To move forward, sometimes you have to look backwards.
By Brian Odell
One of our President / CEO clients recently embarked on a mission to transform his company. He had no choice. After decades of industry leadership, the company was battling an aggressive competitor who was intent on stealing market share by ruthlessly undercutting prices by up to 20% less than our client’s prices. This competitor’s quality and performance levels met most of the basic industry standards, so customers started to buy their products. Their strategy was working.
Rather than risk further share erosion, our client’s initial, short-term strategy was to fight fire with fire by lowering prices to protect the company’s position in key segments and with important customers. This coincided with an intense effort internally to reduce costs and improve efficiency in order to minimize profit loss. He knew he couldn’t sustain this strategy over time, but he needed to slow his competitor’s advance. This gave us time to implement the second part of his strategy: to re-energize his brand and redefine his customer experience. The client felt this was necessary to help him regain his premium position and give customers a reason to pay more.
His products already had a good reputation. They were known for delivering the highest end-use reliability – with performance documented to be better than the competitor’s. But we knew this wasn’t enough. We knew we needed to put more emotional weight into the brand story and give the sales team something more powerful to leverage during customer calls. Focusing only on product benefits, or even a more over-arching unique selling proposition, we felt, would ultimately fall short.
Our first move was to rediscover the brand’s purpose – it’s essential reason for being, the higher order benefit it brings to the world. We started here because research has shown that companies who center their business on their brand “purpose” have a growth rate triple that of competitors, outperforming the market and maximizing profit over the long term.1 In addition to being a business’s essential reason for being, purpose is the factor that connects the core beliefs of the people inside a business with the fundamental human values of the people they serve. It’s not altruism, but a program for growth and profit based on improving the lives of the people being served by a business.
Our investigation into options for our client’s purpose started with some directional, qualitative research. Calls with sales reps, channel partners and customers revealed some interesting stories and insights. People talked about how the brand and the client’s people consistently exceeded expectations. How they helped customers avoid downtime problems. How they helped customers protect worker safety. How they contributed to risk mitigation. How they helped save money. And they also talked about how the company helped them protect their personal reputation.
Unfortunately, over time, all of these points had been lost and underplayed in the company’s marketing campaigns. The marketing story was limited to rational product facts. We knew the new story had to add these emotional triggers.
The interesting thing about this research was that it connected to the original purpose the company had established over 150 years ago. That is, the company founder started the company with those very same customer-driven motivations in mind. He didn’t just want to sell products, he wanted to help people avoid problems and reduce personal risk. He wanted to protect them.
In essence, what we decided, was that the company had to get back to its roots. The founder’s original purpose had to be revived and it had to be combined with a more compelling promise – a differentiated customer experience – which became the second facet of our strategy. The brand had to be about how the company helped customers succeed as much as it was about the products.
This all would have been just words unless our client didn’t also initiate programs to realign employees to this new brand story. We made sure everyone understood the brand purpose and how to deliver on the new brand promise. A whole new set of customer support tools, to make the experience match the promise, became central to the effort.
Today, market share erosion has been halted. Growth is occurring in all key markets and global regions. And, in many ways, it can all be traced back to the founder’s original vision for the company. His original purpose for going into the business – a genuine intent to help and protect people, not just sell products.
So, what’s the lesson? Sometimes the brand story evolves in a way to obfuscate its core reason for being. To recover, it helps to look back at a company’s heritage to inform today’s strategy. It’s also good to understand what stories are being told about the brand. The truth you discover can become the rally point for transformation.
1From Jim Stengel, author of GROW.