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Why Purpose-Led Brands are Winning with Consumers

There’s a new contract, and people expect companies they buy from to protect employees, society and the planet.

For years, companies told consumers what their brand stood for, shouting it from four-story billboards. Whether the company lived up to that purpose didn’t really matter – there wasn’t an easy way for consumers to see behind closed doors nor engage in dialogue. Then, technology transformed consumer expectations. Consumers demanded two-way interactions, constant sharing and ubiquitous connectivity. They were no longer willing to be talked at but rather wanted to be talked to. So, brands built long-term strategies around the voice of the consumer – ensuring their purpose and what they put into the market reflected what target consumers had told them. For a while, that was enough. But now, we are at another inflection point.

“Brands today must not only be vocal in tough conversations but also take action to push the causes they support forward.”

As the world, and more specifically, the United States grapples with the causes and effects of COVID-19, the #MeToo movement, Black Lives Matter, political unrest, climate change, the wealth gap, and more, brands are now being asked to take a stance. Brands today must not only be vocal in tough conversations but also take action to push the causes they support forward.

Human Values are at the Core of Purpose-Led Brands

The Business Roundtable, a non-profit association of CEOs from major U.S. companies, recently asserted that “each of our stakeholders is essential” – including customers, employees, suppliers, communities, and shareholders and “we commit to deliver value for all of them.”

And yet, this idea of shared value will not be enough moving forward. Shared value implies something insular – engaging with and providing value to those already inside a brand’s bubble. At Prophet, we believe brands need, at their core, to have the shared human values that many global societies are striving toward in the twenty-first century: freedom, equality, solidarity, tolerance, respect for nature, and shared responsibility.

A recent Prophet survey asked business leaders about how they define trust in times of crisis. Results demonstrate that consumers are at a tipping point – it is no longer acceptable for brands to only focus on shared value. Now successful brands must demonstrate a focus on these shared human values.

When asked in April, 58 percent of consumers said to earn or keep their trust, it was very-to-extremely important for a brand to offer a relevant set of beliefs and values. By June, this number had jumped to 69 percent. Consumers are no longer willing to trust brands that have fallen out of touch with society’s progress; in fact, 78 percent of consumers believe companies have a larger role to play in society than just looking after their self-interests. Employees feel similarly; in a McKinsey survey, employees said that contributing to society should be a top priority of their companies.

While a brand purpose is critical in providing a ‘North Star’ for an organization’s strategy and culture, it is not sufficient. Companies must ensure their purpose is broad-based and bold, not myopic or near-sighted. They must then authentically and holistically act against this purpose. Today, companies struggle to complete both, equally important, tasks. McKinsey’s study demonstrated that only 21 percent of purpose statements focus on contributing to society and only 42 percent of employees at US companies believe their company’s stated “purpose” had much effect.

Those that do not boldly demonstrate action related to their purpose are penalized– 53 percent of consumers who are disappointed with a brand’s words or actions on a societal issue complain about it, 47 percent walk away from the brand in frustration, and 17 percent never come back. On the other hand, those brands that demonstrate a continued focus through action are rewarded. Unilever’s “Sustainable Living” brands are growing 50 percent faster than the company’s other brands and delivering more than 60 percent of the company’s growth.

Four Ways to Rethink Brand Purpose

We believe brands that are willing to actively demonstrate their brand purpose can push society forward by:

  1. Defining a human value(s) they stand behind. Brands must consider the societal context in which they exist and the human needs present in this context; they must define which of these needs they are willing to support and push forward.
  2. Ensuring their brand purpose is based on that human value(s). Brands must use this understanding of societal context and human values to ensure their purpose encompasses them. Rather than focusing on what they believe they should deliver, companies must focus more holistically on what society needs them to deliver.
  3. Continuously messaging and providing action to demonstrate commitment to their purpose. Brands must put their purpose into action, continuously speaking out and delivering relevant products, services, experiences, charitable giving, campaigns and events to market the human value they are trying to push forward.
  4. Maintaining focus on this purpose internally. Business leaders must demonstrate to their employees and key stakeholders that a consistent focus on brand purpose is not only rewarded but required. Building an organization and culture around the brand purpose will empower employees to hold the organization accountable to its words.

FINAL THOUGHTS

The wariness of brands to take action – whether because they fear losing profit or stickiness with target consumers – is misplaced. Brands that have a well-defined and bold purpose often attract and retain the best talent. In sum, brands that define a bold purpose and truly deliver on it don’t lose profitability, they gain it. Furthermore, brands concerned that their actions will alienate consumers forget that the shared human values their purpose was built on were those that were relevant to core, target consumers. Though brands that act on their purpose may lose business in the short-term, they bolster their relationship with their core consumers, leading to longer-term gains.

Brands that take these steps have a chance to not only win with consumers and grow faster than their competitors, but also positively influence society in a long-lasting way. Interested in learning more about how Prophet helps our clients create actionable purpose-led brands?

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Brand Voice in a Crisis: What to Say When We’re All Speechless

A strong voice gives messages power, making a sprawling corporation feel like a single human.

The first time I was hired to develop a brand voice for a company was in 2008. Times were tough for a lot of corporations, and my client—a big, famous, legacy tech company—was no exception. They were feeling the effects of the financial collapse. Bleeding capital. Losing customers. Even the headquarters seemed stuck in the glory of the previous decade.

At the time, brand voice was quickly rising as a tool every brand had to have in its arsenal.  Before that, people talked about “brand personality” or “tone”, but it usually only got a half-page in a hundred-page Brand Guidelines book that covered things like font kerning and logo lockup. During that same moment, floating through the zeitgeist, was a sense that companies needed to stand for something more than just profits. The importance of having and promoting a strong brand purpose was on the rise. The economic fallout had created a general distrust after so many companies had acted in bad faith.

Companies that were driven towards a higher purpose, could better weather the times. As Nikos Mourkogiannis wrote in his book, Purpose: The Starting Point of Great Companies, “Not all companies have a purpose—but enduringly successful ones do.” Of course, having a purpose is not enough on its own. The organization around that brand must bring it to life through action and expression.

Enter brand voice.

As a person, my word choice and the way I speak express who I am and what matters to me. Brands are no different than people in that sense. A strong voice gives messages power. When individual writers and communicators across an organization can effectively unite around a clear style, rhythm, and point of view, it resonates with the people they are talking to and makes a sprawling corporation feel like a single human. Audiences, in turn, feel treated humanely. And, depending on the nature of the company and its voice, consumers can also feel cared for. Or amused. Or understood. Or put at ease. It all depends on who the company is—really, truly, deeply—and what it stands for.

Back in 2008, my client needed its audiences to get to know the company again, to believe that their positive memories added up to a brand they could trust. And in order to create a voice that could do that effectively, we had to get to know the company at a soul level.  We developed a way of talking and writing that represented who they’d been and where they were going. We trained stakeholders to use this voice to connect with the needs, desires and emotions of their audiences, to help strengthen positive feelings and make the people they spoke to feel cared for and confident. And it helped the company know what to say and how to say it, even in a crisis, when a lot of the news was bad news.

“We trained stakeholders to use this voice to connect with the needs, desires and emotions of their audiences, to help strengthen positive feelings and make the people they spoke to feel cared for and confident.”

And here we are again. Another crisis—or crises. We see brands trying to insert themselves into the reality we all face daily. In the days after we were all ordered inside due to the pandemic, and then, again, after the murder of George Floyd, our inboxes were flooded with messages from brands. Some of these messages were drawn from the core beliefs of the company. For example, Ben & Jerry’s issued a call to “dismantle white supremacy” in the wake of the protests, and it did not feel like lip service because it aligned with who they had always been. Bratz dolls came right out with a statement that quoted Desmond Tutu—and people responded positively in part because Bratz dolls had always promoted diversity and inclusion. As one twitter user said, “Bratz was the first toy brand I remember that really popularized black/minority ethnic dolls…They’ve been amazing for years!”

These were the messages that felt human, leaving us with a feeling of warmth, and a strengthened sense of loyalty. They used a voice that came out of who they are, what they’ve been, where they are going, what they believe. They were authentically drawn from each company’s real sense of purpose. Other companies felt the pressure to come out with a statement, too. But when they did not have the history to back up their words, the message felt hollow and patronizing.

So, the ultimate question. How can a company find an authentic voice to connect with people in crisis? Like all great changes, it begins with learning—who you are as a brand, and what you stand for.

