Purpose versus Imperative

The name of the game in business is making a profit. A venture that does not generate more revenue than its expenses cannot survive long term. Stakes are incredibly high when it comes to profitability. Thus, being profitable should come before any other priority in the organization, right? Not so, according to the CEO of one company that decided it would not participate in the retail apocalypse.

Purpose First…

Profitability is important for a business, but it is not what should drive its reason for being. During an appearance at Adobe Summit, Best Buy CEO Hubert Joly said that Best Buy was headed in the wrong direction several years ago. The retail landscape shifted from dominance of brick-and-mortar to creating an omnichannel experience. Customers want to do business with you where they are, not what is convenient for you. Oh, and you better be competitive on price, or they will go with another option from the many choices they likely have.

Best Buy knew it had to change or else. According to Hubert Joly, the underlying force that led transformation was purpose. “We said we’re not in business of selling products or doing transactions, we have our purpose, which is to enrich lives with the help of technology.” With a clear purpose, Best Buy knew how to proceed to become more competitive. Joly said Best Buy revamped all aspects of the customer experience—website, search, information, and customer service. What needed to change was made clearer through a defined purpose of enriching lives with the help of technology.

“We said we’re not in business of selling products or doing transactions, we have our purpose, which is to enrich lives with the help of technology.” – Hubert Joly, Best Buy CEO

Whether you are a company with $42 billion annual revenue like Best Buy, a start-up business, or considering your personal brand, starting with purpose offers unmatched grounding. Think about how tough decisions can be made with less hand-wringing because purpose is factored into the equation. Does a new initiative, product, or policy reinforce your purpose or stand at odds with it?

…Then Imperatives

The commitment by Best Buy leadership to have purpose drive the company is admirable. However, purpose alone may wind up being lofty aims that are never realized. Best Buy did not forsake business objectives. It did not pretend that focusing on the customer would solve its Amazon problem. Enriching lives with the help of technology required retooling of the customer experience and committing to be price competitive. Top executives could spout the purpose regularly, but if it was not backed up with business strategy to execute the purpose would ring hollow.

Don’t Wait

Best Buy faced a grim reality that its company was headed for major trouble. Its resurgence has been nothing short of amazing. We can learn from Best Buy’s situation, realizing we need not wait until we face dire consequences to gain clarity on organization or personal purpose.

Think of purpose as the map giving direction on where to go. You would not drive from Chicago to Dallas without directions; why try to run a business or steer your career without clear directions (purpose)?

Source: Nadia Cameron (2019, March 27). How Best Buy shifted from retail-led to customer relationship driven. Retrieved from
https://www.cmo.com.au/article/659314/how-best-buy-shifted-from-being-retail-led-customer-relationship-driven/ .

Image credit: Pixabay

IHOP’s Burger Flip: Good for Publicity, Bad for the Brand

What does a business do when it competes in a mature category and is battling for new customers? You shake things up. To that end, give IHOP credit for its bold campaign to introduce new hamburger items to its menu. It was no ordinary product rollout; IHOP has temporarily re-branded as IHOb, or International House of Burgers. After teasing the IHOb name last week, the company unveiled the burger initiative yesterday.

The announcement was met with surprise (many people thought the “b” was for “breakfast”) and anger that IHOP was turning its back on the promise of being a breakfast brand. Don’t worry, pancakes are not going to be eliminated from IHOP’s, err IHOb’s, menu. The name change is nothing more than a publicity tactic to draw attention to the new products. The tactic worked from a publicity standpoint, but will it help or harm the brand long term?

The Case for IHOb

Casual dining is a category in trouble and has been since the recession of 2008. In a mature product category, a prime growth route is to attract competitors’ customers. Growth becomes a zero-sum game rather than an organic process. A textbook marketing response at this stage of the product life cycle is to pursue competitors’ customers. The burger initiative and IHOb campaign is an attempt to attract diners who may not have viewed IHOP as an option.

