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Experience and Innovation Trends: What to Expect in 2020

Simplicity makes a comeback, as companies scurry to connect with customers and employees.

It’s no secret to us (or any of our clients) that advancements in experience and innovation are moving faster than almost every other aspect of business. In fact, spending on experience technologies jumped nearly 8 percent this year to $508 billion, and experts expect it to grow another 8.2 percent in the year ahead.

As companies raise the experience bar, we’re seeing major shifts in the way customers and employees interact with brands. If people can’t see a reason one brand stands out over another, they move on. In a world of practically limitless options, there’s always another choice.

Here are four ways we expect to see more companies – both B2B and B2C – shake up their approach to developing, launching and implementing better experiences.

1. Experience becomes the product, and vice versa.

It’s getting harder to differentiate an experience from a product and a product from an experience. Digitally native companies–especially those with a direct relationship to their customers – have led the way.

While it may be hard to define the “product” from a company like Uber, Spotify or Airbnb, these companies are monetizing experience. They understand that it is their primary commodity.

That means more complex experiences and a broader offering of products. It’s no surprise to companies in Silicon Valley, where companies like Slack, Glassdoor and PayPal have dedicated “product” teams versus “experience” teams. Legacy companies, including Adobe and Capital One, are also adopting this approach.

2. Jobs become talent incubators.

Unemployment rates, currently at a 50-year-low, are expected to stay that way in the year ahead, turning up the pressure on employers who are increasingly desperate to find new workers. That means making even more significant changes in the employee value proposition, especially to attract Gen Z and Centennials. Unlike older workers, these younger people favor purpose-driven employers, with 60 percent saying they believe brands should speak up about social issues. They want to work for companies that align with their own values and expect employers to adapt to and support their changing interests and lifestyles.

They don’t see their first job as merely a paycheck but as a stepping-stone. To win these young workers over, employers need to position themselves as enablers of a career path, whether they are a professional services firm, a tech startup or a fast-food brand. And they need to do so regardless of whether their workers stay with them or not.

“To win these young workers over, employers need to position themselves as enablers of a career path.”

Starbucks led this trend back in 2015, announcing free tuition at Arizona State University’s online program. The company, which had already offered two years of free classes, expanded it to cover four years, offering an undergraduate degree to full and part-time workers.

McDonald’s is taking steps in this direction with a “Where You Want To Be” Campaign, a concerted effort to help employees connect the skills they learn on the job with education, tuition assistance and career tools to take the next step in their professional journey.

McDonald’s developed the program by analyzing generational segments, zeroing in on the soft skills and industries that matter most to these young workers, which include arts and entertainment, technology, entrepreneurship and healthcare, as well as restaurants and food service. It teamed up with five influencers aligned to each industry, offering a few employees once-in-a-lifetime first-hand work experience.

It’s all part of a larger “Archways to Opportunity” program, which offers a suite of career development services, funds and tools designed to help restaurant employees identify potential career paths and chart a course of action to pursue them.

3. Companies build CX portfolios.

Increasingly, we see companies like Bose take steps to formalize the customer-experience role. They’re adding operational complexities to several internal initiatives, managing broad portfolios of customer-experience moves. That includes moving from idea to concept to prototype to scale, but also fixing what’s broken, getting up to par and trying to become “best in class.” Mature companies can manage this broad portfolio by creating experience and innovation organizations.

As they begin to manage these portfolios better, they’re also bearing down on CX measurement. The more companies spend, the more the burden of proof rises. Mature organizations have built-in processes that calculate customer experiences’ contribution to business and brand results, such as increased consumer satisfaction or better conversion rates.

But many companies still get stuck measuring across multiple channels. It’s not enough to know how well an e-commerce site does. Companies are striving for metrics that encompass the success of the full experience. Marketing tools like Adobe are already working on holistic measurements, but we expect the year ahead to bring new players to the field.

4. Simplified design makes a comeback.

With their attention pulled in so many different directions, people are craving more focus. That means simplicity has a higher perceived value. As a result, we expect to see more products and services that streamline experiences and choices.

Some of our favorite examples include Spotify’s Wrapped and Netflix’s updated approach to recommendations and categorization. Shopify is a leader too, with its one-click ordering, chat-based commerce and AR tools. Essentially, the future looks exciting and inspiring for those who adapt and pretty deadly for those who don’t.

Want to learn more about how experience and innovation can transform your business? Hear from our team about why experience matters here or get in touch today. 

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As companies continue to find new and better ways to develop high-impact customer experiences, they need to come to terms with fast-rising customer and employee expectations. Measuring the entire portfolio of experiences becomes more important.

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Organization and Culture: Looking into 2020 Trends

Ease hiring struggles with an improved employee experience–and plans to build young workers into your future.

It’s the time of year when organizational leaders are publishing their 2020 plans, hoping they are effectively responding to the disruptive forces and opportunities of the digital age.

We’ve similarly been reflecting within our Organization & Culture practice here at Prophet. Our views come from not just our ongoing research, but also from helping our clients around the world lead transformations of all shapes and sizes. We’ve distilled that experience into the three factors we believe will be critical to organizational transformations in 2020.

In setting out these opportunity areas for focus, we are not saying these are the only big-ticket items that should occupy your attention. But it is our belief that the ones we have selected are going to become points of differentiation in accelerating successful organizational transformation.

1. Connecting Purpose and Ambition

We’ve written previously about the arrival of “purpose” as a critical component in transformation; bringing a sense of meaning and direction by answering why an organization has its place in the world. We have helped many clients arrive at their north star and to think beyond words about what needs to happen daily for them to infuse true purpose into their organizations and thereby align behaviors and accelerate decision-making across the business.

