The Power of Disruptor Brands and Challenger Brands

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These days, it’s all about disruption. In tiny Davos, Switzerland, “The Fourth Industrial Revolution” was the central theme of the 2016 World Economic Forum, designed to engage thought leaders to prepare us for the “next big thing.”

The proposition is that we are on the cusp of a new era fundamentally changing the way we work and live. Vast technological changes brought on by digitalization are disrupting conventional business practices and social norms, states the economic forum founder, Professor Klaus Schwab, in his essay published by the Council on Foreign Affairs.[1]

      Quotes From World Economic Forum 2016

Image via www.weforum.org

Enter Innovator Brands

A 2015 survey by Brand Keys on behalf of Business Performance Innovation (BPI) Network indicates that household brand names are being replaced by innovative game changers, and they’re gaining respect with mainstream consumers. “Nimble startups compete with legacy enterprises,” say 98 percent of those asked and “the disruption is severe,” indicate 37 percent. Furthermore, there is a “distinct correlation” between perceived innovation and a company’s bottom line results, according to the study.[2]

Start Up Innovation Infographic 600px

Image via www.bpinetwork.org

Challenger Versus Disruptor Brands

The terms challenger brand and disruptor brand are not interchangeable. Challenger brands bring innovation, enhancements, new pricing, or other tweaks (diet soda, dishwasher tablets, boy and girl nappies) to an existing marketplace.

Disruptors enter a marketplace and completely set heads spinning. When eBay appeared, for example, it was difficult for many people to accept paying online in advance for an item from a stranger and simply trusting it would arrive in the post. When email gained traction, traditional mail service was rattled and companies were required to re-define legalities in their terms and conditions. And when Airbnb was introduced, the hotel industry was more than mildly shocked; cities are still attempting to define tax issues.

  Deliveroo Airbnb 600px

Image via www.preweek.com

A Shift to the Customer Interface

The battle for today’s customer is occurring in the digital interface between product and consumer. As Tom Goodwin, senior vice president of strategy and innovation at Havas Media, explains, “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.”[3]

 Tech Company Hierarchy

Image via www.reddit.com

These companies fill a connector space between product and people. These brands are the jam in the sandwich between the customer and the business. Furthermore, Goodwin points out that this new breed of interface companies (Uber, YouTube, Airbnb, Snapchat, Twitter, WhatsApp, Facebook, Google) are the fastest-growing in history. All of them began as challenger brands.

 

What is a Challenger Brand?

From the original biblical tale, best-selling author Malcolm Gladwell borrows a title, “David and Goliath: Underdogs, Misfits, and the Art of Battling Giants,” reminding us that compelling storytelling has long been at the heart of a challenge. In brand marketing today, some famous challenges fall into the hero/underdog sort (Coke vs. Pepsi, Avis vs. Hertz; McDonalds vs. Burger King); others make into it a three-way contest, or even a Big Four fight (Tesco, ASDA, Sainsbury, Morrison’s).

Still other challenger brands enter a crowded category or endeavour to maintain challenger momentum once it starts to fade. Enter the game changers, disrupting the status quo by creating altogether new categories (Match.com, Uber, Airbnb), thus far a hallmark of 21st century disruptor brands.

In discussing the rise of the challenger brand, CMO of Adobe points out, “Essentially, the heart of a challenger brand is the passion, process, and tools they use to create and magnify customer advocacy.” Reflect on those overnight queues snaking around the Apple Store in anticipation of new product releases. “The heart of challenger brands’ success is their ability to turn emotion and affinity into a customer acquisition machine.”[4]

Purpose = Purchase = Profitability

    Apple Store Lines 600px

Image via Rob DiCaterino, Flickr CC2.0

Challenger brand experts Adam Morgan and Mark Holden wrote a book on the subject, “Overthrow: Ten Ways to Tell a Challenger Story,” (with all profits going to UNICEF). In it, they list 10 types that represent the challenger brand state-of-mind. These brief descriptions may help you evaluate and identify your own brand’s personality, purpose and positioning.

  • The Irreverent Maverick

Shock and awe counts more than playing by the rules. This challenger type is big on attitude and best have a big budget for flashy PR, interactive sales tactics and legal advisors. Think Red Bull.

  • The Missionary

The core message is critical for this brand which identifies a need to do something better. The authors suggest. “Think of Al-Jazeera looking to ‘redress the balance’ in media coverage of the Middle East.

  • The Next Generation

Daring to call out the market leader as being old fashioned, this challenger seeks to position itself as very much here and now, totally relevant to today’s cultural trends. Emirates Airline, Euro Star and GoPro are examples.

  • The Democratiser

Sharing great design, catwalk looks and labels is the function of this challenger brand. Often seen in retailing, the purpose is to challenge elitist brands. The right influencers are often part of the equation to deliver street cred. Think H&M.

  • The Real and Human Challenger

Using people as a company resource, this brand breathes life into a dead category, fires up consumers’ imaginations. In the UK, Innocent (little tasty drinks), are those guys who drive around in those cow camouflage vehicles or Hungry Grassy Vans.

  • The Enlightened Zagger

Less fashionable is fine for brands that swim against the tide and challenge conventional wisdom. A brand challenge from Camper shoes mixed it up by suggesting that we walk, rather than run.

  • The Visionary

Big, bold and beautiful is the vision — but never boring. A visionary challenge brings a higher purpose and an emotional connection to the brand, Lady Gaga comes to mind.

  • The Game Changer

An entry into a category that’s unlike anything consumers have seen before is a game changer. The designers think outside the box. Steve Jobs brought game changers to categories from personal computing to phones, cameras and music.

  • The People’s Champion

This brand’s founder/CEO may act as the people’s champion, suggesting the public suffers an inferior service or product from everyone else in a category. The people’s champion puts a friendly face to the shakeup, using humour like Virgin boss Sir Richard Branson.

  • The Feisty Underdog

Here’s the David versus Goliath story in all its storytelling glory. It’s us versus them in the style of Avis Car Rental which adopted the slogan “We try harder. We’re #2,” a unique tagline that garnered empathy during its 50-year run.

