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Defining a Higher Purpose to Build Brands of the Future: A Conversation with David Aaker on His 18th Book 

Prophet experts discuss how to build future-ready purpose-driven brands.

Prophet’s vice chairman and branding expert, David Aaker, has launched his latest book, “The Future of Purpose-Driven Branding: Signature Programs that Impact & Inspire Both Business and Society.” Following his recent books on portfolio strategy and the creation of a winning sub-category, David’s 18th book discusses how organizations can build lasting purpose through the creation of social programs. We sat down with David and Cecilia Huang, a partner at Prophet, to dive into some of the themes and insights mentioned in his newest book and their implications for brands in China.  

Why did you make this the theme of your 18th book? What are the leading market trends you see that indicate brands are becoming more purpose-driven? 

David Aaker: A dominant force is the fact that employees, especially the younger cohort, want more out of their professional life than increasing profits or even building insanely great products. They want to be proud of their firm’s efforts to make society better. Some customers also want to connect with firms that inspire with their social programs. Another factor is that social problems like climate change and inequality are so visible and so serious that the help of businesses is needed. Government cannot do it all. Finally, social programs can give energy and an image lift to businesses, which is sorely needed. 

Cecilia Huang: I’ve found these themes to be especially poignant in the China market as well. A survey among young people showed that 79% of the respondents felt the urgency to take action to build a better tomorrow. In turn, they also show appreciation towards brands that give back. For instance, the sportswear brand Erke gained significant popularity overnight among young consumers thanks to its generous donation pledge in response to the Henan flood in 2021.  

In addition, like their global counterparts, many young Chinese professionals who have started their first jobs begin to evaluate whether the potential employer’s values and culture align with their own before fully committing to the opportunity. How to internalize and motivate employees with a higher purpose has become a key challenge for today’s businesses. Thus, defining a compelling and effective purpose is paramount for every organization and will have a profound impact on the business inside and out.   

How should companies find a purpose that’s meaningful and differentiated? 

DA: A purpose that encourages social programs and creates a supportive culture can be very helpful in explaining to employees and others that the business cares about helping society with the serious issues and problems it faces. It is critical to show commitment to the effort by the CEO and other leaders. It is the organizational culture, beliefs, values, priorities, behavior and management styles that determine how the organization and its employees view and act on issues and options that come before them. A well-thought-out purpose can play a key role. 

Sometimes a business purpose is broad enough to include social programs. For example, CVS Health is about “Helping people on the path to better health”. This guides its business but also provides a home and a direction for its social programs. Tencent promises in its mission to create “Value for Users, Tech for Good,” which is incorporated into its ESG programs. Some of its key focuses include improving the accessibility of technology for elders and promoting scientific innovations through the Xplorer Prize.  

However, in most cases, companies need to develop a social purpose that is separate from a business purpose. A business purpose (or value proposition) can guide and communicate the business model and operation. The social purpose can then focus on the type of social objectives that the business has created. When unconstrained, both can be free to be more complete, more forceful and more credible. They should be complementary, even overlapping, and have staff and programs that interact and even intertwine. 

CH: It is also wise for companies to consider the shared values unique to the local culture and social context. In China, people strive to live a better life – to eliminate poverty and create opportunities for everyone. Therefore, consumers expect businesses to think beyond just “donating money” and get involved by devoting their capabilities and resources to solving societal issues. This can be done through a commitment to infrastructure developments, or by creating open platforms that empower the people.   

We had the pleasure to interview Xin Yi Lim, the executive director of sustainability and agricultural impact at Pinduoduo, and were deeply inspired by the tech leader’s sincere commitment to driving agri-tech innovation and empowering farmers. Another great example from China is Baixiang Food. Earlier last year, it was reported on social media that one-third of Baixiang Food’s employees were disabled, winning the struggling company enormous support.  

What is the role of the signature social program?

DA: With the purpose in place, there are three strategic thrusts or action plans (Figure 1) that will represent the future for firms that strive to move beyond being relevant to being in a leadership position in the purpose-driven age.  

  • Attack society challenges with signature social programs that have inspiring, credible brands.  
  • Integrate the signature social program into a business  
  • Build inspiring, credible signature social brands  

A branded signature social program is needed to represent a social purpose and to impact a visible social need. The brand is critical because it guides, inspires and communicates. Without a branded signature program, the “social effort” tends to be grants, volunteers and energy goals. These often also tend to be unfocused, hard to communicate and the same as other firms.   

The signature program should also elevate the business brand—adding visibility and energy, an image lift and opportunities for employees and others to be engaged through volunteering. When that happens, the program benefits as well gaining an endorsement and access to resources including volunteers and a communication budget. It is a win-win. 

Salesforce, for example, has a signature program called the Pledge 1% in which it devotes 1% of the company’s equity or profits, 1% of products and 1% of employees’ time to society’s good. The program, which was put in place at the launch of the firm by Marc Benioff, now has over 10,000 companies that have joined worldwide. The result is a point of pride for employees and an amazing image lift for Salesforce, especially among those 10,000 firms that have signed on. In the words of March Benioff, “It’s time for a new capitalism — a more fair, equal, and sustainable capitalism that actually works for everyone…”   

 For all this to work, the signature program needs to have a strong brand, a brand with high visibility, a respected image and employees and customers that are engaged. Some paths to brand strength are to form brand communities, create signature stories and to brand your unique appeals or attributes. 

How should international brands adapt and evolve their purpose across different regions, given there might be different social challenges?

DA: Unilever’s Lifebuoy sets a great example of adapting its social purpose for different countries. Lifebuoy was introduced in 1894 as a hygiene hand soap to fight cholera. Drawing on this legacy purpose, it developed the “Help a Child Reach 5” program of improved handwashing in areas without clean water. It has since reached its target to help more than one billion people across the world develop good handwashing habits.  

By collaborating with different NGOs and responding to specific problems unique to different places, Lifebuoy has set up different programs around the world. Its largest programs in Indonesia and Vietnam are a great example, which work in partnership with government organizations to reach mothers with hygiene education. In some of the poorest countries across Asia and Africa where people are at risk of trachoma, a preventable blindness, it has partnered with NGO Sightsavers to adapt schools’ handwashing program to include face washing. When communicating its social programs, Lifebuoy also takes into consideration different local cultures and carefully designs its stories in the most compelling way. One of Lifebuoy’s most moving films tells a story about a young couple’s interactions around a tree. It was later revealed that the tree represents the couple’s lost son, as it is an Indonesian tradition to plant a tree for every child that is born for their health and prosperity.  

CH: It is also important for companies to identify a social purpose that’s anchored in universal values. Brand purposes spawned by these shared values are the most authentic and resonant and are easy to amplify among vast audiences. International brands can define a higher-level purpose that’s rooted in one or two of these shared values and then translate it into more concrete social programs based on the unique cultures of different regions.   


FINAL THOUGHTS

In order to articulate complex social themes, storytelling is key. And social programs are rich sources of emotional stories that connect. Creating signature programs that inspire employees, customers and society at large is key to building purpose-driven branding that is meaningful, impactful and lasting.  

You can contact David Aaker here to interview him for your next podcast or article.   

Contact Prophet today to see how signature programs and purpose-driven branding can be a part of your company’s broader ESG strategy. 

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Six 2023 Leadership Trends That Will Reshape the C-Suite

Profits, politics and planning will look very different in the months ahead.

The last few years have proven that disruption is the only “normal” in business. The world is still slogging through seismic plot twists of the previous few years, making inflation, supply chains, Ukraine and hybrid workplaces a critical topic on virtually every corporate agenda.   

While most forecasts call for nothing but grey skies, we disagree. History shows that periods of economic uncertainty heighten innovation and lead to new products, services and business models. After all, companies like General Motors, Microsoft and Electronic Arts formed during recessionary times.  

In 2023 we expect to see new ideas and products emerge from the rubble of disruption we’ve experienced on a global scale. But to get there, c-suite leaders will need to rethink how they lead their organizations.   

We expect the most successful c-suite leaders to lean into these six key leadership trends in the coming year.  

1. Productivity Improvements Will be a Critical Path to Profitability   

Over the last few years, a handful of digitally native organizations have chosen growth over profitability and had ample investors who were happy to take risks on future opportunities.    

Rising interest rates have ended that party. And as a result, investors are pressuring companies to continue to grow and make money or at least commit to concrete paths to profitability.   

Throughout the second half of 2022, many organizations abruptly shifted their focus from growth at all costs, even if that meant risking profitability, to achieving profitability by cost-cutting measures. 

 And while some companies may need to lean into cost-cutting efforts in 2023, more c-suite leaders will look to enhancing productivity within their workforce to achieve sustainable growth and profitability. For these leaders, the productivity improvements will come from technology, data and analytics.  