But having a purpose alone is not enough to help people through the dizzying world of change we are in. What our 2019 research revealed is needed, and what we are now seeing more of in successful transformations, is codifying purpose through a clear, measurable and time-bound ambition. For some organizations, this is as narrow as painting a comprehensive picture of what a digital transformation will look like in their own firm and for their customers. For others, it means creating a more tangible set of future outcomes that cater to the complete stakeholder ecosystem, both in and outside of the organization.

2. Incorporating the Next Generation of Workforce Planning into Your Talent Strategy

We see organizations realizing more starkly than ever before that they were designed for a different era. New operating models are no longer a consideration – they are becoming a necessity with significant implications for an organizational redesign. Tinkering at the edges of this problem is no longer viable.

Workforce planning is a key strategic imperative, but it has moved firmly beyond predicting talent needs to a synthesis of three formerly separate disciplines: functional and enterprise visioning, business architecture, and powerful people analytics. All three of these disciplines impact how you organize talent to deliver on your business ambition. Prior approaches were frequently focused on cost-cutting and demotivating, decoupled from growth strategy, and executed with the thinnest veneer of quantitative insights to support them. We’re toe-to-toe with this issue with several clients right now and we’ve found that the next generation of workforce planning is different from past approaches because it’s:

  • Linked to vision and ambition
  • Driven by business architecture and not existing organization charts, it’s more tightly coupled to longer-term business strategy
  • Facilitating more strategic decision-making as quantitative tools help SaaS people data platforms really come into their own

On top of this, the reskilling component of workforce planning has now ballooned as a result of years of declining learning and development investment and the use of often ineffective, low-cost alternatives. The future is already here for some leading companies making multi-billion-dollar investments in reskilling in order to remain competitive.

3. EX=CX=EX

Employee experience (EX) has long been talked about as the acid test of any employer brand – the reality of expectations met or otherwise. But in a world where consumer brands have shifted to build their worth through experience first and foremost – suddenly the connective tissue between EX and Customer Experience (CX) is a growing area of focus and can easily hit the headlines when it clearly falls short – notably recently at the direct-to-customer luggage brand, Away.

This is made even more complex through the interplay between technology and humanity – and the challenge that EX has lagged light-years behind CX in terms of technological enablement. The sad truth is that so many “employee tools” are actually designed to cut costs and make the lives of Finance, HR and Operations teams easier – rather than deliver a customer-grade employee experience. As a result, we see HR leaders looking to approach EX differently and learn from CX innovation. And there are also CX leaders taking a more holistic view of the organization and looking at how EX can really drive differentiation for their goals. Ultimately, there is a big prize: EX is powerful and makes work easier for employees, thereby delivering both direct and indirect benefits to the end customer and reinforcing the value proposition for employees to join a firm and thrive – win, win, win.

“Our views come from not just our ongoing research, but also from helping our clients around the world lead transformations of all shapes and sizes.”

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One final point. There is one theme we have not yet called out but, in our view, it flows through our identified focus areas and that is humanity. As symbolized by our Human Centered Transformation model, the organization is a macrocosm of people. Too often leaders continue to mistake the pursuit of digital innovation as separate from the people agenda, which inevitably fails to drive the outcomes they seek. The value created by any organization is rooted in human contribution. Its transformation therefore needs to be viewed in that way.

There is little point in reflecting on 2019 if it does not drive action in 2020. We suggest that you closely consider plans for the year ahead to determine if they adequately address these three transformation focal points and if not, make them your first new year resolutions.

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Brand & Activation: What to Expect in 2020

The most relevant brands are humanizing the way they treat customers, emphasizing privacy and empathy.

When it comes to spotting marketing trends, it’s easy to get distracted by the buzziest tech developments. But in our field of work, guiding the world’s leading brands to avenues of uncommon growth, there’s a higher likelihood that the most important trends aren’t brand new.

“In our field of work, guiding the world’s leading brands to avenues of uncommon growth, there’s a higher likelihood that the most important trends aren’t brand new.”

They’re ideas that sound familiar – the importance of customer experience, for example, or brand purpose – that are undergoing new and powerful changes.

And yes, staying on top of the latest technologies and trends like TikTok and VSCO girls certainly matters. But not as much as paying attention to these five developing – and seismic – shifts. Let’s take a closer look:

1. Digital experience makes way for humans.

For years now, the emerging importance of customer experience has driven big investments in digital technology. AI now powers everything from chatbots to voice activations to CRM machines. But to be truly regenerative – creating experiences that aren’t just satisfying, but also drive revenue – we’re seeing a movement to experiences that are deliberately human.

We’re not saying that the tech-stack trends of the last two decades are going away. And certainly, some of the least human brands continue to dominate our Brand Relevance Index® (BRI) – good luck ever connecting with a live person at Netflix or Amazon. (Sorry, Alexa, you don’t count.)

But in an era when intuitive and personalized digital experiences are expected, the pendulum is swinging back. Some of the fastest-growing brands rely on genuine warmth. When customers return a purchase to companies like Bombas, UNTUCKit and Casper, ultra-enthusiastic specialists artfully turn what might be a negative conversation into a rewarding experience. Zappos continues to set the gold standard here, training associates for four full weeks before letting them take a call. And B2B companies are making these changes, too.

It comes as no surprise that some of these brands are also the most digitally disruptive. Stitch Fix, an online personal stylist subscription service, may excel because its wardrobe selection choices are driven by some of the best AI out there. But it continues to grow because of the personal relationship customers develop with their stylists, fix after fix. This year, we’ll see brands think less about creating efficient experiences and more about injecting them with warmth.

