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On Purpose Page 4
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Dominique Delport, the global managing director of Havas Media Group, summarized the impact of ‘meaning’ on marketing: ‘Great marketing has a cumulative effect as it’s shared. We will only share ideas if brands do stuff that matters to us. We now look to brands for meaningful connections – big or small.’
There is plenty of other evidence that customer-centric businesses with strong brands (ie ones to which customers feel a high level of affinity) outperform their markets. For example, in 2003, a joint study by the University of Carolina and Harvard Business School reviewed the business performance of the Top 100 brands in the Interbrand Global Brand Value survey. They concluded that the businesses that owned these brands not only delivered higher returns to shareholders than other stocks, they also did so at a lower risk rate. In February 2015, Apple’s market capitalization was $765 billion, which is twice as much as the second most valuable company on the planet, Exxon Mobile.1 Paradoxically, Steve Jobs was famously known to be disinterested in making money. Rather, his purpose was, ‘We’re here to put a dent in the universe.’
Insight helps to keep purpose relevant
The digital world and the ‘internet of things’ have transformed how we experience the promises that brands make. They have also transformed our ability to shape and co-create those experiences and to tell millions of other people about our experiences, good or bad. But brand owners have had to face transformative challenges before. In the early 20th century, transformations occurred in the mass production, storage and transportation of goods and, later, in mass media, especially radio and television.
Such transforming factors have, though, never changed the fundamentals of brand building: gain continuous insight into what your customers want, know how the purpose of your brand helps them, be clear about your promises and deliver them brilliantly. Brand owners as diverse as Coca-Cola, Kellogg’s, Guinness, Procter & Gamble (P&G), Disney, Ritz-Carlton and IBM have prospered over centuries because they have understood those simple fundamentals. They have also understood that the trust that the brand earns endures, while what the brand actually sells can change dramatically. IBM does not sell computers any more but its purpose is still driven by the same insight that Thomas R Watson had in 1915 – that ‘information technologies would benefit mankind’. Today, IBM speaks publicly through its advertising of a purpose to create a ‘smarter planet’. The best brands have adapted to the changing needs of society, not just to the individual needs of consumers in that society. In fact, they have anticipated those needs and develop their advanced planning and research and development process to provide the goods and services that will be needed in the future.
Returning to Barclays Bank, if Matt Hammerstein is right and it is incumbent on banks to serve a social purpose, then it becomes essential to them to understand what is happening in society and provide services that help people to cope with its changes, not just to put their money somewhere safe.
Hammerstein explains how Barclays Bank has been looking at those changes:
‘Right now, we’re somewhere in the midst of what I call the third industrial revolution. In the first, there was mechanization in the 18th and 19th centuries; so in the United States, the cotton gin came and it completely disrupted labour economics. In the second, you had motorization in the early part of the 20th century, with the same impact; it completely transformed the way in which the economy worked. Now you’ve got digitization and it’s having exactly the same impact on society.
‘As a bank, we could just sit back, observe that and say “Well, that’s fine, we’re aware of that, we can sympathize with it; it’s going to have a big impact on our business because we’re going to digitize certain things, and there’ll be certain people who won’t be able to do what they do today.” Or we can recognize that actually all of our customers, clients and our colleagues are going through that one way or another and we can orient what we are doing in our business around helping them.
‘In the midst of industrial revolutions, lots of people prosper and lots of people get left behind. So we said that our mission must be to leave no one behind. Now, we’re not literally going to be able to help all 65 million people in the UK, but if we have the ambition of doing whatever we possibly can, it’s going to stretch our imaginations to do things we probably wouldn’t have otherwise done.’
This has led Barclays to launch a programme called ‘Digital Eagles’ (named after the famous logo of the bank). The Digital Eagles are specially trained members of staff on hand in all Barclays branches to provide technology advice to both customers and non-customers. It is a free service, an opportunity for people to build confidence in digital skills. Steven Roberts, director of strategic transformation at Barclays, explains:
‘We firmly believe that Barclays has a commercial and social responsibility to ensure that no one is left behind on the digital journey, so we are on a mission to help and enable people to understand and embrace coding and the new Digital Revolution – whether they are seven or 107.
‘As we transform Barclays into a truly digital business we now have more than 25,000 Digital Eagles worldwide, with over 12,000 in the UK. We’ve even created our own accreditation, called the Digital Driving Licence. Accredited by City & Guilds, it started out for colleagues and is now available and accessible to everyone, free to download as an app. We’ve already got registered users from more than 20 countries around the world and we’re aiming for a million downloads. We’ve already seen the benefit that the Barclays Digital Driving Licence can bring as an accessible and non-intimidating introduction to the digital world.’