  • A brand voice makes it possible for communicators across an organization to express its core beliefs—which means that before you find your voice, you have to have a deep look at who you are and what really matters to you. Look at your history as a company. What have been the moments where you showed the world your true colors? When has your company taken an action because of a value other than profits? Make sure to build that purpose into the voice.
  • A brand voice is a living, flexible tool that anyone can use—not just those of us who self-identify as writers. Start with big ideas about how you want to sound as a brand, finding a single persona or a short list (no more than three!) of attributes. But then, get granular. Find the tactics that everyone can employ every time they express themselves as the brand. Remember that the tool has to work for all circumstances, so help users learn to flex depending on the message and the audience.
  • A brand voice can unite your employees and change the way you work for the better.  Invest in training for all stakeholders and partners—and emphasize the importance of using the voice every day. In our experience, when leadership is really behind the implementation of the voice, that’s when it becomes a company-wide habit that affects the way work is done.

FINAL THOUGHTS

Brand voice is not a trend. Brand purpose is not just a mural on the wall behind reception. As we see in today’s ecosystem, when they are real and true and prioritized, these tools enable companies to express themselves with strength and resolve.

Then, when a crisis hits, there’s no need for soul searching. There’s no need to panic. The only thing to do is to let the purpose guide and the brand voice do its work, enabling messages and responses that come directly from the company’s core. And, in times of chaos and uncertainty, those are the voices we hear most clearly—and the voices we desperately need.

Learn more about Prophet’s verbal branding work and start using communication tools to express your brand and business strategy. 

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Winning in the Post-COVID-19 World: Trends Here to Stay

Employees yearn for more meaning at work and customers are looking for brands they can respect and admire.

In the talk themed “Winning in the Post-COVID-19 World,” I reflected on what changes prompted by COVID-19 are likely to persist and what strategies and programs winning organizations are likely to employ, drawing from the books Aaker on Branding, Creating Signature Stories and Owning Game-Changing Subcategories.

There have been a host of changes in human attitudes and behaviors that have been stimulated or more frequently accelerated by COVID-19.  Many of these will persist, some at a high level, and will affect the strategy options for many industries.

Here are the changes that are here to stay beyond 2020.

1. Search for meaning in life and work.

The virus has prompted many to reevaluate their life and work and assess what is really important. The result is often a realization that their hopes and time allocation need to change to elevate what is truly meaningful and rewarding to them.

One implication is that it is more important than ever for organizations to have a higher purpose that engenders inspiration among both employees looking for meaning at work and customers looking for brands they can respect and admire. A higher purpose can be offer-driven (we make insanely great products), culture-driven (our students and faculty have confidence without attitude) or social/environmentally driven (Avon walk for breast cancer; Unilever’s Sustainable Living Plan)

2. Need for social connections.

The shelter-in-place world made even more vivid what is universally known and true, that for most people, social interaction and connection is a valued and, indeed, a necessary part of human existence.

“It is more important than ever for organizations to have a higher purpose that engenders inspiration among both employees looking for meaning at work and customers looking for brands they can respect and admire.”

That means that brand communities will be even more valuable to both people and brands. A brand community is a group of people that share involvement in an activity, issue or interest area with a brand as a focal point.  Examples are the Harley-Davidsons HOGS (motorcycles and rides), Etsy craft makers (how to make and market crafts), Sephora Beauty Insider (talk, be inspired and get advice about beauty).  They all provide opportunities to interact, connect and belong to a group in addition to providing the brand with a strong link to a committed customer base

3. Valuing trust and authenticity

The importance of earning trust in brands and institutions, which has been eroding for well over a decade, was reaffirmed in the days of the pandemic and surrounding events.  In this context, being able to communicate in an authentic, trustworthy way becomes critical. That means that stories must play a more important role because facts by themselves are not effective communication vehicles and often do not suggest trust or authenticity.

Stories, particular signature stories that “Wow!” and communicate a strategic message, are more able to communicate values and programs that engender trust and authenticity.  When well selected and presented, they will attract attention, change perceptions, distract from counter-arguing, affect behavior and be authentically remembered.

4. Acceleration of change

There were a host of changes that were underway before COVID-19, like working from home, the use of remote conferencing, concern about health and safety, the rise of e-commerce and the power of social media. But all these trends and more have accelerated as has the level of market dynamics. It is increasingly problematic to assume that future business will look the same as the past and that a “my brand is better than your brand” marketing strategy will work.

Strategically, there needs to be a realization that the best path to growth is now owning new subcategories that change the customer experience or brand relationship. The first task is to find or create a compelling set of “must-haves” that are valued by a core customer group. The second is to become the new subcategory exemplar brand that positions, scales and builds barriers.

On May 22, 2020, David Aaker shared these insights with a live audience of 180,000 in India at the MastersSpeak series sponsored by Future Generali, a major India Life Insures Company.  To learn more about creating subcategories that drive uncommon growth at a time of disruption, pick up a copy of his new book, Owning Game-Changing Subcategories: Uncommon Growth in the Digital Age. It is available wherever books are sold.      


FINAL THOUGHTS

As the world moves through the pandemic, marketers must stay alert to the zeitgeist. Many of these changes–especially the need for human connection,, the search for meaning and comfort with the ramped-up pace of change–will be with us for some time. Brands should respond accordingly.

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Rethink Luxury – 7 Actions for Luxury Brands to Accelerate Growth Post-COVID-19

Today’s success stories are using direct-to-consumer thinking, surprising partnerships and new data strategies.

How digital transformation and COVID-19 are forcing the luxury industry to accelerate its transformation efforts and shift toward a new set of values and behaviors.

Building Resilience in Luxury is Both a Marathon and a Sprint

Luxury brands have long been masterful in building strong customer loyalty – many have even built a legacy through loyalty – offering more than just products, the values they embody differentiate them from their competitors and help customers to identify more closely with them while also establishing that elusive emotional bond.

And with COVID-19 putting an abrupt halt on many non-essential sales, the luxury industry should prepare itself by anticipating the societal and economic shifts that may well affect consumer sentiment and behavior. Particularly, if customers start to favor more sustainable and responsible consumption.

Now, more than ever, a luxury icon – like any other brand – needs to adapt, stay curious and constantly be looking for ways to exceed the expectations of its customers. In order to steer that effort, we put together seven actions luxury brands should take now to protect and accelerate their growth:

1. Revisit the Core

How relevant is your core DNA? Does it still evoke the same desire it once did? Have you stayed true to it and ensured your purpose – your reason for being – still resonates and holds strong in the modern age? Think of the stories you are telling, the themes that you associate yourself with. After a longer period of success, a unique heritage often gets cluttered by opportunistic moves and messages. Focus on what makes you strong and let go of the unnecessary noise. And it is not about a new logo, go deeper, find your guiding star, the differentiating quality that guided your previous success.

2. Define and Listen to Your Audience

This should actually be pretty easy because it is by definition a very limited amount of people, right? Unfortunately, the importance of product and service design still sits higher than market insights for luxury brands, lagging behind the approach taken by the FMCG industry with leading brands like P&G and Unilever placing higher importance on qualitative and quantitative customer insights.

Remember, what you offer is exclusive yet attainable and attractive to your target audiences – a group of individuals with unique and specific needs and expectations. Imagine their dreams, think in their context. What is driving those individuals or cohorts? You might apply your very own micro-segmentation, leaving standard sociodemographic or maturity segmentations behind. Take regional specifics into account and make sure that it’s not just a gut feel, but rooted in evidence. When have you last discussed and agreed on two to three core personas to inform your actions? Be sure to install the right antenna for market developments. Do not only try to envision future needs, look left and right to learn from the best. In the end, it is the combination of creative potential and insights that leads to the new edge.

3. Think Direct to Consumer (DTC) First

Luxury brands cater to a select number of clients, so why leave the relationship to intermediaries? Even if those third parties are meticulously curated, you will never be able to collect the entire customer feedback if you are not dealing directly with those individuals. Only that direct response assures you have your finger on the pulse of the market, both to adapt the products but also the service that complements the overall experience. Of course, you want to increase reach, but new business models allow for direct interaction even from afar. Imagine what you can do with the increased intelligence. E-commerce still has a way to go in luxury having been discussed for years and implemented rather hesitantly because of concerns in translating the authentic luxury experience in the digital realm. But concepts and technologies are developing fast and the traditional role of partners and channels are blurring. Accept that going DTC is a joint endeavor and will not be perfect from the start.