2. Consumers have learned the difference between privacy and security–and are ready to hold brands accountable.

While concerns about security breaches and data privacy have been around for ages, mainstream consumers have mostly had their heads in the sand. But between Facebook’s ongoing fall from grace and legislative efforts to put data in the hands of consumers, outrage is entering the mainstream. It’s so top of mind that it’s the focus of Apple’s latest marketing efforts. “These are private things, personal things,” the ads say. “And they should belong to you, simple as that.” As people increasingly view tech companies as villains, we expect more companies to go on the offensive, convincing consumers that they are one of the good guys.

In this year’s BRI research, we talked to people about this issue specifically for the first time. On the measure of “I trust this brand to act responsibly with my data,” financial brands scored far better than tech companies. Fidelity, Turbo Tax, USAA, Vanguard and Visa led the list. Except for Apple and Android, which ranked in the top 20 by this measure, tech–including Amazon–scored poorly. And (no shocker here) Facebook came in dead last, followed by Twitter.

3. Think you’ve got brand purpose? Better ask Gen Z.

A funny thing has happened in the last five years, as companies rushed into purpose-based marketing. Gen Z (kids born between 1997 and 2012) are coming of age. And this problem-solving group is more fiercely committed to changing the world than their millennial older brothers and sisters.

New research shows that 90% are fed up with the negativity in the U.S., and are taking that millennial “OK, Boomer” thinking to the next level. They expect companies to help, if not take the lead. Some 83% consider a company’s purpose before deciding to work there, and 72% before making a purchase. Among their top concerns? Protecting the environment, racial and gender equality, LGBTQ rights and gun safety. Their heroes are peers like environmentalist Greta Thunberg and gun-safety advocate Emma Gonzales.

They favor brands that take bold stands on these issues, like Levi Strauss & Co. and Dick’s Sporting Goods for controversial positions on gun control, American Eagle’s Aerie for unretouched, inclusive marketing and Marvel for its diverse superheroes. Companies that continue to play it safe with purpose risk losing this vital audience.

4. Power for your people.

Making sure employees are engaged and supported at work is important to the success of any enterprise. Employees who trust their employer are far more likely to act in ways that help the company grow and prosper. But the world is watching, and 78% of people say that the single best measure of a company is how it treats its employees.

Employees demand more, too. In new research on trust, 67% expect prospective employers will join them in taking action on societal issues. And 71% of employees believe it is critically important for their CEO to respond to challenging times. Prophet’s recent research on how companies are powering transformation from the inside out confirms this.

More than a third of the companies surveyed are actively developing ways to retrain and reskill their workforce, and 33% already have a roadmap for making sure their corporate culture and growth plans focus on people. This all means more than firing high-level execs who misbehave. It requires managing organizational culture to drive digital transformation. And it calls for more planning, more flexibility and more empowerment for employees.

5. Hello, joy. We missed you.

As we head into an election year that promises to be even more toxic than 2016, people need relief. Scientists say 40% of America is already demonstrably stressed-out by current events, and 73% are worried about fake news being used as a weapon.

Smart brands will respond by offering moments of lightness, laughter and escape. Joy already powers some companies. Among those that soar on our “Makes me happy” measure in the BRI are Disney, Spotify and Hershey’s, with Pixar in first place. (Trust us: Frozen 2, Soul and Onward will be among the year’s most beloved movies.)

The ability to inspire people to be their best, happiest selves is more valuable in cynical times. The most inspiring brands in our Index – including LEGO, Pinterest, Etsy, Fitbit and TED – succeed by leveraging their inspiration to create communities. These people become the brand, uplifting one another in ways that are fun, authentic and rewarding. We predict many companies will borrow some of their tactics, striving to connect people in ways that make them feel better in challenging times.

We expect this urge to spread joy and connection to show up not just in messages, but in ambitious digital and IRL experiences. Think of it as a modern approach to what Coke tried to do, back in 1971, another deeply troubled period in the U.S. In their own way, we think many brands will try and remind us that joy is the real thing. And we’ll drink to that.

Want to up to date on 2020 trends? Read through our Brand Relevance Index® (BRI) for a better look at how 2019 stacked up or get in touch today. 

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Brands can become relentlessly relevant only by understanding that their audiences are always changing. Concerns that have seemed trendy or on the fringe can abruptly become mainstream, requiring fast responses from brands. Purpose, privacy, empathy and joy are important examples, and can help brands get closer to today’s consumers.

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Building Relevant Brands in Healthcare

Make sure your healthcare brand is seen as modern, in touch and better than competitors.

It’s easy to assume that healthcare’s biggest challenges come from pressure to lower costs or growing consumer frustration. But Prophet has just published its fifth Brand Relevance Index, revealing a larger threat: Most people view the non-healthcare companies invading the industry as more relevant to their lives than traditional healthcare providers.

Our researchers ask thousands of consumers about hundreds of brands they’d consider using. Only one healthcare provider–Mayo Clinic (No. 24)–cracked the top 50 of our index. And the brands consumers say are most relevant? These include tech companies that are rapidly rolling out healthcare-related offers, like Apple (No. 1), Amazon (No. 7) and Google (No. 13).

While there’s no denying these brands dominate in other areas, many established healthcare organizations aren’t as worried as they should be. They see these outsiders as indirect threats, perhaps because they are less likely to provide direct care. But as these invaders create greater relevance in healthcare, their disruptive potential is growing. They can commoditize the delivery of care and marginalize providers.

