I wrote a “Change This” white paper for 800-CEO-READ in January 2012. It is about the urgent need to change the narrative of business: the old story is not working and a new, better story is emerging. In light of the groundswell of commentary following the events of last week — Greg Smith publicly resigned from Goldman Sachs; the foreclosure settlement between major banks and government officials was filed in federal court; and the Fed announced the largely positive results from bank stress tests — I thought it would be interesting to again share this thought piece. It seems more relevant than ever.
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During a UK radio interview on Sunday, January 8 with journalists at The Monocle, as part of their two-hour Monocle Weekly program, we discussed the concepts in my book Grow. It was a fun and lively interview, with questions about various brands, what happens to ideals in an acquisition, and how an ideals-driven approach is different from corporate social responsibility.
But the discussion got most interesting when the journalists bantered about my take on the higher-order ideals for the 50 brands I studied in the research for my book.
They did not totally buy it.
Isn’t the ideal of Johnnie Walker just to make great whisky? It’s not to celebrate journeys of progress and success.
Isn’t the ideal of Starbucks just to make a good cup of coffee? It’s not to create connections for self-discovery and inspiration.
I admit at first blush this notion of higher-order brand ideals feels pretty conceptual, and a bit idealistic. Perhaps even a tad “American.” Sir Martin Sorrel, in writing his comments to me about the book, said “When you start reading Grow, you may well feel a little skeptical about the ideal and its bottom-line value. But you’ll soon become intrigued—and then utterly convinced.”
I am glad the Monocle journalists challenged me. They are right that Johnnie Walker must make great whisky, and that Starbucks must make a great cup of coffee. And Apple must make great devices, Pampers must make great “nappies,” Red Bull must make drinks that supercharge your energy, Petrobras must distribute high-quality energy, and IBM must deliver competitive data services. But if that is their only aspiration, they will not attract talent and innovate in ways that make life better for the people they serve. Without an ideal to guide an organization, people lose their passion to create and do meaningful work.
One of my favorite stories in my book is the development of Apple stores, arguably the most successful retail initiative of all time. Their ideal was not just to open cool stores for Apple to sell more devices and services; their ideal was to create relationships with people to help them be more creative, happier, and fulfilled. That is what they recruited for, and what they measured. And the result was rapid growth and the most productive sales per square foot than any retailer ever.
Is your brand ideal too idealistic? My bet is that it is not. I have found quite the opposite: most companies and brands aim too low, with a functional, unemotional brand ideal. And that just won’t drive growth.
This continues the discussion we started in the last blog entry about the future of marketing.
I shared my thoughts that the concept of brand will get more important, marketing will be more about behavior than communication, and that marketing will get more integrated with other disciplines. Here are the rest of my thoughts about the future of marketing.
Empathy and artistry will get more important. Empathy is at the heart of marketing because it is the ability to see and feel through someone else’s perspective. Artistry is the intuition and creativity to invent something that offers something new and important for a customer—also at the heart of marketing. Brands like Edmunds.com get this, as they work with companies like design firm IDEO to make the car buying experience more delightful, a huge area of potential innovation.
Big data and advanced analytics will profoundly impact how well we understand our business. There will be no excuse not to fully understand the interrelationships in your marketing activities and spending. Look at the work marketing analytics firm MarketShare has done with Ticketmaster to better understand behavior and pricing (full disclosure: I serve on the advisory board of MarketShare). And this is only the beginning.
Business model innovation will separate the great brands and great marketers from the ordinary ones. Because those who think about upending the business model are usually closest to potential customers, and who build highly differentiated brands. Red Bull, Apple, Amazon, Groupon, Google, Starbucks, and Vente Privee are a few examples of wildly successful brands that changed the business model in their categories or invented a new business model.
Mobile will increasingly be the gateway to brands. The trend to mobile is dramatic in how people access entertainment, shopping information, news, and just about everything important to them. Eric Schmidt of Google says the future will be social, local and mobile. The smart marketers like Coke are already preparing for this by experimenting, and leading media/content companies are designing experiences starting with mobile devices and tablets versus computer or TV screens.
Are some of these trends and patterns obvious—yes. Are you acting on them now to prepare your organization and capabilities for the future? That is the real question.
I was recently asked by a client to speak to his organization about my thoughts and feelings on the future of marketing, key challenges, and what they could do now to prepare themselves.
He is smart to be asking those profound questions. And while I cannot precisely know where it is all going, there are certainly some undeniable patterns and trends.
Here is some of what I shared with them regarding the future of marketing.
The concept of “brand” will get more and more important. Thirty years ago practically none of the market capitalization of the S&P 500 was attributed to brand equity; today it is above 30%. So marketing has gotten more important, and will only be more vital to a company’s future. That is a huge responsibility for tomorrow’s marketing leaders.
Thanks in part to social media, marketing will be more and more about the behavior of the people behind the brand, not what the brand says. Zappos shared with me that when they tried advertising their products and services versus communication about their people and culture, customers asked them to go back to talking about their culture. IBM’s highly successful current company strategy is about how their people are behaving to help our planet become smarter.
Marketing as a discipline will integrate and synthesize with other disciplines. The old functional lines of sales, marketing, public relations, design, market research, and digital media are blurring, to say the least. The work today to grow a brand involves all these disciplines and more, and the great companies have leaders who do synthesize these disciplines. One example: P&G has broadened the scope of its global head of marketing to include design, public relations and market research. Innovation like ecommerce and social media have triggered these necessary changes, and this will only get more important.
Stay tuned, I will share more about the future of marketing in a few days…
C.K. was a featured speaker at the recently held Luxottica International Marketing Meeting in Milan, along with Jing Zhang of the South China Morning Post, Karin Heijink of MTV, John Auerbach of Gilt.com, Robert Klingensmith of Publicis, and the amazing sprinter Oscar Pistorius from South Africa. I also participated in the meeting, and it was inspirational on many levels.
C.K told the story of building the Tanishq retail jewelry brand, a runaway success. Its brand ideal, in my words, is to uplift and transform the lives of each consumer they touch. You get a great feeling for this in one of their wonderful ads.
What I want to share with you are the principles that underlie their sincere and intense customer focus: it is a great example of activating their brand ideal across their business.
First, they believe if you really touch a customer’s heart, she is your customer for life. And the way they bring this to life is all-consuming: they invite customers (mostly women) to their factory for visits (2,000 a year), they invite women to their stores to celebrate birthdays and anniversaries, complete with a party, and they encourage them to visit whenever they want with no pressure to buy. Tanishq’s sales people are on fixed pay so the focus in on building relationships.
Second, Tanishq creates an ambiance in the store that encourages browsing and socializing. They use the metaphor of a “home”; they want their customers to feel as comfortable as if they were at home. Some customers even throw parties in the store: Tanishq encourages that. They periodically introduce special collections to make the store new and exciting, to encourage repeat visits to simply browse and enjoy.
Third, C.K. and his team are fanatical on measuring customer satisfaction. C.K. shared with me that they currently have an overall customer satisfaction rating for the in-store experience of 8 out of 10, and they are very unhappy about that. Nothing short of 10 is what they expect.
For C.K. and his team at Tanishq, creating fans for life is their single-minded goal. They believe when that happens, they will succeed financially. Everything they do is coherent with that goal. Next time in Bangalore, I will definitely check out Tanishq in person—you should too.