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 brandbuilding: 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.