A second textbook marketing strategy that played into IHOP’s decision is pursuing growth through new products. Business growth can be reduced to two options: sell to more customers or sell more products. Expanding the non-breakfast menu is a way for the brand to broaden its appeal and in turn, bring in new customers… at least in theory.

A business operating in the maturity stage of the product life cycle is in a precarious position. Maintaining status quo could point the bus in the direction of decline. Taking chances on new products to bring in customers may not work, but the possibility of success beats the alternative.

Is the Book Wrong?

Textbook marketing led IHOP to the IHOb campaign. Many marketing experts would argue the book is wrong, or at least not applicable, in this case. Brands are rich with meaning, embedded through customer experience and cumulative marketing exposure. The IHOP brand is synonymous with breakfast. When one thinks of IHOP, chances are the first association that comes to mind is “pancakes.” By extension, subsequent brand associations probably have something to do with breakfast. Associations about hamburgers, chicken, or any other entree probably are less likely to be elicited.

For better or worse, IHOP is associated with breakfast. Rather than trying to break free from the “breakfast box,” IHOP should double down on that association. Instead of attempting to widen its appeal by expanding the menu, IHOP should be on a quest to make breakfast more exciting and desirable. Add variety to the breakfast menu, improve product quality or taste, enhance the dining experience, but whatever you do, carry out the brand promise of a great breakfast.

IHOP has already sought to avoid being limited by a breakfast association. The change from its full name, International House of Pancakes, to IHOP was an effort to not emphasize the signature breakfast item. While you can take pancakes out of the brand name, you cannot eliminate it from brand positioning and promise. Instead of pancakes and breakfast in general being a growth limitation, IHOP is one of the few brands in the restaurant industry that could position itself as the ultimate breakfast experience.

Will It Work?

Sales performance over time will be the ultimate metric to evaluate the IHOP-IHOb campaign. Exposure is beneficial for a brand, particularly in today’s crowded and noisy marketplace. According to a USA Today story, IHOP’s brand mentions online since early June were about 15 times greater than a comparable time period in May. In the battle for the customer’s mind, being noticed is better than not being noticed.

IHOP is risking damage to brand equity in the IHOb campaign. Many consumers will be skeptical that IHOP can deliver on a quality hamburger. After all, it is a breakfast place, not a hamburger restaurant, at least that is what our brand associations tell us. Other brands are perceived as go-to places for a burger. Even if IHOP succeeds in getting customers to try its new burgers, a less than satisfactory experience with the product could be a threat to IHOP. Negative reaction to IHOP burgers could affect perceptions about IHOP in general.

IHOP should remain true to its brand roots and invest in being the best breakfast restaurant around. The brand’s parent company, Dine Brands Global, is diversified in that it also owns Applebee’s. It is pointless to drag IHOP into a bigger arena of competitors. Leverage the existing brand positioning and be great at breakfast.

Making Brand Taglines Great Again

Today, Americans will observe a distinguishing trait of our government: smooth transfer of power. Donald J. Trump will become just the 45^th person to hold the position of President of the United States. Our country has been on a wild ride the past year-and-a-half. Candidates and viewpoints deeply divided us, a division quantified at the polls. In the end, Trump won out. Looking back, it was more about his brand than platform that put him in the oval office.

Politics is left to other forums and people to discuss. But, as Donald Trump becomes President Trump today it is worth taking a look at a key to his movement: a brand tagline.

“Make America Great Again”

For all of the talk of building walls, draining swamps, and securing jobs, four words energized Donald Trump’s campaign for President: Make America Great Again. These words resonated with millions of Americans who felt America had lost an edge. A brand is more than a tagline, of course. However, a tagline aids in brand recall and serves as a thumbnail to explain a brand’s meaning or value. In the case of Donald Trump, his brand makeup in terms of political experience lagged behind most of the other candidates, both Republican and Democrat. Trump’s campaign masked that deficiency by creating a brand promise that attracted voters to him.