Barclays Bank has a long way to go – as do most of the other traditional banks – to persuade people, including its own customers, that it is putting its customer-driven purpose at the heart of all its activities. In 2014, its chairman Sir Anthony Jenkins stated that he thought it would take 10 years for the banks to gain people’s trust. But as the Chinese proverb puts it, the journey of 1,000 miles starts with a single step. It seems that the other Board members were not prepared to make that journey with him, because he was asked to step down in 2015.
Banks, as we have said, are not the only targets of customer and social criticism. Another industry sector at the heart of the ‘digital storm’, which has also attracted much scrutiny from society, is media. Media brands such as newspapers, TV channels and film studios have had their entire operational and regulatory business models disrupted. Print media have particularly suffered. Print media once effectively controlled the news agenda, even in flourishing democracies. Newspapers told us what to think, or at least what to think about. They were the main way in which the institutions that sought to control people’s behaviour (political parties, businesses, religious organizations) influenced us. With only limited competition, newspapers often appeared to act in a form of cartel – setting rules for themselves under the privilege of freedom of speech not granted to other forms of media, such as television. Their relationship with their consumers was what, in psychology, a transactional analyst would have called ‘parent–child’. They claimed to be the ‘voice of the people’ and, in order to prove their point, could use the selective editing of letters from readers and ‘campaigns’ supported by their readers.
Image 1.1 Barclays digital eagles
They operated behind ‘closed doors’ where they could engage in practices that their readers, had they known about them, would probably have deserted in droves, which is in fact what happened as soon as the digital revolution hit them. Suddenly, readers could consume their news, gossip or entertainment any time they liked in any way they liked at any pace they liked. Consumers showed an enthusiasm to ‘get behind the story’, to lift the veil of secrecy to understand ‘what was really going on’ and to which newspapers could not respond. Such a world exposed what was the primary purpose of these print brands, and when readers did not share that purpose, they would quickly turn against it.
Let’
s compare two print brands, both established in the same year, 1843. The first is the News of the World in the UK, established in October 1843 by John Browne Bell and heralded as ‘The Novelty of Nations and the Wonder of the World’. Its founder said: ‘Our motto is the truth, our practice is fearless advocacy of the truth.’ Bell’s insight was that as the political franchise was extended to more and more people, and as standards of education and levels of prosperity increased, more people would want to read more about and be entertained by what was going on in the world. The purpose of the News of the World was ‘to give the poorer classes of society a paper that would suit their means, and to the middle as well as the richer a journal which, by its immense circulation, should command their attention’.
For many years, the newspaper certainly fulfilled part of its purpose: it did command attention. However, by the early 2000s it was embroiled in what appeared to be a war not to bring the truth to its readers but to win more market share and thus greater advertising revenue. The pressure to get more and more exclusives of more salacious detail resulted in journalistic practices that were illegal, offensive and even betrayed their own readers. It culminated in the phone-hacking scandals, which led to its parent company, News International, concluding that the brand was so contaminated that the newspaper had to be closed down and the brand withdrawn from the market.
Compare that brand with an entirely different publication: The Economist. Established in September 1843 by businessman James Wilson with the following purpose: ‘to take part in a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress’. Wilson had a similar insight to Bell about the need for engaging more people with knowledge, but its difference was that he saw the need to drive the world’s progress, not simply report it.
The brand has flourished by consistently staying true to that purpose and finding new and relevant ways to deliver on it. Its owner, Pearson International, with its core product, The Economist weekly magazine as its engine, has found new ways to engage new audiences intelligently through The Economist brand. The Economist Intelligence Unit publishes books, organizes conferences and has a thriving online offer, which attracts an upscale, educated and usually affluent audience, which in turn attracts advertisers with good money to spend. So institutionalized is The Economist culture – its style guide is one of the best books we have read on how to write – that it is impossible to think of it betraying its purpose and editorial principles. Rest assured, should it be tempted to do so, its readers would soon let it know.
How purpose informs building your brand and your business
Robert Stephens explains how building business is driven by the relationship between ‘purpose’ (what you stand for) and ‘brand’ (what customers experience of you):
‘I think purpose is part of brand and brand really is the wrapper that represents the complete package in the customer’s head. Everybody has a need for labels. The human mind has a need for organization, so when we are comparing more than just price, purpose and brand are the thing that people really look at. Can I trust you? Especially if it’s a complex service; it’s not just about the price.
‘Customers look for subtle signs. When you get a bid from somebody, is there handwriting somewhere on it or are they simply using a computer to generate it; do they use a barcode, how fast do they get the bid to you? All of those things tell you a lot about how the supplier is going to behave if you choose to do business with them.
‘The more commoditized something gets, the less we value it, just like the less we have to work for something, the less meaning it has for us. I think you can run a fine company with no higher purpose but, when you have one, it can serve as the glue that holds people together during tough times. It can lower the cost of operating. Purpose acts like an invisible manager to make the organization operate more efficiently and to help people do the right things.