Others see the tech threat as imminent. They believe that as people–doctors and patients alike–feel increasingly at home with tech, traditional healthcare models will get left in the dust. And because these invaders are powered by so much data, they can offer health innovations that are potentially faster, easier, cheaper and safer.

Here are few examples of tech companies disrupting the healthcare space:

  1. Amazon – It’s now adding skills to Alexa that are HIPAA-compliant, making it simpler for providers to use voice-recognition. Pillpack, its online pharmacy, is threatening giants in that field. It’s partnering with Berkshire Hathaway and JP Morgan Chase to form Haven, a still-vague initiative devoted to lowering cost and improving care. And it just launched a virtual clinic for employees, which many believe is a model for future offers.
  2. Apple – The tech giant has also announced plans for its own clinic, is winning with Apple Health Records, breaking down EMR silos and making data more portable.
  3. Alphabet – It is clear the company has a massive healthcare agenda, with efforts that include Google Health, Google Fit, Verily and Nest’s health-monitoring services. Last year, it hired David Feinberg, MD, who had been the CEO of Geisinger Health, to oversee these fragmented efforts. It’s also poached Toby Cosgrove, MD, a former CEO of the Cleveland Clinic, as an executive adviser to its Google Cloud healthcare and life sciences team.

Why isn’t healthcare more relevant?

Consumers are crazy about these tech brands, which have built relationships with people that are deep, immediate and intense. With average relevance scores in the 95 percent-plus range, they do well on all four core drivers–they are customer-obsessed, ruthlessly pragmatic, pervasively innovative and distinctively inspired. When asked about these brands, people often tell us, “I can’t imagine my life without it.”

Yet the scores for healthcare organizations are in the 70 percent range, on average, with some as low as 43 percent.

Frankly, we find this a little baffling. After all, healthcare is about life and death, feeling good instead of lousy. Shouldn’t we see healthcare organizations as more relevant to our lives than a two-hour grocery delivery or the new season of Stranger Things?

So we dug into the data, trying to discover why consumers are relatively indifferent to traditional healthcare organizations, even those that are undergoing impressive transformations.

“Shouldn’t we see healthcare organizations as more relevant to our lives than a two-hour grocery delivery or the new season of Stranger Things?”

After dissecting the relevance scores of 23 healthcare providers, we found inherent strengths. Almost all achieve very high scores on our measures of purpose, beliefs and values. And there are common weaknesses, especially in terms of access. Consumers give healthcare providers much lower scores for “Is available when and where I need it” than for other industries.

Along with Mayo Clinic, organizations like Northwestern Memorial Hospital, MD Anderson Cancer Center and the Cleveland Clinic rose to the top. When we compare the scores of the top three performers in the category with the bottom three, studying how they fare in each of our 20-plus attributes, we find three essential insights. They offer clues for organizations that are genuinely committed to driving a relevant brand.

The most relevant healthcare brands…

Consistently deliver on their promises

Healthcare is about flu shots and colonoscopies, not trips to Disney, so we’d expect these brands to score lower on measures like “Makes me happy.” But consumers want healthcare organizations to be practical, not joyful. They say the most relevant brands provide remarkably consistent experiences, and that they live up to their promises. They expect healthcare organizations to meet their most pragmatic needs. They are impressed when providers do so and well aware when they stumble.

Make sure they’re seen as modern, in touch and better than competitors

While it might seem obvious that communicating state-of-the-art offers is essential in healthcare, our survey shows it matters more than most organizations think. The top-performing brands typically score as much as 40 percentage points higher on questions like, “Has better products, services and experiences than its competitors” and “is always finding new ways to meet my needs.”

Aggressively cultivate trust

Trust is complex. It’s not something an organization does, but rather something it earns. Yet, being seen as trustworthy is an essential ingredient of success. Between 70 and 90 percent of consumers say they trust our top healthcare organizations. For the bottom three, those percentages barely make it past 40 percent. The best healthcare brands carefully track trust measures, including how people feel about data and privacy.

When consumers trust a provider, they’ll be more open to innovation. That engenders relevance, creating a positive cycle. In the case of Piedmont Healthcare, for example, more than 80 percent of consumers say that they would be willing to try anything new it offers them. For the lowest-scoring brands, that willingness hovers at around 30 percent.

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Facing disruption from invaders like Amazon, Apple, and others, the healthcare industry is on notice. Finding ways to deliver better experiences and to remain relevant with consumers should be top of mind for all healthcare executives. At Prophet, we characterize the organizations that are committed to consumer-centric transformation Evolved Healthcare Enterprises. Read more about the four attributes of healthcare organizations dedicated to driving uncommon growth in the digital age.

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3 Dimensions That Separate the Best B2B Brands from the Rest

Keeping your promises, building trust and commitment to innovation all fuel customer loyalty.

The recent release of the Prophet Brand Relevance Index® (BRI) uncovered three important ways B2B growth leaders can set their brands apart in their category.  The study of 225 brands by 13,500 U.S. respondents is important because relevance is so closely linked to profitable growth. In fact, our data reveals that the most relevant brands have outperformed the S&P 500 average revenue growth by 230 percent and EBIT growth by 1,040 percent over the past 10 years.

While B2B brands aren’t ranked in our Index, a large cohort of well-known brands with significant business-to-business (B2B) revenues such as GE, IBM, Adobe and Amazon were included.   The best performing B2B brands tripled the ratings of the remaining B2B brands in three dimensions – consistent promise-keeping, innovative differentiation and trust. Each dimension provides a guide to B2B brand relevance building.