 

  

  

Examples of Successful Challenger Brands

What do eggless mayonnaise, furniture in a box, bagless vacuum cleaners and fashionable spectacles have in common with driverless electric cars and return rockets for colonizing Mars? From aspirational to mainstream and from ideation to manufacture, challenger brands can change the world. Once a brand does achieve commercial success, a new set of opportunities comes into play in order to stay fresh edgy, and relevant, maintaining a challenger brand mentality as a bigger brand player.

1. Hampton Creek

Josh Tetrick, founder of this plant-based food maker, believes that industrialized egg and meat production is unsustainable. Hamptons Creek’s leading product, Just Mayo, is an egg-free spread that’s about making foods with less water, land, and carbon emissions. This is a brand that proves the business case for CSR and social responsibility.

   Hampton Creek Just Mayo 600px

Image via www.hamptoncreek.com

Since 2011, Tetrick has attracted funding from 12 billionaire investors, including Bill Gates, and shot to the top of several lists of innovative companies shaping the future of food.[5] The Guardian reports that Silicon Valley investors are pouring “serious cash into ersatz animal products. Their goal is to transform the food system the same way Apple changed how we use phones, or Google changed the way we find information.”[6]

2. IKEA

With 373 stores in 47 countries, no one would call Ikea a small company. Yet, it was born as a challenger concept in the back woods of Sweden in the 1940s: inexpensive flat-packed furniture for self-assembly, sold via a catalogue and warehouse showroom.[7] By remaining functional, simple, and design-led, Ikea has managed a harmonious marriage built on durable pillars of inexpensive, yet decent quality. Partnering with UNICEF among three dozen other NGOs and IGOs, IKEA Foundation[8] is considered the world’s largest charitable foundation, with an estimated net worth of $36 billion.

 Ikea Unicef Soft Toy Thank You

Image via www.ikeafoundation.org

3. Warby Parker

Four business school grads asked: Why is eyewear so costly? With US $2,500 in seed money from their university, they founded Warby Parker[9] in 2010, shaking up the supply chain dominated by one company. The challenger brand designs and manufactures fashionable spectacles in-house and provides eyewear via its innovative e-commerce site. The Home Try-On program comes with a free no-questions-asked return policy at a fraction of the price. For every pair of eyeglasses that’s sold, Warby Parker donates the funds to donate one pair to charity, currently over one million pairs of glasses.[10] CSR or Corporate Social Responsibility sits at the heart of this very compelling brand. The company is currently valued at US $1.2 billion.

4. Dyson

A few years ago, nobody (except James Dyson) imagined a vacuum cleaner without a vacuum cleaner bag that could operate by centrifugal force. Dyson worked for five years experimenting on 5,179 prototypes before taking a product to the marketplace. With research and design at its core, Dyson machines now include hand dryers, lighting and air treatments that are available in 65 countries. More than 1,000 engineers continually work on inventions.[11] The James Dyson Foundation sponsors design engineering students with scholarships and awards in the UK, USA and Japan.[12]

 James Dyson Dyson School Of Design Engineering

Image via www.jamesdysonfoundation.co.uk

5. Tesla Motors

Inventor, engineer and investor, self-made billionaire Elon Musk has a stable of disruptive products across multiple industries. From artificial intelligence to solar power to reusable rockets for space exploration, Tesla Motors electric cars are Musk’s best-known challenger brand. His entire stable of companies exist to contribute to Musk’s overarching vision: protecting Earth and humankind via sustainable energy sources and reducing the risk of human extinction by becoming a multi-planetary species. “Really pay attention to negative feedback,” is one of this entrepreneur’s top tips. Next up? “I really want to go to Mars,” says Musk, “It’s a fixer-upper of a planet.”[13]

A View from the Challenger Brand Grave

No stranger to failure, Steve Jobs said in his 2005 Stanford University commencement speech, “You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”[14]

And for challenger brands which do reach their goal, they must innovate, innovate, innovate. Success has a great way of dulling the keen edge of ambition; challenger brands can reach a comfort zone of complacency and constant change is the only answer.

Questions to consider

• Are you clear on the differences between a challenger brand and the need for a rebranding?

  

• Is your brand focused on a well-defined purpose?

  

• Have you figured out what you’re challenging and crafted a story that explains why?

  

• Do you have a fresh, imaginative, and stimulating idea, product or service, that you’re now ready to develop using brand profiling which provides your roadmap for bringing it life — making it distinctive, different and memorable so your primary audience can’t resist it?

  

• Do you have the ambitious challenger brand mentality? Are you a risk-taker at heart?

  

• Does your challenger brand represent a positive value for consumers?

  

• Do you have the conviction that your brand is something that will leave the world better off? Are you ready to leave an amazing legacy that changes peoples’ lives, and makes them better forever?

 

 

You may also like:

   

Brand Profiling: How Brand Performance and Purpose are Inextricably Linked

 

Rebranding Strategy: Why Your Rebrand Must Embrace Storytelling  

 

The Profit Power of Cult Brands, Why and How to Create One

 

Brand Profiling: How to Use Emotion to Make Your Brand More Profitable

 

Brand Audits: 10 Things Successful Brand Owners and Managers Must Know  

 

Brand Revitalisation and Relaunch: The do’s and don’ts of doing it successfully!