2. Balancing Short-Term and Future-Back Planning to Drive Sustainable Growth  

Long-term planning will always be a core component of business strategy. But the upheaval of the last few years has made it painfully clear that companies need to speed up the journey from thinking to doing. And that means integrating quick wins with future vision, so that the results you drive today do not hinder your long-term progress. 

Take, for example, Disney’s recent decision to increase prices for park admissions, annual passes and vacation clubs. This decision infuriated loyal Disney fans, who accused the company of price gouging. While the company may have achieved a quick win from this plan, the long-term effects of the decision may slow Disney’s progress toward its vision.  

In 2023, c-suite leaders will need to carefully balance short-term and future-back planning:  

  • Short-term planning: This type of planning requires leaders to think and make at the same time. Risks are reduced with small bets to show progress quickly. Using data and behavioral insights, companies can identify things they know, which they can execute now. They can also explore what they think they know with new and near-term concepts. And those efforts will inform what they think, allowing them to hypothesize, and validate along the way.
  • Future-back planning: This approach is about creating predictive models of the future, nine years or more out, to model the probable and preferable future. Which levers should a company pull to get there? Might they do better to build, buy or partner? It considers complex elements, such as politics and socioeconomic shifts, so leaders can confidently see where the business fits in the future and the immediate steps they need to take to get there.    

C-suite leaders who successfully lean into this leadership trend will be well-positioned to achieve immediate wins while also investing in the future of their organizations.   

3. Purposeful Data-Driven Decision-Making Will Reduce Risks   

Data-driven decision-making is critical to increasing confidence and reducing risks. And while that’s been true for decades, more and more companies realize they may have too much historical data and need more predictive data to better inform their decisions. As a result, many executives are making different demands of their AI and analytics teams, aiming to sharpen their business strategy.   

But being data-driven in your decision-making is only one part of the equation. During times of uncertainty, it’s essential to be purposeful in utilizing data to inform your decision-making.   

Amazon has long aced this approach, using analytics to evaluate whether a decision is a one-way-door or a two-way-door.    

Two-way-door decisions are safer and relatively easy decisions to reverse. For example, if the pricing strategy for a new service is hindering performance, it is possible to right-size and reposition the offering or pricing strategy.    

One-way door decisions are more complex, nearly impossible to undo, and require rigorous scrutiny. For instance, a company that misjudges the demand for a product or service has no opportunity to take that decision back. These decisions require rigor and high confidence levels that predictive data modeling can provide.    

In constrained business environments, risky decision-making can be detrimental to the success of your organization, which is why it is more critical than ever to understand the true impact of the decision and be purposeful in how you evaluate the opportunity.   

4. Environmental, Social and Governance (ESG) Regulations Will Require Businesses to Rethink Their Global Approach 

There was a time when everyone building a global business and a global brand thought they could have one approach that would work across different countries: One operating model. One brand positioning. One value proposition. That time is over. Every country has divergent priorities, consumers and governments requiring differentiated business strategies.   

Consider the increase in ESG regulations that have surfaced globally. For example, the European Union (EU) recently passed the Corporate Sustainability Reporting Directive (CSRD). This new directive will soon require large companies that meet specific requirements or are listed on EU-regulated markets to disclose environmental and social metrics across their supply chains. It will also hold these companies legally responsible for their ESG commitments. To meet CSRD targets, large companies doing business in the EU will have to rethink their supply chains and operations and their entire value chain from product and service design to business models and innovation.   

And in the U.S., the Securities and Exchange Commission’s new proposed rule amendments will require domestic and foreign companies to disclose climate-related risks, governance of climate-related risks, greenhouse gas emissions, climate-related financial statement metrics, and information about climate-related targets and goals.  

Global businesses need to ditch their one-size-fits-all approach to international expansion to meet evolving government regulations and consumer preferences. Instead, these companies will need to find new innovative ways to tailor their brands, business strategies and operations to meet the diverse needs of each market. 

5. New Models of Production Will Unlock Sustainability, Efficiency and Customer Intimacy   

The era of mass production may be ending right in front of our eyes. As a result, we’re seeing a new leadership trend emerge from the c-suite: decentralization. Not only is this a solution for the supply chain challenges it is also a more sustainable and efficient way to impact local communities.    

Many leaders also realize that decentralization can get their products into the hands of their customers in a quicker and more sustainable way. Localized production also allows for co-creation with their customers, improving service and a low-cost path to differentiated and more relevant product offerings.   

There are risks, however. Getting decentralization right will require leaders to closely re-examine their operating models, decision rights, and leadership skills. Without leadership setting a solid direction for the organization, leaders risk efficiency without innovation or innovation without efficiency.   

6. Leaders Will Walk a Tight(er) Rope When It Comes to Political Issues   

The purpose-driven gospel of recent years insists that companies take a stand on issues–or risk losing employees and customers. But figuring out how to do so keeps CEOs, CPOs and CMOs up at night.     

BlackRock’s struggles are emblematic of this challenge. Six states (thus far) have yanked billions in investments from the world’s largest money manager, protesting its commitment to environmental and social change.    

Over the last few years, organizations have been called upon to take a stance on hot-topic political issues ranging from healthcare to ESG. But taking a stance (or not) has become more complicated as companies increasingly navigate accusations of being either too woke or not woke enough.    

In the year ahead, leaders will strive to sort out political agendas with three different pathways:    

  • Publicly support political issues     
  • Stay silent on political issues     
  • Show support for political issues within their workforce policies without publicly supporting the cause     

Regardless of where you or your company stand, the decision to engage publicly on political issues needs to consider the full range of potential consequences that might arise. Speaking out quickly might feel good in the first 24 hours, but unintentionally create outcomes that fly in the face of the very values you espouse. 


FINAL THOUGHTS

The only true business constant is continuous business disruption. Creative leadership, purposeful planning and data-driven decisions will be vital to driving profitability and growth during times of uncertainty.

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CMO Focus: Five Trends to Watch in 2023 

Expect marketers to navigate economic upheaval and changing customer preferences by leaning into new approaches.

Chief marketing officers are looking to the year ahead with caution as the story of the economy plays out through 2023. While growing economic uncertainty means almost nothing will be predictable, it also creates opportunities for leaders to shine by doing more with less and leaning heavily into creativity and innovation. On the one hand, CMOs feel pressured to keep in step. They want to move faster and are looking for ways to add speed and tactical agility. But they’re moving more thoughtfully, too. They want to deepen their connections with people at a time when consumers are more conscious about their spending. Importantly, they feel well equipped “to go into battle” as they can lean back on lessons learned from the beginning of the pandemic. 

While building a strong brand is always critical, it becomes more important during economic downturns. When presented with brand choices, consumers are more likely to stick with brands they know and trust–even when given lower-priced options. So CMOs are questioning which moves will best strengthen trust with their existing customer base while finding ways to resonate with more consumers. 

In the coming year, we expect CMOs to: 

1. Flex Into Expanded Roles 

Their titles haven’t changed, but marketers recognize that their sphere of influence is shifting. The marketing function is no longer just responsible for using marketing to deliver value to the organization. They must prove and demonstrate how while taking on more ownership of the growth agenda. That includes uncovering new pockets of growth and figuring out new audiences and opportunities. 

As board-level expectations rise about marketing’s ability to prove its value, CMOs become integrators. They are bringing together different functions, from sales to product to ESG. This expanded responsibility for growth means moving beyond marketing key performance indicators to commercial KPIs, substantiating their impact on growth.  

And that means marketers must embrace a different language, leaving marketing jargon behind as they translate everything they do into the lexicon of business value. 

2. Refocus on Existing Customers Through Their Post-Purchase Journeys 

In times of economic uncertainty, companies should shore up their customer base, exploring new ways to drive loyalty. In lean times, brands must find ways to build trust and stay top-of-mind. Creating better customer experiences is a sure bet. 

The more companies invest in customer experience, the more they learn how to improve it. That means they’re making sure CX is brand-led, differentiated and personalized. The shift comes from seeing CX less as a defensive exercise and more as a positive relationship builder. It’s a way to expand the brand definition, bringing customers closer to its purpose. It creates more meaningfully engaged communities that act as stores of value during challenging economic times and sources of advocacy when conditions improve. 

Only data can inform that level of intimacy, so CMOs are becoming more outspoken about ineffective corporate data strategies. They’re learning that an overabundance of data often means they can’t thread the needle. And they’re constantly re-evaluating the role analytics play in the marketing organization, aligning marketing technology to produce more meaningful insights. 

It’s not just about having the right data. It’s also about having the right talent and teams in place to support the shifting needs of the business. We expect CMOs to continue to prioritize adding insight and experienced professionals who know how to ask the right questions of data and uncover insights that drive growth. 