  1. 1. Consistent Promise Keeping

Ruthless pragmatism, the brand’s ability to consistently make the user’s life easier, is a key driver of brand relevance.  Three attributes stood out for the best B2B brands: “Lives up to its promises,” “Delivers a Consistent Experience” and “I know I can depend on.” Users and buyers realize that the B2B world is filled with brand options and choices, but no single brand is right for every situation at any given time. Honesty about what a brand can deliver matters enormously, as it makes reasonable and achievable promises to its consumers.

“B2B brands that lose touch and trust are among the first to lose relevance.”

For example, Marriott consistently delivers on its promises to business travelers. They focus on the fundamentals—convenient locations, exceptional cleanliness, comfort without the frills—and they do it every day across thousands of locations, scores of staff members and a portfolio of brands.

  1. 2. Sustained Innovation

A hallmark of relevant brands is pervasive innovation – pushing the envelope and finding new ways to meet consumers’ needs. They find better ways to engage with customers and create superior experiences through service and product innovation.  The brands that excelled in B2B stood out in two key areas: “Is always finding ways to meet my needs” and “Has better products, services and experiences than competitors.” Pushing the envelope appears to be less of a differentiator than sustainable innovation that drives tangible benefits for consumers for top B2B performers.

Amazon Web Services (AWS) embodies the principle of sustained innovation and benefit delivery.  Amazon didn’t pioneer the shift to cloud computing, nor do its web-service innovations depend on cutting-edge tools and applications.  Instead, it relies on building an ever-expanding suite of web services that can be utilized at scale, by different types of businesses, with a wide range of applications with very different levels of data and platform maturity.

  1.  3. In-Touch & Trusted

Survey respondents agree that distinctive inspiration is an important driver of relevance.  In doing so, they are focusing on several different aspects of the brand including, “Makes me feel inspired,” “Has a set of beliefs and values that align with my own,” “Is modern” and “I trust.” Top B2B brands spike on trustworthiness and being modern and in touch.  Trust in the B2B context is far-reaching because it extends from personal relationships with the company’s representatives to confidence in the future behavior of the brand.

B2B brands that lose touch and trust are among the first to lose relevance as Union Carbide, International Harvester and Lehman Brothers can attest. Far more brands are building strategies focused on staying in touch and building trust. One example is Mayo Clinic, which is extending its relevance outside the hospital into the B2B world, offering services for executive health, which helps the brand build trust beyond its patients and into the top of the funnel of organizations.

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Relevance is earned day by day, one customer at a time.  Consistent promise-keeping, sustained innovation and being in touch and trusted neither require lucky breakthroughs nor depend on macro-economic conditions.  They are all within the control of company leaders.  The relevance and growth they generate are achievable with dedicated focus and leadership attention.

Interested in increasing relevance in your market? Prophet assists companies with developing strategies that drive brand relevance.

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Prophet Brand Relevance Index® 2019

Apple, Android, Spotify and other leaders offer lessons about how all brands can get closer to customers.

For over 100 years, brands have been built a certain way. But the modern world demands something new. Prophet has played a pivotal role in shaping brand strategy – it’s our heritage and our future. With the launch of the BRI, we set out to learn more about relevance and ultimately answer the question, “What does it take to build a relentlessly relevant brand?”

Here’s our answer. Relentlessly relevant brands engage, surprise and connect. They push themselves to earn and re-earn customers’ loyalty—and they continually redefine what’s possible.

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Which Brands Have a Purpose Customers Believe In?

Whatever their mission, brands like AARP, Fitbit, NPR and Peloton energize and evangelize audiences.

Many brands attempt to create a customer relationship by having a purpose that inspires and engenders respect.  Such a purpose can form a customer bond that goes way beyond functional benefits.  What brands have a purpose that is known, understood and admired? And which have disappointed?

The recently-launched 2019 U.S. Prophet Brand Relevance Index® (BRI) measures the strength of 225 top brands from over 27 categories among respondents that are active in the category and are familiar with the brand. One of the measures in the survey, which I will be evaluating in this post, was centered around brand purpose. Prophet talked to consumers about the brands they loved, inquiring whether they agree with the statement: “The brand has a purpose that I believed in.”

Observations on Brands With a Purpose We Believe In

Of the media brands, NPR (Ranked No. 1 for the dimension) and TED (7) were significantly above news outlets like CNN, The New York Times, and Fox – all of whom were near the middle of the sample.  This is likely because NPR and TED are not perceived as biased. Entertainment brands Disney (No. 6 in purpose rankings) and Pixar (25) did well probably in part because they are well-positioned as companies that use technology to produce entertainment experiences that bring happiness to others. Consumers believe in Disney and Pixar’s purpose because it is easy to understand and authentically integrated into their products and services. It is no surprise these same entertainment and informational media brands dominated the top ten brands on the “connects with me emotionally” scale.

Of the 18 insurance brands, two brands stood out with respect to purpose—USAA and AARP, both ranking in the top 12 brands on purpose metrics.  With USAA focused on military families and AARP on retired seniors, they have a clear and niche focus, which helps them understand their consumers to an intense degree. They can then evolve their purpose e to fit their needs, making it more meaningful to their customers.  Aflac also is in the top 20 percent on purpose— the top insurance brand (30) in the “connects with me emotionally” scale.

Two fitness brands, Fitbit (3) and Peloton (5) were in the top five brands. Both had brand purposes that resonated with their customer base.

