 has in fact presented more opportunities for companies in Southeast Asia to accelerate their digital transformation agendas. As the fourth largest trading and consuming region in the world, with one of the largest young and digitally savvy segments, companies in SEA should keep investing in building new digital capabilities and technologies to stay competitive, while conveying a strong strategic vision and executive leadership. Last but not least, it is important to increase efforts on modernizing IT infrastructure to catch up with other leading markets in the world.

Download the full PDF report, or get in touch to learn more about how to accelerate your digital transformation in SEA to drive uncommon growth.

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Why Brand Growth Moves Power Business Transformations

Learn how brand growth moves will help you win customers and growth in the long term with these real-world examples.

At Prophet, we believe the most powerful brands are those that are “Relentlessly Relevant.” We have measured relevance through Prophet’s proprietary Brand Relevance Index and know it is a predictor of long-term growth for brands. Effective leaders recognize the power of their brand assets to support ambitious growth goals and transformation efforts.

In today’s world, as technologies evolve and consumers seek more active relationships and connections with businesses, it’s becoming more challenging for brands to maintain relevance.

So how can brands stay a step ahead of consumers and their competition? They can start by asking three key questions:

  1. How can brands reflect what matters to society, yet stay true to who they are?
  2. How can brands deliver a brand experience that’s consistent, but also flexible and adaptive?
  3. And most importantly, how can brands build momentum to sustain long-term brand relevance?

By making moves. Brand moves.

What exactly is a brand move?

Brand strategies offer companies a foundation on which to build their purpose, but alone, strategy doesn’t build relevance. To drive profitable growth and deliver tangible impact, strategy must be put into action.

Brand moves are actions businesses make to strengthen and sustain their brand. They can help activate a strategy (campaigns, events, etc.) or bring the strategy to life (products, services, experiences, etc.) with both consumers and employees.

Think of AT&T’s Thanks® program, which brings its customer-centric strategy to life through a loyalty program with exciting benefits and perks. Or AXA’s Equitable launch event that galvanized thousands of employees around the return of a 160-year-old legacy brand.

“To drive profitable growth and deliver tangible impact, strategy must be put into action.”

Oftentimes, growth-focused brand strategy moves become a signature trademark of the brand itself. Take for instance, Gatorade’s G Series product line, which fuels athletes from warm-up to recovery, delivering on their leadership in the sports fuel market. Or Amazon’s Prime Day, an annual event with deals for Prime members, delivering on its strategy of unparalleled and expedient service for its customers.

Given that today, only 5 percent of CMOs are highly confident in their ability to impact the overall direction of the business and to garner support for their initiatives among their peers, brand moves provide CMOs the opportunity to enhance their influence within the organization and demonstrate measurable outcomes. With brand moves, marketing leaders can drive a cross-functional team to deliver on high visibility programs delivering in-market impact.

What makes a brand move successful?

Whether it’s a business as established as Amazon or AT&T, or a startup in its beginning phases, all brands can adhere to four key principles to ensure their brand growth moves deliver effective and relevant outcomes:

  1. Grounded in—and amplify—brand strategy. Brand moves should have a clear purpose rooted in shared human values that resonates with all stakeholders, including employees and consumers. Rather than replace a brand’s positioning, brand moves are complementary and play a critical role in putting purpose into practice. For example, American Express’ Small Business Saturdays is a brand move that embodies the company mission: helping customers and their communities thrive. While the purpose remains unchanged, it is brought to life in a way that appeals to small business merchants, their customers, and communities.
  2. In-tune and in-touch with target consumers’ needs. Brand moves use insights defined as the brand constantly listens, senses and anticipates needs and expectations of the target audience, taking action that demonstrates empathy in return. For example, Spotify’s Discover Weekly feature introduces users to a playlist of 30 new songs each week, based on users’ past plays and preferences. With recommendation systems detecting their most-listened-to artists, songs and albums, Spotify keeps a pulse on what its users want more of—to keep them coming back week after week.
  3. Consistent, yet adaptive. These brand moves are cohesive and seamless, adapting to current context, yet consistently delivering an ‘on-brand’ experience. Due to their dynamic nature, brand moves should also be able to sit alongside other offers, without competing or cannibalizing. Look at Nike’s flagship store: a first-in-kind omnichannel experience that blurs the lines between digital and physical retail experience. This move is unique to Nike and unlike anything else in its portfolio, yet still delivers a cohesive, consistent brand experience that’s recognizably Nike: a dynamic, active shopping environment as responsive as its digital NikePlus app and online platforms.
  4. Continuous, inside and out. Brand moves provide a continuous, rolling thunder of action that influences both customers and employees. For example, T-Mobile’s “Un-carrier” campaign repositioned the telecom giant as different than traditional phone carriers. John Legere, its charismatic and quirky CEO, became known for sending out-of-the box tweets and gave motivational speeches that empowered employees to drive its success. Beyond a pure customer focus, brand moves fuel relevance from the inside out.

What is the impact of brand moves?

Brand growth moves that embody these four principles drive significant, positive impact on a global scale.

Since the launch of the G Series product line, Gatorade has seen increases of over $2B in franchise revenue and was the only brand in PepsiCo’s portfolio to see double-digit growth over five years. And in the last ten years of AmEx Small Business Saturdays, consumers reported spending an estimated total of over $120B at local small businesses, with seven out of ten adults aware of the (holi)day.

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Companies like these and many others have used the power of brand moves to create and maintain relentless relevance and uncommon growth for decades—with proven results.

So how should your brand ensure its strategy gets off the page and out into the world? It’s your move.

Interested in learning more about how Prophet can help you turn strategy into action, creating brand moves that lead to measurable impact? Talk to our team today. 

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DTC Marketing: Benefits, Best Practices & Examples

This increasingly common sales model helps amass data for better insights and constant experimentation.

What is direct-to-consumer (DTC) marketing?

Direct-to-consumer (DTC) marketing is a business model defined by direct transaction channels and customer engagement that lead directly to the consumer or customer. Called DTC marketing or D2C for short, it’s become more important than ever due to the way it has fundamentally changed the customer experience and marketplace for brands.

As eMarketer forecasted, DTC sales are expected to reach $17.75 billion by the end of 2020.

Direct-to-consumer companies mainly distribute their products directly to buyers without relying on intermediaries like traditional stores or other distribution channels. This allows DTC companies to sell products and services at lower costs than traditional brands. And it also allows them to maintain end-to-end control over the making, marketing and distribution of products.

Unlike their more traditional competitors, these D2C brands can also experiment with distribution models, from shipping directly to consumers, offering subscriptions, partnerships with physical retailers and opening pop-up shops.

DTC marketing is usually associated with disruptive retail brands. But many brands in a growing number of industries, and even those with a business-to-business (B2B) model, are experimenting with DTC marketing channels to engage more directly with consumers and customers.

How does DTC marketing work?

DTC marketing encompasses many areas, including efforts to build brand awareness, content marketing, growth marketing and performance marketing. These are all enabled by direct customer channels and direct customer engagement.

Direct-to-consumer marketing heavily relies on digital platforms including social media and digital advertising, but may also use mediums outside of pure digital, including print, out-of-home, TV, radio, etc. to interact directly with the target consumer or customer. Sometimes, these messages offer relevant content. Other times, they are designed to trigger the consumer to make a purchase.

“DTC marketing priorities are based on performance and growth marketing tactics, including customer acquisition, customer retention, product merchandising, content marketing, social media, and paid/owned/earned media.”

DTC marketing priorities are based on performance and growth marketing tactics, including customer acquisition, customer retention, product merchandising, content marketing, social media, and paid/owned/earned media. Tracking and capturing data across these efforts are done digitally. Companies measure it by analyzing customer acquisition cost (CAC) and lifetime value (LTV / CLTV).

