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. 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.
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.
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.
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.
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.
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.
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.
While there are several other brand lists and rankings out there today, none other speaks directly to consumers to find out which brands are the most indispensable to their lives.
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.’
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.
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:
Lead generation and customer experience are the top digital marketing priorities.
Scaling marketing innovation, the right talent and proving impact are the greatest challenges.
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
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.
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:
Customers were twice as interested in an insurance product when sold with relevant services (Source: Prophet Insurer Research)
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)
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:
Understand what customers want. What is the foundational understanding of customer wants and needs to guide services development?
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)?
Prioritize unique and relevant services. What are the set of unique services most relevant to your customer base that you will prioritize developing?
Drive engagement. Where and when within the journey do customers become aware of services and how do we improve interest for them?
Improve the experience of access and use. What is the right experience behind driving easier services access and use to deliver greater customer value?
Identify the right internal owners. Who within the organization is responsible for funding, building and managing our services strategy?
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.
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
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:
Align on the vision, with clear objectives and a creative theme that will serve as the guiding foundation to engage all stakeholders
Plan the experiences throughout the campaign and define the desired interaction and requirements
Design and develop unique content to bring the experience to life at each touchpoint – spanning digital & physical and internal & external
Prepare for activation with an integrated roadmap that pulls together all activities into a coherent campaign
The Mind, Body and Soul of Healthcare’s Consumer-Centric Transformation
Change requires that leaders clarify purpose, articulate cultural expectations and alter incentives.
In today’s environment, patients are increasingly becoming “e-consumers” and that is a good thing. Despite its name, e-consumer is not a technical term. The concept of the “e-patient,” was coined in the 1990s by the late Tom Ferguson, M.D., an American physician who advocated for increasing the role of the patient in managing their own healthcare. E-patients, he says, are empowered, engaged, equipped and enabled. While the concept of the e-patient is limited to direct interactions with healthcare organizations, we have expanded and evolved it into the e-consumer. Read more here.
If healthcare organizations are to serve the e-consumer and engage, empower, equip and enable them, they too will need to make a shift by putting the consumer at the center of all they do.
Challenges of Consumer-Centric Healthcare
Expanding from patient-first to consumer-first thinking.
Being consumer-first even when it conflicts with being physician-first.
Neither is an easy task, and both demand a change in both organization and culture for most healthcare organizations.
Our colleague Tony Fross writes about the “mind, body and soul” of digital transformation, but this model is also relevant for the consumer-centric healthcare transformation (digital or otherwise). In this Prophet model, an organization first determines what it wants its DNA to be – its purpose, its brand proposition and/or its strategic plan to win. Next, it goes to work on the “mind” (its talent, capabilities, and skills), the “body” (governance, process and tools) and the “soul” (its values, behaviors and rituals).
Based on our findings, to be a consumer-centric healthcare organization, you must take the following steps:
1. Inspire the Team
Healthcare organizations may have a vision of where they want to go, but they need internal support to get there. “We didn’t develop a consumer- and patient-centric strategy for the sake of hanging it up on the wall,” says Kevin Brown, President and CEO of Piedmont Healthcare. “The patient is at the center of all that we do. We’re living and breathing it. It is how we manage, run meetings, prioritize initiatives, approve capital, hire talent.” Consumer-centric healthcare transformation must be activated at the ground level, and healthcare organizations can successfully inspire their employees in several ways; for example, demonstrate leadership role modeling, codify cultural expectations, co-create cultural expectations and make it personal.
Leadership Teams Need to Model Consumer-Centric Behaviors
Inspiring employees to embrace consumer-centricity requires vocal leaders, who demonstrate their commitment through actions. It is important to have leaders who are on board with pursuing consumer-centricity, as their behaviors set a precedent for the broader organization.
Articulate Cultural Expectations
Much like an organization’s definition of consumer-centricity, a consumer-obsessed culture is most impactful when outlined in a tangible manner and built into the organization’s processes. By articulating the culture through behavioral expectations, organizations can help employees understand what consumer-centricity means to them and what it looks like when carried out on a day-to-day basis.
“The patient is at the center of all that we do. We’re living and breathing it. It is how we manage, run meetings, prioritize initiatives, approve capital, hire talent.”