 

Brand CSR: The Business Case for Successful Branding and Social Good

 

Co-Branding: 13 Tips for Growing Your Brand Through Strategic Partnerships

 

 

[1] https://www.foreignaffairs.com/articles/2015-12-12/fourth-industrial-revolution

[2] http://www.bpinetwork.org/thought-leadership/views-commentary/395/new_digital_disruptors_that_gratify_and_excite_consumers_eclipse_tech_brand_incumbents_in_innovation_rankings

[3] http://techcrunch.com/2015/03/03/in-the-age-of-disintermediation-the-battle-is-all-for-the-customer-interface/#.wp0rsdo:0sCd

[4] http://www.cmo.com/articles/2013/12/3/rise_of_the_challeng.html

[5] https://www.facebook.com/hamptoncreek/info/?tab=page_info

[6] https://www.theguardian.com/science/2014/feb/14/silicon-valley-hack-food-industry

[7] http://www.ikea.com/ms/en_GB/about_ikea/our_business_idea/index.html

[8] http://www.ikeafoundation.org

[9] https://www.warbyparker.com/history

[10] https://www.warbyparker.com/buy-a-pair-give-a-pair

[11] http://www.dyson.com/community/aboutdyson.aspx

[12] http://www.jamesdysonfoundation.com

[13] https://www.youtube.com/watch?v=gV6hP9wpMW8

[14] http://news.stanford.edu/news/2005/june15/jobs-061505.html

   

   

Rebranding: Crisis Recovery and Brand Rebuild

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In the first quarter of 2015, SDL conducted a survey of almost 3,000 customers and found four out of five would walk away from a brand and never give it another chance after experiencing a major issue.

 

That statistic explains why some brands have no choice but to rebrand in an attempt to resolve crises. Furthermore, of the people who return to a brand after being let down, 59 percent of them show less loyalty than before. [1]

 

Have you given some thought to how to mitigate potential risks to your brand? Do you have an appropriate brand crises management strategy in place in the event of the untoward happening?

 

Here we’ll share with you some of the critical issues you need to consider both in terms of how to rebrand and rebuild customer brand trust after a crisis.

 

Reasons to Rebrand

 

This article will focus on the need to rebrand in order to make a strong comeback after a crisis. However, there are other reasons to tackle rebranding, including: [2]

 

  • Your audience is changing, and rebranding is necessary to maintain brand relevance
  • Desire to move into an international market
  • Outgrowth: You’ve outgrown your brand in its earlier context and need to align more closely to current, larger needs
  • Customers aren’t sure what you do or what you offer. Your brand lacks distinction or difference
  • Competitors are eating into your market and enticing customers away
  • Name change
  • Brand is outdated and lacks relevance
  • Innovation: New technology has changed your market and your brand needs to change with it

 

 

Preparatory and Recovery Measures to Minimize Crises

 

Although you can’t ascertain definitively when problems might occur and what they will entail, it’s important to be aware of the potential threats your brand might face. Those can be identified through a brand audit and SWOT analysis, plus customer feedback. Sometimes, potential threats become apparent because of mass cultural feedback.

 

 

CASE STUDY 1: Page 1 Solutions

 

In July 2015, a dentist sparked worldwide outrage when he went on a game-hunting trip in Zimbabwe and killed Cecil, a beloved lion. Although officials have concluded the dentist’s actions were legal and he cannot be charged [3], people immediately took to the internet to vent their extreme displeasure over Cecil’s death.

 

 

Page 1 Solutions, a marketing firm that had once represented Palmer, was caught in the fray. Even though the firm had not been associated with Palmer since 2013, the public accused Page 1 Solutions of trying to defend the dentist. [4]

 

The marketing firm’s president clarified Palmer had not been on the client roster for a couple of years. However, public outrage continued to affect the small business.

 

Page 1 Solutions released several subsequent statements, and members of the company’s social media team responded to messages personally.  Other employees reached out to current clients and corrected misunderstandings. Local news branches were also contacted, and the CEO gave several interviews. Although company representatives say the unexpected catastrophe made their establishment stronger, they also recognized the need to develop a crisis plan for future issues.

 

Once you have identified potential threats to your brand, it’s critical to develop and document your brand strategy [5] to deal with them. Your crisis plan should include things such as:

 

  • A defined team to handle crises
  • A media coverage policy
  • Contact information and a contact log
  • Boilerplate information for press releases, plus fact sheets
  • A social media strategy

 

During the recovery process, the crisis plan should keep your actions purposeful and targeted, reducing the chances you’ll forget to attend to the needs and worries of stakeholders.

 

 

Focusing on the Desired Outcomes of Rebranding

 

If you’ve experienced a brand crisis, and post-event analyses indicates too much reputation damage has occurred to fully recover from, then it may be necessary to consider rebranding. However before you launch into a full-scale rebrand you need to determine what your desired outcomes are from rebranding your product, service or company. [6] Typically these might include:

 

  • Solve a problem that has tarnished the brand
  • Correct a damaging story that’s surrounding the brand
  • Disconnect from an association that is harmful or no longer meaningful or relevant from a customer perspective
  • Keep pace with competitors that are outperforming the brand

 

 

Actionable Strategies for Rebranding After a Crisis

 

Unintentional blunders are always possible during a rebrand if it’s not carefully planned, developed, managed and executed. You can minimize these oversights by integrating some of the steps mentioned below.

 

 

Decide if a Complete Rebrand is Truly Necessary

 

Depending on the severity of a crisis, it can sometimes be difficult to fully determine whether it’s better to fix the factors that have caused the brand to falter, or wipe the slate clean and start from scratch.

 

Making the choice can become even more difficult if a crisis has attracted a great deal of media attention. Independent external analysis can be useful to help put things into perspective so informed and unprejudiced decisions can be made.

 

 

CASE STUDY 2: Malaysia Airlines

 

2014 was a difficult time for Malaysia Airlines, as it was the year one of its flights went missing, and another was reportedly downed by a Russian missile. For weeks, the brand received constant negative media exposure, making people wonder if it would ever recover.

 

Although a complete rebranding is in the works, there are few details about it.[7]  Therefore, some industry analysts suggest it would be better to refresh the brand so as to not lose certain favorable associations or the perceived value of the brand’s equity. [8].

 

 

 

 

The airline was established in 1937. With that long history comes an undeniable amount of brand equity and awareness. Malaysia Airlines already had declining profits before the disasters of 2014, and it would be very expensive, indeed required considerable investment, to create a similar level of awareness after a rebrand. Although it remains to be seen what Malaysia Airlines will do in an attempt to recover, it’s clear the brand has a tough road ahead.

 

 

Rebranding and Crises Recovery Tips

 

1. Maintain Ongoing Communications: A rebrand risks alienating your audience. Avoid that possibility by keeping in touch through open, transparent dialogue.