The fastest-growing brands like Chrono24, Chronext (watch platforms) or Tesla and Polestar in the electric mobility space are eliminating the middle man. Richemont was pioneering e-commerce with NET-A-PORTER and MR PORTER and they learned their way through, now also partnering with Alibaba’s Luxury Pavilion –  further pushing its Asian exposure. In the midst of the COVID-19 crisis, even Patek Philippe has allowed their authorized dealers to offer their watches online. Watches & Wonders, the Geneva watch fair with a strong Richemont backing, swapped to a virtual-only conference in just a few weeks. Everybody accepted it wasn’t perfect, yet still, it was a blast.

4. Curate the Experience

To provide luxury at scale, you need to tell memorable stories and be able to duplicate experience standards. Selecting and developing the right context and platforms has become as important as curating the living ecosystem. Doing all that without clearly defined experience principles? Impossible. Navigating through the ever-increasing stack of platforms? Necessary! For example, the meticulously curated Las Vegas resort The Cosmopolitan seamlessly integrates stories, guests, platforms and social media to continuously learn and adapt to changing needs and trends. Also, the auction houses like Phillips and Sotheby’s are masters in curation. The sale of the Rolex Paul Newman Daytona was a benchmark example of curation, storytelling, partnership and as a result, was also a game-changer for the whole auction industry.

Pick your core relationship platform – this might very likely be your website – impart your DNA and focus on your audience by constantly refining the platform. Again, make sure you understand every single move of your audience. There are plenty of tools out there to help you understand and optimize. And remember, the most successful luxury brands are not necessarily the most advanced in digital technologies, but they learned to curate an exceptional experience across platforms and channels. They tell the best stories and those stories can live in all formats.

5. Combine Intuition with Hard Data

For centuries, those in the know were able to better serve the needs of the demanding. That has not changed. Nowadays, each and every individual is expecting nothing less than a perfect personalized experience. Data collection has gone way beyond retailers with transaction and credit card data. Loyalty programs and search behaviors are now used to complement the data set and social media is increasingly used to contextualize this data. Despite a reluctance or even allergic reaction, to giving away more intimate data, luxury clients expect you to understand and anticipate what they want, tailoring offers and solutions that will seduce them and lock them into your own proprietary ecosystem. Having the right data strategy in place to combine demographic, transactional and behavioral data has become as necessary as having a content strategy. Leveraging your expertise and intuition with a new set of quality data allows you to anticipate the upcoming moves and outmaneuver the competition.

“Having the right data strategy in place to combine demographic, transactional and behavioral data has become as necessary as having a content strategy.”

The hospitality and travel industry has a longstanding experience with their loyalty programs like Bonvoy by Marriott or Miles & More by Lufthansa. They combine guest insights with agile processes to come up with unique propositions that increase loyalty way beyond awards. Similar to the FMCG brands on customer insights, the luxury industry can learn a lot from the Amazons in the West and the Alibabas in the East when it comes to collecting and using data. Imagine where Rolex, Patek Philippe or Audemars Piguet could go if they leveraged their already rich data set that they collected with their product and client register by enhancing the data quality and using the insights to have a deeper, more direct interaction with their loyal following.

6. Grow with the Right Partners

Partnering along the brand experience has become another high-performance discipline. Originally something that goes back to the Fifties and Sixties, when luxury distributors like Asprey, Cairelli, Tiffany or Beyer were double signing with Rolex, Patek and the likes, new technologies and new consumer generations are supercharging partnerships. Dealers, ambassadors, authorities, celebrities, influencers, brand partners and many more specialized partners are involved to deliver that high-end curated experience. And it’s not just about the next transaction, it’s about creating stories and experiences that you would simply not be able to deliver on your own. It is now widely accepted to collaborate along any step of the experience chain, from comms to product to after-sales and, of course, also in the wider ecosystem of any brand experience. Your customers don’t care whether you do everything by yourself, they just expect the perfect experience from your brand. Lately, fueled by social media, the trend of co-branding has again proved to be a successful way to expand into new segments or reposition your core, like Louis Vuitton with Supreme, Caran d’Ache with Paul Smith or Rimowa with OFF-WHITE. Collaborate with the best.

7. Be bold, stay focused and stick to your plan

Your marketing budget is limited, so be focused. Stick to who you are and whom you are catering for. What is the content that inspires your demanding clientele? Where do they indulge, how do they escape and feel good? Where do you touch them, what are the right messages? Besides extreme value creation, it is also about the right voice and tone at the right time – always like ‘a first date’. Have a clear plan, stick to it, be creative, surprise! And remember, you got rid of a lot of clutter in the first place, do not add any unnecessary noise now. You cannot and you do not want to please everybody. Stay focused.

It was a brave decision by the Swiss watch brand Breitling to reposition and also to step out of the traditional watches & jewelry fairs. Investing more in its own innovative global experience platforms. Launching a new collection via webcasts was obviously also a lucky decision, now that everybody struggles to go virtual at high speed.

The car industry is struggling a bit here. New electric vehicle concepts for example are only very slowly getting traction. BMW, a bold inventor with the presentation of the i3 series concept at IAA in 2011 was not really able to sustain the momentum and stay ahead of the competition, Tesla was.


FINAL THOUGHTS

Get serious about taking a stand and nurture the new luxury. Conspicuous consumption goes out of favor and we’re witnessing a call for a new, silent, meaningful and humble approach to luxury. We saw that trend growing long before COVID, but the crisis has definitely served as an accelerator. Purpose and experience rather than prestige and status are set to take precedent. Removing consumer guilt, living ethically and leaving a positive mark instead of excessive consumption.

But again, always link your activities to your customers’ needs and expectations. Your targets are shifting too, increasingly from emerging markets, female and younger audiences. What will the increasing dominance of Chinese consumers mean for your value proposition?

Now is the right time to pause, re-adjust, focus and then accelerate with a refined proposition. In the end, it is about creating something that we have not imagined before. Something luxuriously new.

Our experts are happy to share more insights on how the current situation impacts the luxury sector and what businesses need to do next. Reach out today!

This article was co-authored by Roland Ott, an expert in Luxury Brand Management. He was part of the successful growth teams at the Richemont Maisons IWC Schaffhausen and Roger Dubuis and the relaunch of Carl F. Bucherer in Brand, Marketing & Communications Management. He is an Alumni of the University of St. Gallen and the Stanford Graduate School of Business.

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Brand Behaviors: Critical for Leaders, Managers & Employees

Empower employees to interact with customers differently, adjusting policies to reflect new hardships.

Think about the last time you ordered a cup of coffee. Did the barista who took your order smile and welcome you? Or was it clear she was ready for his shift to be over? How about the last time you needed to speak to a customer service manager? Was the manager reading robotically from a script, or did she take the time to ask questions and empathize with your situation?

How your business leaders, managers and employees show up has always been a critical input for how customers feel about your brand. And when you have customers interacting with your brand weekly, daily, or even hourly – consistently positive interactions can drive trust, loyalty and repeat business, while even just a few negative interactions can cause customers to jump ship and head to a competitor.

This is nothing new – experiences have been built, and brands have grown through the way employees treat customers. What’s new is how important these brand behaviors will be as the world adjusts to its new normal. We are being thrown, without warning, into new ways of interacting with customers. Brands that lead with care and purpose will build trust. Brands that are careless in their actions run the risk of losing out.

A New Normal for Brand Behaviors

Brands with well-defined brand behaviors or service styles have a competitive advantage over their peers. There’s a reason why Team Members at Chick-fil-A always respond with a “my pleasure” and a genuine smile when you say, “thank you.” It’s core to who they are and how they serve, and it’s ingrained in every employee from day 1.

“Consistently positive interactions can drive trust, loyalty and repeat business, while even just a few negative interactions can cause customers to jump ship and head to a competitor.”

Something as simple as greeting a guest with a smile, or taking a few seconds to ask how their day is going will always be strong examples of Brand Behaviors that build loyalty. But think for a minute about the new behaviors that might drive trust in a post-COVID-19 world:

  • An employee wiping down a touchscreen after every customer
  • A cashier being empowered to give a nurse a free cup of coffee
  • A manager knowing how to empathize with a customer who can’t make a monthly payment because he’s been furloughed

Now, the stakes are higher – the presence of positive, on-brand behaviors will build trust and loyalty, while the absence of these behaviors will force customers to go elsewhere. As a leader, it’s a great time to revisit the standards for how your employees interact with customers and how your brand is experienced.