Financial services firms did not score well against the dimension, with most of the brands surveying in the bottom half.   The exceptions were Vanguard (3), Fidelity (16), TurboTax (23) and Paypal (36). Vanguard is a customer-owned company that focuses on low-cost funds and Fidelity adds to a low-cost goal, a commitment to make financial expertise broadly accessible. Consumers who are attracted to these brands share the goal of finding low-cost financial options and so the brands’ purposes clearly align with their customer base.  (It is noteworthy that both brands were way ahead of Charles Schwab on this measure).

“The brand has a purpose that I believed in.”

Restaurant brands also didn’t do well with respect to purpose.  Of the 21 brands, eight (mostly fast-food brands) were in the bottom 10.  A notable exception was Chick-fil-A, whose purpose includes “to be a faithful steward of God and to have a positive influence on all who come in contact with the brand.” One manifestation of this purpose is their practice of not operating on Sundays – a day for rest, family and church services. It led to a place in the top 20 percent and was number 13 on the scale “aligned with customer beliefs and values.”  Even restaurants oriented to quality or health, like In-N-Out and Hello Fresh, did not make the top half, perhaps because their purposes were not differentiated enough.

Tesla was a winner among automobile brands with a top ten position undoubtedly driven by its passion to accelerate the movement to all-electric cars as a way to combat global warming but also for its features and driving experience.  Honda finished in the top 10 percent perhaps because of its history of technological innovation and Toyota in the top 25 percent because of the Prius and its associations with the fight against global warming.

Social media and Internet services did well, with most in the top 25 percent.  The top social media brands were Spotify (8), Pinterest (15), Roku (21), Waze (22) and Airbnb (26).  Facebook and Twitter were at the bottom of all the brands in the sample, likely because of the roles they play in controversial political and social discourse.

Which brands have a purpose you believe in? Leave a note in the comments.

For more information on the 2019 Prophet Brand Relevance Index, please visit the dedicated report microsite.

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Prophet’s ongoing relevance research proves that an authentic purpose is one of the surest ways to achieve relevance. Consumers–especially younger ones–want to do business with brands they admire.

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Prophet Brand Relevance Index® 2019 – China

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Purpose Driven Brands are Relevant Brands

Why IKEA, DIsney and Lush resonate with consumers in the UK, because they know actions mean more than ads.

It is well reported that brands with purpose outperform their peers; often attracting and retaining the best talent, providing a real point of difference for consumers. Unilever announced strong results that support this notion with purpose-led brands in their portfolio growing 69% faster than the rest of the business and delivering 75% of the growth.

The results of our 2019 Prophet Brand Relevance Index® (BRI), which speaks to 12,200 consumers in the UK to understand the brands most indispensable to their lives, shows that many of the brands successfully soared up the rankings are the ones centered on clear, authentic purposes. Brands like Lush, Ikea and Disney have all seen their relevance with British consumers increase over the past 12 months and they were classified as purpose-driven brands in the U.K.

“It is well reported that brands with purpose outperform their peers; often attracting and retaining the best talent, providing a real point of difference for consumers.”

So, what do purpose-driven brands do to drive success? Purpose exists to differing degrees in organizations and even for those that are truly purposeful, there is an ongoing journey to maintain the conversation and engagement with consumers in order to stay responsive in an ever-changing world.

Here are three fundamentals to become a purpose driven brand:

1. Identify a purpose rooted in truth

A purpose cannot just be invented. It is not just a slogan or a campaign. A purpose-driven brand knows why it exists, and what it wants to achieve. It is at the core of what makes the brand relevant because it is in the DNA of the company. Ikea, for example, knows the importance of brand purpose and stays true to its guiding principle to ‘create a better every day for the many people.’ Even as Ikea continues to grow, its relentless focus on bringing design to the masses in a way that is authentic and transparent has manifested itself across the entire business model. This year, the brand jumped up 10 spots in our BRI, to sit comfortably at 18.

2. Articulate the ‘why’

A purpose should inspire its audience, acting as a rallying cry for its employees as well as a demonstrative signal to the outside world of the values and belief system behind the company. To drive impact, the purpose must resonate with hearts and minds.

A great example of this is Disney, which climbed to No. 14 in the Index with its simple and inspiring purpose: “make people happy.” Not only is this rooted in the organization’s DNA, but it inspires across all levels of the organisation and drives behaviours in the pursuit of constantly increasing happiness. This single unifying principle speaks to the heart. And when a purpose speaks to the heart it has the power to truly inspire change.

3. Activate with conviction

A purpose-driven brand doesn’t make empty, albeit appealing and cleverly executed, claims. It actually uses its brand purpose as a yardstick to measure what they do and how they do it. Brands that possess purpose have a clear conviction; they don’t just talk, they act too. Purpose drives relevance and perceptions, but to do so employees and customers need to know about it.

Lush has long been a proponent of cruelty-free and vegan products. And whilst much has been made of previous campaigns what constantly remains at the core of their actions is a real conviction. Lush doesn’t just talk about the environment, it acts on it. It is a big deal to put your conviction above profit but that’s precisely what the brand did on Friday 20th September when it closed its stores and website to lend its voice to the climate crisis. It is no wonder Lush powered into the top 10 this year, with British consumers scoring it highest on relevance measures such as ‘has a set of beliefs that align with my own’ and ‘lives up to its promise.’

Empower
Employees

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FINAL THOUGHTS

Brands need to learn that it’s actions and not ads that make the difference. To build a relentlessly relevant brand, and perhaps move through next year’s Index, you must identify your organisation’s true brand purpose, articulate it well to employees and customers, and activate it for the world to see.

If your brand is ready to become a purpose driven in order to unlock uncommon growth, let’s set up a time to discuss. Our team of strategic consultants is ready to help you chart the course.