‘Go back a few years and if you had some great people and you had an interesting brand, you could probably deliver an experience that was distinctive and different and appealing to customers, but I think it’s just so much more difficult now, because yes, you can have a brand, and yes, you can have maybe a little bit of a distinctive experience, but unless you’re able to convey that, to communicate it, to deliver it intentionally across all of these different channels, be that the web or social media or retail or whatever, then, you know, it’s suboptimal.’
Purpose drives and informs all aspects of brand building. If you can’t answer the simple question, ‘If our brand didn’t exist, would we need to create it?’ with a resounding ‘Yes, because…’ and articulate your purpose, then don’t even bother with the other elements of branding. Purpose helps you to define who your target customer is and what they need. Lots of people may buy you but there will be one type of person, or rather one mindset, which will be most receptive to your sense of purpose – it drives what you want to be special and different for in their minds (the ‘positioning’ of the brand). It drives the personality of your brand.
Much of branding is emotional, the establishment of a ‘relationship’ with a customer psychologically, based on a perception of their own self-image. You create that image through the way you look, talk and act. So personality (tone of voice, visual style, sales environment, packaging etc) is critical. Specifically, it informs your choice of a protectable, relevant and appealing brand identity. That is the only way that customers can actually find your brand, buy it and recommend it. It is the most important legal asset you will own. We constantly talk about the ‘branded customer experience’. It means making sure that the valuable experience you give to customers is so distinctive and unique to you that your customers associate it with you and no one else!
Apple’s insight was that computers would become media devices for personal pleasure and enrichment. Steve Jobs famously declared in 1977 that in the future everyone would have an Apple computer. And in 1983, he gave a speech in a small room in California in which he described that insight in terms of a vision of what the future would be. The tape of that speech was found in 2012 and uploaded to the internet. It is remarkable in the accuracy of its predictions.
That insight into people’s desire for empowerment and creativity through knowledge drove the purpose of the brand. And that purpose informed the choice of name as well as a trademark look and feel for graphic, product and retail design, communications and marketing. An apple is fresh and zesty, as well as being associated with breakthroughs in human knowledge and empowerment.
Purpose defines how far your brand can stretch and whether you will want or need to create sub-brands or other brands. Disney knows that the purpose of its brand is to make people happy; it does so by promising magical family entertainment targeted at the child in all of us. It has the production capacity also to make films that are not ‘happy’ movies, but it makes them under a different brand, Touchstone Pictures. This protects the integrity of the Disney brand for both the customer and the business.
Purpose drives the culture and processes you develop internally and thus the choices you make to ‘deliver and live’ your brand externally. Steve Jobs and his team were zealous about communicating internally. They even changed the design of their head office to allow people to ‘bump’ into each other, so facilitating more natural, intuitive and creative conversations. Johnny Ives, the UK designer given much credit for Apple’s success, insists that though Steve Jobs was demanding, it was because he believed passionately in Apple’s purpose and so he was very clear to everyone what was expected from Apple.
Robert Stephens explains how ‘purpose’ drove culture and customer experience at Geek Squad:
‘For me, purpose acts like a lighthouse, but the light shines at a certain wavelength that only attracts a certain kind of person. The kind of people you want; it helps keep the others out. The purpose of the Geek Squad is to help ordinary people do extraordinary things with te
chnology; a squad of people who combine their individual talents within a team to provide a service for the public. What they fix, whether it’s PCs or tablets or phones, will change as technology changes, but how they serve customers will never change.
‘That’s what the Geek Mobiles did for us. You know, people think the uniforms and the cars and our branding were some kind of marketing gimmick. Not at all, in fact they weren’t even really for the public. They were for our people. I needed those people to believe that they are the nearest living things to James Bond, five times a day. Take the uniforms: there are a lot of tech people who look at that uniform and say, “I’m not wearing a clip-on tie.” That actually becomes a litmus test for humility and they self-select out. So purpose acts as the lighthouse that draws and also repels.’
Finally, purpose must be what you measure business performance against. You need to know whether you are doing what you said you would do and whether that is converting into the customer and financial performance you want. Most measures are generic and every company looks at them. There are the lag measures (which tell you how you’ve done) such as sales, market share, profitability; and the lead measures (which tell you how you might do) such as brand opinion, brand image and net promoter score (NPS). What is more important, however, is to identify the specific measures that determine whether your customers are getting the experience that your brand is promising. For example, telco O2’s purpose is to connect customers with the people and things they want, so a key measure is how many ‘dropouts’ (ie losing a signal during a call) customers experience. If you are a priority customer trying to book your tickets to a big gig at the O2 arena, for example, you are going to be fairly angry with O2, the network operator, if half-way through booking you lose the connection and have to start all over again.