Ability to capitalize on change drives growth of leading brands
Much has been written about the new era of consumption, consumers, and even culture. But what about the new era of brand and business growth? As the world around us keeps evolving and traditional approaches to business growth begin to retrograde, where can business leaders turn to reinvigorate customer relationships and drive sustained success—regardless of industry, geography, size or age?
As companies’ answer to “why we exist” increasingly expands beyond purely profit to include having a more inspirational impact, so too does the role and remit of brands in helping to achieve this more ambitious goal. Indeed, nearly 90 percent of today’s consumers desire more purposeful brands that make it clear what values they stand for. But while this often manifests in rushed adoption of a purpose and backing of well-intentioned CSR initiatives, today’s winningest brands are paying homage to Peter Drucker’s time-tested truth: the ultimate purpose of a business is to create and keep a customer. This is what ultimately drives brand and business value—both today, as new customers are acquired, and long into the future, as they become loyal and are retained. Today more than ever, this virtuous flywheel is accomplished via customer experience. Key here of course is that customers and the world around them constantly evolve—meaning what it takes to create them and, more importantly, what it takes to keep them do too.
With brand and customer value core to business value, the growth formula is becoming increasingly intangible. Choices are no longer driven by products delivering functionally in a transaction-based and performance-led exchange. Instead, they are more emotional and longer-term, inspired by a superior experience with a brand and translating to stickier, relationship-driven bonds resulting from the collection of positive interactions that together form the “brand experience.” With the inundation of options available, the winning formula is now less about what you offer, and more about the customer centricity (the human) and market responsiveness (their reality) surrounding that offer. This new world is the new era of brand-building: ecosystem-driven growth.
Ecosystems chase ‘share of life’*
Today’s leading brands are the strongest proof that growth comes from the ability to capitalize on change. Companies aware of and fluent with changes in the broader environment—the marketplace, consumers and their expectations, and society more broadly—better grasp how economies impact behavior, technologies transform experiences, and values, attitudes, and expectations relate to purchase choice. Their entire playbook has shifted as category rules are challenged, returns to small variations to products or services and other forms of incremental innovation slow, and consumer expectations are increasingly anchored on the best experience encountered anywhere—even beyond category and geography lines. Best-in-class brands see all this change as a platform for growth, revealing new and evolving opportunities areas through which to better engage and connect with consumers.
We’ve already witnessed the transition from products to services, and offline to online. Today, we face another critical inflection point. If yesterday’s top brands dominate share of wallet as lifestyle brands that are core to the very identity of the audience they serve, today’s brands are already thinking about, and planning for, what that identity will be tomorrow. They are laser-focused on not just meeting a need, but also beating the need. They are moving from being one option out of many, to a one-stop shop. And they’re no longer defending share of market, because their “market” is so fluid and transitory it becomes obsolete by the time it’s defined. They’re busy chasing share of life.
The most effective ecosystems are defined not by costs and defense of market share, but by revenues and creation of new markets altogether, which better satisfy real needs. Realizing that expectation is reality, these players resist going for cheaper and instead battle for better—better quality, convenience, speed, and relevance. Direct-To-Consumer, for example, is not a channel: it’s a personal, emotional, and rewarding interaction with your local bakery instead of a cold, mission-accomplished, unfulfilling mass-produced dessert from the nearest grocer. It’s a dialogue that is naturally more authentic because it’s rooted in not the share of wallet the company is chasing, but the real value it’s striving to deliver to the human it’s trying to serve.
Key strategic attitudes in today’s marketplace
From meeting a need, to beating a need
Silicon Valley’s holy grail is product-market fit. But today’s winners, realizing that there are so many products but limited markets, think differently about what they’re bringing to the world. For them, it’s about solution-need fit, where knowing your customers and their current needs, anticipating their future needs, and exceeding their expectations around fulfilling needs at any point in time results in solutions that serve rather than products to push.
With an acute awareness of and fastidious focus on needs, success comes from effectively offering a solution and reducing friction points—beyond whatever your immediate product offers. Through a combination of sensitivity, speed and agility, innovation stems from the world of opportunity—the ecosystem—around a need. This evolved offer is much more than a brand extension (which often tackles the same need in a different way); instead, it addresses peripheral needs surrounding the core one, creating more numerous and more powerful synapses which not only forge stronger connections with consequently more satisfied customers, but also equip brands with critical insight and ammunition to continue feeding the flywheel.
From one-out-of-many, to one-stop shop
As brands evolve from a focus on brand extensions to the abundance of opportunity afforded by an ecosystem strategy, they derive real benefits from the network of connections and interactions they can create with their customers. Provided that data is collected, integrated, and leveraged smartly, more touchpoints benefit both the business and its buyers. More knowledge about customers (especially on a per-customer basis) means greater familiarity with key audiences at each stage of the funnel, translating to deeper insight about the audience, what matters to them, where future needs may arise, and even what gaps need to close to convert deflectors. Winning brands use this multi-faceted view of customers to better anticipate and proactively innovate for the future by personalizing experiences, capitalizing on emergent trends, and generally improving their offer. Importantly, all this leads to customers enjoying a better, more relevant experience.
And, realizing that a greater number of customer interactions means more opportunities for forging an invaluable and even unbreakable relationship, leading ecosystem brands obsess over providing a consistent, coherent, and hugely positive experience regardless of the touchpoint, channel, or level of the funnel. Because customer experience is such a valuable and highly effective driver of customer satisfaction—and ultimately loyalty—due to the emotional connection it can forge, top ecosystem brands are increasingly focusing on these touchpoints over traditional marketing and communications altogether. Instead of the inertia that leads to returning to the same brand (or brand extension) as before, this combination creates powerful magnetism between the brand and the buyer: the consistent and coherent experience becomes a reliable promise from the brand that today’s increasingly wary and distrusting consumer actively seeks out.
From defending market share, to capturing share of life
A third pivot, core to this new era, is the transformative redefinition of “customer experience.” It’s no longer a customer service function limited to reacting to customer needs and handling problems, nor is it about where a prospective or returning consumer is in their shopping journey with a given retailer. Leading brands with thriving ecosystems appreciate and obsess over customer experiences that actually stem from customers themselves, and their expectations: what a target audience needs, wants, and expects from brands and retailers as their journey through life happens to intersect with purchasing occasions. Instead of a product-first orientation focused on operationalizing efficiencies and push marketing to add yet another product, service, or option to consumers’ already over-stimulated existences, winning brands consider the human experience. They appeal to the head, heart, and hands to create solutions for real wants and needs, and they craft experiences that not only live up to standards set by other categories and companies, but also seamlessly integrate into lives and become objects of desire.
- Source: Vertic