Building Brand Behaviors

Implementing a set of on-brand brand behaviors is an intuitive, yet careful process with many critical milestones.

1. Clarify the Ambition

Well before jumping right to “what do I want my employees to say or do”, it’s important to start with an ambition. At the end of the day, Brand Behaviors must be thought of strategically in the context of what your brand stands for and link back to the priorities of the business.

  • What is core to our brand purpose and which aspects of our brand do we want employees to bring to life?
  • How do we want our customers to feel?
  • Why is this important to the overall growth of our business?

2. Define the Behaviors

With the ambition in place, you can translate the strategy to behaviors for customer-facing employees; behaviors that will be recognized and appreciated by your customers, and easy to learn and display without disrupting the roles and responsibilities of frontline employees.

  • Where are the moments that matter most in the customer’s journey and experience with our brand?
  • How can our employees bring our brand to life in these moments in simple, memorable ways?
  • Are there exemplary on-brand behaviors happening already that we can share more broadly? And which new behaviors will our employees be excited to display?

3. Codify and Share the Behaviors

Even they go nowhere without thoughtful planning to share and create buy-in with those expected to display them. Here it’s all about simplifying the ask and telling a compelling story that gets employees excited to play a role.

  • Why are we asking our employees to display these behaviors?
  • What will get our team excited and incentivized to display these behaviors?
  • How will these behaviors empower our team to serve our customers better, while being authentic to themselves and to our brand?

Getting Started

Defining and implementing Brand Behaviors is a journey, but it’s a journey that can get started with a few simple steps:

  1. Reflect on how you want your brand to show up, especially in this uncertain world
  2. Think of the simple but memorable behaviors that will bring your brand to life and stand-out from the competition
  3. Connect your team to the bigger why and make it easy for them to exhibit new behaviors

FINAL THOUGHTS

Now more than ever the experience your customers have with your brand is paramount. And the brands that come out ahead at the end of this crisis are the ones that will have started by leading with care and purpose.

For more on equipping your teams to display brand behaviors through learning and development, read this article titled “10 Things to Say to Your Team Right Now” or contact us today.

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Five Consumer Trends Impacting Future Business Growth

Self-care, moving from “I” to “we,” and a reshuffled e-commerce world shake-up experience expectations.

The COVID-19 pandemic will have a long-lasting impact on businesses and their customers. Some industries have been disrupted, while others thrive despite the crisis. Leading through disruptive times requires businesses to consider new consumer perspectives, rethink their value propositions and further accelerate their digital transformations. At Prophet, we have identified two imperatives that will help businesses achieve uncommon growth in the post-COVID-19 world: adapting to the new normal consumers and accelerating digital transformation.

Considering Asia is ahead in getting back to a new normal, in this series, we will delve into the underlying consumer trends, social and technological enablers as well as emerging patterns of digital transformation that all work to point out new opportunities in Asia and also soon to be in the rest of the world.

Adapting to the New Normal Consumers: Five Major Customer Experience Trends

In order to reimagine your business, you must first understand the new consumer habits, perspectives and expectations arising from the pandemic. COVID-19 does not change the fundamentals, but it is accelerating the trends that were underway. As consumers are immobilized at home, they are forced to rethink how we work, learn, live, entertain, stay healthy and buy. Such seismic changes are a wake-up call for companies to rethink their value propositions and accelerate digital transformation.

1. More “We” Less “I”: A Greater Sense of Community and Social Responsibility

After years of rising individualism and personal expression, the pandemic has sparked a greater sense of community and civism. As social interactions are limited, the post-COVID-19 world will be one that is characterized by a shared desire for deeper, more meaningful connections both with others as well as the planet.

Companies will be held accountable for their business decisions more than ever. Fashion, for example, will accelerate its efforts to deliver more sustainable and responsible products through a cleaner value chain. In response to this trend, global companies are taking the initiative to become more eco-conscious. In May 2020, fashion label The R Collective launched its Denim Reimagined collection using surplus denim from Levi’s jeans. Officially endorsed by Levi’s, the upcycling collection was launched at Levi’s flagship store in Hong Kong.

Deeply impacted, the travel industry will also need to reinvent itself to match the new travelers’ expectations. Post-lockdown, travelers will not only expect the highest degree of protection and hygiene, but they will also travel with a renewed sense of purpose and sensitivity towards the health of people and the planet. They will actively search for activities and experiences tied to communities and look for greater transparency on sustainable measures taken while on the road.

2. Home Sweet Home: A Safe Haven Where Everything Happens

While the world can expect a surge in attendance at theatres, bars and gyms once quarantine measures are lifted, many consumers will have already formed routines indoors. With the convenience brought upon by a range of digital platforms such as TikTok (抖音), Hema Fresh (盒马鲜生) and Ele.me (饿了么), the home has become a place where we can work, learn, shop, exercise, socialize and entertain.

For example, many have found peace of mind in the kitchen and picked up home-cooking during the crisis. McCormick, a food company that manufactures spices and condiments, is seeing a double-digit YoY increase for its products in China, even after quarantine restrictions have been eased, indicating cooking at home is here to stay.

This means that traditional service providers will either have to outcompete the home experience or adapt to offer the digital equivalent substitutes for their services. In May, Apple launched an online shopping experience offering the same services available in its retail stores, including the virtual ‘Today at Apple at Home’ classes recorded by Apple’s Creative Pros. Across Asia and in China, many nightclubs have delivered on needs for social connection by launching dance parties on TikTok. Bars and clubs will need to ‘up’ their game and reclaim their spot as favorite destinations out of the home.

3. ‘New’ New Retail: A Reshuffled Game of Online and Offline Retail

The COVID-19 outbreak has forced consumers to become familiar with engaging online, even those who were previously slow to adopt a digital lifestyle. It is no wonder that the pandemic has upended the retail industry and compelled retailers, both large and small, to provide online shopping experiences that offer escapism and instant gratification.

“Online shopping has become social, personal and entertaining.”

Online shopping has become social, personal and entertaining. Appetite for live-streaming content on platforms such as RED (小红书) and BiliBili (哔哩哔哩) is growing, which puts more pressure on offline retailers to deliver a truly distinctive customer experience that online shopping journey cannot fulfill.

The food delivery industry has also found new and improved ways to provide its services to the mass. Across Asia, services such as KFC, McDonald’s and Meituan (美团) offer a completely contactless order journey and assure high safety and hygiene standards at the same time. Traditional retailers will have to rethink their experiences and the customer journey to deliver on the same guarantees.

4. Health is the New Wealth: A Renewed Focus on Self-care

With COVID-19 exposing the vulnerabilities of our food systems and prompting increased vigilance over personal hygiene practices, staying healthy will become a top priority for consumers. This not only means that products need to guarantee safety, but healthcare will also need to be accessible through digital means. The customer experience in healthcare will need to be on-demand, accessible at a distance and highly personalized.

Online medical consultations were already becoming ubiquitous in China, but the use of digital platforms is a defining characteristic of COVID-19. The Ping A Good Doctor (平安好医生) app saw a 10-fold increase over the coronavirus outbreak to reach 1.11 billion accumulative visits in January.

The insurance industry will also be transformed with rapid demand for better health coverage and life protection. While international players like AXA, AIA or MetLife will compete with enhanced services to capture the more affluent rising middle class, mutual-aid insurance platforms, such as Xiang Hu Bao (相护宝), are capturing the lower end of the market with a peer-to-peer business model (300M members as of April 2020).

5. Value Redefined: A Shrewder Consumer and Smarter Purchasing Decisions

With millions being affected financially as a result of unpaid leaves and extended furloughs, many will shift preference toward low-priced value propositions and will want to be financially savvy. Consumers who have the spending power will also reassess their definition of ‘premium,’ seeking more pragmatic, tangible superiority in the brands they choose and putting greater value on responsible buying.

Shopping festivals such as Valentines Day, Double 11, 618 will continue their hot streak as over 15 e-Commerce holidays are scheduled in 2020. But the journey doesn’t end after such “deal hunters”. Gen-Z and millennial shoppers are learning to offload used possessions and embracing a more sustainable attitude. Chinese social media saw the rise of #ditchyourstuff (断舍离), and the second-hand or flea market app, Idle Fish (闲鱼), has witnessed accelerated growth in recent years.