 

2. Involve Skilled People: Rebranding will likely require a specialized team. As you give feedback during a rebrand, remember the people you’ve hired have gone through rebrand and crises challenges before and should be best positioned to provide expert direction on how to best handle yours.

 

3. Make All-Encompassing Changes During the Rebrand: Some companies make the costly mistake of thinking it’s sufficient to merely create a new company logo, change the brand collateral or switch employee uniforms to make people forget about a crisis. Instead, understand that major changes will have to be instigated across your entire organization, which will also typically require brand cultural changes together with both management and general staff brand induction and re-training, if you want to ensure your rebrand is a success.

 

 

CASE STUDY 3: LIVESTRONG Foundation

 

When it was discovered that cyclist Lance Armstrong had been taking performance-enhancing drugs for over a decade, yet had reportedly denied doing so, LIVESTRONG realized it needed to cut ties with the athlete. Meanwhile, Armstrong went on an “apology tour” and visited media outlets.

 

It began by changing its name from LIVESTRONG to the LIVESTRONG Foundation, launching a new identity, and reminding the public of the brand’s fundamental values and focus on helping people affected by cancer, not the actions of one person who’s a cancer survivor. [9]

 

 

 

 

The brand tapped into the public recognition of the foundation’s bright yellow hue and kicked off a campaign about cancer’s impact and what’s needed to address it. [10] The teams handling the rebranding deemed the project successful, and subsequent media coverage was positive.

 

 

Livestrong 600px

Image via © blog.livestrong.org

 

 

Rebranding and Crises Recovery Tip 4

 

Influence the Conversation: During a rebrand, it may be necessary to bring a new voice to the conversation. That’s especially likely if your brand has gone through a crisis that has caused people to speak badly about your products or services.

 

 

Case Study 4: Maggi Noodles

 

In June 2014, Maggi, a leading Indian noodle brand, marketed by Nestlé, was removed from the market when tests reportedly revealed lead content and found the product was mislabeled regarding monosodium glutamate (MSG). A Global Chief Executive from Nestlé stated the noodles were safe, but shortly afterwards, the company was unable to confirm when the noodles would be available to purchase again. [11]

 

By September, Maggi decided it would go against a characteristic aversion to publicity. Part of that initiative involved encouraging people to recall fond memories of eating Maggi noodles, complete with nostalgic media spots and the #WeMissYouToo hashtag.

 

Nestlé believed by changing and moving the conversation towards something emotionally more positive, people would begin to trust the brand again. [12] When Maggi noodles were offered for sale, the brand capitalized on a “Welcome Back” theme.

 

 

 Maggi Noodles 600px

Image via © http://www.maggi.in

 

 

Rebranding and Crises Recovery Tip 5

 

Measure the Worth of the Rebrand: There are several metrics that can be examined to evaluate whether your rebrand was a success. Some forms of measurement include customer engagement levels, quarterly profits, and feedback surveys about perceptions.

 

 

 

 

 

The exact elements of a rebranding campaign will vary depending on the crisis a brand has dealt with, but whatever the circumstances rebranding is far more than just changing a logo and colour scheme. Rather, it often entails fundamentally changing or evolving what the brand ‘stands for’ through brand profiling; values, mission, vision, promise, personality, culture and goals, not to mention ensuring the rebrand is well positioned in the marketplace and fully understood by its target audience.

 

 

Key Takeaways

 

  • A crisis plan will help your brand respond strategically to mishaps without losing focus
  • Desired outcomes and key objectives should be fully established before proceeding with a rebrand
  • If issues can be remedied, a complete rebrand may not be necessary
  • A successful rebranding requires being transparent and fully engaged with your customers, stakeholders and the public at large

 

 

Questions to Consider

  

  • Does your brand have a crisis plan, or are you working to develop one?

   

  • How would you evaluate your company’s brand strategy and performance the last time it had to deal with something unexpected?

  

  

  • Has your brand had to disconnect from a harmful association, as the LIVESTRONG Foundation did?

  

  • Do you think nostalgia will be powerful enough to restore the Maggi Noodles brand?

 

 

You may also like:

 

• What Customers Want: Top 16 Branding Trends in 2016

 

• Rebranding Strategy: Why Your Rebrand Must Embrace Storytelling

 

• Brand Profiling: Top 6 Components to Creating a Strong Brand Personality

   

• Brand Audits: Why You Need Them and How to Perform One

 

• Creating New Brands: Top 10 Tips for Brand Success  

  

• Colour Psychology: Cracking the Colour Code for Profitable Branding

  

• Brand Personality: Is Your Brand’s Character Big Enough to Compete?

  

• Luxury Branding: How to Establish or Re-Position Your High-End Brand

 

  

[1] http://www.sdl.com “Avoiding CX Failure Fallout,” May 2015.

[2] Wendy Bolhuis, http://www.vim-group.com/, “The Top 10 Reasons for Rebranding,” June 2014.

[3] Reuters in Harare, http://www.theguardian.com, “Cecil the Lion: Zimbabwe Will Not Charge U.S. Dentist Over Killing,” October 2015.

[4] Adam Rowan, http://www.prdily.com, “What a Marketing Firm Did When a Former Client Killed Cecil the Lion,” December 2015.

[5] Jonathan Bernstein, “The 10 Steps of Crisis Communications,” 2013.

[6] David Brier,  http://www.risingabovethenoise.com, “How to Rebrand: 19 Questions to Ask Before You Start”

[7] Marcus Osborne, http://www.brandinginasia,.com, “Malaysia Airlines Rebrand is Coming: How Big Will it Be?,” December 2015.

[8] Mark Ritson, http://www.marketingweek.com, “Malaysia Airlines: Fix, Don’t Nix the Brand,”July 2014.

[9] http://www.corporate-eye, “Livestrong Rebrands as Livestrong Foundation Without Lance Armstrong, March 2013.

[10] Rigsby Hull, http://www.aiga.org, Case Study: LIVESTRONG Branding, November 2013.