In the pharmaceutical industry, D2C marketing plays a very different role. There is no direct route between consumers and prescription medications, so doctors are intermediaries. Though controversial, ads that encourage consumers to “ask your doctor” have been proven to boost prescription drug sales. Pharma companies spend about $6 billion on such ads a year.

How does DTC marketing result in growth and digital transformation?

The DTC model has disrupted business by opening up direct-to-consumer channels for intrinsic customer engagement with brands. The best ones are powered not just by sales, but by growing commerce with meaningful content and a community of other users. These three come together to create a powerful flywheel effect.

This personalized relationship with people has shifted expectations about brands. They expect more in terms of products, customer service and brand purpose. The approach has also transformed businesses with growth opportunities by arming them with direct and immediate consumer data, communication and channels.

How brand plays a role in DTC

A company’s brand plays a unique role in direct-to-consumer companies and should guide marketing efforts. Depending on the relationship with the consumer or customer, multiple campaigns are sometimes necessary. For example, the types of marketing that will resonate with an intermediary, such as a retailer, may differ from what will resonate with the end-user or consumer. To drive growth, companies must align the brand positioning, DTC marketing and target consumer/customer, even among these individual efforts.

Benefits of a DTC marketing strategy

Companies with strong direct-to-consumer channels have some significant advantages over those that don’t. They typically have much more customer data and can mine it for insights. Because they are often digital by nature, DTC companies have testing agility that traditional companies don’t. They can apply growth marketing tactics of constant experimenting and testing to deliver refined results. Often, they experiment with many offers simultaneously. All this information, combined with constant conversations with customers, makes them more flexible. They can make decisions immediately, shifting direction and budgets quickly.

Common DTC marketing challenges

These companies also face unique challenges. Often, they struggle to acquire consumers/customers in a financially sustainable way, requiring outside funding to power growth efforts. And since many start with only a few products, such as mattresses, razors or shoes, they have difficulty positioning themselves against new entrants in the space. They often fail to optimize multi-channel marketing approaches or take advantage of the breadth of digital customer engagement approaches. And when there are significant shifts in customer expectations, it can be especially hard for D2C companies to remain relevant.

Redefining how B2B / B2B2C companies directly engage with customers

By optimizing direct channels, business-to-business companies can achieve many of the benefits of the DTC model while driving insights and exceptional growth.

There are two different approaches to DTC Innovation:

B2B/B2C Innovating in Full DTC Model:

Some companies have used this approach to increase revenues, grow market share and build a stronger relationship with business partners. To begin, start by asking:

  • How can we play to win with a DTC model?
  • How do we position ourselves for executive and board-level investment and buy-in?
  • What is our go-to-market strategy and plan?
  • How do we build an operational and organizational model to support the new business?

B2B/B2C Innovating with DTC Principles and Tactics

Other businesses do better by adopting a few approaches from DTC playbooks, adjusting them to suit specific market needs. Start by asking:

  • How do we experiment with DTC principles without transforming our business model?
  • How do we build a customer relationship and engage with customers on direct channels, without disrupting our existing sales channels?
  • How can we build a DTC offering in parallel with the legacy business?

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Wondering whose lead to follow in the DTC space? Take a look at these apparel brands, all with a different approach to DTC marketing. Start with Adidas, Allbirds, Everlane, MeUndies, Nike and Stitch Fix

How Prophet’s DTC consulting services can support your strategy

Prophet’s strong DTC background can provide:

  • Experience, mindset and DTC tactics customized for our transforming clients
  • Innovation framework for DTC launches
  • Customer-centric brand growth strategies
  • Evolving DTC marketplace intelligence

Prophet has done this type of DTC work with MeUndies, Canoo, MB Bank, Ava, Express Scripts, and many others. Learn more about Prophet’s DTC offering and contact DTC Practice lead Eunice Shin directly for more information.

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