How did “Make America Great Again” compare to brand taglines of Trump’s competition? An article from the Washington Post early in the 2016 campaign season critiqued several candidates’ slogans. Here are three:

Ted Cruz: “Reigniting the Promise of America”

Mike Huckabee: “From Hope to Higher Ground”

Marco Rubio: “A New American Century”.

Trump’s slogan differed from these messages in that it conjured images that voters could imagine. In contrast, many people might struggle with explaining a “New American Century.” A tagline must be more than a clever combination of words and phrases.

Why a Brand Tagline is Important

Donald Trump’s unconventional presidential campaign offers a case study in the importance of a brand tagline. “Make America Great Again” did not get him elected by itself, but the tagline played a role in Trump’s victory. How did it play a role? “Make America Great Again” met three criteria for a brand tagline:

Aids in brand awareness. Donald Trump had high brand awareness in terms of his personal brand. His campaign tagline took awareness to the next level by building awareness for why he wanted to be President.
Differentiates from competition. Branding practices in general serve to set apart a seller from competing offerings. Trump’s “Make America Great Again” message stood out in a sea of unremarkable slogans associated with his opponents’ campaigns.
Relates to pain points of the target market. Ultimately, a brand exists in the minds and hearts of the marketplace. An underlying question we mull over any time we are presented with an offer is “what’s in it for me?” A brand promise encapsulated in a tagline must be about the benefit of the brand for the target market.

Branding is important because it is unrealistic to expect customers to know everything about you. You want them to latch on to salient characteristics and benefits you possess. A tagline has the power to do just that, even for complex buying decisions like which candidate to support for President of the United States.

Now What?

Another characteristic of branding is once strategy is set, a brand must follow through on promises made. Time will tell if the Trump administration can back up the promise to Make America Great Again. The ability to bring brand promises to life that sets apart great brands from the pack.

The inspiration for writing this post did not come from the events of today as much as what Trump said earlier this week. In an interview, Trump dropped hints of his 2020 campaign tagline: “Keep America Great.” Will Trump fulfill the promise of Make America Great Again to the point that Keep America Great would resonate with voters? Stay tuned.

The Dangers of Brands Swimming Downstream

A harsh reality about brands is that there is no brand in existence that is for everyone. Some people think your prices are too high. Others think your quality is unacceptable. Yet others believe your brand is aligned with interests incongruent with their own. You get the picture- even the most popular brands do not appeal to all buyers. Segmenting markets is the typical response to this dilemma, targeting different groups of buyers with distinct offerings. Instead of seeing segmentation as a strategy of last resort, recognize it as a default strategy- you are going to have to segment in order to pinpoint the customers you are best equipped to serve.

Two recent brand extension announcement by prominent retailers reflect a desire to broaden appeal to a wider customer base, specifically “trading down” to serve more price conscious buyers. The companies differed in the strategy employed to compete at lower price points, and the decisions may not only affect the success of their value-based ventures but impact long-term brand health, too.

Whole Foods Market’s Downward Move

Whole Foods Market has established itself as a force as an upscale supermarket, even earning the nickname “whole paycheck” for garnering price premiums paid by shoppers wanting better-for-you food products. However, Whole Foods Market’s brand positioning has a downside: It essentially paints the brand into a corner from which it cannot escape. You could say Whole Foods did too good of a job with brand positioning. It is so entrenched as a premium brand that there is no way to attract buyers more concerned with price.

The solution to Whole Foods Market’s positioning quandary was introduction of a new brand concept, 365 by Whole Foods Market. The stores will be smaller and although selling products at lower prices than Whole Foods Market stores they will be driven by the same values and commitment to brand execution that has set the parent brand apart. More importantly, branding of the new concept strikes a balance between attracting customers that may believe the Whole Foods Market brand is beyond their reach and leveraging equity of the Whole Foods Market brand by using it in an endorser role. The 365 brand name takes center stage as the platform to move down in the grocery category.