3. Hold the Line on Brand Versus Performance Marketing Budgets 

The mix matters. And it requires extra attention in bumpy economies. Many companies are already slipping into fear-based budgeting, tipping into demand marketing at the expense of brand initiatives. It’s easy to do so at a moment when the rest of the C-suite is begging for quick results.  

But it’s also a mistake. And the most effective CMOs will make a case for sticking to the 60/40 rule, even as they find better ways to integrate brand as a growth engine. 

And they’ll increase efforts in key areas: 

  1. Experimentation: Under budgetary pressure, it’s tempting to back away from unproven channels. Those that continue to test and learn will see the best long-term growth results versus relying solely on quickly outdated benchmarks. But with the stepped-up scrutiny on budgets, experimentation should be agile. It’s okay to redeploy resources if the tests aren’t delivering results.  
  2. Channel Strategy: Social media is changing so fast that it requires teams to constantly refine goals and tactics. As TikTok becomes mainstream, Twitter (and new competition) evolves, YouTube gains clout and the metaverse beckons, brands need to constantly chart new directions. Few brands can–or should–be everywhere. But they all need to know how and why their customers use social.  
  3. Reporting: Tracking and socializing results should be done through business outcomes, not marketing metrics. This makes it more possible to connect brand and demand performance. No one in the board room wants to hear about clicks. The point of reporting is to evaluate past performance and make better, more effective strategic decisions for future efforts, getting the most out of limited resources. 

4. Welcome More ESG Moves into the Marketing Tent 

As governments, investors, employees and customers demand more accountability, environmental, social and governance policies are under the microscope–and their weaknesses are showing. Marketers can and should take on more, addressing the many ways ESG issues directly impact brand value. More CMOs are putting sustainability commitments and public announcements on the front of bottles, addressing it in packaging and formulation.  

They’re becoming more aware of how vulnerable brands are to greenwashing claims. That means focusing on the key proof points needed to substantiate ESG efforts.  

But most importantly, CMOs recognize that ESG has become a customer preference and a strong one. People want companies to make less harmful products and to behave responsibly. It’s no longer possible to think that only subsets of consumers care about the planet or labor practices. It’s a trend that will only intensify. 

We’ll see more businesses realize that ESG shouldn’t be thought of as a single set of initiatives. It’s a commitment a company makes, which then translates into many facets of operation and consumer engagement. 

5. Rewrite Their Personal Purpose 

Many CMOs are facing a significant amount of internal and external headwinds which can lead to a sense of frustration by not being able to deliver the impact they’re looking to achieve. While their creative energy and strategic skills may have propelled them to the top job, the harsh challenges of the last few years have sucked much of the fun out of their careers. Bludgeoned by the Great Resignation, skirmishes over hybrid work policies, positions that seem unfillable and looming economic storm clouds, many feel more like survivors than visionaries. They have less freedom to be creative. And motivating teams while managing department-wide burnout takes much more of their time than it once did. 

While the last few years may have presented a number of challenges, there’s ample opportunity to start taking their purpose-branding lessons to heart and redefining their career goals. Expect to see CMOs applying the lessons from tough times to dig deeper for motivation and find new ways to reignite their passion for marketing. Their goal is to transform resilience from a corporate buzzword to a personal mantra. 


FINAL THOUGHTS

We’re not surprised that the average CMO tenure hovers at 40 months, the lowest in a decade. Periods of constraint are inherently more demanding than growth spurts, and CMOs have to do more with less. But cutbacks also fuel innovation. We expect to see CMOs build trust with customers by leaning into personalization. They’ll find new ways to collaborate, forming creative partnerships that span silos. They’ll enrich their brands with thoughtful experimentation. And in doing so, they’ll unlock uncommon growth–even in a recession.

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Best and Worst Brands of 2022 

From YouTube, Patagonia and Taylor to Twitter, FTX/Crypto and Adidas

This has been a year for brands to shine in big ways–and fall in even bigger ones. It has also been a year of impressive brand heroics, with record-setting generosity, expanded inclusivity and high-octane comebacks. We’ve seen more companies spin pandemic-era lessons into smart marketing moves, using brand purpose and customer engagement to achieve impressive levels of relevance.  

Many brands unleashed their inner value propositions, from EVs coming out of Detroit to the inspiration named Volodymyr Zelenskyy to the hard-charging prowess of HBO Max and Hulu. And many took the world by surprise, like the brilliance of BeReal and the reimagination of “ugly” shoe brands such as Crocs and New Balance. It’s also been a blast to see Harry and Taylor rise (again) and watch the coming-out party for AB InBev. All in, 2022 found plenty of unexpected ways to win hearts, minds and wallets, especially in an unstable economy.  

With as many brand winners, we saw an equal number that either missed the mark or raised more questions than answers. Elon Musk imploded, tainting Twitter and Tesla. Then there was FIFA’s continued corruption and Ticketmaster’s monopolistic nightmares coming true. Singer Jax revealed the truth about Victoria’s Secret, Shopify lost some magic and Beyond Meat failed to meet the moment. Big Oil garnered record profits while most of the world struggled at the gas pump, and questions about Meta(verse) abound. Many brands are ending the year trying to climb out of big holes. 

That said, I went to my amazing Prophet colleagues from around the world to get their take. For the tenth straight year, they delivered, producing close to 100 nominees. A dozen stand out, all with lessons for marketers as we head into 2023. 

The 2022 Brand Winners  

Airbnb 

This hospitality company continues to expand its frame of reference with a super-inclusive approach and stream of updated offers. This includes a new listing service in the U.S. that allows renters to offer their apartments for short-term sublets, just as homeowners can. And its categories feature is a genius way of browsing. Why not stay in homes that are 10,000 feet above sea level, built into caves or with amazing pools? Even as rival VRBO comes on strong with consistently powerful marketing of its own, Airbnb continues to redefine what it means to be a creative traveler. 

Patagonia 

In a world full of Mars-bound billionaires, Founder and Chief Executive Yvon Chouinard donated the entire organization to Planet Earth. By giving his $3 billion company to a foundation that will devote all profits to the environment, he invented a Triple Crown for branding: Epic generosity, the most significant investment in brand purpose ever and a competitive difference none can match. Bravo Patagonia! 

Taylor Swift 

Few performers–and fewer women–have built a brand as strong, enduring and appealing as Taylor Swift. Her tightly controlled record releases with a host of product tie-ins (the record clock) show that no one else is calling the shots. And in an acid test for all brands, she’s expertly steering through her part in the epic Ticketmaster fiasco, reaching out to fans to heal the damage.  

YouTube 

YouTube, the Google-owned social media platform that’s also the world’s second-largest search engine, outdid itself this year, proving its relevance as never before. It surpassed Netflix in global streaming watch time. And it sharpened its support for creators, launching monetization for shorts and providing a much better deal on revenue sharing than TikTok. It’s barreling into live shopping. And it surpassed 80 million music and premium subscribers, up 30 million in one year.  

BeReal 

This social platform appeared out of thin air and captured an audience of 74 million with its two-minute window of authenticity. Radically different from competitors, it finally gives young fans the ability to shake off that phony Instagram vibe. And like Wordle, which won big love last year by asking for so little, BeReal is fast becoming a daily ritual for increasingly anti-social young people. Is it sustainable? That may be a meaningful question for marketers. Gen Z could care less.  

AB InBev 

OK, Budweiser and the AB InBev stable of beers have been languishing stateside for years. But a moment on the giant stage of the FIFA World Cup gave Budweiser a chance to shine, making it the beverage of choice for pro-Western democracies. When Qatar banned beer sales just days before the tournament, Budweiser’s quick-witted response made sure its $75 million sponsorship didn’t go to waste, with its promise to donate all that beer to the winning country with a smart new campaign, “Bring Home the Bud”.  

The 2022 Brand Losers  

Twitter 

Unsurprisingly, Elon Musk and Twitter are No. 1 on the most bad-brand lists. But the real loser may turn out to be Tesla. Musk’s reign of terror at Twitter transformed his personal brand from disruptor to dirtbag, a reputational body blow that may follow him forever. With massive layoffs, his gutting of the unprofitable social media company has resulted in plunging ad revenues. Hate speech on the platform is soaring as customers flee: In the first week of Musk’s control, Twitter lost 1 million users

Tesla 

Elon may have also believed Tesla, long a darling of the tech world, was immune. But there may be little overlap between the free-speech absolutists who love him on social media and Tesla’s affluent planet-conscious customer base. Tesla sales are declining, pressured by cheaper competition and anti-Elon-ism. And its stock price keeps dropping, falling 50%–well below the overall market. 