FINAL THOUGHTS

The post-COVID-19 era provides an unprecedented opportunity for businesses to lead and transform, achieving uncommon growth in the face of disruption. While many businesses recognize their consumers are no longer the same, they are eager to learn where to start in order to seize the transformation opportunity.

By pulling different levers from consumer insights to brand marketing, experience design and digital transformation, businesses can formulate a strategic roadmap to respond, adapt and transform. Act now and win the day.

Stay tuned for the next part of the series, in which we will delve deeper into the major enablers that will fuel and accelerate digital transformation in this new normal.

Download the PDF report, or contact us to learn more about what levers you can pull to reimagine your business for uncommon growth in the post-COVID-19 era.

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Naming Strategies and Market Dynamics Will Tip the Scales in the Streaming Wars

In the crowded world of new streaming services, name choice is one of the important decisions companies make.

Global stay-at-home orders due to COVID-19 have caused streaming traffic to surge just as the category once dominated by Netflix is seeing an influx of competition from industry veterans, tech giants, startups, and everything in between.

Launch momentum is vital to these subscription services, as the platforms rely on the buzz from early adopters to lay the foundations for success. For customers determining which of these nascent services to add to their monthly bills, the decision comes down to preconceived notions of the quantity and quality of existing content, as well as trust in future production capabilities. Brand perceptions are key to generating momentum at launch and in turn, to the long-term viability of these services.

“Brand perceptions are key to generating momentum at launch and in turn, to the long-term viability of these services.”

At this critical early stage, one strategic decision to leverage and build brand perceptions has been naming architecture: the extent and manner to which the service’s name links to the recognized parent brand. While startups will inherently launch with a new name, most streaming entrants represent a strategic investment by a larger company with entertainment aspirations. These players must determine whether the brand name should emphasize cohesion with the master brand – as in the case of Disney+ – or create a level of distinction from it – as in the case of NBCUniversal’s Peacock.

Of course, there is no one-size-fits-all answer to the question of naming architecture. Each brand must determine the optimal solution based on its unique equities, credible capabilities and strategic ambitions. Companies need to leverage the perceptions that will help them in this particular industry at this exact moment and build or partner to achieve the equities they lack.

These naming considerations play a key role in generating momentum and encouraging trial and subscriptions, but the impact of today’s market dynamics must be considered as well.

Let’s take a look at both the naming strategies of these new services as well as the potential impact of today’s unprecedented market conditions as they relate to the success of the platforms.

Disney+

In its first six months, Disney+ has been a success story.  Historically, Disney has at times named its owned brands to maintain the distinction, like with ABC and ESPN, and it continues to do so with existing streaming services Hulu and ESPN+. With Disney+, however, it appeals to children and adults of all ages by leveraging the strong equities of the legendary Disney brand name to instantly bring to mind its inspirational and emotional stories and characters. In fact, in the 2019 Prophet Brand Relevance Index, Disney ranked number one in the “distinctively inspired” category out of over 200 brands tested, with consumers praising the brand for its ability to make them happy and connect with them emotionally.

The Disney+ name draws an unmistakable connection between the new streaming service and this beneficial legacy, and consumers have heard the message loud and clear. With a stated goal of 60 to 90 million subscribers by the end of the fiscal year 2024, Disney+ exceeded all expectations and boasted 50 million members just five months after its launch.

While naming indeed plays a key role in initial launch success, we must acknowledge that the current global pandemic has thrown a Wreck-It Ralph-sized wrench into the industry, and Disney now faces an uphill battle with retention.  The launch strategy leveraged the Disney brand to connote nostalgia and the global pandemic delivered additional sign-ups, but the company was banking on original content in 2020 and 2021 to supplement its kid-friendly library with more new content for older viewers.

Now, with global productions shut down due to COVID-19, Disney is hungry enough for new content that the studio announced it will fast-track the release of its film adaptation of the Tony and Pulitzer Prize-winning Broadway show, “Hamilton,” straight to Disney+ July 3rd, over a year ahead of schedule.  With the flex, Disney sends a strong reminder to the industry that its arsenal of content is deep enough to sustain the service through the pandemic, and that it is willing to join the growing trend of releasing theatrical-quality content directly on home entertainment.

Apple TV+

If Disney+ demonstrates the opportunity in leveraging a strong existing brand name, Apple TV+ demonstrates the risk to streaming success.  Tellingly, the company hasn’t announced its Apple TV+ paid subscriber numbers, but bad reviews and the departure of its head of content a mere two weeks after launch, signal an underwhelming start for the service.  In a bid to accelerate momentum, Apple has included free Apple TV+ membership with every device it sells.  And yet, even with the streaming service available for free, Bloomberg estimates that only 10 percent have activated their free accounts. Google trends also show a lack of consumer appetite for Apple TV+. Launching within weeks of Disney+, Apple TV+ has consistently generated far less buzz.

Disney+ and Apple TV+ adopted quite similar naming strategies, but the varying success can be partially attributed to the specific equities that each name holds in the minds of consumers.  While Apple registered as the number one overall brand in the Brand Relevance Index, its strengths lie in innovation – it outperforms all other brands in measures of modernity and ability to push the status quo.  The revered Apple brand name instantly connotes sleek and cutting-edge technology and cross-product integration. Even when the company caught lightning in a bottle in reshaping the music industry, it did so through a game-changing integration between iTunes software and iPod hardware – it never became a record label itself.  In the streaming space, customers crave character development and intriguing storylines.  Device manufacturing capabilities are less relevant.

Even with the most powerful brand in the world, tying the streaming service so close to the master brand – and with a name that potentially creates confusion with the existing Apple TV hardware product – may have contributed to the lackadaisical launch.  Now, Apple is investing billions in deals with top-tier showrunners and production studios, including a production deal with former HBO CEO Richard Plepler, in order to build its perception as a content creator from the ground up. Perhaps in this case, Apple would have been better served by partnering with a respected industry veteran to accelerate the launch as it entered the new industry, a strategy it successfully employed in partnering with Goldman Sachs to launch the Apple Card.

HBO Max

How will WarnerMedia’s HBO Max streaming service fare when it launches tomorrow?

With a similar naming strategy driving cohesion with the existing entertainment brand, the new service will immediately remind consumers of the company’s legacy of captivating characters and content across genres, from The Wire and Game of Thrones to Curb Your Enthusiasm and Veep.  With relevant brand equities in the HBO name, the launch may see momentum closer to Disney+ than Apple TV+.  However, with two separate streaming services called HBO GO and HBO NOW already in the market, WarnerMedia will need to clarify its offerings to avoid confusion as it launches HBO Max.   

Once again, the naming decisions must be considered in tandem with market dynamics, which will hugely impact the service’s success. After paying $425 million for the exclusive streaming rights to Friends and offering each cast member over $2.5 million for a single new reunion episode, the pandemic disrupted production and forced the platform to launch without this marquee original content. HBO Max is forced to deal with pandemic-induced challenges even beyond the production issues of Disney and Apple, as debuting mid-pandemic also jeopardizes its initial marketing campaign.  Now, not only will the service enter the fray without its key Friends original content, the platform will also launch without its March Madness media blitz and other premiere advertising opportunities.

Peacock

As streaming entrants join the industry from all angles, we also see examples of brand names that create distance from parent companies or that are new to the market, both from established players and startups.

NBCUniversal will launch its Peacock streaming service on July 15, opting for a name that creates more distinction from the parent than the Disney, Apple and HBO services that carry the parent name.  The Peacock name is instead a nod to the NBC logo first introduced in 1956 to emphasize the network’s innovative new color TV capabilities and is a fitting homage as the company launches its next-generation content delivery platform.

In the case of NBC, this is an interesting decision. Consumer perceptions of the NBC name are less tied to the brand’s content, so Peacock may prove advantageous to a name like NBC+.  As popular as the content may be, many younger viewers don’t associate the studio with The Office or Parks & Recreation, as the shows have been syndicated to other networks and available on Netflix for many years.  Other shows produced by the studio, like Brooklyn Nine-Nine for example, aired on other networks from day one.  So, while customers may clamor for the shows they love, the NBC name wouldn’t be particularly helpful in gaining brand loyalty.

The same can be said for Universal Pictures – the average viewer doesn’t immediately associate the studio with movies like Jurassic Park, Knocked Up or Back to the Future.  The Peacock name can create distinction from NBC to allow the platform to encompass both NBC and Universal content, and the more contemporary feel connotes modern technology rather than just the digital arm of a TV network.