J.Crew Moves Downward, Too

Last week, clothing retailer J. Crew announced the launch of a new retail concept aimed at luring price conscious shoppers. The J. Crew Mercantile brand will widen the company’s reach by offering lower priced products in addition to an existing its J. Crew Factory stores. Retail analysts see the move as a form of diversification. J. Crew seems to be taking a page from Gap’s playbook as that company’s lower priced Old Navy brand has thrived even as Gap stores have been challenged to attract shoppers.

The move downward to compete in the lower priced segment of the clothing retail category is understandable, but the branding approach taken by J. Crew is risky. Will shoppers make distinctions between the name J. Crew Mercantile and existing brands J. Crew and J. Crew Factory? The name of the new concept may have the unintended effect of confusing consumers and creating unfavorable associations with the J. Crew brand. More distance is needed between the J. Crew brand and the Mercantile store concept.

Share or Split?

The underlying branding question faced by Whole Foods Market and J. Crew is whether their downstream brand extensions (as well as their core brands) would be better served by sharing associations with each other or splitting to create their own identities. Both companies have solid brand associations among upscale shoppers. Extensions that drag the core brand downstream run the risk of harming existing equity and confusing buyers about the value proposition of the core brand as well as the extension. The endorser brand approach taken by Whole Foods Market for its 365 concept is an acceptable middle ground. Associating the Whole Foods Market brand via an endorser role gives instant credibility to the upstart 365 brand, and it protects the core brand from dilution in ways that J. Crew is not protected with the J. Crew Mercantile branding strategy.

Can McDonald’s be Saved?

What does a sports team do when performance fails to meet expectations? Often, the coach is replaced in an effort to energize the team and provide new direction. You cannot get rid of the entire team at once, and since the coach is the figurehead leader of the organization it is usually the most prudent course of action to stimulate change. This sports analogy plays out in business, too. A CEO or other leaders in the C-suite tend to take the fall for disappointing performance.

The latest example of a business leader paying the price for unmet expectations is Don Thompson, the CEO of McDonald’s. Thompson is a 25-year veteran of the company and only 51 years old, but he will be “retiring” March 1 after a two-year stint as CEO. McDonald’s has experienced a precipitous slide under Thompson that includes 14 consecutive months of declining store sales and five straight quarters of declining profits. Just as it is easier to for a sports team to fire the coach and not all of its players, the Board of Directors at McDonald’s can at least demonstrate it is making an effort to reverse the company’s fortunes by making a change in leadership. Unfortunately, the problems faced by McDonald’s go far beyond the person sitting in the CEO chair.

“It’s not You, It’s Me”

The problem faced by McDonald’s is not who is in the role of CEO, CMO, or any other individual. McDonald’s has been a mainstay in American culture because it resonated with families. However, many people that were McDonald’s fans as children and adolescents find when they become adults that the value proposition of McDonald’s does not fit their lifestyle. Whether it is young parents wanting to have their children adopt healthy lifestyle practices early on or young adults who have tired of the menu offerings of McDonald’s, many customers have grown apart from the brand. It is not as much about McDonald’s doing something to alienate these consumers as it is changes in life cycle stage and lifestyle have led to them drifting away from the brand.

A Matter of Relevance

Changing tastes certainly play a role in the woes McDonald’s is facing, but it is not the only problem faced. The brand has lost relevance among many consumers. Fast casual brands like Chipotle and Panera Bread give diners an alternative to quick-service burgers. And, the experience of eating at McDonald’s can be more like going to the DMV than enjoying a relaxing meal at a restaurant. To McDonald’s credit, it has invested heavily in updating its stores to be more like a Starbucks than a McDonald’s. Unfortunately, it has looked more like trying to put a square peg into a round hole. The physical environment might be improved, but the menu is largely still the same fare that customers have drifted away from eating. McDonald’s still excels at offering price-based value, but it may have painted itself into a corner that it cannot escape. Is it destined to be perceived only as the value-priced restaurant brand?