Adidas 

Adidas first formed a partnership with Kanye West, now known as Ye, in 2013, earning plenty of sales and enviable cultural relevance. The relationship deteriorated, and Adidas reportedly has been looking for an exit for four years. But by waiting until Ye spiraled into overtly antisemitic tirades, Adidas calls its commitment to purpose into question. In some ways, it is understandable: Yeezy products brought in $2 billion in sales or 8% of its revenue. But the delay is inexcusable–perhaps more so because of the founders’ apparent ties to the Nazi party. Will Adidas bounce back? Of course. It’s one of the world’s biggest sporting brands. Will consumers ever believe its purpose blather, all about integrity and diversity? That remains to be seen. 

FIFA 

This global organization has been engulfed in corruption scandals for so long that it’s hard to imagine the brand faring worse. Yet this year’s FIFA World Cup Qatar 2022 vaulted it to new levels of disgrace. The selection of tiny Qatar, triggering human rights, a bigoted stance on the LGBTQ+ community and more corruption accusations proved that the ugliest organization represents the beautiful game. 

Victoria’s Secret 

The world’s largest underwear brand is halfway through an ambitious five-year makeover aimed at erasing decades of sexism and misogyny. Some might say it’s working: Sales are rising, and it’s launched new and more inclusive marketing–there are even reports it may reintroduce its fashion shows. But the popularity of Jax’s “Victoria’s Secret” exposes how many younger consumers still take issue with the unrealistic body image standards that the brand is so well known for promoting. And the $400 million acquisition of AdoreMe, the direct-to-consumer dynamo, seems like an admission that it doesn’t know how to talk to Gen Z. 

FTX/Crypto 

While FTX’s $32 billion meltdown is deservedly getting much attention, the entire crypto market has taken a terrible hit. And certainly, the 30-year-old Sam Bankman-Fried is a Madoff-level conman. But we’d like to call out the mainstream press, including the New York Times and the Wall Street Journal, that lauded him as an altruist. While some brands will weather the crypto collapse, the entire regulatory apparatus that allowed FTX to happen deserves condemnation. And it likely set retail investing back a generation. 


FINAL THOUGHTS

We would love to hear your thoughts. What brands made your 2022 winner/loser lists? 

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The Missing Secret to M&A Success: Organizational Culture 

5 cultural pitfalls to avoid in pursuit of maximum M&A value.

Despite economic uncertainty and a slower rate of deals, organizations will continue to utilize mergers and acquisitions (M&A) to grow, diversify, penetrate new markets and develop new capabilities.   

M&A events represent a unique opportunity to transform a business, externally and internally. Externally, it can serve as an opportunity to enhance reputation, deliver on emerging or underserved needs and increase market share. Internally, it serves as an opportunity to drive lasting cultural change and inspire renewed purpose within the evolved organization.   

There’s a lot written about mergers failing because of culture. Unfortunately, most organizations are not using company culture effectively or systematically to maximize value and minimize risk in their deals. Organizations and deal team’s care. But it’s not a significant part of the integration playbook and doesn’t receive the required attention to make it accretive to the deal.  

At Prophet, we view culture as a hidden asset in determining the success of an M&A deal. Yet, culture is integral to the success of an organization. As organizations become more digitized and automated, people change businesses, which is why we have developed the Human-Centered Transformation Model™. Our Human-Centered Transformation Model™provides an easy and accessible, holistic lens for unpacking complexities and highlighting and understanding specific components to address cultural integration.  

With this framework in mind, here are five common cultural pitfalls many companies face during M&As and actionable insights on how you can turn the tide and achieve maximized return on your investment.   

1. Not Applying the Same Rigor to Cultural Analysis as to Deal Economics  

M&A teams pride themselves on meticulous due diligence. They dig into every financial, legal and operational element they can find. But they are often under-equipped for systematic analysis of the culture of the company they are acquiring. Nor do they detail the pathway to cultural integration in the same way that they would for the financial and legal elements to prove the viability and value of the deal.  

To overcome this challenge, M&A deal teams must determine cultural similarities and differences between the two organizations before finalizing the deal. To help our clients do the proper cultural due diligence, we build this critical cultural analysis and integration process into our transformation and integration playbooks. Gathering cultural data pre-deal reduces risks and speeds up integration by informing the strengths and differences between companies.   

It’s critical to find common ground to build on. Identify the bright spots that should be preserved due to intrinsic or financial value. It is also an opportunity to anticipate friction and allocate resources to support rapid integration.  

2. Lack of Transparency and Intention About Strategic Cultural Choices  

In most merger situations, leaders don’t clearly articulate the type of culture required to make the integration and future NewCo growth strategy successful.   

However, being honest and upfront about the cultural preferences that best support strategy, brand and integration strategy will begin the merger on a solid foundation and earn the trust of both sets of employees.   

Whether there is a dominant culture, a selection of specific attributes from both organizations worth merging, or a net new culture, executives must be transparent with employees. Be honest and open about the decisions, processes and rationale for every choice to preserve trust and respect across organizational lines.   

One critical choice to get right is who is selected for leadership positions. Individuals chosen for the top jobs within the NewCo signal to employees whether or not elements of their legacy organization’s culture and values will endure. The goal at this stage is not to be popular. Instead, it is to set a clear strategic frame for the people and cultural aspects of the journey ahead and a clear “why” that explains the decisions and the approach.  

3. Failure to Align Leaders From Both Parties  

M&A deals often come together in a rush. There may be multiple bidders. Or companies aware of the market anxiety that comes from a prolonged rumor phase, are anxious to make deals official. Once signed, the focus shifts rapidly to the physical and operational integration elements – there is always a lot of work to be done, and it’s very easy to overlook perceived ”softer” topics such as values and beliefs.   

That’s a mistake. As early as possible, leadership groups from both organizations need to come together to co-create purpose and values, the ambition for the desired culture and a roadmap to get there. It’s also essential to involve employees as early as possible. Regardless, if leaders from both sides don’t have the opportunity to debate and align on a shared ambition, direction and journey, the road ahead is much harder. Leaders from both sides of the NewCo must have a shared message for the organization’s purpose and values rather than deferring to their unmerged entities’ old purpose and values.   

Aligning the cultural direction and ambition during the early stages of an M&A deal is especially important when acquiring start-ups, which are often based on a radically different ethos than larger companies. Without deciding how to protect that difference from the outset, the acquirer can wind up squashing the cultural traits that are most valuable for growth.  

The nitty-gritty of cultural integration can come later. But there must be some initial high-level sense of how that might happen amongst the leadership group. Without a shared vision for what the united cultural DNA will be–the NewCo’s purpose and values–the deal is unlikely to fulfill its promise.  

4. Not Managing Cultural Messages – Everyone Is Watching Everything  

Once leaders from both parties have reached a consensus on what this new DNA will be, they must actively and consistently model those values as integration begins and beyond. Our research on Catalysts highlights leadership behavior as a fundamental lever in cultural transformation, especially during M&A events.  

In times of uncertainty and change, all eyes are on leadership. Every action and message–intentional or not–is analyzed and interpreted by employees. Never mind the top leader appointments, even decisions that may seem tactical, such as the choice of ERP platform or brand color palette, can send a cultural message. Senses are heightened in times of change. An organization failing to manage cultural messages consistently creates unnecessary fear and upset, impacting productivity and value.  

Intentional signaling early on and careful consideration of decisions, timing and positioning –with specific details about this new, merged culture–will be critical to building trust and engagement for the journey ahead. Being thoughtful about language, decisions, symbols, and rituals in the moments that matter will enable the integration to proceed at a quicker pace. Understanding employees’ experiences, perceptions and needs are essential.   

Put yourself in the shoes of employees. Use tools rooted in neuroscience, such as “SCARF,” to establish a standard toolkit and language, invite dialogue, track trends and equip your leaders to make good decisions and deliver consistent messages in line with your chosen culture strategy.   

5. Stopping Too Early 

It takes longer than most teams expect to holistically embed the “new” culture–to make it the culture. Leaders involved in the deal are like the elite athletes in a marathon. They are off and running before the employee base has even reached the start line and can quickly move on without thinking about those behind them. Once leaders have passed the initial messaging phase, they are often surprised at the depth and time commitment required to make cultural changes stick.  

This work requires detailed roadmaps to be clear on the destination and the steps to get there. These need to be measured and managed, even beyond the early integration phases, to help leaders stay the course and bring people with them.  

 Prophet’s Human-Centered Transformation Model ™️ (HCTM) provides leaders with an accessible lens for unpacking complexities and highlighting specific components that require focus–such as required skillsets and capabilities, important behaviors and symbols and the central structures, processes and governance mechanisms. The priorities can then be easily explored and understood to support rapid integration and drive sustainable value.   