[11] Ratna Bhushan, http://articles.economictimes.india.com/, “Maggi Noodle Fiasco: Nestle Works On Alternative Snack to Reposition Brand,” June 2015.

[12] Jacob Schindler, http://www.worldtrademarkreview.com, “Nestlé Taps into Nostalgia in Bid to Re-Launch Maggi Brand in India.” September 2015.

 

Brand Profiling: How Brand Performance and Purpose Are Inextricably Linked

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Ask the people in any room for a show of hands for who leaves the house to go shopping for unheard of brands in nondescript shops. No hands will go up. Wishy washy products and unremarkable, generic services certainly don’t motivate anyone. However, instantly recognizable market leaders, famous brands, cults and classics pack in plenty of appeal by projecting a purpose that’s engaging and compelling for both employees and customers alike.

Purpose Equals Purchase

“Consumers choose the brands that engage them on their passions and interests 42 percent more often than they do those that simply urge them to buy the product being advertised,” according to a 2014 report by Think with Google, undertaken in partnership with TNS and Ogilvy. Interviews with purchasers of auto vehicles, beauty products and smartphones indicates that, more than ever,

Purpose = Purchase.

Profit is Not Brand Purpose

The sole intention, or purpose of a business, is not, and cannot be, just to make money. Rather, profit is a consequence of doing business. In 2000, Peter Drucker, the father of modern management theory, shared his thoughts on this topic as mentor to the former chairman of Procter & Gamble, “The purpose of a company is to create a customer” and “A business….is defined by the want the customer satisfies when he or she buys a product or a service. To satisfy the customer is the mission and purpose of every business.”[1]

Search For Higher Truth Hugh Mac Leod 600px

Image via www.gapingvoidart.com, ©Hugh MacLeod

What Does Your Brand Stand For…And Upon?

One cannot over emphasize the importance of building a strong base as a platform for a brand, using the following key elements as bricks in its foundation:

  • vision
  • mission
  • values
  • purpose
  • promise
  • positioning
  • architecture/hierarchy structure
  • story
  • personality
  • corporate social responsibility

When working with our private clients or indeed delivering our open branding masterclasses and workshops we use the Personality Profile Performer™ System to develop all these key brand foundational elements for our clients’ or workshop participant’s brands. The outputs from the Personality Profile Performer™ then provide you with your brand blueprint or brand roadmap, together with the brand direction for your brand design application in brand collateral, brand communications strategy, training and so forth.

Notice that purpose is one of the key building blocks for a strong brand foundation. This part of the brand foundation provides the critical direction for brand strategy, and consequently, for high performance with the laser-focused results marketers seek. Here we aim to show you how a well-defined brand purpose is inextricably tied to stronger brand performance.

Defining Brand Purpose

Since some employees and employers may say that the purpose of a business it to make a profit, it’s understandable that thought leaders must reiterate the actual meaning of brand purpose.

So, what is brand purpose and what is it not? Drucker and other experts observed that brand purpose is to create customers through superior products and services which have value and usefulness. In other words, customers do not shop and pay so that a company can become richer. They buy because they perceive value in their purchases.

It’s important to note that 60% of branding is about perceived value and only 40% about the actual product or service, so how you communicate your brand’s mission, vision and purpose actually has a significant impact on your bottom line.

To quote Simon Sinek “People don’t buy what you do, they buy ‘why’ you do it, and what you do simply proves what you believe.”

Branding expert David Aaker writes about value that inspires purchase from both sides of the buy/sell relationship. “It is easy to get caught in a focus on financials, but employees and customers are increasingly attracted to brands and firms that have a higher purpose.”[2]

This is why, for example, at their very foundation of purpose, Volvo family cars are built around a steel cage design to achieve maximum safety, Mercedes-Benz defines meticulous German engineering and innovation in luxury cars, and Tesla produces electric cars to decrease our dependency on gasoline. Purpose is also why one of the most successful brands on earth doesn’t just sell computers, but dreams up groundbreaking products such as the Apple Watch, iPads and iPods to create “insanely great products” that enhance peoples’ lives and that many people consequently want…a lot.

How Clear Brand Purpose Improves Performance

Brand educator Mark Di Somma counsels that marketers should view the relationship between purpose and product as a symbiotic one, not as an either/or one.[3] “For purpose to realize its full potential, the commercial leadership must align with, and be framed by, a clear and shared moral leadership.”[4]

When brands are able to connect and balance great storytelling founded on a clear vision, mission, values, and purpose, with the right product or service, then the magic happens. We look into three case studies from Coca-Cola, Wal-Mart Stores and Patagonia.

Case Study 1: How Coca-Cola Made History Selling Togetherness

Who remembers the tune, “I’d like to buy the world a Coke and keep it company”? It was 1971 when McCann-Erickson’s creative and music directors first produced those lyrics[5], placed a group of Coke bottle-holding, flowers-in-the-hair, multicultural lip-syncing teenagers on top of a hill outside Rome and portrayed a positive message of sharing, hope and love. The world said “Wow!”

One of the most successful adverts of all time, now enshrined in the National Museum of American History at the Smithsonian Institution[6], married the idea of happiness and universal love with the product. In a ground-breaking collaboration between advertising and the record industry, it was re-envisioned as a hit song rising to UK #1, as a Christmas advert and as a Disney collaboration for years to come.

Case Study 2: How Wal-Mart is Re-Thinking Purpose

In America, Walmart has been reportedly criticized, rightly or wrongly for years, one issue after another. Non-union jobs at low wages that depress the job market, running small businesses out of town, accusations of racial and gender employee discrimination, foreign product sourcing, and environmental policies are a few of the themes that have splashed across the pages of various news publications and media.

America’s largest retailer is also America’s largest employer. Wal-Mart Stores has also created America’s richest family with a fortune placed at US $149 billion.[7] Yes, they have low prices in 5,000 stores. But, it’s fair to ask: What’s their brand purpose? What do they stand for?