Read the Signs

McDonald’s has been a fixture in America’s popular culture for decades, and its foray into foreign markets is a slice of Americana that can be found around the world. As it struggles to find its identity among today’s consumers, McDonald’s may have hit on a sweet spot that resonates with consumers in its “Signs” commercial. The spot shows signs from local McDonald’s displaying a variety of messages of support, sympathy, and encouragement inspired by events in their local communities or major events like 9/11 or the Boston Marathon bombing.

McDonald’s can tinker with its menu all it wants, but the long-term success of the brand will depend less on what new sandwiches are on the menu and more on the impact McDonald’s stores have in the neighborhoods where they operate. “Signs” is a powerful message that there are people behind the McDonald’s brand, people who care about what is going on in the lives of customers and the good of the community.

Thought Leadership a Constant in B2B Marketing

Marketing is changing at a pace faster than ever. In one survey of marketers last year, 76% agreed that marketing had changed more in the past two years than the previous 50 years. If you subscribe to this sentiment, then you would likely not be surprised by findings from a recent study about B2B marketing priorities now and in the near future. The Information Technology Services Marketing Association (ITSMA) surveyed B2B marketers to determine their perceptions of leading marketing responsibilities now and what they will be two years from now.

Below is a graphic from eMarketer summarizing the top 5 lists for now and two years out:

A comparison of the top 5 lists for current responsibilities and the priorities in two years suggests B2B marketers anticipate dramatic changes in their roles. The number one priority currently- brand management- does not even make the top 5 list for two years from now. Use of marketing technology tools hits the two-year-out list at number 2. It can be assumed that this increased emphasis on using marketing technology will touch the other four anticipated leading responsibilities. Two observations from the list of anticipated responsibilities are that “understanding buyers” appears at number 1 seemingly out of the blue. But, has that not always been the fundamental job of a marketer? If we do not understand buyers, the destiny of our business is likely assured… and the end is not pretty. The other observation is the constant priority given to thought leadership, landing at number 4 on both lists. It is on this constant that we will examine more closely to understand.

What is Thought Leadership?

In an age in which anyone with Internet access and a keyboard has a voice, establishing a brand (corporate or personal) as a thought leader is crucial for wielding influence, building a community, and ultimately driving business growth. But, what exactly is meant by the term thought leadership? Thought leadership experts Russ Allan Prince and Bruce Rogers offer the following definition of a thought leader:

“A thought leader is an individual or firm that prospects,clients, referral sources, intermediaries and even competitors recognize as one of the foremost authorities in selected areas of specialization, resulting in being the go-to individual or organization for said expertise.”

Consumers evaluate a seller’s credibility along the dimensions of expertise and trustworthiness. Becoming a thought leader is a way to positively impact both of those judgments made by consumers. Blog posts, how-to videos, and case studies are three examples of how marketers use content to “show what they know” (expertise). A content strategy aimed at building thought leadership can also “humanize” a brand through the stories told and employees featured, tactics for building trust with buyers. Oh, and there is one more part to the definition put forth by Prince and Rogers:

“A thought leader is an individual or firm that significantly profits from being recognized as such.”

This element of the definition means that aspiring to a position of thought leadership is not done for the purposes of stroking ego; it is meant to contribute to business growth.

What It Means to be a Thought Leader

It is human nature that people like to do business with individuals and companies that they like and trust. Let’s add one more qualifier- we like to do business with individuals and companies in which we have confidence in their capabilities (related to trustworthiness but speaks more to expertise). Given this characteristic of buyers, it is not surprising that thought leadership is considered a top priority today and in two years… and in five years and in ten years. Being a thought leader is not saying “Look at me- I am great!” It is about demonstrating your capabilities to solve problems and provide help to others. Having the ability is not enough; it must be communicated to the audiences that stand to benefit from your thought leadership.

What are you waiting for? Make your voice heard by becoming a trusted resource for information, advice, opinion, and action.

How Do You Respond to Competition?