Tap Employees for New Definitions
In addition to articulating what consumer-centricity means, employees must derive personal meaning from it. That is particularly important, as employees are often the ones who interact with consumers and care for patients. Leadership can help employees find personal meaning through co-creation. After a merger, Indiana University Health (IUH) needed to integrate acquired and legacy cultures. The organization took the time to understand the needs, wants, and aspirations, both personally and professionally, of their employees to co-create a promise that was common to both its employees and members of the communities in which they lived. “Not everyone got the old promise, particularly our professional staff. With [the new one], everyone gets it. Can we show that we’re reinforcing this promise with actions and decisions? We have to do it for every patient, every interaction. That’s the next big step we’re working through,” says CEO Dennis Murphy.
Make Consumer-Centric Healthcare Personal
There is no question that healthcare is personal. Whether undergoing treatment or taking care of a sick loved one, we all experience healthcare at a deeply individual level. Sometimes, organizations can make consumer-centricity more powerful when leaders emphasize the personal aspect. That requires leaders to find their own source of inspiration so they can constantly remind the organization who they are serving each day, why their work matters and why the experience should be among the best in any category.
2. Enable Successful Employers
The executives we interviewed described many ways to enable their employees, including creating new working environments, reimagining traditional business functions and putting purpose over process.
Create Environments That Reinforce the Culture You Want
As healthcare evolves, the demands of employees at healthcare organizations need to evolve as well – and in some cases, change altogether. To solve that challenge, leaders are spending time with companies like Google to understand and replicate some aspects of the culture that those organizations have created to enable both digitally-minded and healthcare-minded people to thrive. If it takes bean bags and dartboards and modifying the dress code, so be it.
Remake Functions and Functional Expectations
In an effort to better address consumers’ questions at their first touchpoint, Florida Blue revamped its customer-service function. By investing in systems that aggregate data across formerly disparate platforms, employees were now empowered with the right tools and information to answer questions, as well as offer solutions and value outside of the immediate issue at hand. The tools don’t just enable employees to do their job; instead, they enable employees to do their job in service of the consumer, which ensures both internal and external impact.
Demand Focus on Purpose Over Process
As healthcare organizations shift their mindset, they may find that their current processes are not conducive to consumer-centricity. Great processes, whether operational or strategic, should be informed by asking how the organization can deliver the best outcome for consumers. Starting with this question leads to clarity of purpose for building a consumer-centered organization. This purpose-first, process-second philosophy better enables employees to deliver on a consumer-centric strategy instead of being inhibited by legacy processes and protocols. Healthcare organizations can empower employees to drive consumer-centricity by ensuring process doesn’t get in the way of progress (or purpose).
3. Incentivize the Team
Once employees have embraced consumer-centricity and have the tools to deliver it, they still may require an extra push to act. For some, cultural transformation requires an enormous shift in their day-to-day lives. Organizations can help by incentivizing their employees and teams personally, professionally and financially.
Establish Metrics That Drive Change
Mobilizing around consumer-centricity requires top-to-bottom alignment on common goals. Organizations need to establish clear metrics that reinforce consumer-centricity to the overall business strategy. If organizations value and reward only non-consumer metrics like revenue or operating efficiency, then progress on those metrics is all that will be delivered. Having consumer metrics, even ones as simple as satisfaction, is critical to showing and driving a true commitment to consumer-centricity. It changes employees’ motivations and behaviors, which are both critical components of culture.
Leaders are rethinking what they measure, moving from measures tied to satisfaction (e.g., Hospital Consumer Assessment of Healthcare Providers and System, NHS Patient Satisfaction Surveys) to measures tied to loyalty (e.g., Net Promoter Score or NPS). Relationship-oriented metrics help paint a fuller picture of the experience and will compel functions across the organization to establish ways of working that address the experience holistically.
Link New Strategies to People’s Pay
Putting compensation and promotions on the line is a sure-fire way to change behavior. However, incentives alone are not enough to drive results. Instilling lasting cultural change requires that employees have a clear understanding of specific performance objectives, behaviors and actions needed to drive improvements tied to consumer-centricity.
To set a foundation for its cultural transformation, Anthem looked at its key metrics and realized that, while consumer-centric measures were in place, the organization lacked clarity around creating real change. Executive leadership endorsed NPS as its key metric and tied it to executive compensation, resulting in a focus on relationship building with consumers. “Once it affected everyone’s bonus, the demand to meet with and discuss the metric took off,” says Doug Cottings, Staff Vice President, Market Strategy & Insights at Anthem.