   Walmart Orlando 600px

Image via Wikipedia CC 4.0, Credit: Miosotis Jade

In keeping with the growing trend in other parts of the world, American consumers’ sense of values have become more focused on where products come from, how they are made, whether a company is doing the right thing for the environment, for sustainability, for its workers and for corporate citizenship, says Allen Adamson, North American chairman at Landor Associates in AdWeek.[8]

Since mid-2015, AdWeek reports Walmart is starting to turn things around by embracing brand purpose. Examples include partnering with actor and gender-equality activist Geena Davis for a hometown theater festival in Arkansas, speaking out against anti-gay legislation, raising hourly salaries above federal minimum wage, and adopting “five freedoms of animal welfare” for its supplier chain.

Case Study 3: How Patagonia Used Reverse Psychology with its Purpose

“Don’t Buy This Jacket,” screeched the boldface type in caps to accompany the image of a parka. To launch their Common Threads Initiative[9], (reduce, repair, reuse, recycle, reimagine) the outdoor clothing maker grabbed attention in the New York Times on 2011’s Black Friday, a frenzied shopping day.

“This season, share some values,” the advertisement beseeched readers, focusing attention on consumerism versus conservation — hence, Patagonia’s mission: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

As AdWeek explains[10] about Patagonia’s startling spin on things, “The point is, Patagonia, whose business relies literally on the outdoors, is in it for the long term.” Actively protecting the environment is central to Patagonia’s core purpose or raison d’être.

Patagonia Dont Buy This Jacket 1250 600px

Image via www.adweek.com and © www.patagonia.com

What happened to sales? According to Bloomberg Business,[11] two years into the buy less campaign, outdoorsy customers pumped an extra US $158 million, nearly a 40 percent lift, into the company, which opened 14 additional store locations. Environmentalists may take note that Patagonia has launched “Twenty Million & Change,”[12] a venture capital fund to invest in startups that share environmentally responsible corporate values.[13]

More Case Studies on Brand Purpose

For readers who may wish to research further examples of clear brand purpose driving improved business performance, we can suggest the following:

• Charles Schwab, the investment broker, highlights how they can help small investors who don’t really want, or need, to understand the stock market in depth to beat inflation. “Talk to Chuck.” was the groundbreaking campaign launched in 2005, years ahead of social media interactive conversations. Their personality-driven approach successfully carved out a unique positioning for the brokerage, squarely between the discount broker firms and the full-service Wall Street firms for larger investors.

• Rubicoin, founded by Dublin-born Emmet Savage who is listed in Irish America’s Wall Street 50 (the list recognises the achievements of the most innovative Irish-American and Irish-born leaders in finance) is noted as one of the most successful investors in the world and this brand’s primary purpose is to get the world investing successfully, to remove the perceived barriers to accessing the stock market by giving everyone the basic ingredients required to successfully invest so they are empowered to change their lives financially.

 Rubicoin Corporate Logo 2015 Rgb 72dpi 600px

• Nike places their mission statement up front and center: “To bring inspiration and innovation to every athlete* in the world.” Note the asterisk on the word “athlete.” Former university track and field coach and Nike co-founder Bill Bowerman said, “If you have a body, you are an athlete.” Any questions?

Nike Mission 600px

Image via © www.about.nike.com

• The Walt Disney Company, of course, was the brainchild of a master visionary. Now parent to four major companies, Walt explained the theme park concept best when explaining how he was bored watching his daughters in a playground. “I felt that there should be something built…something where the parents and the children could have fun together.” Walt would have approved of the company’s purpose as addressed by its former mission statement,  “To make people happy.”[14]

Do you think they miss the mark with the current one? “Now Disney’s mission is “To be one of the world’s leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world.”[15]

That’s certainly a mouthful for Mickey Mouse or a dreamy-eyed child…or just about anyone outside the boardroom.

Questions About Brand Purpose to Consider:

• Does your brand have a clearly defined purpose? Have you engaged in the brand profiling process using a system like the Personality Profile Performer™?

 

• Is your brand’s purpose written in plain and simple language which everyone, both employes and customers alike, can clearly articulate on, or is it written in corporate lingo?

 

• How often do you re-visit, re-evaluate and brand health check your expression of your brand purpose?

 

• In what way is your brand’s purpose actively lived, expressed and shared with everyone in your business and interpreted by your employees?

 

• How would your employees respond to the question of what excites them and gets them out of bed in the morning?

 

• How and where is your brand’s purpose expressed to existing or potential customers?

 

If you’re struggling to answer these questions maybe its time your gave your brand a brand audit health check or brand refresh. Feel free to get in touch, we’d love to help!

 

  

You may also like:

‘What Customers Want: Top 16 Branding Trends in 2016’

 

‘Brand Profiling: How to Use Emotion to Make Your Brand More Profitable’

 

‘Rebranding Strategy: Why Your Rebrand Must Embrace Storytelling’

 

‘Brand Audits: 10 Things Successful Brand Owners and Managers Must Know’

 

The Profit Power of Cult Brands, Why and How to Create One

 

‘Brand Revitalisation and Relaunch: The do’s and don’ts of doing it successfully!’

 

Brand CSR: The Business Case for Successful Branding and Social Good

 

‘Co-Branding: 13 Tips for Growing Your Brand Through Strategic Partnerships’ 

[1] https://hbr.org/2009/11/why-read-peter-drucker

[2] https://www.prophet.com/blog/aakeronbrands/216-what-is-your-higher-purpose

[3] http://www.brandingstrategyinsider.com/2016/01/brand-debate-focus-on-product-or-purpose.html#.VqwmcmRViko

[4] http://www.brandingstrategyinsider.com/2014/08/defining-your-brand-purpose.html#.VqxKb2RVikp

[5] http://www.coca-colacompany.com/stories/coke-lore-hilltop-story

[6] http://www.smithsonianmag.com/smithsonian-institution/american-history-museum-scholar-coke-advertisement-180955318/?preview&no-ist

[7] http://www.forbes.com/profile/walton-1

[8] http://www.adweek.com/news/advertising-branding/walmart-trying-brand-itself-socially-conscious-165034

[9] http://www.patagonia.com/us/worn-wear

[10] http://www.adweek.com/news/advertising-branding/ad-day-patagonia-136745

[11] http://www.bloomberg.com/bw/articles/2013-08-28/patagonias-buy-less-plea-spurs-more-buying

[12] http://www.patagoniaworks.com/#index 

[13] http://www.fastcoexist.com/1682011/patagonia-launches-a-venture-fund-for-environmentally-responsible-startups

[14] http://www.fastcompany.com/1821021/defining-your-companys-vision

[15] https://thewaltdisneycompany.com/about/

Brand CSR: The Business Case for Successful Branding and Social Good

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According to a Nielsen poll of consumers in 60 countries, 55 percent of purchasers are willing to pay more for products and services from companies that do their part to encourage positive social and environmental impacts.[1]

 

Clearly, corporate social responsibility influences buying preferences, but how else is it important? We’ll examine the answer to that question below.