Of course, Peacock will face many of the same challenges as HBO Max in launching during a global health crisis.  The debut was positioned around the 2020 Olympics, with plans to promote the platform during the televised events, as well as air exclusive Olympic programming on the streaming service.  With the Olympics and other sporting events postponed, NBCUniversal loses thousands of hours of programming and ad revenue.  Further, while the ad-supported nature of Peacock differentiates it from other streaming players, it also creates questions in a post-COVID world.  Will customers prefer the service because it offers content without a monthly subscription?  Or on the flip side, will advertisers cut their ad spend without the Olympics drawing in viewers?

Quibi

Finally, Quibi launched in early April with a promise of premium content on the go.  The startup (if you can call a $2 billion investment a “startup”) was launched by Dreamworks co-founder Jeffrey Katzenberg and offers professional quality content in episodes no longer than 10 minutes. The content is created for viewing on mobile devices – think Netflix-caliber content for TikTok attention spans.  The Quibi name is a portmanteau meaning “quick bites,” a moderately coined name intended to describe the offering in the short-term and, if successful, eventually become common lexicon itself.  In addition to hinting at the short-form nature of its content, the name proudly asserts its startup status through its use of modern naming trends, beginning with “Q” and ending with “I”. Netflix took a similar semi-descriptive naming approach and grew into the biggest player in streaming, so the strategy can hardly be scoffed at – though Quibi’s descriptive meaning is not as immediately apparent as that of Netflix.

While Quibi arguably has the potential to change the streaming industry with its short-form content, it also has faced the strongest headwinds in launching mid-pandemic.  With a value proposition centered around on-the-go viewing, global lockdowns have hit the streaming startup particularly hard. Episodes are meant to fill gaps in consumers’ days as they brew their morning coffee or wait for the bus, so the relevance of this offer is questionable as commuting routines face permanent changes. Even before the pandemic though, the concept was far from a sure bet.  Does the appeal of short-form content platforms like YouTube and TikTok stem from the democratization of production that allows anyone with a camera and the internet a chance to go viral?  Or is there an unmet need for short-form content featuring A-list production and talent?  Quibi posits the latter, offering content featuring A-list talent from accomplished actors like Christoph Waltz and Kristen Bell and inspirational athletes like Megan Rapinoe and Lebron James.


FINAL THOUGHTS

The future streaming leaders will surely be determined in large part by content, user experience, pricing strategies, and market conditions out of anyone’s control. Nonetheless, as new entrants continue to saturate the streaming space, generating momentum will be imperative to long-term success. Naming choices will continue to play a key role in building brand perceptions to accelerate customer acquisition.

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In Brands We Trust

How well brands respond in crises correlates with how much their customers trust them.

As the COVID-19 pandemic continues to evolve, becoming an impossibly larger crisis and creating huge uncertainty, brands must consider how to engage with consumers in a way that garners and protects brand trust. Though distinct in nature and breadth from COVID-19, previous crises offer a telling look into the importance of preserving consumer trust. During the 2008 financial crisis, it became clear that crises impact consumer trust. Banks, in particular, are still trying to regain consumer trust. A 2019 Gallup report reveals that only 30 percent of Americans have confidence in financial institutions today—a mere 9 percent above its record low reported in 2012. This remains the case today as 65 percent of consumers say that a brand’s response to a crisis would have a huge impact on their likelihood to purchase in the future. As the typical elements that drive trust—namely, brand purpose, competence, and integrity —become table-stakes during crisis, brands must deliver more to retain and grow consumers’ trust and ensure their own success in the long run. 

“65 percent of consumers say that a brand’s response to a crisis would have a huge impact on their likelihood to purchase in the future.”

Experts note that, in an era of stability, consumer trust is created and fostered through consumers’ direct, day-to-day experiences with brands over time. If a brand can consistently and reliably deliver on its purpose and promises competently and with integrity, it can generate trust that will have a long-lasting impact on its bottom line. Though these pillars of consumer trust account for trust in organizations such as Amazon, Google, and Chick-Fil-A (a few of the most trusted brands in 2020, according to a recent study from Morning Consult, a research and technology firm), we believe that they are not enough to continue to secure consumer trust during times of crisis.

The loss of trust in times of crisis is fed by a perceived erosion of social, communal and financial safety nets, contributing to an overall rise in consumers’ feelings of uncertainty, according to a World Health Organization study. We believe that as doubt grows consumers need more than brands’ overarching purpose, competence and integrity; they need brands to support them in reducing their uncertainty. Brands that fail to do so run the risk of losing consumer trust (and their revenue); brands that succeed can build trust amongst both current and new. Brands can do this by:

Being truthful and showing authentic concern. 

In times of crisis, consumers want brands to acknowledge and show true concern for them and their employees’ vulnerability. They also want brands to be humble, acknowledging the extent of their own vulnerability and uncertainty. Prophet’s Pulse Survey on Defining Trust in Times of Crisis finds that 73 percent of consumers felt it was very-to-extremely important for brands to be transparent about the steps it is taking to keep employees safe, 77 percent find it similarly important that a brand respects its employees’ needs, and 67 percent noted the importance of a brand making them feel safe and secure.

For example, Slack encouraged employees to take care of themselves above all else, allowing flexible and/or reduced hours to ensure that team members can take care of their mental health concerns. Employees were also given a $500 stipend to make their work-from-home arrangements comfortable and were not charged for sick days through April 15. Externally, Slack is supporting all nonprofits and other organizations carrying out critical relief efforts during this time with free access to a Slack paid plan for three months.

Working with agility to finetune its purpose to more specifically assuage consumer anxieties. 

According to Prophet’s Pulse Survey on Defining Trust in Times of Crisis conducted in April 2020,  63 percent of consumers felt it was very-to-extremely important for brands to commit to delivering on its beliefs and values – no matter what – during a time of crisis. Brands must recognize that consumers need stability from the brands they trust; as such, brands must continue to offer their key purpose, tweaking it for the situation at hand.

For example, the Time Out Group’s historical brand purpose has been to help consumers discover the best of the city, delivering on it by offering perspective on the best experiences and places to explore in major cities. As social distancing and shelter-in-place orders took hold, the Group temporarily refined its purpose to be about discovering the best of the city…in consumers’ own homes. It now offers recommendations on the best takeout, best virtual opportunities to explore cities (e.g., virtual museum tours, concert livestreams), and best ways to spend time in your own apartment.

Offering products, services and experiences that instill hope and confidence in the future. 

While economic and social forecasts remain uncertain, brands can offer hope for the future by providing products, services and experiences that aim to lighten consumers’ days. Prophet’s Pulse Survey noted that 61 percent of consumers felt it was very-to-extremely important for brands to inspire them to believe in an optimistic future. Moreover, 62 percent find it just as important that a brand seems like it is financially stable, revealing that consumers want to be reassured that brands will continue to deliver confidently, and well into the future. Consumers trust brands that look beyond this crisis in the products, services, and experiences that they offer.

For example,Delta Air Lines was the first among U.S. air carriers to extend travel vouchers, loyalty program status, and related benefits noting, “…as coronavirus continues to dramatically impact travel across the globe, you don’t have to worry about your benefits – they’ll be extended so you can enjoy them when you are ready to travel again.” United Airlines and American Airlines followed Delta’s lead in the weeks afterward.


FINAL THOUGHTS

While brand trust in times of stability is well-understood to rest on the pillars of purpose, competence and integrity, trust in times of crises requires more. As the elements that drive trust in stable times become tablestakes, brands must consider how they can help consumers reduce uncertainty – by being truthful and showing authentic concern, by working with agility to finetune their purpose, and by offering products, services, and experiences that instill hope and confidence in the future.

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Owning Game-Changing Subcategories: A Conversation with David Aaker About His 17th Book

Digital powerhouses like Airbnb, Salesforce and Dollar Shave Club demonstrate the transformative power of subcategories.

It’s been nearly 20 years since I started working with my mentor and friend David Aaker. Dave inspired me to write my first book, Brand Asset Management and my second, with my Prophet partner in crime, Michael Dunn, called Building the Brand Driven Business.  Dave remains a shining light in helping all of us think of brands as true assets that cannot only unlock true accretive enterprise value but can be also leveraged as a strategic north star in helping a company reach its longer-term growth aspirations.

“To grow you need to become the exemplar brand to position, scale, and build barriers.”