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Digital Marketing Priorities in Financial Services for 2019

Our research shows that lead generation and customer experience top the list. And hiring is a major headache.

It’s clear that emerging Fintech and Insuretech entrants are shaking up financial services. Across the board – from large to small-scale companies – we’re observing an accelerated need for more digitally fluent marketing organizations to tackle new challenges in an evolving market.

To understand the challenges and priorities impacting the insurance and banking industries today, we turned to Prophet’s digital analyst group Altimeter surveyed 68 global financial services executives as part of their industry-wide 2019 State of Digital Marketing report that spoke to over 500 executives in North America, Europe and China.

“Altimeter surveyed 68 global financial services executives as part of their industry-wide 2019 State of Digital Marketing report.”

The report surfaced three primary digital marketing insights specific to where financial services executives are betting their marketing investments to address business challenges:

  1. Lead generation and customer experience are the
    top digital marketing priorities.
  2. Scaling marketing innovation, the right talent and proving impact
    are the greatest challenges.
  3. Data analysis, marketing automation and UX design are the
    most sought after skills.

Let’s dive into the results.

1. Lead generation and customer experience are the top digital marketing priorities.

Lead generation and customer experience came out on top (see Figure 1) – ranked higher than brand awareness and brand health – a top priority across other industries.

To measure digital marketing success, financial services companies are placing greater emphasis on customer loyalty/customer lifetime value (CLTV) – even before direct revenue (see Figure 2).

We see these forces working within financial services companies that are investing more to acquire customers through digital demand-building activities. Specifically, with the increases in the promotion of banking, investment and insurance products going more digitally direct-to-consumer. We also see loyalty as a rising metric to diagnose and resolve potential attrition challenges before being confronted.

2. Scaling marketing innovation, the right talent and proving impact are the greatest challenges.

Financial services marketing organizations are navigating several challenges with their focus on lead generation and CX development, particularly around scaling, hiring and proving business impact (see Figure 3).

In addition, we learn that compared to other industries, financial services companies are experiencing a much greater challenge in seeing a return on investment for their marketing technology spend with 32 percent saying that it took a long time before they saw any return. Consequently, it is now considered to be their top Martech challenge.

3. Data analysis, marketing automation and UX design are the most sought-after skills.

Financial services companies are now focused on building capabilities in data analysis, marketing automation, and user experience design (see Figure 4) to enable the scaling of marketing innovation across the full enterprise and ultimately to prove business impact.

Financial services companies as a consequence are finding the need for capabilities to apply digital marketing in new ways previously not considered.

These evolving digital marketing priorities are making way for the future

Drive
Customer
Demand

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FINAL THOUGHTS

What’s clear from the findings of Altimeter’s 2019 State of Digital Marketing report is that as financial services companies place greater emphasis on driving customer acquisition and shaping customer experiences, marketing must bring in new capabilities formally nascent within the organization, invest in the right marketing technology, and prove business impact on a small – yet scalable – way.

At Prophet, we help our clients drive uncommon growth through transformation. We work with leaders across the insurance and banking categories to understand where to play and how to win to unlock the full potential of the brand and customer relationships. Learn more with our guide to digital marketing excellence here or get in touch today. 

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6 Actions to Build an Insurance Service Strategy that Drives Growth

Our research finds that consumers expect more, and want products combined with services.

Over the past several years insurance companies have faced increased product commoditization due to ubiquitous online presence, more sophisticated aggregators and the increased availability of insurance products. They are faced with the challenge of driving growth while managing their risk profiles to be less capital-intensive. In a market with heightened expectations for digital experiences – which the COVID-19 pandemic raised even more – the likes of Oscar, Lemonade and other new DTC market entrants are raising consumer expectations, spurring companies to develop more experience-led strategies to drive engagement and value. Then there’s other players like American Express and Chase making their play.

Where should insurers look to drive growth?

Against this backdrop, Life, Health and P&C insurers are turning to new services to drive growth and engagement. Services create more compelling and differentiated solutions that focus on customer needs, going above and beyond basic insurance coverages. This enables insurers to identify new streams of less capital-intensive revenue and increase demand for existing products – especially in a category that has historically struggled to drive engagement at moments outside of the core product moments (e.g., purchase, premium payment and claim).

Based on our extensive experience and research within the industry, integrating a services strategy also translates into impactful business outcomes for insurers globally – from initial purchase intent to long-term customer retention. The results speak for themselves:

  1. Customers were twice as interested in an insurance product when sold with relevant services (Source: Prophet Insurer Research)
  2. The presence of services impacts broker interest with three-quarters of brokers stating that services are critical to their choice of provider when recommending to clients (Source: Prophet Insurer Research)
  3. Insurers who offer three or more services on top of the core product see NPS increases between 20-40 points.

When it comes to services, who is doing it well?

Insurers are already recognizing the value services can bring both to their customers and their business. However, as many insurers do not have exclusive relationships with services providers, avoiding services replication across the industry is key. Insurers are therefore partnering and acquiring across the services ecosystem to uniquely deliver new customer value.

P&C providers are already seeing strong integration of services into their offers given their ability to utilize customer tracking and connected devices, not only providing product discounts but also additional services on-top. For example, Progressive Insurance has partnered with TrueMotion to launch Snapshot, a service that monitors and measures driver data through either their smartphones or a plug-in device. This enables customers to understand their driving habits and generate personal discounts. Progressive is continuing to explore expansions to the program and invest in partnerships to combat distracted driving.

“Integrating a services strategy also translates into impactful business outcomes for insurers globally – from initial purchase intent to long-term customer retention.”