 

Corporate Social Responsibility 600px

Image via www.huffpost.com

 

 

What is Corporate Social Responsibility?

 

Corporate Social Responsibility, or CSR, occurs when companies take into account the sociological, financial and environmental impacts its actions have in the world and decides to ensure its actions make a positive impact. [2].

 

Some business experts have simplified the definition of CSR even further to suggest it encompasses everything a company actively does to have a positive impact on society.

 

There are numerous types of CSR, such as:

 

  • Philanthropy
  • Production Improvements
  • Better Conditions for Workers
  • Sustainability
  • Community Enrichment
  • Diversity in Hiring Practices
  • Supporting Companies with Similar Values

 

Typically, the manner in which a company engages in CSR is closely aligned with its brand strategy, brand values, positioning, primary audience and industry sector. For example, a clothing manufacturer might iron out a CSR plan that improves working conditions in factories located in developing countries, while an establishment that makes paper products might commit to CSR that ensures the world’s most at-risk forests are protected and regenerated.

 

 

Why is CSR Good for Business?

 

Although many corporate leaders are encouraged by the aforementioned statistic that shows a company’s involvement in CSR may mean a customer is willing to pay more for its services, they usually require stronger beneficial commercial evidence before taking further action.

 

However, they don’t need to look very far before uncovering some of the numerous other benefits linked to CSR, including: [3]

 

 

  • Happier Staff: Employees take pride in working for a company that supports the greater good through worthy actions and happier staff are more productive and better brand ambassadors

 

  • More Informed Customers: If your company announces a CSR strategy, the associated plans could potentially result in a more transparent organization which in turn typically results in more loyal customers.

 

Research shows customers want to know more about the things they buy, product or service, than ever before. For example, a study published by IBM noted 59 percent of American consumers and 57 percent of consumers from the United Kingdom have become more informed about the foods they buy and eat over the two years prior to the study’s publication.[4]

 

In other words, customers’ predisposition to buy, product or service, is becoming increasingly influenced by an organization’s authenticity, openness and commitment to the greater good.

 

  • Reduced Costs: CSR can cut costs by helping companies become aware of and minimize risks, plus improve the efficiency of their supply chains.

 

  • Improved Competitiveness: In a challenging marketplace, a worthwhile CSR plan could carve out a more solid place with a unique positioning for a company to thrive.

 

  • Better Public Relations and Reputation Management: A CSR plan gives a company a platform through which to promote good things like community involvement, donations to charities and other big-hearted gestures.

 

 

 

Developing an Effective Corporate Responsibility Plan for Your Brand

 

In order to launch a CSR plan that’s good for business and engages genuinely with your stakeholders, it must be carefully crafted. The key is to strike a balance between benefiting society at large, and benefitting the business. [5] Doing that means:

 

Business Idea Action Plan 600px

 

 

  • Evaluating how and where the business can have the greatest societal impact without taxing the company’s leadership and resources. This frequently involves scrutinizing the company’s existing competencies. Those strengths can provide clues to possible CSR strategies that are revealed after tapping into existing skillsets.

 

  • Cultivating a deep understanding of how certain actions could help the business while simultaneously supporting the chosen causes. This often also necessitates having an open heart and mind while listening to feedback from stakeholders.

 

  • Aligning with partners can propel your desired efforts and help bring goals to fruition. Ideally, adopting a long-term mindset when forming collaborative CSR relationships is best for all concerned.

 

  • Ensure business objectives and CSR goals match up. If there is a disconnect between these two components, your CSR activities risk being time-consuming and lacking the power needed to make lasting changes.

 

 

Examples of Brand CSR Strategies That Have Worked Well, and Why

 

Now you have a deeper understanding of what corporate social responsibility is and how to start formulating your own plan, let’s look at the characteristics of some successful CSR programs with companies that are excelling in their CSR endeavors [6]. You can then use these actionable tips to drive your own brand CSR inspiration.

 

CSR experts agree all successful CSR programmes typically have:

  • clear objectives
  • measurable outcomes
  • well-developed theories for how to achieve the desired goals
  • sufficient information for stakeholders about why causes are worth pursuing
  • dedicated and highly focused efforts from the entire company
  • a willingness to partner with credible experts.

 

 

Let’s look at a few case studies that detail some stellar CSR successes.

 

APS Group

This UK-based SME spent years ironing out its CSR strategy. Lacking the resources to hire a dedicated CSR team, the company found employees who were willing to champion the company’s CSR causes, which include education and supplier sustainability.

 

 

 

 

 

Media clips from the company place a strong emphasis on making things possible for clients that they would not be able to achieve alone, as does the company’s published document about its CSR initiatives. Through CSR efforts, it can also be strongly argued the company is living out its “Make More Possible” slogan by enabling the people and organizations affected by the causes it supports. APS Group is a great example of how even if a company thinks creating a CSR plan is a daunting task, success is still within reach. [8]

 

 

Method

This brand of cleaning products uses natural ingredients such as coconut oil and soy. Furthermore, the products’ packaging is environmentally responsible and biodegradable. Since the company boasts over $100 million in revenue annually, that is proof “green” products can be commercially viable.