Throughout the journey, leaders can promote the foundational DNA elements of the organization’s mission, purpose and values to act as the north star as they track tangible outcomes and signs of progress against the roadmap.  


FINAL THOUGHTS

The effort is worth it – your people and shareholders will thank you. M&A events offer a unique opportunity to transform an organization’s business strategy and customer perceptions and to drive lasting cultural change. Building a human-centered approach into your M&A playbook is essential (or adopting Prophet’s playbook!) –people are the way to unlock the deal’s success. Co-create and share the “new” organization’s cultural ambitions as early as possible. It will build trust, create transparency and help realize the deal’s value.   

Ready to unlock the value of an M&A event through culture? Connect with our experts today. 

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How to Use Storytelling to Bring Your ESG Strategy to Life 

Here, we offer five essentials for organizations to consider in order to tell a more compelling ESG story.

Let’s face it: In the past year, “ESG” has started to feel like a corporate buzzword. 

Pressure from external stakeholders to show measurable progress on Environmental, Social and Governance (ESG) initiatives has spurred brands to make bold commitments and activate ESG strategies. Likewise, ESG reporting (a report of ESG activities and data required for financial disclosures) gained traction with 92% of the S&P 500 publishing Sustainability Reports in 2020 and the EU introducing the Corporate Sustainability Reporting Directive (CSRD), a policy requiring companies to “disclose information on the way they manage social and environmental challenges.” 

So, yes, given this collective shift to outline ambitions, draft agendas and share the latest company data, it’s easy for a concept like ESG to feel overused, overwhelming or even inconsequential. But at its core, brands acting for the causes they believe in are anything but.  

A solid ESG strategy is comprised of an ESG ambition (where we want to go) and an ESG agenda (how we will get there). Together they inform the ESG narrative. The ESG narrative is a powerful story or series of stories, that should drive understanding and inspire action, ultimately making your ESG journey real, relevant and resonant to your stakeholders.  

Which is why after establishing a sound strategy, brands must ask themselves: What’s the narrative? How can we contribute to a larger conversation? How can our efforts connect with and inspire people?  

Here, we offer five essentials for organizations to consider in order to tell a more compelling ESG story.  

Go Deeper and Get Specific 

Your organization’s ESG strategy will likely cover a broad spectrum of topics, and consequently, the narrative will speak to a variety of initiatives. But just because the broader story encompasses so much, doesn’t mean you have to hit on it all in every single communication. Tetris-ing mentions of all your ESG initiatives at random and throughout every written piece can confuse your audiences and may even minimize the perceived gravity of what you’re working towards. Instead, use individual storytelling touchpoints as opportunities to go deeper on one or two intersecting topics at a time to uncover the human element. You can reference your ESG materiality assessment to help you identify and prioritize the relevant topics your business has committed to. 

Giving a specific topic or initiative adequate space and airtime will help you be more intentional with storytelling around key components of your ESG strategy — elevating your ambitions into something tangible rather than just scratching the surface of all your efforts at once.  

With that in mind, look for the moments where your ESG initiatives and the issues they address naturally intersect with each other. Those may be the most compelling storytelling opportunities. Take HydroFlask, the brand puts ESG storytelling front and center on its website via its Parks For All program. It spotlights grant recipients across the country, sharing details about what the nonprofits are doing to ensure nature is accessible to all and contextualizes why the company believes everyone should have access to the benefits of nature: “the benefits of nature are mental, physical and social.” 

Sincere, emotive messaging helps bring its grant initiative to life by getting to the heart of why what it’s doing matters on a human level — potentially inspiring audiences to get support or apply for a grant themselves. 

Know What Your Audiences Want and Expect 

Just like any other form of communication, you should modulate your storytelling approach to meet the needs — or expectations — of different audiences. But to do so, you need to understand them. For instance, regulators and investors may be more stimulated by facts and figures, whereas employees, consumers and the broader market will likely connect with stories that demonstrate how your initiatives may show up in their routines, communities, experiences and relationships. Understanding the emotional drivers of these audiences allows you to ground your stories in accessible, human experiences, making your ESG efforts feel real and relatable. 

Direct-to-consumer brand Humankind’s messaging consistently emphasizes how people can easily reduce single-use plastic waste simply by using its products in their daily routines. It claims that “you can fight this flow of plastic waste, just by getting ready in the morning,” helping consumers envision its product within the context of their lives. The brand even extends this notion into its nomenclature, naming some of its product offerings the “Dental Routine Bundle” and the “Shower Routine Bundle.”  

Oat beverage company Oatly already broke the mold of the milk-alternative (and milk) industry by embodying a challenging, self-aware and even playful voice, but that’s not the only way it stands out among competitors and remains relevant to its audiences. Oatly Stories provides a series of updates about “the work [it’s] doing and the issues [the brand] cares about.” Stories range from deep-dive investigations about whether oat milk truly does taste horrible in tea to interviews with various company founders whose visions for a sustainable and more equitable future align with Oatly’s.  

Make it Measurable 

Your ESG story is only as powerful as the hard facts that underpin it — audiences crave real, tangible measures to go hand-in-hand with a strong narrative. What steps are you taking toward the causes you believe in? How has that journey progressed over time? And how can you strive to be better?  

Here, transparency and humility play surprisingly important roles. Rather than overstate the scope and impact of your ESG efforts, it pays to be candid about the work that has yet to be done and the problems that remain to be solved. Doing so can manage against your brand being charged with “greenwashing” and “virtue signaling.” 

People are drawn to authenticity — and they relate to companies that can deliver on their promises, no matter how far out that delivery may appear. As Gen Z consumers enter the market, they are actively seeking out more opportunities for meaningful brand stories. A vulnerable nod to what remains to be done adds a compelling layer to the stories you tell. And it leaves room for a dynamic journey that they can follow along with. 

Consider Walmart’s approach to ESG reporting, which strives to create an accessible, transparent way to measure impact and stay accountable. Communications accompanying the report share the findings for any stakeholder to consult, in a way that’s easily digestible. And, on top of that, it clearly lays out the spaces that remain open to improvement in candid terms.   

“Substantial improvements in outcomes may be years in the making,” Kathleen McLaughlin, Walmart’s chief sustainability officer, admitted in a July blog post in regard to equity initiatives at the company. “Yet we are encouraged by signs of progress.”  

Use Bold Language to Express Your Bold Moves 

If you’re making measurable, authentic operational changes or business decisions to deliver your ESG strategy, don’t shy away from language that will excite, inspire and rally people around those efforts. 

While it may be easy to lean towards a safer territory with storytelling that doesn’t risk polarizing your audiences, the greatest test of sincerity often lies in how we address personally and emotionally charged issues. Don’t mask your progress or stance in equivocal language that can be interpreted anyway — this is an especially important point for Gen Z employees, who seek out employers who are willing to clearly and confidently advocate for causes they believe in and actively support. 

The risk that some of your intended audience won’t agree with your delivery will always be there. But the most powerful brands acknowledge the risk inherent in their activism, and their subsequent storytelling. Even if they know sharing their stance and efforts may not always be a profitable decision, they do so with assurance and aspiration, and then keep on charging ahead.  

Patagonia took this to the extreme when it confidently declared: “Earth is now our only shareholder.” Since this courageous business decision, the company will now use the wealth it creates and invest it into fighting the environmental crisis. The action itself is honorable, but the word choice and storytelling are what helped amplify the impact and make it feel real to stakeholders. As Yvon Chouinard, the company’s founder powerfully put it in the announcement: “Instead of ‘going public,’ you could say we’re ‘going purpose.’” 

Brands don’t have to communicate their stance blindly. They can and should refer to their materiality assessments to get a sense of the causes that resonate saliently to them and to their stakeholders to make informed choices around how they share their progress tactfully.  

Keep it Going 

A powerful ESG story doesn’t stop with a single campaign, blog post or annual report. It’s not a forced divergence from your brand’s more important objectives. Instead, it’s a living, breathing element of your core identity as a brand. It’s consistent with everything you are and every cause you stand for. And it needs to remain that way over time.  

Your story must evolve with the world around it. As new current events and social causes come to light, brands need to look for opportunities to authentically tie them back to their story and keep their narratives relevant.    

Dove’s Real Beauty Campaign has been supporting diverse representations of beauty since 2004 — and it has served as an example of how staying true to your core values will never fall out of trend.  
 
Over the years, the campaign has found many different iterations of two key themes: female empowerment and the fight against stereotypes. And this past June, Dove took a powerful stance opposing the overturning of Roe V. Wade, publicly taking to social media to declare: “It’s her body. It should be her choice.”  