Health and Life are also now capitalizing upon the opportunity to integrate services into their portfolios by exploring the way they can utilize health tracking to adjust premiums through improved health. From a global standpoint, Vitality is one example of a brand that has developed a personalized customer health and wellness tracking and support platform. In the U.S. specifically, John Hancock has partnered with Vitality to provide discounts and tailored recommendations to their customers based on their health tracking. While in Asia, AIA has made a focused push to expand the solutions they offer to customer across the region.

Health insurers also are exploring the role of partnerships with preventative health start-ups to help customers manage chronic illnesses. For example, Cigna has partnered with Omada Health to offer customers a personalized preventative health solution to mitigate risk against diabetes, heart disease and stroke.

Six actions for insurers to create impact and drive growth through services

We believe there are six actions insurers take to develop a winning services strategy:

  1. Understand what customers want. What is the foundational understanding of customer wants and needs to guide services development?
  2. Identify the business opportunity. What role could and should services play for your business and what business objectives should your services strategy inform (i.e., acquisition, incremental revenue, retention, efficiency)?
  3. Prioritize unique and relevant services. What are the set of unique services most relevant to your customer base that you will prioritize developing?
  4. Drive engagement. Where and when within the journey do customers become aware of services and how do we improve interest for them?
  5. Improve the experience of access and use. What is the right experience behind driving easier services access and use to deliver greater customer value?
  6. Identify the right internal owners. Who within the organization is responsible for funding, building and managing our services strategy?

Identify
Growth
Pathways

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FINAL THOUGHTS

Insurers are falling short on delivering value to customers. A well-defined services strategy can nurture customer relationships and earn loyalty to fuel growth.

If you’d like to learn more about the role of services and how we have helped leading insurance companies execute experience-led strategies that drive impact and engagement, get in touch.

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Using Anniversaries to Reinforce Your Brand Purpose

Annual events can strengthen and reinforce important values, helping to tell different stories.

It is more important than ever for companies to have a brand purpose. To remain relevant to their customers, companies need to find opportunities to share that purpose with the world and in turn, also become inspiring places to work for their employees.

A powerful way to reinforce a brand’s value to both internal and external audiences is through brand anniversaries.

They are also an opportunity to celebrate the past while setting up a vision for the future.

In the past few years, many iconic brands have used key anniversary milestones to strengthen ties with their stakeholders and build brand perceptions around a strong purpose. But anniversary celebrations can be used in different strategic ways as well. We’ve identified 3 ways brands can make the most of their anniversary through a focused strategy.

3 Ways Brands Can Use Anniversaries to Reinforce Their Brand’s Purpose

Reinforce the Core

For example, Marvel Studios used its 10-year anniversary to engage core fans and drive loyalty through its “More Than a Hero” campaign. The branding campaign kicked off with a week-long event showcasing 20 Marvel movies in IMAX theaters. Marvel also released behind-the-scenes, never-before-seen footage and launched a sweepstake for fans to share their favorite Marvel memory on social media.

Through these activities and content, they successfully engaged tens of thousands of fans in live events and via anniversary videos on YouTube (which received over two million views), helping to cement loyalty for the franchise.

Strengthen Your Image

Swiss Re celebrated its 150th anniversary by engaging stakeholders worldwide to participate in collaborative dialogues on important topics of our time, such as advancing sustainable energy solutions, funding longer lives and partnering for food security. To achieve its goals, Swiss Re launched The Open Minds Forum around the world, discussing ground-breaking ideas and exploring fresh perspectives on the risks facing generations to come. Employees were also encouraged to write articles and share their perspectives.

The anniversary celebration helped Swiss Re initiate conversations around business and societal risks with its customers and reinforced the brand image of being ‘smarter together,’ by creating a dialogue with people around the world.

Shift the Narrative

For its centennial anniversary, BMW launched “The Next 100 Years”, a year-long integrated campaign to strengthen its brand worldwide. As part of the campaign, the company revealed four concept cars and released “The Next 100” publication to invite industry experts & pioneer thinkers to envision the future of BMW. They interacted with consumers digitally through curated content on a dedicated centennial website, live discussions on social media platforms, and AR/VR interaction through the ‘BMW VISIONS’ mobile app.

These anniversary celebrations bolstered BMW’s status as a future shaper by gathering hundreds of thousands of guests and consumers to join celebration events in person or online.

How Do Anniversary Celebrations Help to Amplify Brand Purpose?

While each of these celebrations took on different forms and focused on different objectives, there were four guiding principles they each followed which made them successful:

  • Be authentic: For any anniversary celebration, you need to stay true to your brand DNA in everything you do and say
  • Be clear: You need to have clear objectives and create a single, overarching theme to align all activities and leave stakeholders with a clear understanding of what your brand stands for
  • Be targeted: You must consider what you represent to different stakeholders and design specific ways to engage each of them appropriately
  • Be bold and brilliant: To deliver impact, you must activate at sufficient scale and frequency to get noticed and to show the company in a new light

Reimagine
Brands

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FINAL THOUGHTS

Anniversaries are a great time for celebration and a great opportunity to reinforce your brand purpose. To get the most out of the milestone, they require a deliberate approach. As you plan your next brand anniversary make sure you do four key things:

  1. Align on the vision, with clear objectives and a creative theme that will serve as the guiding foundation to engage all stakeholders
  2. Plan the experiences throughout the campaign and define the desired interaction and requirements
  3. Design and develop unique content to bring the experience to life at each touchpoint – spanning digital & physical and internal & external
  4. Prepare for activation with an integrated roadmap that pulls together all activities into a coherent campaign
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