While changing the mind, body and soul of an organization is difficult, there are tangible steps that organizations can take to get started. With employees who understand, embrace and live consumer-centricity, organizations can both win with and create more e-consumers.
Ready to partner with us to become a consumer-centric healthcare organization? Reach out today.
M&A Portfolios: Are You Thinking Like a Digital Native?
Companies need radical flexibility, not “house of brands” hang-ups.
After several quarters of near-frenzy pace, global deal-making is starting to slow. But for those in charge of managing portfolio and architecture strategy, the recent mergers and acquisition binge is creating something of a mess.
Many of the decisions about customers, brands and marketing have been addressed too quickly as deals were coming together. And once the integration process starts, those initial plans unravel. As the financial and operations teams that finalized deals hand them off to those responsible for taking new assets to market, tangles of false assumptions and the sub-optimal use of brand assets emerge; the value creation logic of the deal never gets out of the spreadsheet. And with $1.24 trillion in deals already on the books this year, that confusion presents material risk for shareholders.
Increasingly, clients are coming to us for help figuring out the best ways to organize and manage new, post-deal asset bases. Often, they start by asking: “Should we be a house of brands? Or a branded house?”
“Should we be a house of brands? Or a branded house?”
We’re not afraid to say that’s simply the wrong question. Digitally-focused companies can’t afford to think that way. The modern approach to architecture and portfolio strategy, and the one inherently chosen by digital natives, is radical flexibility.
Older companies are coming to understand this, too, focusing on customers earlier in the M&A process, aware that integration management offices are often working with incomplete data.
In order to get this right and maximize the value of today’s deals, we believe the best post-merger decisions come down to answering three essential questions.
Three Essential Questions For the Best M&A Portfolio Strategy
1. Are we customer-obsessed?
Our research on brand relevance offers compelling evidence that companies that are obsessed with customers significantly outperform others. It’s no surprise that the names that dominate the top of the Prophet Brand Relevance Index® are digital-first, including Apple, Amazon and Netflix. And those at the top of the list consistently outperformed the S&P 500 by 3x in revenue and 205x in profit in the last decade. These companies constantly ask themselves: Are we putting customer-use cases and environments first? All decisions are filtered through the perspective of customers and prospects.
When considering customers first—the buyers, the deciders–it’s easy to see how easily a company like Procter & Gamble and Schick might be outflanked. Direct-to-consumer brands like Dollar Shave Club and Harry’s have devoted themselves to changing and improving the razor shopping experience, rather than focusing on promotions and product features.
In post-M&A environments, brand portfolios should be built around key customer use cases, balancing the desire for efficiency with a customer-centric model that leverages the strongest brand for each use case. When J.P. Morgan & Co. and The Chase Manhattan Bank merged, they prioritized efficiency over customers and created a brand mash-up that weakened both brands. After a couple of years of brand value degradation, a new strategy that led with customer needs was founded with a powerful institutional brand, J.P. Morgan, and a powerful retail brand, Chase. This approach allows for effective targeting of clearly defined customer segments with separate brands and tailored offerings, and is paying off for JPMorgan Chase, with a five-year gain in brand value of 53%.
2. Can we find max value?
When M&A deals fail to generate revenue synergies, there is usually a lack of early focus on customer, marketing and branding issues. Playbooks often don’t include these steps and when they do, the discussions are qualitative and overly reliant on opinion and emotion.
The solution is in this key question: Are we deploying our assets to maximize customer use cases?
Companies can find significant incremental deal value when they integrate customer and marketing analytics in pre-close analysis and the integration management office. We studied one deal that doubled the final price of a $5 billion global asset by modeling the financial impact of future (post close) brand use cases. Another estimated market-share gains between 2 and 3% on a $60 billion deal through brand portfolio economic analysis. And on the cost side, we are helping companies lower post-merger migration costs between 15 and 40% by using cost-optimization analysis.
3. Are we serving up the right offer?
The best way to achieve this optimization is to constantly elevate the right offer for each person, on the right device and at the perfect time. Companies like Google, Amazon, Facebook and SAP are experts at this kind of hyper-responsiveness, with nearly-infinite capabilities for personalization, depending on the needs of each customer. They continually ask: Do we have an adaptive brand architecture? To win with today’s digitally demanding customers, companies need to maximize all the flexibility available through digital tools, making sure offers are as adaptive and individualized as possible.