It’s a powerful message from Dove, precisely because of the messages Dove has put forth over the years around women’s empowerment. With this stand, the brand has shown consistent loyalty to its principles, even in the face of a potentially polarizing topic.  


FINAL THOUGHTS

While ESG rightfully continues to gain momentum, it takes more than broad strokes and light touches to make your ESG intentions feel serious and bold.  

By investing in the right storytelling strategies, you will not only connect to your audiences’ hearts and minds — you’ll make your important ESG efforts feel committed, real and lasting.    

Contact us to learn more about building and communicating an authentic ESG strategy for your organization.

BOOK

The Future of Purpose-Driven Branding 

BY DAVID AAKER

Learn how to guide, inspire and enable effective communication of a purpose-driven branding program.

In his book, “The Future of Purpose-Driven Branding,” branding expert, David Aaker, shows a pathway to business and social program leadership and offers five branding “must dos” to guide, inspire and enable effective communication of the program. The book includes:  

  • A thorough case for why social programs are the secret weapon to helping business leaders build stronger brands and more connected work cultures, while supporting important social causes 
  • Powerful case studies from organizations leading with exemplary social programs
  • Tools and insights for integrating social programs into the organization and business 
  • Five branding “must dos” when building signature social brands 

Download the first chapter today.  

Loved the first chapter? Order the book on Amazon.

About the Author 

David Aaker is the author of more than one hundred articles and 18 books on marketing, business strategy, and branding that have sold over one million copies. A recognized global authority on branding, he has developed concepts and methods on brand building that are used by organizations around the world. 

Connect 

Want to interview David Aaker or feature him on your next podcast? Please connect with us or David directly. 

Reach out to learn how David Aaker and Prophet can help your business create signature social programs that capture the hearts of leadership, customers, employees and brand followers.  

BOOK

The Future of Purpose-Driven Branding

BY DAVID AAKER

Read the book to learn five branding “must-dos” to guide, inspire and enable effective communication of the social purpose and program.  

Summary

Winners in the future will embrace social program leadership … or fade into irrelevance with customers, investors and employees. It’s not enough for companies to commit to reducing energy or have an ad hoc budget for grants and volunteering. The world needs the resources and agility of large businesses to address existential threats in society with imaginative and impactful programs. 

In his book, “The Future of Purpose-Driven Branding,” branding expert David Aaker shows a pathway to business social leadership that include four strategies:  

  • Employ resources to address the most pressing societal challenges – like climate change and identity inequalities 
  • Create impactful, inspiring, and mission-driven signature social programs that will help business leaders build brands that are more relevant and purpose-driven as well as impact important social challenges 
  • Integrate the signature social programs into the business to bolster the organization’s brand as a mission-driven enterprise that is “doing good”
  • Create and manage a portfolio of signature social brands that inspire, engage and communicate with passion and clarity by using the five branding “must-dos” 

Highlights 

  • A thorough case for why social programs are the secret weapon to helping business leaders build stronger brands and more connected work cultures while supporting important social causes 
  • Powerful case studies from organizations leading with exemplary social programs 
  • Tools and insights for integrating social programs into the organization and business 
  • Five branding “must-dos” when building signature social brands 

Take a sneak peek and read the first chapter here.

Endorsements

“David Aaker, the branding guru, shows how to leverage signature social programs using vivid case studies. Integrating the social program into the business creates a win-win infinity loop.  ‘The Future of Purpose-Driven Branding’ is a must-read book for the purpose era.”

Joe Tripodi 
Former CMO at Coca-Cola, Allstate and MasterCard

“Every company should adopt a social cause beyond profit-making. Aaker has written the perfect book to help you find that cause and build a unique program and brand that makes a difference.”

Phil Kotler
The Father of Modern Marketing

“This is a roadmap for nonprofits who want to build an inspiring brand and attract active business partners. The five branding “must dos” are game-changing.”

Eve Birge
Exec Director, White Pony Express, “All of Us Taking Care of All of Us”

 

About the Author 

David Aaker is the author of more than one hundred articles and 18 books on marketing, business strategy and branding that have sold over one million copies. A recognized global authority on branding, he has developed concepts and methods of brand building that are used by organizations around the world. 

Connect 

Want to interview David Aaker or feature him on your next podcast? Please connect with us or David directly. Reach out to learn how David and Prophet can help your business create signature social programs that capture the hearts of leadership, customers, employees and brand followers.  

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Naming in Today’s White-Hot M&A Environment  

Learn the five best practices to get M&A naming right.

Despite the uncertainty of the global pandemic and recessionary outlook, M&A activity continues to surge across all industries, with a record $2.9 trillion in transactions in 2021, and 2022 is expected to be even bigger. While not every deal requires naming, the large transformation deals do. In these cases, a new name is the most visible, symbolic and longest-lasting M&A decision. It’s an opportunity to start fresh and signal unity to employees and customers alike. But shockingly, many companies still get it wrong. 

Getting to a great name in these fast-paced environments requires significant care and attention. What sometimes starts out as “let’s brainstorm and come up with something cool,” can often turn into a highly emotional, intensely subjective process that can create leadership friction and decision-making paralysis, ultimately delaying a brand’s launch.  

Following are five best practices to get M&A naming right.

1. M&A naming is not a democracy. 

Since naming a new enterprise is something many executives experience just once in their careers, many leaders don’t want to make the decision alone. So, they invite stakeholders from every angle to weigh in. However, there will likely already be numerous decision-making voices at the table—including multiple CEOs, private equity partners, other investors or board members. In these multi-stakeholder environments, we believe the decision-making body should be kept to the right balance of as few executives as possible, but as many as necessary, with focused participation early in the process (yes, even CEOs).  

Despite the perception that naming is a fun, creative exercise, the reality is that it’s a high-stakes, emotional decision that will carry your organization into the next several years, and maybe even the next several decades. With this in mind, getting lean on the decision-making team, and ensuring they’re active participants from the very beginning, will lead to a more successful outcome.   

We also recommend that clients resist the temptation to test name candidates with employees—while inclusion is a noble goal, this step gives employees a voice in the decision, rather than treating them as an audience we want to inspire with our ultimate reveal.  

2. The name you want is probably taken, but there’s a better name out there that isn’t. 

This one is a tough pill to swallow. But with most M&A deals being highly global, getting a name to clear across many trademark classes and geographies requires deep, divergent thinking. Yes, ‘Mosaic’ is taken. No, you cannot have the name ‘Fountain’. ‘Iris’ does indeed tell an intuitive metaphorical story, but four other organizations already beat you to it!  

While we wish it was easy enough to just call the U.S. Patent and Trademark Office and ask for an exception, unfortunately, it’s not. But by exhausting creative exploration, you can uncover an adjacent or new idea that tells an even richer story. Sometimes that means you’ll get lucky with a simple, metaphorical real word that isn’t yet taken. Sometimes it’s about coining a gettable, “sticky” new word, and sometimes it takes getting comfortable with an idea that is more abstract—and more ownable. With an estimated 213 million companies in the world, naming isn’t just a creative game. It’s also a numbers game. And arriving at an answer that is inspired, strategic and viable requires diligence, objectivity and a willingness to push past your comfort zone. 

3. Every name has varying degrees of legal risk—but not every risk is a deal breaker.  

To add on to point #2, almost any name you consider will have some degree of risk associated. No name is ever given an ‘all clear,’ so getting legal involved early on can help you understand what degree of risk your organization is willing to take on, which will then influence the types of names explored. What’s more, different legal teams may employ different legal strategies to pursue or secure a name, from acquiring a mark to petitioning for co-usage with another party.  

When Google launched Alphabet, even an enterprise of their size and influence couldn’t clear the pure URL of alphabet.com or secure the pure ‘alphabet’ social handles, which were currently being used by other organizations with the same name, including a division of BMW. But Google believed Alphabet was the name that best represented the story they wanted to tell, so they went to market understanding there were legal risks associated with that name and launched with another URL—the very clever www.abc.xyz. All to say, legal baggage associated with your favorite names can be investigated and often worked around, as long as you have legal embedded in your process from the very beginning. 

4. Fast-paced M&A deadlines can work in favor of a successful naming outcome.  

With all the critical decision points and process gates leading to deal closings and ultimately a new brand launch, getting a name identified, cleared, designed and launched can feel like a daunting process. At Prophet, we believe sticking to an objective process and adhering to a thoughtful naming brief as the source of truth enables teams to use time pressure in a way that works in their favor. Having less time can actually be the forcing function teams need to evaluate ideas objectively, leave emotion and biases at the door and make quick, but meaningful decisions. When there is no time to second guess or decide by consensus, teams often trust their guts and arrive at impactful answers. 