 

Method Cleaning 600px

Image via © www.methodhome.com

 

 

Furthermore, Method demonstrates CSR focuses do not have to be separate from the products you make. Some media clips from the company that details its CSR focuses specifically highlight input from industry experts to make a bigger impact.

 

 

 

 

 

LUSH Cosmetics

This company sells bathing and beauty products filled with natural ‘Fair Trade’ ingredients. The brand’s Charity Pot is sold to benefit a rotating assortment of non-profit organizations. All proceeds from the Charity Pot go directly to the chosen groups, resulting in millions of dollars raised. [10]

 

The packaging is just one indicator of how easy it is for people to support good causes by purchasing these black, lotion-filled containers. LUSH uses the labels on the top of pots to inform consumers who the recipients are by clearly stating the designated charity concerned.

 

Lush Pot Lids 600px

Image via © www.lush.co.uk

 

 

The brand also has a fund that supports communities which produce fairly traded goods. It was launched in 2010 and borne from a desire the company had to do something more than just use fair-trade ingredients in their products whenever possible. [11]

   

 

  

   

 

Charting the Results of Your CSR Strategy

 

It can sometimes appear somewhat difficult to determine with certainty whether your CSR strategies have achieved the desired outcomes. One of the more effective ways you can answer that question is by engaging an independent research firm, with specialist expertise, to rank certain aspects of a company’s CSR performance, from human rights to the environment and community. [12]

 

Additionally, you can check effectiveness through various metrics [13] such as:

 

  • Environmental indices for pollution or air/water/soil quality
  • Quality and quantity of mentions in media outlets
  • Measurements for the quality of life within a society, such as literacy rates, life expectancy and incidences of disease, plus mental, physical and emotional heath. The latter could be gauged through feedback surveys given to workers
  • Indicators of the company’s economic health by way of profits, growth, and stability, before and after a CSR campaign launches

 

 

Statistics 600px

 

 

In conclusion, customers are becoming increasingly hyper-conscious of how and where they spend their money. Recent research also indicates this trend is strongest among Millennials, the largest consumer segment in terms of buying power. [14] Specifically, 91 percent of Millennials actively switch to brands that support a worthy cause, and abandon the brands that aren’t perceived to have an authentic contribution policy.

 

In addition to boosting your customer base and potential profits, a well-developed CSR plan could strengthen your relationship with suppliers, increase competitiveness in the marketplace and help you cut costs by becoming more aware of risks. Therefore, many business leaders have come to realize it’s short sighted to not be involved in corporate social responsibility.

 

Key Takeaways

 

  • Customers are typically willing to pay more for products from companies associated with strong CSR brand strategies
  • CSR goals vary depending on a company’s values and the composition of their stakeholders
  • A good CSR plan should both benefit the business and help society
  • The CSR plan must align with a company’s business objectives
  • Expert individuals or notable groups can help improve CSR strategy success
  • Metrics and independent research groups can evaluate whether a CSR plan is working well

 

Have you integrated a CSR strategy into your organization? If not, it might be a good idea to take a look at how CSR could benefit all concerned.

  

Questions to Consider

  

  • Does your company have well-defined core competencies that could translate into areas of CSR focus?

  

  • How motivated are your stakeholders to pursue a CSR plan?

 

  • Are there obstacles that might delay CSR-related brand strategy plans?

  

  • Have you thought about how to tackle negative responses from stakeholders that CSR is not currently worthwhile?

 

  • Which measurement methods will you consider using to verify your CSR brand strategy effectiveness?

 

 

You may also like:

 

• What Customers Want: Top 16 Branding Trends in 2016

  

• Rebranding Strategy: Why Your Rebrand Must Embrace Storytelling

    

• Brand Profiling: Top 6 Components to Creating a Strong Brand Personality

  

• Creating New Brands: Top 10 Tips for Brand Success  

 

• Brand Personality: Is Your Brand’s Character Big Enough to Compete?

  

• Millennial Branding: 6 Ways Your Brand Can Appeal to Millennial Customers 

 

• Co-Branding: 13 Tips for Growing Your Brand Through Strategic Partnerships 

 

• Video Brand Strategy: Top 11 Tips for How and Why You Need to Use Video

     

[1] http://www.nielsen.com, “Global Consumers Are Willing to Put Their Money Where Their Heart Is When it Comes to Goods and Services from Companies Committed to Social Responsibility”, June 2014

[2] http://toolkit.smallbiz.nsw.gov.au, “What is Corporate Social Responsibility?”

[3] http://www.csrinpractice.com, “What is Corporate Social Responsibility?”

[4] George Pohle and Jeff Hittner, https://www-935.ibm.com, “Attaining Sustainable Growth Through Corporate Responsibility.”, 2008

[5] Tracey Keys, Thomas W. Malnight, and Kees van der Graaf, http://www.mckinsey.com, “Making the Most of Corporate Social Responsibility” June 2009

[6] Frederick E. Allen, http://www.forbes.com, “The Five Elements of the Best CSR Programs.” April 2011.

[7] http://www.theapsgroup.com/who-we-are/corporate-social-responsibility/

[8] Lisa Henshaw, http://www.theguardian.com, “How SMEs Can Engage in Social Responsibility Programmes,” December 2011.

[9] http://www.inc.com, “How Two Friends Built a $100 Million Company”

[10] Helaina Hovitz, http://www.forbes.com, “Following the Millions in LUSH’s ‘Charity Pot’. December 2014

[11] https://www.lush.co.uk/.  “Introducing the SLush Fund”

[12] Tima Bansal, Natalie Slawinski, Cara Maurer, Natalie Slawinski, Cara Maurer. http://www.iveybusinessjournal.com, “Beyond Good Intentions: Strategies for Managing Your CSR Performance” January/February 2008.

[13] Katherine N. Lemon, John H. Roberts, Priya Raghubir and Russell S. Winter, http://www.philoma.org. “A Stakeholder-Based Approach: Measuring the Effects of Corporate Social Responsibility”, 2011.

[14] www.conecomm.com, “New Cone Communications Research Confirms Millennials as America’s Most Ardent CSR Supporters,” September 2015.