David’s ability to evolve his business acumen, while grounding it into his key landmark idea – brand relevance – has made him an icon in the eyes of generations of marketers like myself. His 17th and latest book, Owning Game-Changing Subcategories: Uncommon Growth in the Digital Age, tackles brand-building amidst digital transformation – a topic that could not be more important today.

As organizations and brands face unprecedented change, opportunities and challenges (i.e. coronavirus), they must turn to digital to continue to grow. Dave and I had a (virtual) catch-up recently to learn more about his book and what marketing leaders can gain by creating “must-haves” in the digital age.

Your new book, Owning Game-Changing Subcategories: Uncommon Growth in the Digital Age, is launching in early April. Why did you pick this subject and why now? 

I observed in category after category— from Japanese beers to automobiles to computers— bursts of growth were almost always explained by the formation or reframing of a subcategory created by a new or improved customer experience or brand relationship.  It almost never was caused by a “my brand is better than your brand” strategy.  So, I felt that there would be value in a compact book that explained why that assertion was true and how to implement a subcategory growth strategy.

Of course, digital is putting subcategory growth strategies on steroids by enabling subcategories and their exemplar brands to pop up more often and grow at incredible rates. I knew that I needed to factor in digital’s prominent role into the book’s insights as it is a true accelerator in both overall brand and the use of subcategory growth.

You dive into several real-world examples of brands that are achieving growth by creating categories of their own. What are some of your favorite brands you discuss? Why?

The first was Asahi Super Dry which immediately took 10 share points from Kirin because it defined a new subcategory with a new taste AND a young, cool personality. Then there was the Chrysler minivan, which created and owned the minivan subcategory for 15 years with no competition. Enterprise Rent-A-Car became, for decades, the exemplar and only relevant brand for a subcategory that targeted an underserved market, those with a car under repair.

My favorite brands of the digital age include Airbnb, Dollar Shave Club and SalesForce.com.  Each developed a new subcategory and customer experience and then expanded and enhanced that experience over time.  Each also created a persona and brand relationship that delivered energy, passion, and creativity.   Airbnb inspired and enabled the owner/managers to be entrepreneurial hosts.  Dollar Shave Club and SalesForce.com both burst onto the scene as a feisty underdog ready to take on the established giants with an irreverent sense of humor.

What is the biggest takeaway you hope readers gain by reading your book?

There are four takeaways.

First, real growth comes from relevant subcategory creation, not from “my brand is better than your brand” competition based upon differentiation.

Second, to grow you need to become the exemplar brand to position, scale, and build barriers. Unlike other innovation strategy books, this book recognizes the role of brand building that makes a new subcategory come to life and win the day both win the short term and over time.

Third, brand communities in the digital age are an important way for customers to become involved in the subcategory and bond with the brand and others that share a common interest and/or activity.  Brand communities can be built around B2B products or even at companies with ‘commoditized’ products or services but a social program that has relevance and energy like that illustrated by Dove’s self-esteem initiatives.

Fourth, digital has put subcategory creation on steroids through the Internet of Things (IoT), e-commerce, social media and websites, and brand communities.

You wrote your first book in the seventies, now you’re about to publish your 17th book in 2020.  What are some of the biggest changes you’ve seen over the decades?  What has remained the same?

The concept of brand equity is the same.  It is brand visibility, brand associations, and the size and strength of the customer base.  And the process involved in creating and building brands is much the same as well.

One change is the enhanced role of higher brand purpose, particularly social higher purposes.  Employees, especially, younger ones, need motivation that raises above increasing sales and profits.  And customers increasingly value a higher purpose as part of a brand relationship.

Another is the power of digital—the IoT impact on offerings, e-commerce and social media providing customer access, and brand communities all have created a more dynamic marketplace, accelerated innovation and new subcategory formation. The digital era makes it more challenging to create messaging that breaks through. One answer is to package content into stories that involve, entertain, engender emotion, intrigue etc. in order to attract attention, change perceptions and avoid counter-arguing.

How has the necessity for brands to “go digital” shaped your current perspective on topics like “brand equity”?

In my view, digital transformation has an important strategic role to play in marketing and organizational strategy. Digital can enable the creation and success of new subcategories providing strategic growth platforms that become the basis of strategic vitality and success.  Too often the focus is on the tactical role of digital. Its exciting to see the way Prophet is changing to help our clients with their digital transformations.

One of your passions is brand relevance. Not only did you write the book about it, but you’ve entered it into the lexicon of marketers and executives everywhere. What does it mean to be a relevant brand in the digital age?

Being relevant means being visible and credible with respect to a subcategory.  So, it is context-specific.  A brand that is relevant to automobiles does not mean it is relevant to compact hybrids.  Becoming the exemplar brand is critical because it is not only the one positioning, scaling and building barriers, but its status as the subcategory representative makes it the most relevant or even the only relevant brand.

In this digital age, the road to relevance almost always needs to involve digital-enabled communication to provide both visibility and credibility and a website to represent the brand message in all its multiple dimension richness.  And digital enables brand communities, a loyalty driver, to thrive.

You’ve been called the “father of modern branding.” What is your personal brand?

My purpose and my brand has been to encourage organizations to manage for the long-term by building brand assets that will be the basis of their future success.  That has not changed even though digital has expanded the challenge and enabled new routes to that goal. My brand also involves aspirational process elements such as research-based ideas, rigorous conceptual thinking, and humor.

Look out for David Aaker’s book wherever books are sold, including online and e-book retailers. Learn more about Owning Game-Changing Subcategories and reach out if you’d like to connect with David or any other experts from Prophet.


FINAL THOUGHTS

While many of the principles of modern branding remain the same, digital continues to make some more powerful than ever. The right subcategories can add rocket fuel to growth strategies.

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Five Powerful Ways Brands Can Use Their Voices Today

Companies like Target and REI are finetuning what they say–and how they say it–to make people feel safer.

Brands with strong voices can lift us out of our fears, reassure us that life will move forward and assist us as we continue to embrace major change together. More practically, brands can drive clarity around important topics, like new safety practices, inventory availability or even business closures. 

A distinct brand voice helps a company elevate its message and show the world who they are and what they stand for. Amidst the COVID-19 pandemic, the way brands use their voices to communicate with us is more salient than ever. 

It feels comforting to us, as verbal branders, to notice the brands that are doing it right. The ones who have used their brand voices to connect with their audiences and express who they are in a meaningful, lasting way. We drew helpful insights by evaluating how brands reacting at the beginning of the coronavirus pandemic – communicating in a way that both comforted their consumers and supported their business.  

Here are Five Examples of Communication Approaches We Love  

Admit to Not Having All the Answers

While brands often have the responsibility of steering the conversation in their category, it is perfectly OK to ask customers what they want to hear. 

Reformation, a sustainable clothing brand, chose a direct communication style to connect with their audience, ending an update with refreshing candor. “Lastly, we’re not exactly sure what is appropriate for a company like ours to be talking and posting about right now. What’s resonating with you? Do you still want to hear about new collection launches and sustainability-related stuff…? Please let us know.” This created a refreshing moment of candor that felt on-brand for Reformation. 

Restate the Brand Purpose to Frame Inspired Action

Some brands are using this time to reflect on their mission and values. 

Target frames its steps to protect employees and customers by stating a core promise of the brand. Chairman and CEO of Target Brian Cornell stated, “…a commitment to help all families is at the heart of Target’s purpose. Our goal is to be here for you and keep navigating through uncertainty together – and we will do everything in our power to live up to that promise.” 

“The way brands use their voices to communicate with us is more salient than ever.”

Through this lens, Target’s actions, such as designating their early hours as a sanctioned time for the elderly to shop or enacting back-up care benefits for parents and caregivers, become proof points of its enduring purpose. 

Address the Emotional Impact

Many brands are well-positioned to connect with their audience about the emotional impact this hardship is having on their lives. 

Zola, a wedding registry company, primarily serves engaged couples. Right now, much of their audience is scrambling to make alternate arrangements or postpone their weddings. 

Zola has sent several emails to communicate plans to support their audience, including setting up a help hotline to call for advice. One message rings clear across all channels: “If your wedding has been affected, we’ll do anything we can to help”. 

The intentional use of the word “anything” subtly mirrors their tagline, “anything for love,” which is displayed under the signature of every email. Here, Zola is stretching beyond a registry to be a helpful resource in a challenging time. 

Encourage Community Mindfulness While Communicating Operational Changes 

Retailers are uniquely challenged with making tough business decisions and communicating them in a sensitive way. 