5. And finally, remember that a name is a powerful asset—but not the only asset. 

Although we always say your name is your most visible asset, it is not your only asset. This is especially important in M&A environments, where there are multiple parties coming together under a shared value proposition that is oftentimes broader and more aspirational than their previous strategies or stories. While the name can certainly signal part of this new experience, it cannot tell the complete story on its own. We help clients see their name in the context of other strategic levers, like the promise they make to their customers, their visual language, or the experiences they aim to create.  


FINAL THOUGHTS

Naming in M&A environments poses its own challenges but launching a new brand at this scale and on the global stage—and doing so with a name you feel confident in and inspired by—is a deeply rewarding experience.  

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Three Ways Brands Drive Value in Turbulent Times 

Companies often want to cut back brand marketing during recessions. It’s a mistake. 

Buckle up, brand marketers. While a recession is by no means certain, it’s clear that the markets are unsettled. As consumers cut back on their spending, layoffs start and revenues slow, jittery leadership will begin to look for ways to slash spending. Brand marketing budgets are often high on the list. 

However, that’s a mistake. A well-built portfolio of brands is critical in a recession–or even just a downturn. Healthy brands generate more trust, they’re more in demand and have more resilience and strong brands retain customers, even in the face of lower-priced alternatives. In fact, in past downturns, companies that held marketing budgets steady or increased them bounced back best, reports the Harvard Business Review

For example, Reckitt Benckiser increased marketing spending by 25% during the 2008 financial crisis, as rivals trimmed their budgets. With a larger share of voice, the UK-based consumer goods company saw revenues gain 8%, and profits rose 14%. Most of its competitors posted profit declines of 10% or more. 

The 2021 Prophet Brand Relevance Index® (BRI), which was fielded in late 2020 during the pandemic and a period of high market uncertainty, proved this point. . As obvious as it seems in hindsight, consumers flock to names they trust in times of instability. They’re less inclined to take risks, and trust is significant to them. 

In the 2021 BRI, the average relevance score of the top brands jumped 5%. In other words, in a time of uncertainty, these leading brands became more relevant than they had been in times of relative calm.  

Strong brands allow companies to justify and maintain pricing power because consumers understand the value equation. Products from companies like Apple, KitchenAid, Dyson, Bose and USAA on the whole cost more than competitors. But because consumers appreciate their value, they are willing to pay more. 

That advantage holds for B2B companies as well. When selling through intermediaries, B2B firms that deliver greater value can retain a negotiation advantage with channel partners. Weak brands have less leverage and are easier to squeeze. 

An economic downturn may mean fewer people are spending on a given category, reducing the size of the pie. But strong brands get to take a bigger bite. Here are three ways to protect and build brand value, even in stormy economic periods: 

1. Strengthen the Brand’s Foundation 

Strong brands, often with a years-long history of consistent investment, already have a robust foundation. Brand equity stems from clarity of purpose. These brands know what they promise and how to deliver on that promise in the market. That clarity of purpose ensures an efficient spending of dollars. 

Even companies that believe they’ve adequately defined their brand’s purpose need to take a closer look, finding new ways to sharpen, deepen and extend that focus. Purpose–the reason a brand exists in the world– should be clear internally. And it should shine through to customers in every offer, channel and message. 

This is also a great opportunity to lean into the stakeholder networks. With a well-defined purpose, it’s easier to ask key stakeholders–customers, employees, investors, influencers and community members– to step in and act as brand ambassadors. They can amplify a brand’s voice and purpose. Because trust matters so much more right now, word-of-mouth endorsements carry even more resonance. 

2. Make Sure the Story of Value is Clear  

While this is most evident in B2B marketing, it’s just as important when dealing with consumers. People are worried about money, especially with inflation and interest rates rising. There’s an increased focus on the value equation of their purchases. They want to understand all the trade-offs they make between price and quality.  

Customers have a lower tolerance for confusion. This is a moment for marketers to be exquisitely clear about the value in each part of their portfolio. It’s too much to expect people to confront a number of brands and sub-brands and understand why they are priced or marketed differently. Spell out precisely what they get by trading up or down within the portfolio.  

3. Stay Nimble, Rebalancing Brand and Demand Investments 

Agility is important. Marketers should be having earnest internal debates about how and whether to rebalance spending between brand and demand marketing.  

Brand marketers will–and should–argue it’s an important time to continue building trust and equity. Demand marketers, as well as financial leaders watching revenue trends most closely, will want to focus more on driving immediate sales. Our latest research, Brand and Demand Marketing: A Love Story shows that brand and demand marketers must find ways to work together – and those that do are able to deliver better outcomes that are tied to the overall business goals. Everyone wants to ensure they are the brand chosen at the end of people’s purchase decision. 

We’re betting that a year from now, CMOs will have plenty to say about how they’ve threaded this needle and which investments yielded the best results. But right now, brand and demand need to work in tandem, more closely than they have in the past. 

Strong brands can be confident that they’ll continue to lead the way, delivering the innovations that matter most to consumers. 


FINAL THOUGHTS

As economic conditions continue to soften, brand marketers should brace themselves to defend budgets–even if the U.S. enters a recession. And they should take steps to ensure those brand investments. By shoring up brand purpose, clarifying each offer’s value, tapping stakeholders’ networks and carefully considering the balance of brand and demand marketing, they can keep brands strong through every downturn and in the next cycle of recovery.  

Get in touch with our team today to help make the case to your board and executive leadership team on the value of investing in your brand during uncertain market conditions.  

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Brand-Building in the Metaverse: A Marketer’s Guide 

Understanding how this next frontier will redefine the relationship between brands and consumers.

It’s hard to have a conversation about technology these days without hearing the terms blockchain, Web 3.0, NFT, decentralization or Metaverse. These concepts are undoubtedly the building blocks of the next generation of the Internet – but as a marketing or innovation expert, what exactly should you be considering?  

Below, we provide our thoughts on how this next frontier will redefine the relationship between brands and consumers – and how brands can position themselves to win. Brands must be clear on their “why” (strategic objectives) as well as their “what” (experience value proposition and activation strategy). 

What is the Metaverse and Web 3.0? 

First a simple explanation of what the Metaverse and Web 3.0 are. Web 2.0 is built on contribution, interactivity, collaboration and social media. However, whoever controls the data on their “centralized server” has access to a lot of information.  

This imbalance is what Web 3.0 is trying to solve. Web 3.0 is a space where people operate on decentralized platforms. This means moving away from the big tech giants and intermediaries and shifting towards democratized, collective governance. The users create the content! 

We are at the beginning of the Metaverse. There are still a lot of limitations including visual, user experience, commercial infrastructure and sustainability considerations. However, brands are already out there on the Sandbox, Decentraland, or other platforms, exploring unique value propositions to offer to users and their consumers.  

Is Your Company Leveraging the Metaverse to Elevate Your Brand? 

In the Metaverse, consumer brands will continue to enable commerce, interactions and experiences for people. Brands must think about how they will engage with customers in this new world. What will their needs be? What will touchpoints–including marketing and sales channels–look like? What are the limitations, or rather, the possibilities of what a brand can stand for in the Metaverse? How should marketing campaigns be launched to attract the target audience?  

We found that brands that have invested in the Metaverse follow five key trends, which reflect a wide breadth of opportunities for marketers: 

  1. Broadcast: increase brand awareness through large live events
  2. Engage: drive consumer engagement by creating communities and immersive experiences, especially younger demographics
  3. Advocate: engage loyal customers with exclusive offerings 
  4. Inform: create gamified, interactive education on their products and services
  5. Sale: launch virtual offerings and explore new business models  

The Metaverse offers a novel and uninhibited space for brands to test and learn. Because of this, brands are eagerly diving in, testing the waters and making a splash with bold moves. However, the Metaverse is far from merely a new touchpoint/channel/platform for marketing activation. Eventually, it will redefine the entire world brands operate in.  

Marketers need to maintain a long-term perspective as they consider brand building in the Metaverse:   

1. Bolstered and Enriched Brand Promise and Equities 

Entering the Metaverse does not mean starting over. A strong brand in the physical world can focus on bolstering its image in the Metaverse by reinforcing its message, amplifying its reach and innovating new ways to delight customers.  

Because the Metaverse also offers a fundamentally different way for consumers to experience the world, brands should seize the opportunity, which offers them the ability to explore how their existing equities can be reimagined in a new space and in a holistic and multidimensional way. Entering the Metaverse can unleashes new possibilities for both themselves and their customers.   

For instance, Nike created the virtual world, Nikeland, on Roblox’s online gaming platform. Nikeland is complete with customizable avatars, Nike headquarters buildings, mini-games and apparel. It builds on the brand’s mission to create immersive and engaging communities that offer a personalized experience for every user.  