We have a new neighbor, one that many people have fought to keep out of their neighborhoods and towns: Walmart. It is the third one in our city; the new location is slightly more than a mile from our house. And, it is just down the road from a Kroger store. This post has nothing to do with whether Walmart is good or evil. Rather, it contains observations on how to respond to competition. How should you respond when new competition arrives in your neighborhood (or company or office)? Here are three rules to apply when facing competition:

Be Ready before They Show Up

If you are any good at all at what you do, you will have competition eventually. Why? The product life cycle tells us that during the growth stage, increased opportunity as reflected in growing sales and profits attracts new entrants. Those new entrants can be businesses expanding geographically or companies rolling out new products. You have to know that if business is good, competition is not far behind. Likewise, if you are a business that has a reputation for developing talented employees, other firms will be seeking to lure some of them away. Create a culture that customers and employees alike value and would not consider leaving.

Put Your Best Foot Forward

Once competition makes its intentions known, respond by stepping up your game. You have something they want: Customers. Protect the asset that is your customer relationships by revisiting how well you deliver value. In the case of my local Kroger’s new neighbor, Walmart, it has been evident that Kroger was being proactive to new competition. The store has made significant changes to visual presentation, employees are noticeably more customer-focused (not Publix-like but more customer oriented nonetheless), and most evident, Kroger has lowered prices on many items to narrow Walmart’s price advantage. New competition was the inspiration for Kroger to make these changes. Just like an athlete reaches back for that little extra to perform at a peak level when competing against elite competition, step up your game and take on competitors.

Let Competition Make You Better

A tendency exists for competition to be perceived strictly as a negative. For example, when conducting a SWOT analysis competition almost always is categorized as a threat. Rather than being fearful of what competition might do to impact your business, view the prospect of competition as a force that makes you better. In fact, you need not compete at all in that you do not have to battle other businesses to win customers. The battle is internal, within yourself or your organization of how to improve and be a resource to customers. This point is not a suggestion to ignore or be oblivious to competition (perhaps that is why I saw the Kroger store manager walking the aisles at Walmart a few days after grand opening). Instead, let the focus of competition be how you can get better at doing what you do. That will go a long way to fending off competition.

In business, competition is often the fourth certainty, added to the customary list of birth, death, and taxes. If you think you have little or no competition you are either very fortunate or very out of touch. But, if you approach competition as an internal quest to reach peak performance you will likely find external competitors to be less of a threat to your existence.

Biz Eye View: Building a Brand that Looks Different, Stays Agile

Editorial Note: This post is the first installment of a new feature, Biz Eye View. Innovative business professionals will be featured periodically, sharing their expertise to help you grow.

In marketing, we place a premium on differentiation. The opposite of differentiation is commoditization, the specter of which terrifies many marketers. It is easy to understand the importance of differentiation; the challenge resides in figuring out how to execute. This challenge is not limited to product brands. Differentiation is essential for building your personal brand and advancing your professional career, but moving from concept to action snags many people.

How to Survive and Thrive in the Jungle

For professionals looking for guidance on how to break out from commoditization, I recommend reading Zebras and Cheetahs: Look Different and Stay Agile to Survive the Business Jungle by Michael Burt and Colby Jubenville (Wiley, 2013). They acknowledge that there are no quick fixes or “Easy” buttons for developing your brand, but they tackle this problem through systematic questioning of assumptions and background to position ourselves for growth.

One of the creators of the Zebra/Cheetah model is Colby Jubenville, PhD. He is a professor, consultant, and strategist based in Murfreesboro, Tennessee. Colby shared his perspective on zebras, cheetahs, and differentiation.

DR: What inspired the Zebras and Cheetahs model?

CJ: The model was developed with Coach Micheal Burt while sitting at Demos’ restaurant in Murfreesboro. A company challenged Micheal to dive monster growth over an 18-month cycle. We asked ourselves how we could make growing a company simple, easy and fun. The model is simple to understand because it is centered on a dominant focus that everyone can see and connect to. Once people understand the dominant focus of the organization, it’s easy for them to carry out the work that must be done that is related to the dominant focus.