Amazon remains a perfect example. Rather than being a monolithic Amazon or a fragmented collection of sub-brands, the brand adapts to its audience, use case or environment. Do you listen to a book at 9 p.m. each night? If so, it’s likely Amazon will push an Audible brand message just before. Recently ordered paper towels? Alexa will check-in to see if you need a refill. Context is king in our world, and successful companies will deliver an adaptive architecture that ensures maximum relevance.
Older companies don’t have to cede their future to those that came of age as digital natives. Moving forward, all companies–and all brands–can benefit from a modern portfolio and architecture strategy. And while all companies acknowledge that the future is digital, we’re convinced that those that win are those that also understand that the digital’s primary power is in better serving customers.
For more information on capturing greater value in the M&A, please contact us today.
From driving demand to enabling sales, new tech solutions make buying easier for business customers.
We’re now several decades into the digital age and yet transformation is still profoundly changing how we work. Until recently, the most disruptive elements have been those that empower consumers, giving rise to entirely new brands and industries like Airbnb, Uber and Spotify. B2B sales organizations–and most B2B sellers–have been several steps removed from the biggest changes. Certainly, B2B companies have deployed digital technologies to enhance business performance. But, in B2B industries such as medical devices, insurance, agriculture and business software, disruption has been less evident.
That’s changing fast, as smart B2B companies race to rethink their selling strategies. Access to data, information and channel alternatives has arrived in B2B and it’s changing the selling landscape. Intermediaries– hospitals, farm cooperatives and brokers, for example–no longer have a monopoly on data. The ability to collect customer data, store it centrally via the cloud and migrate it with orchestration across platforms is quickly breaking down legacy system silos. Data aggregators are emerging, providing a more complete view of the customer. For the first time, end-to-end customer data is a reality in B2B.
The impact of these relatively new changes is transformational. The most evolved B2B companies are reinventing the way they sell and finding ways to increase growth dramatically. But many B2B companies are still struggling to find the best path to modernize selling to accelerate growth.
The Five Digital Shifts Impacting B2B Selling
At Prophet, we see the impact of digital in B2B selling in five selling shifts:
Digital sales enablement
Digital outsourcing
Digital relationship development
Data-driven solutions
Digital demand generation
We’re working with clients to tap into each of these shifts more effectively, leveraging these future-proofing strategies to achieve uncommon growth:
Digital Sales Enablement:
This is the shift where many B2B companies have already made substantial progress by using digital tools and data to enable sellers to become more effective. Sales enablement tools, including Salesforce, Oracle and SAP are so well embedded that they are expected to be a $5 billion market within three years[1]. These platforms, networks and apps help individual salespeople achieve more and help sales teams work more effectively.
In the past few years, these platforms have shifted from customer relationship management to helping customer teams more fully engage the entire customer decision-making team. The advantages are immediate: Better equipped and coordinated salespeople accomplish more. They increase revenues, strengthen customer relationships and stay with companies longer.
Digital Outsourcing:
Companies are shifting more of selling’s routine chores to digital functions because studies of sales time utilization indicate two-thirds of a typical sales person’s day is spent on non-selling tasks[2]. Outsourcing frees-up sellers to focus on what they do best: building and expanding human relationships.
Many early efforts included more precise targeting, better sales resource planning and automating routine order-taking functions. More advanced B2B companies are also successfully making it easy to order spare parts or accessories online and handling problem resolution with advanced AI bots and call centers. These new tools make freeing up the sales persons’ time to develop relationships while increasing team efficiency and effectiveness through improved resource deployment.
Deepening Relationships:
The combination of new, more targeted vehicles such as LinkedIn advertising to reach B2B decision-makers with compelling content like video and virtual reality has opened up a shift called account-based marketing (ABM).
ABM is more personalized and tailored to the needs and criteria of individual decision-makers than traditional push email and digital advertising campaigns. It is also an integrated effort that coordinates the use of salesperson interaction and digital engagement for maximum impact and efficiency. The digital components also extend engagement into an anytime, anywhere experience through the 24/7 advantages of online and mobile vehicles.
“While the full impact of digital transformation on the sales process is still evolving, it’s clear that the classical model–where marketing and communications generated interest while the sales team closed the deal and expanded relationships–is dead.”