Louis Vuitton, one of the most storied brands in the fashion industry, has embraced digital transformation in the Web 2.0 world with a successful omnichannel approach. In the Metaverse, LV has continued to stay at the front of the pack by launching the mobile game “Louis: The Game” to commemorate the 200th birthday of its founder. In the game, players can explore six different Metaverse worlds while learning about LV’s history, earning virtual branded memorabilia and even collecting in-game only NFTs. The game allows the brand to honor its deep heritage and timeless legacy in an entirely new way that enriches the customer experience and deepens their connection to the brand. 

2. Multi-Sensorial and Immersive Branded Experience 

Regardless of which approach you choose to take, the Metaverse has meaningful implications on how a brand comes to life visually. Nike extends its signature curve of the Swoosh into the Nikeland with a bright and dynamic color palette. LV applies its iconic emblem to the character and landscape designs of “Louis: The Game.” These robust visual assets have made their Metaverse experiences stand out among the others.  

However, in the Metaverse, establishing a brand using logos, typography and color palettes alone is not enough. Current brand identities and visual systems are largely made for two-dimensional usage, but the Metaverse requires us to expand our thinking and create brands that are conversational, multidimensional and multi-sensorial. Brands need to create meaningful interactions to immerse the users and reward their visit. 

How does a brand express itself through aspects such as dimension, motion, sound, touch and conversation? How can a brand build towards a holistic identity that is not just an eye-catching way to create buzz, but rather a lasting way to reinforce what it stands for and position itself for long-term growth? These are the important questions brands must consider while entering the Metaverse. 

Think About Your Metaverse Strategy Today 

Whether you’re a skeptic or an evangelist, there is no doubt that the Metaverse will create an unprecedented shift in how consumers and brands interact. As Web 3.0 technologies continue to develop and companies race to build our future virtual world, brands must think about how they will show up and how they will engage their customers in the marketplace of tomorrow. Traditional and digitally native brands alike have an opportunity to redefine themselves in the hearts and minds – and screens – of their consumers.  

As a wrap up, these are the questions brands must be able to answer: 

  1. Your target audience: Who is hanging out there? 
  2. Your business outcome: What are your strategic objectives? 
  3. Your experience value proposition: What do you do there? 
  4. Your campaign strategy: How to activate and engage your audience?
  5. Your costs: What costs do you need to have in mind?  

FINAL THOUGHTS

The Metaverse is like the Sagrada Familia in Barcelona; it will take a while to complete. But we have strong convictions on how to be successful in the Metaverse. Stay tuned for our next articles that address these points in more detail.

Schedule a conversation with our digital practice today to discuss how your brand can be set up to win.

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Demystifying Today’s Confusion Around Brand Purpose and Social Impact

Both brand purpose and ESG strategy are important to build a relevant brand, but they do not have to be one and the same.  

The idea of brand purpose is not new. For years Prophet has helped clients fuel business growth by defining their purpose – an evergreen and inspirational North Star that articulates the core business strategy and guides internal and external audiences by answering two key questions: What do we believe? And why do we exist? While brand purpose has long been a critical first step in building and maintaining brand relevance, today, it has become a highly discussed and often misunderstood catchphrase.

A recent “Wall Street Journal” article investigated “the brands-with-purpose strategy,” questioning Unilever’s decision to assign each of its 400 brands a socially or environmentally focused purpose. As purpose continues to rise to the top of brand builders’ “to do” lists, these conversations illustrate a growing misconception: Purpose is being conflated with social or environmental impact. While it’s true that purpose and Environmental, Social, and Governance (ESG) strategies are both critical to building a relevant brand, not all brands’ core reasons for existing can or should be centered around social or environmental impact. 

Brand Purpose and Its History

Over the last century, in the first iteration of purpose, brands often focused on signaling strength and building employees’ and shareholders’ confidence. Under legendary CEO Jack Welch in the 1980s, General Electric existed “to be the world’s most valuable company.” Brands formed consumer relationships through one-way mass media communication, and consumers had more transactional expectations of brands, so many brands anchored their purpose (or mission, as they were often called) around a strong product portfolio, optimized operations and a healthy balance sheet that resonated primarily with shareholders. This is no longer a viable option.

In today’s world of unprecedented access to data and elevated customer expectations, brands have an ability – and indeed a responsibility – to speak directly to the needs and motivations of consumers. McDonald’s falls squarely in this realm. The fast-food giant exists “to make delicious feel-good moments easy for everyone.” With a focus on the customer, the brand is built around taste, happiness, ease and accessibility. Many brands today successfully anchor their purpose around the key impact they make in customers’ lives, even as they implement strong and cohesive ESG strategies.

Over the past two years, the pandemic, social justice movements, political polarization and climate crisis have accelerated the transition to the next stage of brand purpose. In this environment, consumers are more socially- and environmentally-minded than ever before and, thus, a socially- or environmentally-oriented purpose can be a viable strategy.

For those brands attempting to build relevance by elevating social or environmental impact into their purpose, two key considerations can help ensure authenticity and avoid accusations of virtue signaling or greenwashing – creating an authentic connection between the business model and social or environmental impact and taking meaningful action to back up the brand’s purpose.

Create an Authentic Connection Between the Business Model and Social or Environmental Impact

The closer the inherent connection between the business model and the social or environmental impact at hand, the more authentic the purpose becomes. Patagonia’s dedication to climate protection, for example, is a natural fit with its outdoorsy audience. Tesla’s quest “to accelerate the world’s transition to sustainable energy” aligns with the gas-free cars it produces. Oat milk brand Oatly exists “to make it easy for people to turn what they eat and drink into personal moments of healthy joy without recklessly taxing the planet’s resources in the process.” As an oat-based milk provider, Oatly can credibly deliver against this purpose simply by continuing to produce oat milk over dairy or almond milk.

Take Meaningful Action to Back up a Brand’s Purpose

Brands must also consistently take real, substantial action to bring their purpose to life. Oatly backs up its purpose with actions like opting to include its environmental impact statistics on the back of its packaging and leading a campaign to encourage lawmakers to require all food producers do the same. Some of Unilever’s brands including Ben & Jerry’s and Dove have been able to authentically build social impact into their purpose through true dedication, as evidenced by in-market moves over many years. Including their recent move to go as far as to sue their parent company “to protect the brand and social integrity Ben & Jerry’s has spent decades building.”

The idea that brand purpose must always be focused on social or environmental impact is a misconception. It is neither authentic nor prudent for every brand to integrate social or environmental impact into its purpose, and many brands with strong ESG strategies do not articulate social or environmental impact as part of why they exist.

Warby Parker, for example, investigated what mattered most to its customers and decided to focus its purpose on style, fit, value and the buying experience – needs that its customers valued more than the brand’s ESG commitment to donate a pair of glasses for every pair purchased. The beloved direct-to-consumer glasses and contacts brand exists today because they “believe that buying glasses should be easy and fun. It should leave you happy and good-looking, with money in your pocket.” While its “buy a pair, give a pair” ESG strategy continues to be a critical driver of employee recruitment and retention, its purpose centers on the key impact it makes in consumers’ lives.

Purpose is the North Star – It’s Not the Whole Universe.

Purpose does not – and should not – provide all the critical elements of a strong brand strategy. A purpose must be brought to life through everything the brand does – internally, by whom it hires, how it supports its employees and how it recognizes the values it stands for, and externally, by the promise it makes to deliver value for customers, the way it portrays itself through its promotional marketing, and, yes, its ESG strategy.

Hellmann’s mayonnaise appears to be following in the footsteps of Ben & Jerry’s and Dove, after integrating an explicit emphasis on social impact into its purpose a few years ago. The condiment brand appears to have an authentic dedication to fighting food waste and is determined to build its brand about this social impact. Additionally, Hellmann’s focused on this food waste initiative explicitly and exclusively in this year’s Super Bowl commercial.

If it continues to consistently live up to this purpose through its actions as well as its advertising, it can create a relevant brand that could differentiate it from the competition – as long as it also continues to relentlessly reinforce its core promise to deliver the best tasting mayonnaise on the shelf. Though the Super Bowl commercial focused entirely on fighting food waste, its tagline “Make taste, not waste” indicates that Hellmann’s is on the right track to creating a relevant brand purpose by balancing consumer benefit and social impact.


FINAL THOUGHTS

Many relevant brands build their purposes around a dedication to making an impact in customers’ lives and maintain a strong ESG strategy that dovetails with this overarching purpose. Those brands who do opt to explicitly integrate a social or environmental impact into their purposes must create a coherent connection to the business model and deliver sustained moves in-market to remain relevant and authentic. 

Ready to understand what role social or environmental impact should play in your brand and organization?

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