DR: In your view, what are some obstacles that businesses and professionals face in the quest to “look different and stay agile?”

CJ: Many experts tell others that they must differentiate. But, don’t follow that up with how one does that. To me it’s about answering one simple question: What is the unique value I deliver to others in the market? Unique value is broken into three areas:

Unique Perspective (How you see what you do)
Unique Education (How you know what you do)
Unique Experience (How you deliver what you do).

Understanding perspective, education and experience is critical to looking different.

Running Faster is about mindset and buying into this idea that we all need coaches in our lives. If you look back on your life, I would bet that a mentor/coach had conversations you didn’t want to have, made you do things you didn’t think you could do which led you to become something you didn’t think you could become. Coaches, in essence, teach us how to see and seize opportunity.

DR: How do you keep your personal brand focused on continuous development and growth?

CJ: I think that starts with having a clear understanding of the unique value I deliver to the world. I focus on helping organizations and people do three things: become better known, better understood, and better understand the unique value they deliver. Every decision about my brand and how I position myself goes through that filter.

Ask Questions to Understand Your Brand

One of the strengths of the Zebra/Cheetah model is the use of questions to gain perspective. Specifically, Burt and Jubenville encourage us to ask six questions for introspection to connect our past, present, and future:

How is my perspective different from any other in the jungle?
Through my education, what do I know that will give me and the tribe an added advantage?
What are the top three experiences that have shaped who I am and who I want the tribe to become?
What past struggles have helped me think better, make better decisions, and communicate in a way that the tribe understands?
Where is the most opportunity for growth for me and my tribe?
How can I make all of this simple and easy for others to understand?

Working harder isn’t the answer; trying your best isn’t the answer; completing checklists isn’t the answer; technology isn’t the answer. Developing a new perspective that will elevate our performance to a higher level is the answer. The Zebra/Cheetah model can help you navigate the concrete jungle and enable you to look different and stay agile while adding value to those with whom you serve.

For CVS Caremark, It’s Positioning over Profits

Would you walk away from $2 billion a year in revenue that your business has already acquired? The question is unusual- most of the time marketers expend their energy in a quest to amass revenue. If you are going to forego significant revenue, you had better have good reason… right?

A Clear Decision

One company confronted this very question and concluded that the best interests of its business was served by answering “yes” and exiting a product category worth $2 billion in annual sales. The company is CVS Caremark, and it recently announced that it would discontinue sales of tobacco products in its 7,600 CVS stores by October of this year. The decision translates into $2 billion in revenue, or about 3% of the company’s total sales. Despite the magnitude of revenue CVS Caremark stands to lose, discontinuing tobacco sales was a clear decision to make. Why? Company management knew that in order to be true to the brand promises CVS Caremark makes as an advocate for wellness and a healthy lifestyle, its merchandise strategy has to be congruent with the overarching mission of the business.

Two Questions to Ask

Brand positioning is one of the most important marketing decisions you will make. Why? It draws a line in the sand as to how a brand is unique, different, or superior to competition. Without a clearly defined brand position, you are doomed to mediocrity, if not failure. It sounds like a dire prediction but think about it- when a brand lacks clarity in its meaning and does not articulate a point of difference, it can be perceived as a commodity that is easily interchangeable with other products. A brand is vulnerable to being rendered irrelevant when it lacks a clear point of difference that conveys its value proposition to the market.

The decision to position is easy; the approach taken to position a brand is not so clear cut. The good news about brand positioning is that a marketer has many options from which to choose to create a positioning basis. The bad news is… well, the bad news is the same as the good news- the number of possibilities for positioning a brand can be overwhelming. How do you decide what differentiation point is most viable as a positioning basis? You need to ask two questions when evaluating a potential brand position:

Is the point of difference real? A brand position has to be a legitimate proof point that exists- not a puffery claim or slogan. For CVS Caremark, positioning as a brand associated with a healthy lifestyle would be harder to achieve if it continued to sell tobacco products in its stores.
Is the point of difference relevant? Possessing a point of difference is one thing; possessing one that matters to your customers is something quite different. Judging from feedback posted on CVS’s Facebook page about the decision to end tobacco sales, many customers and non-customers alike believe it was the right thing for the company to do. It elevates the credibility of CVS Caremark as a lifestyle brand.