Data-Driven Solutions:
Oceans of data flooding the B2B value chain are shifting what sellers sell as well as how they sell. As suppliers gain greater access to data about their customers–and their customers’ customers–they have expanded the playing field for moving from selling products and services to providing data-driven solutions.
Infused with analytics and insights, solution-sellers can more readily mix the elements of the customer value proposition including pricing, value realization, value-added services, experiences and core offer innovation to suit the customers’ particular needs. In a data-driven world, they are better able to extend solutions into partnerships with other providers and make them interoperable with the customers’ systems and the ecosystem of the industry. These strategic decisions are also blurring the lines between sales, R&D, marketing and operations and demanding better leadership and teaming behaviors from sales team members and other functions.
Demand generation:
This may be one of the most exciting and rapidly evolving areas of B2B selling, particularly in intermediated businesses. The explosion of data and a rapidly expanding set of vehicles to reach B2B decision-makers among the customers’ customer is making it possible to create direct relationships with them. These channel and content alternatives are enabling established sellers to generate demand in three principal ways:
Bypassing the intermediary to sell directly
Generating sales pull through the intermediary
Hybrids of 1 and 2 where smaller size customers or certain offerings go direct, and larger size customers or parts of the portfolio are sold via intermediaries.
The Organization Imperative
All five of these B2B selling shifts spark the need to rethink the organization, redefine the roles of sales, marketing, e-commerce, data analysis and customer research and build new, often agile ways, for these teams to work together. It also requires rethinking the digital stack of how platforms and data work together in a way that can support the shifts and adapt to future changes.
Generally, we see a blurring of the roles of sales and marketing as digital investments that were previously the domain of communication-oriented marketers are redeployed to accelerate selling momentum. While the full impact of digital transformation on the sales process is still evolving, it’s clear that the classical model–where marketing and communications generated interest while the sales team closed the deal and expanded relationships–is dead.
And while we realize that B2B selling in many companies may never be fully automated, it’s essential to acknowledge how much digital can do to make it more efficient, not just more effective. Research consistently shows that the top 20 percent of a sales team is truly productive, while the bottom half often has a neutral or even negative impact on revenue growth. Hiring and training humans gets more expensive all the time, while the cost of using digital tools to find, target, serve and support customers in routine areas is plummeting.
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[1] Jim Lundy, Lead Analyst, Aragon Research, 2017 “Aragon expects the worldwide sales engagement platform market to grow from U.S. $1.57 billion in 2017 to $5.59 billion by 2023.”
[2] Salesforce.com, Top Productivity Trends, Salesforce Blog, 2019
We don’t expect many B2B companies to be able to modernize selling without bumps and hiccups. The key to tackling these bumps is to think through the shifts and build momentum while in parallel developing and enhancing the organization’s capabilities to handle these shifts.
Our marketing and sales consulting practice helps B2B companies around the world overcome disruption and identify paths to achieving uncommon growth. Contact us to learn how we can help you.
Is Your Value Proposition Clear and Customer-Informed?
Cigna, Starbucks and JP Morgan all offer lessons on discovering what customers really want.
Companies seeking to accelerate growth by improving their value proposition may be stopping short by solely focusing on identifying the total addressable market (TAM). While identifying attractive market spaces is the right first step, a market-led growth approach alone is insufficient. It can lead to false assumptions that make a business vulnerable. Successful value propositions require a deep exploration of target customer needs, not just market size, to inform how to unlock growth.
The Limitations of a Market-Led Growth Approach: Starbucks’ Expansion
To see the limitations of using only a market-led growth approach, recall in 2008 when Starbucks announced the closure of 600 US stores. At the time, Starbucks was confronted with the challenge of continuing to drive same-store sales while rapidly expanding its footprint. The brand created new offers around wi-fi services, music and an expanding menu of food and drinks while opening stores at a rapid pace.
However, Starbucks’ customers were starting to seek out other coffee chains. Companies like McDonald’s and Dunkin Donuts were improving their value propositions around coffee to regain forfeited shares. In the process, Starbucks diverted investments in delivering a great coffee experience in favor of investing in near market adjacencies with little success.
“Successful value propositions require a deep exploration of target customer needs, not just market size, to inform how to unlock growth.”