Retail and recreation company REI stood their ground as community leaders by calmly communicating the temporary closing of their stores. The brand, which is well known for their unique take on consumerism habits (most notably, their Black Friday #OptOutside initiative), framed their announcement as a thoughtful decision to protect the community, rather than their business, saying “…there are more important things than business right now—we owe that to one another.” The letter ends with, “be well and take care of one another.” It’s simple but authentic to the REI brand. 

Find Moments for Thoughtful Playfulness—If It’s Authentic to Your Brand 

Kin Euphorics, a non-alcoholic social tonics brand, is deeply rooted in social connection and finding enlightened, healthy ways to connect. Their brand voice has an undeniable playfulness, which they brought to life by renaming social distancing as “Solitude Scaries,” playing off the phrase “Sunday Scaries.” 

This pinch of playfulness feels on brand and is a simple way to ease the intensity of the stressor and create a sense of community. 


FINAL THOUGHTS

Whenever faced with hardship, brands have an opportunity to connect with their audience to reassure and comfort. This pandemic has invited us to consider the unique and powerful ways brands can wield their voice to help us feel better—and move forward. 

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Understanding and Enhancing Brand Communities

They don’t just add to a brand’s credibility. They bring together people with shared passions and purpose.

A fifth key topic in the book Owning Game-Changing Subcategories is brand communities that are enabled or enhanced by websites and social media. A major and often overlooked contribution of digital to business strategy is brand communities—groups of people that bond because of shared interest or passion in something connected to a brand.

Consider, for example, the community experience of the buyers and sellers on Etsy. They bond with each other through crafting and homemade goods,  and with Etsy and its supporting programs. The affinity is strong and lasting and provides an Etsy “must-have.”

What Brand Communities Offer

People hunger for connection and a brand community delivers. Brand communities have been around forever. The Harley Owners Group (HOG) was founded in 1983. However, digital technology has radically enhanced the power and relevance of communities, allowing the membership base to quickly expand geographically and demographically by leveraging digital tools not available to HOG members of the early ‘80s.

“People hunger for connection and a brand community delivers.”

A brand community can be offering-focused, centered around the buying and using experience. That was the case for communities formed at Salesforce.com (where members seek to improve their use of the Salesforce.com software), at LEGO (where LEGO builders interact) and at the Marriott Vacation Club (with members who live for travel and to experience the Marriott vacation options).

If a brand lacks an offering-driven following, it may develop a shared interest that fits the brand to form the locus of a community. That was the case at the Sephora Beauty Insider (which centers on skincare and beauty), Nike Run Club (work-out programs) and the Dove “self-esteem” movement (a shared passion for inner beauty).  Such communities also can lead to social benefits created by the involvement of like-minded customers.

How Brand Communities Help Exemplar Brands

Brand communities help exemplar brands and their subcategories by:

  • Creating or enhancing a brand relationship. When an exemplar brand is involved as an active partner with an activity that is important to a customer, it provides a relationship that could not be obtained by communicating functional benefits of an offering. A person has a special affinity for others that share his or her passion, goals and activities. If the brand is associated with that interest, it too will be highly regarded. When a community helps to represent a person’s identity, its impact is magnified.
  • Adding energy, visibility and involvement. These are critical elements of brand-building that are difficult to achieve using conventional media and methods. Every time a person interacts with the community, the brand is rewarded with some energy and visibility, accentuated because a person initiated the interaction, not the brand.
  • Providing credibility to members and brand partners. For many, online communities may feel like a grouping of valued and trusted friends. As a result, the information sourced from the community is not seen as biased, phony or self-serving. Further, the brand gains credibility because it is no longer a seller but is, instead, “one of us.”
  • Becoming a barrier to competitors. An exemplar brand that has created a brand community that can regularly involve the customer with a shared interest often will earn a core group of customers with a high affinity toward the brand. Those customers will be hard for competitors to attract.
  • Sourcing new or enhanced product/service ideas and evaluating these ideas. Being involved in product/service development and refinement provides useful and timely information to the brand team and a feeling of being an active part of the community for the customers.

The e-book version of Owning Game-Changing Subcategories is now available. The book will be available April 7, 2020. 


FINAL THOUGHTS

Brands that encourage communities grow and achieve relevance faster, uniting like-minded people around shared passion points. Whether it’s cooking, fitness or gaming, communities help people belong to something larger.

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Breaking Down the Importance of the Exemplar Brand

Make building the subcategory the priority. The brand is just the vehicle for doing so.

A fourth big idea in the book Owning Game-Changing Subcategories is the concept and role of the exemplar brand in subcategory creation and management. To own a game-changing subcategory, a major task is to become its exemplar brand. An exemplar brand is the brand that represents the subcategory and becomes its most visible and credible brand option.

The Role of an Exemplar Brand

The exemplar brand has the power and authority to build the subcategory into a market winner. It has several jobs, which include:

  • To develop and evolve “must-haves” that will frame the way people view and evaluate the subcategory
  • To create visibility and credibility for the subcategory and use the “must-haves” to position it in the marketplace
  • To nurture the growth of a core customer base committed to the “must-haves” and the subcategory
  • To build barriers to competitors so that they will struggle to be relevant

In addition to building the subcategory, the exemplar brand will simultaneously be making the exemplary brand the most relevant subcategory brand. But it should be recognized that building the brand is a secondary byproduct of the effort to build the subcategory, which should be the priority. The brand is the vehicle to build the subcategory.

“Building the brand is a secondary byproduct of the effort to build the subcategory, which should be the priority.”

How to Become the Exemplar

So, how do you become the exemplar brand?  It really depends on the context. Every subcategory story is different, but there are four guidelines that have proven successful.

Act Like One

First, to become an exemplar brand, act like one out of the gate.  Promote the “must-haves” of your brand and use them to frame the conversation.  Be the subcategory innovator and thought leader.  Build subcategory loyalty.  Do not sound like a “my brand is better than your brand” marketer.  Rather, sound like you are introducing a game-changer, a new experience or relationship.

Successful exemplar brands like Warby Parker, Uniqlo and Tesla did exactly that. They made visible and credible “must-haves,” and created a core customer group that not only valued them but also talked about them to friends and family.

Scale, Scale, Scale

Second, scale as fast as possible even if that means taking financial risks. Aggressive scaling will create buzz and, more importantly, will build the core customer base that will support the initial growth platform and inhibit potential competitors.  It is critical for the “must-haves” to get established.  That might mean taking risks, overinvesting in “must-have” creation, refinement and promotion. It is not important, or even common, for an exemplar brand to be the first brand in the subcategory. It just needs to be the first to get it right and have the commitment, talent and means to scale aggressively.

Game-changing subcategories often can and should start as a crude test product. Airbnb started with two guys with air mattresses wanting to make some extra money to pay the rent. They were able to expand and refine their “must-haves” ahead of competitors.

Brand the “Must-Haves”

Third, brand the “must-haves” or the subcategory itself. For example, Uniqlo’s innovative fabrics have “must-have” brands like HeatTech, AIRism, and LifeWear. Airbnb branded its guest experience program “Airbnb Experience.” The success and power of Amazon is due in part to its branded “must-haves,” such as 1-Click and Prime. A brand signals that the innovation is worth a brand of its own. It also signals that the organization will support it and branding makes the communication task easier. That is what a brand does.

The subcategory itself could be branded as in the case of Asahi Super Dry, Dannon’s Light & Fit or Burton’s Snowboard (far better than Snurfer, its predecessor). 

Build and Enhance Barriers

Fourth, keep building and enhancing barriers.  Become a moving target.  Don’t allow competitors’ openings to become relevant.  Look to Amazon as a role model.  In particular:

  • Reinforce and enhance existing barriers. Improve them. Make them visible.  Energize them.
  • Add new “must-haves” over time to make the subcategory dynamic.
  • Create barriers involving “beyond functional” relationships like personality, values or higher purpose programs that connect with consumers and are hard to duplicate.
  • Own the “must-haves” by branding them and then actively manage and support those brands.
  • Play defense by delivering on the promise every time. Don’t give a competitor a route to relevance because customers have become less satisfied or even annoyed with some aspect of the promise delivery.

The e-book version of Owning Game-Changing Subcategories is now available. The book will be available in early April. 


FINAL THOUGHTS

Exemplar brands are powerful game changers and the source of uncommon growth. By developing “must have” features, they can change the way consumers consider their purchases. And because they are new, they attract attention and build credibility.

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