Be True, not Popular

While many consumers and health professionals have lauded CVS Caremark for its decision to discontinue tobacco sales, the decision was not embraced universally. Many CVS customers that buy tobacco now say they will take their business elsewhere. Other people have chided CVS Caremark for not removing other products with questionable effects on health such as beer, wine, soda, and snacks (such complaints do not appear to be an apples-to-apples comparison with cigarettes, but I will leave that debate for other people in other forums). These examples of negative feedback is a reminder that you will always have detractors- “haters gonna hate.”

In the end, it is more important to be true to your brand values than making decisions you believe will be popular. CVS Caremark has taken a bold stand to be consistent with its brand promises. While some people might see it as an expensive stand to take, it is one that CVS Caremark believed it could not afford not to take.

Use Content to Show How, not Show Off

Perhaps one of the most challenging aspects of developing a content marketing strategy is answering a straightforward question: What should be the content in our content marketing? Many brands seem to struggle with coming up with a correct answer to this question. Why? They adopt an old school, mass media mindset in which the means to the end goal (customer acquisition or retention) is pursued with brand centric messaging. The goal is essential for business survival and success, but the means to get to the goal can be easily dismissed by the very people targeted to persuade.

Content Marketing as Source of Utility

One of favorite activities during the break between fall and spring semesters is to catch up on reading. My reading list during the last few weeks of a semester becomes students’ case reports, strategic plan projects, and course participation reflection. The number one book on my list to read during the recent break was Youtility by Jay Baer. This book is a must read for any marketer using content marketing or a less experienced marketer trying to figure out what content marketing is and its usefulness in building customer-brand relationships.

For me, the most salient point made by Baer is that for a brand to succeed it can pursue being amazing or being useful. If we look around the marketing landscape today, there are a few amazing brands (Amazon, Apple, Harley Davidson, Nike, and Starbucks immediately come to mind), but most brands fail to wow us consistently. That leaves being useful as the approach most brands have the best chance of leveraging to successfully differentiate from competition.

Utility = Show How

The difference between being useful and being amazing can be viewed as a distinction between “showing how” and “showing off.” Showing how is outwardly focused, communicating to customers and others how a brand can solve problems, offer benefits, or otherwise be a resource. Showing off is just that- a brand-centered position of the business and its virtues. If we are smart, we will jump on the bandwagon and be a customer! This contrast makes it clear that showing how offers much more utility (benefit) for the individuals or groups targeted.

A show how focus is a three-pronged mindset for adding utility:

Show how much you are interested in others- Content marketing (and social media, for that matter) should be about others- customers, community, or employees… not so much about your company or product. Listen, share, and celebrate what is going on around you to establish brand credibility.
Show how well you understand customers’ needs– Content should focus on customer needs and problems and how to provide solutions or remedies. The latter could include your product… or it could not be about your product. Think about content (e.g., a YouTube video) that is useful to you. A need that I have occasionally is tips on how to pack business clothing in a suitcase without having massive wrinkles when I arrive at my destination. That is a customer need- a show-how mindset delivers answers to that need. But, it does not necessarily entail selling something. Well actually it does- you are selling your value as a problem solver.
Show how your organization can be a resource to others– Many companies have amazing untold stories that exist in the background. Employees with outstanding talents or gifts, inspiring stories of courage or determination, or selfless service to others in their community. These stories could provide utility by energizing or motivating people who are exposed to these messages.

It’s Your Choice

The approach to take for pursuing business success is simple: Strive to be amazing or be useful. Some of you will build amazing brands and businesses. We need you and admire your accomplishments. The rest of us (I am including myself) will strive to make our mark by being useful to others. We need amazing and useful brands; figure out which stance you can take and execute.