This led Starbucks to deliberately rethink its value proposition and develop a focused set of customer-led growth moves to turn around the business. And where did Howard Schultz start? With the customer. Starbucks launched a series of new moves including the introduction of a Pike Place blend, delivering whole bean coffee to stores and purchasing new machines designed for better coffee brewing. Starbucks later continued with one of the most engaging loyalty programs in retail to continue to drive same-store sales. They have continued to evolve their value proposition in countries against customer needs, with frappuccino beverages ranging from red bean green tea in China to dulce de leche in Argentina. Starbucks has even created uniqueness in its more than 30,000 stores around the world.
Why Value Propositions Should Be Aligned with Customer Needs: An Example From Cigna
Sharpening one’s value proposition against target customer needs and supporting it with market-shaping moves can become an essential motivator on “why buy from us”. But it’s not just retailers who seek out developing strong customer-led, value propositions. We see categories like health insurance and financial services driving massive transformations in their market-facing propositions and investing greatly to understand customer needs.
Take the health insurance challenge of continued cost pressure, rising cost burdens, and trying to create engagement and value beyond the policy. To combat this, global health services company Cigna has made significant investments to truly understand its customers, recently completing a three-year study of 200,000 consumers on health incentives. The company has been on a journey to strengthen its value proposition with a focus on integrated capabilities and connected, personalized solutions that advance whole-person health.
Cigna started this proposition development through a thoughtful augmentation of value-added services for employers and employees built around customer needs. Cigna services support a range of issues employers care about for employees such as life assistance, financial wellness, health advocacy, wellness and travel. The company is taking these services to the next step piloting Cigna Health Today™, an Amazon Alexa voice skill aimed at proactive health engagement.
In 2018, Cigna distributed more than $255 million in cost savings back to customers for completing 2.5 million health goals. Further, in December 2018 Cigna announced a $67 billion acquisition of Express Scripts Holding as a move to strengthen the company’s position as a one-stop-shop for health needs. Core to Cigna’s value proposition is finding a more complete way to engage and support customers beyond just insurance.
A Customer-Informed Value Proposition to Drive Uncommon Growth: JP Morgan Chase
In financial services, a lot of focus has been placed to thwart off emerging FinTech and BigTech (e.g., Alibaba, Apple, Amazon) and winning with the next generation of affluent millennial consumers. JP Morgan Chase shocked audiences during a time of industry-wide increased operational cost pressure by offering 100K point consumer signup bonuses on its new millennial-focused Sapphire Reserve card. The card hit its annual acquisition goal in two weeks and Chase even ran out of the signature metal cards.
JP Morgan estimated quarterly losses at the end of 2016 at over $300 million. This did not come absent of a strategy than invested heavily on deeply understanding millennial consumer financial services and spending needs down to the “plunk” factor of dropping the metal card. JP Morgan Chase was seeking to build one of the strongest value propositions behind Sapphire and extend the offer well beyond credit cards.
JP Morgan Chase, CEO Jamie Dimon shared that despite acquisition costs expensed over 12 months, the benefits would come over several years. Fast-forward just over 2 years since the launch and the results are impressive. The average Sapphire Reserve cardholder income is ~$180K and the average sales volume of $39K, a true “top of wallet” card. What’s more impressive is that 96% of cardholders actively use their cards and annual renewal rates are >90%. The company does 2X the industry average in merchant processing volume over $1.2 trillion and has raised its credit card Net Promoter Score with customers 18 points since 2012. JP Morgan Chase hasn’t stopped there, the company continues to find meaningful ways to deliver customer value (new “moves”). Evolving its Premier Platinum checking accounts to launch Sapphire Banking, with new perks like no ATM, foreign exchange, or wire transfer fees. Sapphire Banking also includes free online stock and ETF trades along with access to special experiences. Sapphire is giving valued customers an ever-widening list of perks and services to keep people locked into the ecosystem.
What can we learn from Starbucks, Cigna, and JP Morgan Chase? That true value proposition development is a customer-led effort (not just a market-led one) and requires focused, deliberate, multi-stage investments in moves to deliver growth.
Ask the following questions to assess if your organization is headed in the right direction to strengthen its value proposition with customers:
Do you have a clear articulation of why customers should choose you and stay with you vs. your competitors?
Is your growth agenda fueled by deep customer insights on “how to win”?
Have you validated and mapped the series of customer demand-generating “moves” your company will pursue over the next 1-3 years to build your value proposition?
Learn how Prophet is strategically helping evolved enterprises across the globe transform their marketing and sales for uncommon growth.
